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Pension and Other Benefit Plans | 12 Months Ended
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Mar. 31, 2025
Retirement Benefits [Abstract] |
Pension and Other Benefit Plans | Pension and Other Benefit Plans The Company offers a number of pension and OPEB plans, life insurance benefits, deferred compensation and defined contribution plans. Most of the Company's pension plans are not admitting new participants; therefore, changes to pension liabilities are primarily due to market fluctuations of investments for existing participants and changes in interest rates. Defined Benefit Plans The Company sponsors a number of defined benefit and post-retirement medical benefit plans for the benefit of eligible employees. The benefit obligations of the Company's U.S. pension, U.S. OPEB, and non-U.S. OPEB plans represent an insignificant portion of the Company's pension and other post-retirement benefit plans. As a result, the disclosures below include the Company's U.S. and non-U.S. pension and OPEB plans on a global consolidated basis. Eligible employees are enrolled in defined benefit pension plans in their country of domicile. The defined benefit pension plans in the U.K. represents the largest plans. In addition, healthcare, dental and life insurance benefits are also provided to certain non-U.S. employees. A significant number of employees outside the United States are covered by government sponsored programs at no direct cost to the Company other than related payroll taxes. During fiscal 2023, pension trustees and the Company took actions to reduce the volatility of a defined benefit pension plan in the U.K., including entering into pension risk transfer transactions involving the purchase of annuity contracts for portions of its outstanding defined benefit pension obligations using assets from the pension trust. In connection with this transaction, the pension trustees transferred $1.0 billion of gross defined benefit pension obligations and related plan assets to an insurance company for approximately 5,000 U.K. plan participants. In addition, the Company recognized a noncash pension settlement charge of $361 million, which includes the accelerated recognition of prior service credit that was included in accumulated other comprehensive loss. This transaction is irrevocable, and as a result of the transaction, the pension trustees and the Company were relieved of all responsibility for the related pension obligations and the insurance company is now required to pay and administer the retirement benefits. The change in projected benefit obligation for fiscal year 2025 is primarily related to interest cost, benefits paid, and actuarial gains. Actuarial gains were primarily due to discount rate increases in the U.K. Projected Benefit Obligations
|  | As of
(in millions) |  | March 31, 2025 |  | March 31, 2024
Projected benefit obligation at beginning of year |  | $ | 6,915 |  |  | $ | 6,937 |
Service cost |  | 52 |  |  | 53 |
Interest cost |  | 300 |  |  | 307 |
Plan participants’ contributions |  | 7 |  |  | 21 |
Amendments |  | 13 |  |  | 6 |
Business/contract acquisitions/divestitures |  | — |  |  | 4 |
Settlement/curtailment |  | (23) |  |  | (268) |
Actuarial (gain) loss |  | (908) |  |  | 67 |
Benefits paid |  | (286) |  |  | (292) |
Foreign currency exchange rate changes |  | 91 |  |  | 98 |
Other |  | (17) |  |  | (18) |
Projected benefit obligation at end of year |  | $ | 6,144 |  |  | $ | 6,915 |
The following table summarizes the weighted average rates used in the determination of the Company’s benefit obligations:
|  | Fiscal Years Ended
|  | March 31, 2025 |  | March 31, 2024
Discount rate |  | 5.1 | % |  | 4.4 | %
Rates of increase in compensation levels |  | 2.2 | % |  | 2.4 | %
Interest Crediting Rate |  | 3.3 | % |  | 2.7 | %
Fair Value of Plan Assets and Funded Status
|  | As of |  |  |  |
(in millions) |  | March 31, 2025 |  | March 31, 2024 |  |  |  |
Fair value of plan assets at beginning of year |  | $ | 7,318 |  |  | $ | 7,636 |  |  |  |  |
Actual return on plan assets |  | (229) |  |  | 67 |  |  |  |  |
Employer contribution |  | 15 |  |  | 49 |  |  |  |  |
Plan participants’ contributions |  | 7 |  |  | 21 |  |  |  |  |
Benefits paid |  | (286) |  |  | (292) |  |  |  |  |
Contractual termination benefits |  | — |  |  | 1 |  |  |  |  |
Plan settlement |  | (21) |  |  | (265) |  |  |  |  |
Foreign currency exchange rate changes |  | 108 |  |  | 118 |  |  |  |  |
Other |  | (17) |  |  | (17) |  |  |  |  |
Fair value of plan assets at end of year |  | $ | 6,895 |  |  | $ | 7,318 |  |  |  |  |
Funded status at end of year |  | $ | 751 |  |  | $ | 403 |  |  |  |  |
Selected Information
|  | As of |  |  |  |
(in millions) |  | March 31, 2025 |  | March 31, 2024 |  |  |  |
Other assets |  | $ | 1,181 |  |  | $ | 874 |  |  |  |  |
Accrued expenses and other current liabilities |  | (30) |  |  | (34) |  |  |  |  |
Non-current pension obligations |  | (387) |  |  | (423) |  |  |  |  |
Other long-term liabilities - OPEB |  | (13) |  |  | (14) |  |  |  |  |
Net amount recorded |  | $ | 751 |  |  | $ | 403 |  |  |  |  |
Accumulated benefit obligation |  | $ | 6,084 |  |  | $ | 6,842 |  |  |  |  |
|  | Benefit Plans with Projected Benefit Obligation in Excess of Plan Assets |  | Benefit Plans with Accumulated Benefit Obligation in Excess of Plan Assets
(in millions) |  | March 31, 2025 |  | March 31, 2024 |  | March 31, 2025 |  | March 31, 2024
Projected benefit obligation |  | $ | 1,048 |  |  | $ | 1,113 |  |  | $ | 741 |  |  | $ | 777 |
Accumulated benefit obligation |  | $ | 994 |  |  | $ | 1,047 |  |  | $ | 708 |  |  | $ | 744 |
Fair value of plan assets |  | $ | 617 |  |  | $ | 646 |  |  | $ | 324 |  |  | $ | 327 |
Net Periodic Pension Cost
|  |  |  |  |  |  |  | Fiscal Years Ended
(in millions) |  |  |  |  |  |  |  | March 31, 2025 |  | March 31, 2024 |  | March 31, 2023
Service cost |  |  |  |  |  |  |  | $ | 52 |  |  | $ | 53 |  |  | $ | 73 |
Interest cost |  |  |  |  |  |  |  | 300 |  |  | 307 |  |  | 254 |
Expected return on assets |  |  |  |  |  |  |  | (455) |  |  | (446) |  |  | (498) |
Amortization of prior service credit |  |  |  |  |  |  |  | (5) |  |  | (6) |  |  | (7) |
Subtotal |  |  |  |  |  |  |  | (108) |  |  | (92) |  |  | (178) |
Settlement/curtailment (gain) loss |  |  |  |  |  |  |  | — |  |  | (2) |  |  | 361 |
Recognition of actuarial (gain) loss |  |  |  |  |  |  |  | (232) |  |  | 447 |  |  | 1,070 |
Net periodic pension (income) expense |  |  |  |  |  |  |  | $ | (340) |  |  | $ | 353 |  |  | $ | 1,253 |
The service cost component of net periodic pension (income) expense is presented in costs of services and selling, general and administrative and the other components of net periodic pension (income) expense are presented in other (income) expense, net in the Company’s statements of operations. The weighted-average rates used to determine net periodic pension cost were:
|  | Fiscal Years Ended |  |
|  | March 31, 2025 |  | March 31, 2024 |  | March 31, 2023 |  |  |  |  |  |
Discount or settlement rates |  | 4.4 | % |  | 4.5 | % |  | 2.7 | % |  |  |  |  |  |
Expected long-term rates of return on assets |  | 6.3 | % |  | 6.0 | % |  | 4.3 | % |  |  |  |  |  |
Rates of increase in compensation levels |  | 2.4 | % |  | 2.8 | % |  | 2.9 | % |  |  |  |  |  |
Interest Crediting Rate |  | 2.7 | % |  | 4.5 | % |  | 4.0 | % |  |  |  |  |  |
The following is a summary of amounts in accumulated other comprehensive loss, before tax effects:
|  | Fiscal Years Ended
(in millions) |  | March 31, 2025 |  | March 31, 2024
Prior service credit |  | $ | (158) |  |  | $ | (176) |
Estimated Future Contributions and Benefits Payments
(in millions) |  |  |  |
Employer contributions: |  |  |  |
2026 |  | $ | 34 |  |  |
Benefit Payments: |  |  |  |
2026 |  | $ | 337 |  |  |
2027 |  | 340 |  |  |
2028 |  | 353 |  |  |
2029 |  | 361 |  |  |
2030 |  | 371 |  |  |
2031 and thereafter |  | 1,982 |  |  |
Total |  | $ | 3,744 |  |  |
Fair Value of Plan Assets The tables below set forth the fair value of plan assets by asset category within the fair value hierarchy:
|  |  | As of March 31, 2025
(in millions) |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Equity: |  |  |  |  |  |  |  |
| Global/International Equity commingled funds |  | $ | 21 |  |  | $ | 652 |  |  | $ | — |  |  | $ | 673 |
| U.S./North American Equity commingled funds |  | 5 |  |  | — |  |  | — |  |  | 5 |
Fixed Income: |  |  |  |  |  |  |  |
| Non-U.S. Government funds |  | 3 |  |  | 76 |  |  | — |  |  | 79 |
| Fixed income commingled funds |  | 38 |  |  | 323 |  |  | — |  |  | 361 |
| Corporate and other bonds |  | 1 |  |  | 3,145 |  |  | — |  |  | 3,146 |
Alternatives: |  |  |  |  |  |  |  |
| Other Alternatives (1) |  | — |  |  | 783 |  |  | 1,480 |  |  | 2,263 |
| Hedge Funds(2) |  | — |  |  | — |  |  | 37 |  |  | 37 |
Other Assets |  | — |  |  | 19 |  |  | 77 |  |  | 96 |
Insurance contracts |  | — |  |  | 111 |  |  | — |  |  | 111 |
Cash and cash equivalents |  | 112 |  |  | 12 |  |  | — |  |  | 124 |
Totals |  | $ | 180 |  |  | $ | 5,121 |  |  | $ | 1,594 |  |  | $ | 6,895 |
|  | As of March 31, 2024
(in millions) |  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Equity: |  |  |  |  |  |  |  |
| Global/International Equity commingled funds |  | $ | 21 |  |  | $ | 662 |  |  | $ | — |  |  | $ | 683 |
| U.S./North American Equity commingled funds |  | 5 |  |  | — |  |  | — |  |  | 5 |
Fixed Income: |  |  |  |  |  |  |  |
| Non-U.S. Government funds |  | — |  |  | 29 |  |  | — |  |  | 29 |
| Fixed income commingled funds |  | 1 |  |  | 205 |  |  | 12 |  |  | 218 |
| Fixed income mutual funds |  | — |  |  | — |  |  | — |  |  | — |
| Corporate and other bonds |  | — |  |  | 3,678 |  |  | 91 |  |  | 3,769 |
Alternatives: |  |  |  |  |  |  |  |
| Other Alternatives (1) |  | — |  |  | 943 |  |  | 1,018 |  |  | 1,961 |
| Hedge Funds(2) |  | — |  |  | 8 |  |  | 48 |  |  | 56 |
Other Assets |  | 28 |  |  | 26 |  |  | 60 |  |  | 114 |
Insurance contracts |  | — |  |  | 91 |  |  | — |  |  | 91 |
Cash and cash equivalents |  | 347 |  |  | 45 |  |  | — |  |  | 392 |
Totals |  | $ | 402 |  |  | $ | 5,687 |  |  | $ | 1,229 |  |  | $ | 7,318 |
(1) Represents real estate and other commingled funds consisting mainly of equities, bonds, or commodities. (2) Represents investments in diversified fund of hedge funds. Changes in fair value measurements of level 3 investments for the defined benefit plans were as follows:
(in millions) |  |
Balance as of March 31, 2023 |  | $ | 1,201 |
Actual return on plan assets held at the reporting date |  | 14 |
Purchases, sales and settlements |  | (18) |
Changes due to exchange rates |  | 32 |
Balance as of March 31, 2024 |  | 1,229 |
Actual return on plan assets held at the reporting date |  | 97 |
Purchases, sales and settlements |  | 279 |
Transfers in and / or out of Level 3 |  | (35) |
Changes due to exchange rates |  | 24 |
Balance as of March 31, 2025 |  | $ | 1,594 |
Domestic and global equity accounts are categorized as Level 1 if the securities trade on national or international exchanges and are valued at their last reported closing price. Equity assets in commingled funds reporting a net asset value are categorized as Level 2 and valued using broker dealer bids or quotes of securities with similar characteristics. Fixed income accounts are categorized as Level 1 if traded on a publicly quoted exchange or as level 2 if investments in corporate bonds are primarily investment grade bonds, generally priced using model-based pricing methods that use observable market data as inputs. Broker dealer bids or quotes of securities with similar characteristics may also be used. Alternative investment fund securities are categorized as Level 1 if held in a mutual fund or in a separate account structure and actively traded through a recognized exchange, or as Level 2 if they are held in commingled or collective account structures and are actively traded. Alternative investment fund securities are classified as Level 3 if they are held in Limited Company or Limited Partnership structures or cannot otherwise be classified as Level 1 or Level 2. Other assets represent property holdings by certain pension plans. As above, the property holdings represent a master lease arrangement entered into by DXC in the U.K. and certain U.K. pension plans as a financing transaction. Insurance contracts purchased to cover benefits payable to retirees are valued using the assumptions used to value the projected benefit obligation. Cash equivalents that have quoted prices in active markets are classified as Level 1. Short-term money market commingled funds are categorized as Level 2 and valued at cost plus accrued interest which approximates fair value. Plan Asset Allocations
|  | As of |  |  |  |  |  |
Asset Category |  | March 31, 2025 |  | March 31, 2024 |  |  |  |  |  |
Equity securities |  | 10 | % |  | 9 | % |  |  |  |  |  |
Debt securities |  | 52 | % |  | 55 | % |  |  |  |  |  |
Alternatives |  | 35 | % |  | 29 | % |  |  |  |  |  |
Cash and other |  | 3 | % |  | 7 | % |  |  |  |  |  |
Total |  | 100 | % |  | 100 | % |  |  |  |  |  |
Plan assets are held in a trust that includes commingled funds subject to country specific regulations and invested primarily in commingled funds. For the U.K. pension plans, the Company's largest pension plans by assets and projected liabilities, a target allocation by asset class was developed to achieve their long-term objectives. Asset allocations are monitored closely and investment reviews regarding asset strategy are conducted regularly with internal and external advisors. The Company’s investment goals and risk management strategy for plan assets evaluates a number of factors, including the time horizon of the plans’ obligations. Plan assets are invested in various asset classes that are expected to produce a sufficient level of diversification in order to reduce risk, yet produces a reasonable amount of return on investment over the long term. Sufficient liquidity is maintained to meet benefit obligations as they become due. Third party investment managers are employed to invest assets in both passively-indexed and actively-managed strategies. Equities are primarily invested broadly in domestic and foreign companies across market capitalizations and industries. Fixed income securities are invested broadly, primarily in government treasury, corporate credit, mortgage backed and asset backed investments. Alternative investment allocations are included in selected plans to achieve greater portfolio diversity intended to reduce the overall volatility risk of the plans. Plan asset risks include longevity, inflation, and other changes in market conditions that could reduce the value of plan assets. Also, a decline in the yield of high quality corporate bonds may adversely affect discount rates resulting in an increase in DXC's pension and other post-retirement obligations. These risks, among others, could cause the plans’ funded status to deteriorate, resulting in an increased reliance on Company contributions. Derivatives are permitted although their current use is limited within traditional funds and broadly allowed within alternative funds. Derivatives are used for inflation risk management and within the liability driven investing strategy. The Company also has investments in insurance contracts to pay plan benefits in certain countries. Return on Assets The Company consults with internal and external advisors regarding the expected long-term rate of return on assets. The Company uses various sources in its approach to compute the expected long-term rate of return of the major asset classes expected in each of the plans. DXC utilizes long-term, asset class return assumptions of typically 30 years, which are provided by external advisors. Consideration is also given to the extent active management is employed in each asset class and also to management expenses. A single expected long-term rate of return is calculated for each plan by assessing the plan's expected asset allocation strategy, the benefits of diversification therefrom, historical excess returns from actively managed traditional investments, expected long-term returns for alternative investments and expected investment expenses. The resulting composite rate of return is reviewed by internal and external parties for reasonableness. Retirement Plan Discount Rate The U.K. discount rate is based on the yield curve approach using the U.K. Aon GBP Single Agency AA Corporates-Only Curve. Defined Contribution Plans The Company sponsors defined contribution plans for substantially all U.S. employees and certain foreign employees. For certain plans, the Company will match employee contributions. The plans allow employees to contribute a portion of their earnings in accordance with specified guidelines. During fiscal 2025, 2024 and 2023, the Company contributed $191 million, $188 million and $203 million, respectively, to its defined contribution plans. As of March 31, 2025, plan assets included 2,069,090 shares of the Company’s common stock. Deferred Compensation Plans DXC sponsors two Deferred Compensation Plans, the “DXC Technology Company Deferred Compensation Plan” (the “DXC DCP”), and the Enterprise Services Executive Deferred Compensation Plan (the “ES DCP”). Both plans are non-qualified deferred compensation plans maintained for a select group of management, highly compensated employees and non-employee directors. The DXC DCP covers eligible employees who participated in CSC’s Deferred Compensation Plan prior to the HPES Merger. The ES DCP covers eligible employees who participated in the HPE Executive Deferred Compensation Plan prior to the HPES Merger. Both plans allow participating employees to defer the receipt of current compensation to a future distribution date or event above the amounts that may be deferred under DXC’s tax-qualified 401(k) plan, the DXC Technology Matched Asset Plan. Neither plan provides for employer contributions. As of April 3, 2017, the ES DCP does not admit new participants. Certain management and highly compensated employees are eligible to defer all, or a portion of, their regular salary that exceeds the limitation set forth in Internal Revenue Section 401(a)(17) and all or a portion of their incentive compensation. Non-employee directors are eligible to defer up to 100% of their cash compensation. The liability under the plan, which is included in other long-term liabilities in the Company's balance sheets, amounted to $28 million as of March 31, 2025 and $31 million as of March 31, 2024. The Company's expense under the Plan totaled $2 million and $5 million for fiscal 2025 and 2024, respectively.

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