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Retirement Plans
 6 Months Ended
Nov. 30, 2020
Compensation And Retirement Disclosure [Abstract]  
Retirement Plans

(7) Retirement Plans

We sponsor programs that provide retirement benefits to most of our employees. These programs include defined benefit pension plans, defined contribution plans and postretirement healthcare plans. Key terms of our retirement plans are provided in our Annual Report.

Our retirement plans costs for the periods ended November 30 were as follows (in millions):

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Defined benefit pension plans, net

 

$

27

 

 

$

37

 

 

$

52

 

 

$

74

 

Defined contribution plans

 

 

153

 

 

 

136

 

 

 

311

 

 

 

278

 

Postretirement healthcare plans

 

 

20

 

 

 

21

 

 

 

41

 

 

 

43

 

Retirement plan mark-to-market (“MTM”) net loss

 

 

52

 

 

 

—

 

 

 

52

 

 

 

—

 

 

 

$

252

 

 

$

194

 

 

$

456

 

 

$

395

 

 

Net periodic benefit cost of the pension and postretirement healthcare plans for the periods ended November 30 included the following components (in millions):

 

 

 

Three Months Ended

 

 

 

U.S. Pension Plans

 

 

International Pension Plans

 

 

Postretirement Healthcare Plans

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Service cost

 

$

212

 

 

$

192

 

 

$

26

 

 

$

24

 

 

$

11

 

 

$

10

 

Other retirement plans (income) expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Interest cost

 

 

239

 

 

 

250

 

 

 

11

 

 

 

11

 

 

 

9

 

 

 

11

 

    Expected return on plan assets

 

 

(446

)

 

 

(401

)

 

 

(13

)

 

 

(13

)

 

 

—

 

 

 

—

 

   Amortization of prior service credit and other

 

 

(2

)

 

 

(25

)

 

 

—

 

 

 

(1

)

 

 

—

 

 

 

—

 

   MTM net loss

 

 

—

 

 

 

—

 

 

 

52

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

(209

)

 

 

(176

)

 

 

50

 

 

 

(3

)

 

 

9

 

 

 

11

 

 

 

$

3

 

 

$

16

 

 

$

76

 

 

$

21

 

 

$

20

 

 

$

21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

U.S. Pension Plans

 

 

International Pension Plans

 

 

Postretirement Healthcare Plans

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Service cost

 

$

425

 

 

$

384

 

 

$

49

 

 

$

48

 

 

$

22

 

 

$

21

 

Other retirement plans (income) expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Interest cost

 

 

479

 

 

 

500

 

 

 

21

 

 

 

22

 

 

 

19

 

 

 

22

 

    Expected return on plan assets

 

 

(892

)

 

 

(801

)

 

 

(25

)

 

 

(26

)

 

 

—

 

 

 

—

 

   Amortization of prior service credit and other

 

 

(4

)

 

 

(52

)

 

 

(1

)

 

 

(1

)

 

 

—

 

 

 

—

 

   MTM net loss

 

 

—

 

 

 

—

 

 

 

52

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

(417

)

 

 

(353

)

 

 

47

 

 

 

(5

)

 

 

19

 

 

 

22

 

 

 

$

8

 

 

$

31

 

 

$

96

 

 

$

43

 

 

$

41

 

 

$

43

 

For 2021, no pension contributions are required for our tax-qualified U.S. domestic pension plans (“U.S. Pension Plans”) as they are fully funded under the Employee Retirement Income Security Act. We made voluntary contributions to our U.S. Pension Plans of $1.0 billion during the first half of 2020.

We incurred a pre-tax, noncash MTM net loss of $52 million in the second quarter of 2021 related to amendments to the TNT Express Netherlands Pension Plan. Benefits for approximately 2,100 employees will be frozen effective December 31, 2020. Effective January 1, 2021, these employees will begin earning pension benefits under a separate, multi-employer pension plan. This $52 million net loss consists of a $106 million MTM loss due to a lower discount rate and a $54 million curtailment gain.

In 2020, we announced the closing of our U.S.-based defined benefit pension plans to new non-union employees hired on or after January 1, 2020. We will introduce an all-401(k)-plan retirement benefit structure for eligible employees with a higher company match of up to 8% across all U.S.-based operating companies in 2022. During calendar 2021, current eligible employees under the Portable Pension Account (“PPA”) pension formula will be given a one-time option to continue to be eligible for pension compensation credits under the existing PPA formula and remain in the existing 401(k) plan with its match of up to 3.5%, or to cease receiving compensation credits under the pension plan and move to the new 401(k) plan with the higher match of up to 8%. Changes to the new 401(k) plan structure become effective beginning January 1, 2022. While this new program will provide employees greater flexibility and reduce our long-term pension costs, it will not have a material impact on current or near-term financial results.