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Employee Pension and Other Benefit Plans | 12 Months Ended
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Jun. 28, 2025
Retirement Benefits [Abstract] |
Employee Pension and Other Benefit Plans | Note 17. Employee Pension and Other Benefit Plans Employee 401(k) Plans The Company sponsors the Viavi Solutions 401(k) Plan (the 401(k) Plan), a defined contribution plan under ERISA, which provides retirement benefits for its eligible employees through tax deferred salary deductions. The 401(k) Plan allows employees to contribute up to 50% of their annual compensation, with contributions limited to $23,500 in calendar year 2025 as set by the Internal Revenue Service. For all eligible employees, the Company offers a 401(k) Plan that provides a 100% match of employees’ contributions up to the first 3% of annual compensation and 50% match on the next 2% of compensation. All matching contributions are made in cash and vest immediately. The Company’s matching contributions to the 401(k) Plan were $5.2 million, $5.3 million and $5.4 million in fiscal 2025, 2024 and 2023, respectively. Employee Defined Benefit Plans The Company is responsible for a non-pension post-retirement benefit obligation assumed from a past acquisition, which is closed to new participants. As of June 28, 2025 and June 29, 2024, the liability balances related to the non-pension post-retirement benefit plan were $0.3 million. The liability balances were included in Other non-current liabilities on the Consolidated Balance Sheets. The Company sponsors significant qualified and non-qualified pension plans for certain past and present employees in the U.K. and Germany including the plan assumed in a prior acquisition. These pension plans have been closed to new participants and no additional service costs are being accrued, except for certain plans in Germany assumed in connection with an acquisition during fiscal 2010. Benefits are generally based upon years of service and compensation or stated amounts for each year of service. As of June 28, 2025, the U.K. plan was fully funded while the other plans were unfunded. The Company’s policy for funded plans is to make contributions equal to or greater than the requirements prescribed by law or regulation. For unfunded plans, the Company pays the post-retirement benefits when due. Future estimated benefit payments are summarized under the Future Benefit Payments section below. No other required contributions are expected in fiscal 2026, but the Company, at its discretion, can make contributions to one or more of the defined benefit plans. In July 2024, the U.K. Court of Appeal upheld a ruling in the matter of Virgin Media Limited v NTL Pension Trustees II Limited, a decision that VIAVI was not a party to or involved in, that certain historical amendments for contracted out defined benefit schemes were invalid if they were not accompanied by the correct actuarial confirmation. In June 2025, Department for Work and Pensions announced that the government will introduce legislation to give affected pension schemes the ability to retrospectively obtain written actuarial confirmation that historic benefit changes met the necessary standards. The prospective legislation could significantly reduce the potential negative impact of the court decision in the Virgin Media case on U.K. pension schemes, including the Company’s U.K pension scheme, as there would be an opportunity to pursue retrospective confirmation if necessary or applicable to validate historical amendments. No expected timeline of when the legislation will come out has been announced. The Company continues to monitor developments and assess potential impact for its U.K. pension scheme. The Company accounts for its obligations under these pension plans in accordance with the authoritative guidance which requires the Company to record its obligation to the participants, as well as the corresponding net periodic cost. The Company determines its obligation to the participants and its net periodic cost principally using actuarial valuations provided by third-party actuaries. The obligation the Company records on its Consolidated Balance Sheets is reflective of the total PBO and the fair value of plan assets. The following table presents the components of the net periodic benefit cost for the pension and benefits plans (in millions):
| Years Ended
| June 28, 2025 |  | June 29, 2024 |  | July 1, 2023
Interest cost | $ | 3.3 |  |  | $ | 3.3 |  |  | $ | 2.7 |
Expected return on plan assets | (1.8) |  |  | (1.9) |  |  | (1.7) |
Recognized net actuarial losses (gains) | 0.2 |  |  | 0.1 |  |  | (0.1) |
Net periodic benefit cost | $ | 1.7 |  |  | $ | 1.5 |  |  | $ | 0.9 |
The components of net periodic pension cost are included in Cost of revenues, R&D and SG&A in the Consolidated Statements of Operations. The Company’s accumulated other comprehensive income (loss) includes unrealized net actuarial (gains) losses. The amount of unrealized net actuarial (gain) loss expected to be recognized in net periodic benefit cost during fiscal 2026 is $0.2 million. The changes in the benefit obligations and plan assets of the pension and benefits plans were (in millions):
| Pension Benefit Plans
| June 28, 2025 |  | June 29, 2024
Change in benefit obligation |  |  |
Benefit obligation at beginning of year | $ | 83.7 |  |  | $ | 86.1 |
Interest cost | 3.3 |  |  | 3.3 |
Actuarial (gains) losses | (3.1) |  |  | 1.5 |
Benefits paid | (6.2) |  |  | (6.1) |
Foreign exchange impact | 7.2 |  |  | (1.1) |
Benefit obligation at end of year | $ | 84.9 |  |  | $ | 83.7 |
Change in plan assets |  |  |
Fair value of plan assets at beginning of year | $ | 32.0 |  |  | $ | 31.1 |
Actual return on plan assets | (1.5) |  |  | 0.7 |
Employer contributions | 6.0 |  |  | 6.5 |
Benefits paid | (6.2) |  |  | (6.1) |
Foreign exchange impact | 2.6 |  |  | (0.2) |
Fair value of plan assets at end of year | 32.9 |  |  | 32.0 |
Funded status | (52.0) |  |  | (51.7) |
Accumulated benefit obligation | $ | 84.9 |  |  | $ | 83.7 |
| Pension Benefit Plans
| June 28, 2025 |  | June 29, 2024
Amount recognized on the Consolidated Balance Sheets at end of year: |  |  |
Non-current assets | $ | 7.6 |  |  | $ | 6.6 |
Current liabilities | 5.8 |  |  | 7.5 |
Non-current liabilities | 53.8 |  |  | 50.8 |
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss): |  |  |
Net actuarial gain (loss) | $ | 0.1 |  |  | $ | (2.1) |
Amortization of accumulated net actuarial losses | 0.2 |  |  | 0.1 |
Total recognized in other comprehensive income (loss) | $ | 0.3 |  |  | $ | (2.0) |
During each of fiscal 2025 and fiscal 2024, the Company contributed £1.0 million or approximately $1.3 million to its U.K. pension plan. These contributions allowed the Company to comply with regulatory funding requirements. Assumptions Underlying both the calculation of the PBO and net periodic cost are actuarial valuations. These valuations use participant-specific information such as salary, age, years of service, and assumptions about interest rates, compensation increases and other factors. At a minimum, the Company evaluates these assumptions annually and makes changes as necessary. The discount rate reflects the estimated rate at which the pension benefits could be effectively settled. In developing the discount rate, the Company considered the yield available on an appropriate AA corporate bond index, adjusted to reflect the term of the scheme’s liabilities as well as a yield curve model developed by the Company’s actuaries. The expected return on assets was estimated by using the weighted average of the real expected long-term return (net of inflation) on the relevant classes of assets based on the target asset mix and adding the chosen inflation assumption. The following table summarizes the weighted average assumptions used to determine net periodic cost and benefit obligation for the Company’s U.K. and German pension plans:
| Pension Benefit Plans
| June 28, 2025 |  | June 29, 2024 |  | July 1, 2023
Used to determine net periodic cost at end of year: |  |  |  |  |
Discount rate | 4.2 | % |  | 4.1 | % |  | 4.1 | %
Expected long-term return on plan assets | 5.3 | % |  | 5.9 | % |  | 5.9 | %
Rate of pension increase | 2.4 | % |  | 2.5 | % |  | 2.5 | %
Used to determine benefit obligation at end of year: |  |  |  |  |
Discount rate | 4.2 | % |  | 4.1 | % |  | 4.1 | %
Rate of pension increase | 2.4 | % |  | 2.5 | % |  | 2.5 | %
Investment Policies and Strategies The Company’s investment objectives for its funded pension plan are to ensure that there are sufficient assets available to pay out members’ benefits as and when they arise and that, should the plan be discontinued at any point in time, there would be sufficient assets to meet the discontinuance liabilities. To achieve these objectives, the trustee of the U.K. pension plan is responsible for regularly monitoring the funding position and managing the risk by investing in assets expected to perform approximately in line with the liabilities and help minimize volatility in the funding position. The trustee invests in a range of frequently traded funds (pooled funds) rather than direct holdings in individual securities to maintain liquidity, achieve diversification and reduce the potential for risk concentration. The funded plan assets are managed by professional third-party investment managers. Fair Value Measurement of Plan Assets The following table sets forth the plan assets at fair value and the percentage of assets allocations as of June 28, 2025 (in millions):
| Target Allocation |  | Total |  | Percentage of Plan Assets |  | Level 1 |  | Level 2
Assets: |  |  |  |  |  |  |  |  |
Fixed income | 100 | % |  | 32.5 |  |  | 98.8 | % |  | — |  |  | 32.5 |
Cash | — | % |  | 0.4 |  |  | 1.2 | % |  | 0.4 |  |  | — |
Total assets |  |  | $ | 32.9 |  |  | 100.0 | % |  | $ | 0.4 |  |  | $ | 32.5 |
The following table sets forth the plan’s assets at fair value and the percentage of assets allocations as of June 29, 2024 (in millions):
| Target Allocation |  | Total |  | Percentage of Plan Assets |  | Level 1 |  | Level 2
Assets: |  |  |  |  |  |  |  |  |
Equity / Other | 40 | % |  | $ | 12.1 |  |  | 37.8 | % |  | $ | — |  |  | $ | 12.1 |
Fixed income | 60 | % |  | 17.0 |  |  | 53.1 | % |  | — |  |  | 17.0 |
Cash | — | % |  | 2.9 |  |  | 9.1 | % |  | 2.9 |  |  | — |
Total assets |  |  | $ | 32.0 |  |  | 100.0 | % |  | $ | 2.9 |  |  | $ | 29.1 |
The Company’s pension assets consist of multiple institutional funds (pension funds) of which the fair values are based on the quoted prices of the underlying securities. Pension funds are classified as Level 2 assets since such funds are not directly traded in active markets. Fixed income consists of several funds that invest primarily in index-linked Gilts (over 5 years), Gilts index (over 15 years), sterling-denominated investment grade corporate bonds and overseas government bonds. Equity / Other consisted of several funds that invested primarily in U.K. equities and other overseas equities as well as a small portion in liquid alternatives. Future Benefit Payments The following table reflects the expected benefit payments to defined benefit pension plan participants. These payments have been estimated based on the same assumptions used to measure the Company’s PBO at fiscal year end and include benefits attributable to estimated future compensation increases (in millions):
Fiscal Years |
2026 | $ | 7.4 |
2027 | 6.3 |
2028 | 6.7 |
2029 | 6.6 |
2030 | 5.9 |
2031-2035 | 27.5 |

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