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Retirement Plans | 9 Months Ended
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Feb. 28, 2022
Compensation And Retirement Disclosure [Abstract] |
Retirement Plans | (6) 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 February 28 were as follows (in millions):
|  | Three Months Ended |  |  | Nine Months Ended |
|  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Defined benefit pension plans, net |  | $ | 2 |  |  | $ | 20 |  |  | $ | (3 | ) |  | $ | 72 |
Defined contribution plans |  |  | 226 |  |  |  | 182 |  |  |  | 577 |  |  |  | 493 |
Postretirement healthcare plans |  |  | 22 |  |  |  | 21 |  |  |  | 67 |  |  |  | 62 |
Retirement plans MTM net loss |  |  | — |  |  |  | — |  |  |  | 260 |  |  |  | 52 |
|  | $ | 250 |  |  | $ | 223 |  |  | $ | 901 |  |  | $ | 679 |
Net periodic benefit cost of the pension and postretirement healthcare plans for the periods ended February 28 included the following components (in millions):
|  | Three Months Ended |
|  | U.S. Pension Plans |  |  | International Pension Plans |  |  | Postretirement Healthcare Plans |
|  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Service cost |  | $ | 209 |  |  | $ | 213 |  |  | $ | 14 |  |  | $ | 19 |  |  | $ | 12 |  |  | $ | 11 |
Other retirement plans expense (income): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest cost |  |  | 254 |  |  |  | 240 |  |  |  | 8 |  |  |  | 10 |  |  |  | 10 |  |  |  | 10 |
Expected return on plan assets |  |  | (478 | ) |  |  | (447 | ) |  |  | (3 | ) |  |  | (13 | ) |  |  | — |  |  |  | — |
Amortization of prior service credit and other |  |  | (1 | ) |  |  | (2 | ) |  |  | (1 | ) |  |  | — |  |  |  | — |  |  |  | — |
|  |  | (225 | ) |  |  | (209 | ) |  |  | 4 |  |  |  | (3 | ) |  |  | 10 |  |  |  | 10 |
|  | $ | (16 | ) |  | $ | 4 |  |  | $ | 18 |  |  | $ | 16 |  |  | $ | 22 |  |  | $ | 21 |
|  | Nine Months Ended |
|  | U.S. Pension Plans |  |  | International Pension Plans |  |  | Postretirement Healthcare Plans |
|  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |  |  | 2022 |  |  | 2021 |
Service cost |  | $ | 625 |  |  | $ | 638 |  |  | $ | 43 |  |  | $ | 68 |  |  | $ | 36 |  |  | $ | 33 |
Other retirement plans expense (income): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest cost |  |  | 765 |  |  |  | 719 |  |  |  | 27 |  |  |  | 31 |  |  |  | 31 |  |  |  | 29 |
Expected return on plan assets |  |  | (1,433 | ) |  |  | (1,339 | ) |  |  | (23 | ) |  |  | (38 | ) |  |  | — |  |  |  | — |
Amortization of prior service credit and other |  |  | (5 | ) |  |  | (6 | ) |  |  | (2 | ) |  |  | (1 | ) |  |  | — |  |  |  | — |
MTM net loss |  |  | 36 |  |  |  | — |  |  |  | 224 |  |  |  | 52 |  |  |  | — |  |  |  | — |
|  |  | (637 | ) |  |  | (626 | ) |  |  | 226 |  |  |  | 44 |  |  |  | 31 |  |  |  | 29 |
|  | $ | (12 | ) |  | $ | 12 |  |  | $ | 269 |  |  | $ | 112 |  |  | $ | 67 |  |  | $ | 62 |
For 2022, 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 $500 million d uring the nine months of 2022. 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 introduced 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 were 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 PPA and move to the new 401(k) plan with the higher company match of up to 8%. Changes to the new 401(k) plan structure became effective 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. In the second quarter of 2022, we incurred a pre-tax, noncash MTM net loss of $36 million related to the U.S. FedEx Freight Pension Plan. During the second quarter of 2022, 21% of FedEx Freight Corporation (“FedEx Freight”) employees elected to move from the current pension/401(k) benefit structure to the new 401(k)-only structure with a higher company match effective January 1, 2022. The $36 million net loss consisted of a $75 million MTM loss due to a lower discount rate, partially offset by a $39 million curtailment gain. We incurred an additional pre-tax, noncash MTM net loss of $224 million in the second quarter of 2022 related to the termination of the TNT Express Netherlands Pension Plan. Effective October 1, 2021, the responsibility of all pension assets and liabilities of this plan was transferred to a separate, multi-employer pension plan. In the second quarter of 2021, we incurred a pre-tax, noncash MTM net loss of $52 million related to amendments to the TNT Express Netherlands Pension Plan. Benefits for approximately 2,100 employees were frozen effective December 31, 2020. Effective January 1, 2021, these employees began earning pension benefits under a separate, multi-employer pension plan. This $52 million net loss consisted of a $106 million MTM loss due to a lower discount rate and a $54 million curtailment gain.

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