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Pension Benefits
 12 Months Ended
Mar. 31, 2024
Retirement Benefits [Abstract]  
Pension Benefits Pension Benefits
The Company maintains a number of qualified and nonqualified defined benefit pension plans and defined contribution plans for eligible employees.
Non-U.S. Defined Benefit Pension Plans
As of March 31, 2024 and 2023, the Company’s non-U.S. defined benefit pension plans cover eligible employees located predominantly in Norway and Canada. Benefits for these plans are based primarily on each employee’s final salary, with annual adjustments for inflation. The obligations in Norway are largely related to the state-regulated pension plan which is managed by the Norwegian Public Service Pension Fund (“SPK”). According to the terms of the SPK, the plan assets of state regulated plans in Norway must correspond very closely to the pension obligation calculated using the principles codified in Norwegian law.
The Company divested certain pension assets and liabilities as part of the European divestiture activities discussed in more detail in Financial Note 2, “Business Acquisitions and Divestitures.” During fiscal 2023, the Company divested pension liabilities totaling $75 million and released $13 million of gains from accumulated other comprehensive loss related to the divestiture of the E.U. disposal group, and divested pension assets of $49 million and released $30 million of losses from accumulated other comprehensive loss related to the divestiture of the U.K. disposal group. During fiscal 2022, the Company divested $43 million of pension liabilities and released $11 million of losses from accumulated other comprehensive loss related to the sale of its Austrian business.
Defined benefit plan assets and obligations are measured as of the Company’s fiscal year-end. The net periodic expense for the Company’s pension plans were as follows:
Years Ended March 31,
(In millions)202420232022
Service cost - benefits earned during the year$2 $5 $11 
Interest cost on projected benefit obligation8 7 14 
Expected return on assets(7)(5)(19)
Amortization of unrecognized actuarial loss and prior service costs
2 1 3 
Curtailment/settlement gain— (1)(5)
Net periodic pension expense$5 $7 $4 
The projected unit credit method is utilized in measuring net periodic pension expense over the employees’ service life for the pension plans. Unrecognized actuarial losses exceeding 10% of the greater of the projected benefit obligation or the market value of assets are amortized straight-line over the average remaining future service period of active employees.
Information regarding the changes in benefit obligations and plan assets for the Company’s pension plans was as follows:
Years Ended March 31,
(In millions)20242023
Change in benefit obligations
Benefit obligation at beginning of period (1)
$172 $701 
Service cost2 5 
Interest cost8 7 
Actuarial gain— (65)
Benefits paid(9)(11)
Curtailment/settlement— (3)
Expenses paid— (1)
Divestitures (2)
— (408)
Foreign exchange impact and other1 (53)
Benefit obligation at end of period (1)
$174 $172 
Change in plan assets
Fair value of plan assets at beginning of period$174 $681 
Actual return on plan assets(1)(51)
Employer and participant contributions5 7 
Benefits paid(9)(11)
Expenses paid— (1)
Settlements— (3)
Divestitures (2)
— (393)
Foreign exchange impact and other2 (55)
Fair value of plan assets at end of period$171 $174 
Funded status at end of period$(3)$2 
Amounts recognized on the balance sheet
Current assets$— $— 
Long-term assets18 24 
Current liabilities(1)(1)
Long-term liabilities(20)(21)
Total$(3)$2 
(1)The benefit obligation is the projected benefit obligation.
(2)Relates to the completed divestitures of the E.U. disposal group and U.K. disposal group in fiscal 2023 as discussed in more detail in Financial Note 2, “Business Acquisitions and Divestitures.”
There was no actuarial gain in fiscal 2024:
•Discount rates: The weighted average discount rate slightly increased to 4.55% as of March 31, 2024 from 4.54% as of March 31, 2023.
•Demographic and assumption changes: There were offsetting gains and losses in the demographic and assumption changes.
The actuarial gain of $65 million in fiscal 2023 was primarily attributable to:
•Discount rates ($69 million gain): The weighted average discount rate increased to 4.54% as of March 31, 2023 from 2.67% as of March 31, 2022.
•Demographic and assumption changes ($4 million loss): This represents the difference between actual and estimated participant data and demographic factors, including items such as inflation assumption, compensation changes, mortality, and other changes.
The following table provides the projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for all the Company’s pension plans, including accumulated benefit obligation in excess of plan assets:
March 31,
(In millions)20242023
Projected benefit obligation$174 $172 
Accumulated benefit obligation172 171 
Fair value of plan assets171 174 
Amounts recognized in accumulated other comprehensive loss consist of:
March 31,
(In millions)20242023
Net actuarial loss$57 $49 
Prior service cost 1 1 
Total$58 $50 
Other changes in accumulated other comprehensive loss were as follows:
Years Ended March 31,
(In millions)202420232022
Net actuarial (gain) loss$9 $(7)$(32)
Prior service cost— 1 — 
Amortization of:
Net actuarial loss(2)(9)(14)
Prior service credit— 2 1 
Foreign exchange impact and other1 (5)(5)
Total recognized in other comprehensive (income) loss$8 $(18)$(50)
In fiscal 2023, the Company recognized $17 million in net actuarial losses for pension plans to stockholders’ deficit as a result of the divestitures of its E.U. disposal group and U.K. disposal group. In fiscal 2022, the Company recognized $11 million in actuarial losses for pension plans to stockholders’ deficit as a result of the sale of its Austrian business. Refer to Financial Note 2, “Business Acquisitions and Divestitures,” for more information on the Company’s European divestiture activities.
Projected benefit obligations related to the Company’s unfunded plans were $19 million and $18 million at March 31, 2024 and 2023, respectively. Funding obligations for its plans vary based on the laws of each jurisdiction.
Expected benefit payments for the Company’s pension plans were as follows: $8 million, $9 million, $10 million, $10 million, and $10 million for fiscal 2025 to fiscal 2029, respectively, and $53 million for fiscal 2030 through fiscal 2034. Expected benefit payments are based on the same assumptions used to measure the benefit obligations and include estimated future employee service. Expected contributions to be made for the Company’s pension plans are $4 million for fiscal 2025.
Weighted-average assumptions used to estimate the net periodic pension expense and the actuarial present value of benefit obligations were as follows:
Years Ended March 31,
202420232022
Net periodic pension expense
Discount rates4.54 %2.67 %1.89 %
Rate of increase in compensation3.21 3.67 3.20 
Expected long-term rate of return on plan assets4.05 1.63 2.56 
Benefit obligation
Discount rates4.55 %4.54 %2.67 %
Rate of increase in compensation3.21 3.21 3.67 
The Company’s defined benefit pension plan liabilities are valued using a discount rate based on a yield curve developed from a portfolio of high-quality corporate bonds rated AA or better whose maturities are aligned with the expected benefit payments of its plans. The Company’s defined benefit pension plan liabilities are valued using a weighted-average discount rate of 4.55%, which represents an increase of one basis point from its fiscal 2023 weighted-average discount rate of 4.54%.
Plan Assets
Investment Strategy: For plan assets, the investment strategies are subject to local regulations and the asset/liability profiles of the plans in each individual country. Plan assets are broadly invested in a manner appropriate to the nature and duration of the expected future retirement benefits payable under the plans. Plan assets are primarily invested in high-quality corporate and government bond funds and equity securities. Assets are properly diversified to avoid excessive reliance on any particular asset, issuer, or group of undertakings so as to avoid accumulations of risk in the portfolio as a whole.
The Company develops the expected long-term rate of return assumption based on the projected performance of the asset classes in which plan assets are invested. The target asset allocation was determined based on the liability and risk tolerance characteristics of the plans and at times may be adjusted to achieve overall investment objectives.
Fair Value Measurements: The fair value hierarchy has three levels based on the reliability of the inputs used to determine fair value. Level 1 refers to fair values determined based on unadjusted quoted prices in active markets for identical assets. Level 2 refers to fair values estimated using significant other observable inputs and Level 3 includes fair values estimated using significant unobservable inputs. The following tables represent the Company’s plan assets as of March 31, 2024 and 2023, using the fair value hierarchy by asset class:
March 31, 2024March 31, 2023
(In millions)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Cash and cash equivalents$7 $— $— $7 $7 $— $— $7 
Equity securities:
Equity commingled funds— 20 — 20 — 18 — 18 
Fixed income securities:
Government securities— 4 — 4 — — — — 
Corporate bonds— 4 — 4 — — — — 
Fixed income commingled funds— — — — — 7 — 7 
Other:
Annuity contracts— — 103 103 — — 110 110 
Real estate funds and other— 3 — 3 — 2 — 2 
Total$7 $31 $103 $141 $7 $27 $110 $144 
Assets held at NAV practical expedient (1):
Other30 30 
Total plan assets$171 $174 
(1)    Equity commingled funds, fixed income commingled funds, real estate funds, and other investments for which fair value is measured using the NAV per share as a practical expedient are not leveled within the fair value hierarchy and are included as a reconciling item to total investments.
Cash and cash equivalents - Cash and cash equivalents include short-term investment funds that maintain daily liquidity and aim to have constant unit values of $1.00. The funds invest in short-term fixed income securities and other securities with debt-like characteristics emphasizing short-term maturities and high credit quality. Directly held cash and cash equivalents are classified as Level 1 investments. Cash and cash equivalents include money market funds and other commingled funds, which have daily net asset values derived from the underlying securities; these are classified as Level 1 investments.
Equity commingled funds - Some equity investments are held in commingled funds, which have daily net asset values derived from quoted prices for the underlying securities in active markets; these are classified as Level 1 or Level 2 investments.
Fixed income securities - Government securities consist of bonds and debentures issued by central governments or federal agencies; corporate bonds consist of bonds and debentures issued by corporations. Inputs to the valuation methodology include quoted prices for similar assets in active markets, and inputs that are observable for the asset, either directly or indirectly, for substantially the full term of the asset. Multiple prices and price types are obtained from pricing vendors whenever possible, enabling cross-provider price validations. Fixed income securities are generally classified as Level 1 or Level 2 investments.
Fixed income commingled funds - Some fixed income investments are held in exchange traded or commingled funds, which have daily net asset values derived from the underlying securities; these are classified as Level 1, 2, or 3 investments.
Annuity contracts - The value of the annuity contracts is reported by the Trustee and is based on a valuation of the remaining contracted cash flow of the contract. Inputs in the valuation include discounted future cash flows; these are classified as Level 3 investments.
Real estate funds - The value of the real estate funds is reported by the fund manager and is based on a valuation of the underlying properties. Inputs used in the valuation include items such as cost, discounted future cash flows, independent appraisals, and market based comparable data. The real estate funds are classified as Level 1, 2, or 3 investments.
Other - At March 31, 2024 and 2023, this includes $30 million of plan asset value relating to the SPK. In principle, the SPK is organized as a pay-as-you-go system guaranteed by the Norwegian government as it holds no Company-owned assets to back the pension liabilities. The Company pays a pension premium used to fund the plan, which is paid directly to the Norwegian government who establishes an account for each participating employer to keep track of the financial status of the plan, including managing the contributions and the payments. Further, the investment return credited to this account is determined annually by the SPK based on the performance of long-term government bonds.
The following table presents the changes in the Level 3 plan assets measured on a recurring basis for the years ended March 31, 2024 and 2023:
(In millions)Level 3
Balance, March 31, 2022
$175 
Return on assets(65)
Balance, March 31, 2023
$110 
Return on assets(7)
Balance, March 31, 2024
$103 
Multiemployer Plans
The Company contributes to a number of multiemployer pension plans under the terms of collective-bargaining agreements that cover union-represented employees in the U.S. In 2017, it also contributed to the Pensjonsordningen for Apoteketaten (“POA”), a mandatory multiemployer pension scheme for its pharmacy employees in Norway, managed by the association of Norwegian Pharmacies.
The risks of participating in these multiemployer plans are different from single-employer pension plans in the following aspects: (i) assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers; (ii) if a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers; and (iii) if the Company chooses to stop participating in some of its multiemployer plans, the Company may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability. Actions taken by other participating employers may lead to adverse changes in the financial condition of a multiemployer benefit plan and the Company’s withdrawal liability and contributions may increase.
Contributions and amounts accrued for U.S. multiemployer pension plans were not material for the years ended March 31, 2024, 2023, and 2022. Contributions to the POA for non-U.S. plans exceeding 5% of total plan contributions were $23 million, $19 million, and $20 million for the years ended March 31, 2024, 2023, and 2022, respectively. Based on actuarial calculations, the Company estimates the funded status for its non-U.S. Plans to be approximately 79% as of March 31, 2024. No amounts were accrued for a liability associated with the POA as the Company has no intention to withdraw from the plan.
Defined Contribution Plans
The Company has a contributory retirement savings plan (“RSP”) for U.S. eligible employees. Eligible employees may contribute to the RSP up to 75% of their eligible compensation on a pre-tax or post-tax basis not to exceed IRS limits. The Company makes matching contributions in an amount equal to 100% of the employee’s first 3% of pay contributed and 50% for the next 2% of pay contributed. The Company, at the discretion of its Board of Directors (the “Board”), may also make an additional annual matching contribution for each plan year to enable participants to receive a full match based on their annual contribution. The Company also contributed to non-U.S. plans that are available in certain countries. Contribution expenses for the RSP and non-U.S. plans were $138 million, $125 million, and $116 million for the years ended March 31, 2024, 2023, and 2022, respectively.
Postretirement Benefits
The Company maintains a number of postretirement benefit plans, primarily consisting of healthcare and life insurance (“welfare”) benefits, for certain eligible U.S. employees. Eligible employees consist of those who retired before March 31, 1999 and those who retired after March 31, 1999, but were an active employee as of that date, after meeting other age-related criteria. It also provides postretirement benefits for certain U.S. executives. Defined benefit plan obligations are measured as of the Company’s fiscal year-end. The net periodic credit or expense for the Company’s postretirement welfare benefits was not material for the years ended March 31, 2024, 2023, and 2022. The benefit obligation at March 31, 2024 and 2023 was $42 million and $45 million, respectively.