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Employee Benefits | 6 Months Ended
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Jun. 30, 2025
Retirement Benefits [Abstract] |
Employee Benefits |
Note 8. Employee Benefits
We maintain non-contributory defined benefit pension plans for certain employees. In addition, we maintain postretirement health care and life insurance plans for certain retirees and their dependents, which are both contributory and non-contributory, and include a limit on our share of the cost for certain current and future retirees. In accordance with our accounting policy for pension and other postretirement benefits, operating expenses include service costs associated with pension and other postretirement benefits while other credits and/or charges based on actuarial assumptions, including projected discount rates, an estimated return on plan assets, and impact from health care trend rates are reported in Other income (expense), net. These estimates are updated in the fourth quarter or upon a remeasurement event, to reflect actual return on plan assets and updated actuarial assumptions. The adjustment is recognized in the income statement during the fourth quarter and upon a remeasurement event pursuant to our accounting policy for the recognition of actuarial gains and losses. Net Periodic Benefit Cost The following tables summarize the components of net periodic benefit cost related to our pension and postretirement health care and life insurance plans:
| (dollars in millions)
| Pension |  | Health Care and Life
Three Months Ended June 30, | 2025 |  | 2024 |  | 2025 |  | 2024
Service cost - Cost of services | $ | 35 |  |  | $ | 39 |  |  | $ | 7 |  |  | $ | 11 |
Service cost - Selling, general and administrative expense | 6 |  |  | 6 |  |  | 1 |  |  | 2 |
Service cost | $ | 41 |  |  | $ | 45 |  |  | $ | 8 |  |  | $ | 13 |
Amortization of prior service cost (credit) | $ | 28 |  |  | $ | 28 |  |  | $ | (32) |  |  | $ | (32) |
Expected return on plan assets | (134) |  |  | (140) |  |  | (7) |  |  | (7) |
Interest cost | 101 |  |  | 112 |  |  | 137 |  |  | 136 |
Remeasurement loss, net | 45 |  |  | 136 |  |  | — |  |  | — |
Other components | $ | 40 |  |  | $ | 136 |  |  | $ | 98 |  |  | $ | 97 |
Total | $ | 81 |  |  | $ | 181 |  |  | $ | 106 |  |  | $ | 110 |
| (dollars in millions)
| Pension |  | Health Care and Life
Six Months Ended June 30, | 2025 |  | 2024 |  | 2025 |  | 2024
Service cost - Cost of services | $ | 69 |  |  | $ | 80 |  |  | $ | 14 |  |  | $ | 22 |
Service cost - Selling, general and administrative expense | 11 |  |  | 13 |  |  | 3 |  |  | 4 |
Service cost | $ | 80 |  |  | $ | 93 |  |  | $ | 17 |  |  | $ | 26 |
Amortization of prior service cost (credit) | $ | 56 |  |  | $ | 56 |  |  | $ | (64) |  |  | $ | (64) |
Expected return on plan assets | (268) |  |  | (348) |  |  | (14) |  |  | (14) |
Interest cost | 204 |  |  | 269 |  |  | 273 |  |  | 271 |
Remeasurement loss, net | 45 |  |  | 63 |  |  | — |  |  | — |
Other components | $ | 37 |  |  | $ | 40 |  |  | $ | 195 |  |  | $ | 193 |
Total | $ | 117 |  |  | $ | 133 |  |  | $ | 212 |  |  | $ | 219 |
The service cost component of net periodic benefit cost is recorded in Cost of services and Selling, general and administrative expense in the condensed consolidated statements of income while the other components, including mark-to-market adjustments, if any, are recorded in Other income (expense), net. Pension Annuitization On February 29, 2024, we entered into two separate commitment agreements, one by and between the Company, State Street Global Advisors Trust Company (State Street), as independent fiduciary of the Verizon Management Pension Plan and Verizon Pension Plan for Associates (the Pension Plans), and The Prudential Insurance Company of America (Prudential), and one by and between the Company, State Street and RGA Reinsurance Company (RGA), under which the Pension Plans purchased nonparticipating single premium group annuity contracts from Prudential and RGA, respectively, to settle approximately $5.8 billion of benefit liabilities of the Pension Plans, net of certain adjustments, resulting in a net pre-tax settlement gain of $200 million. The purchase of the group annuity contracts closed on March 6, 2024. The group annuity contracts primarily cover a population that includes 56,000 retirees who commenced benefit payments from the Pension Plans prior to January 1, 2023 (Transferred Participants). Prudential and RGA each irrevocably guarantee and assume the sole obligation to make future payments to the Transferred Participants as provided under their respective group annuity contracts, with direct payments beginning July 1, 2024. The aggregate amount of each Transferred Participant's payment under the group annuity contracts will be equal to the amount of each individual’s payment under the Pension Plans. The purchase of the group annuity contracts was funded directly by transferring $5.6 billion of assets of the Pension Plans, net of certain adjustments. The Company made additional contributions to the Pension Plans prior to the closing date of the transaction, as discussed below. With these contributions, the funded ratio of each of the Pension Plans did not change as a result of this transaction. Pension plan assets and liabilities are primarily presented within Employee benefit obligations in our condensed consolidated balance sheets. 2024 Voluntary Separation Program In June 2024, we announced a voluntary separation program for select U.S.-based management employees. Under this program approximately 4,800 eligible employees separated from Verizon through the end of March 2025. Severance Payments During the three and six months ended June 30, 2025, we paid severance benefits of $201 million and $607 million, respectively, primarily related to the voluntary separation program. During the six months ended June 30, 2025, we paid an additional $96 million, related to other severance related contractual obligations associated with the voluntary separation program. At June 30, 2025, we had a remaining severance liability of $389 million, a portion of which relates to future contractual payments to separated employees under the voluntary separation program. Employer Contributions During both the three and six months ended June 30, 2025, we made a discretionary non-cash contribution to our qualified pension plans in the principal amount of $563 million. See Note 5 for additional information. During the six months ended June 30, 2024, we made discretionary contributions to the Pension Plans in the aggregate amount of $365 million. During both the three and six months ended June 30, 2025 and June 30, 2024, we made insignificant contributions to our nonqualified pension plans. No required qualified pension plans contributions are expected through December 31, 2025. No significant changes are expected with respect to the nonqualified pension and other postretirement benefit plans contributions in 2025. Remeasurement loss, net During the three and six months ended June 30, 2025, we recorded an insignificant net pre-tax remeasurement loss in our pension plans triggered by settlements. During the three and six months ended June 30, 2024, we recorded a net pre-tax remeasurement loss of $136 million and $63 million, respectively, in our pension plans triggered by settlements. During the three months ended June 30, 2024, we recorded a net pre-tax remeasurement loss of $136 million in our pension plans triggered by settlements. The remeasurement loss was primarily driven by a $245 million charge resulting from the difference between our estimated and actual return on assets, partially offset by a credit of $109 million due to changes in our discount rate assumption used to determine the current year liabilities of our pension plans. During the three months ended March 31, 2024, we recorded a net pre-tax remeasurement gain of $73 million in our pension plans due to a net pre-tax settlement gain of $200 million resulting from the pension annuitization transaction discussed above, partially offset by a net pre-tax remeasurement loss of $127 million triggered by settlements. The net pre-tax remeasurement loss recorded for the three months ended March 31, 2024, was primarily driven by a $613 million charge resulting from the difference between our estimated and actual return on assets, partially offset by a credit of $486 million due to changes in our discount rate assumption used to determine the current year liabilities of our pension plans.

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