Retirement benefits

9 Months Ended

May 31, 2023

The Company sponsors several retirement plans, including defined benefit plans, defined contribution plans and a postretirement health plan.

Defined benefit pension plans (non-U.S. plans)

The Company has various defined benefit pension plans outside the U.S. The principal defined benefit pension plan is the Boots Pension Plan (the “Boots Plan”), which covers certain employees in the UK. The Boots Plan is a funded final salary defined benefit plan providing pensions and death benefits to members. The Boots Plan was closed to future accrual effective July 1, 2010, with pensions calculated based on salaries up until that date. The Boots Plan is governed by a trustee board, which is independent of the Company. The plan is subject to a full funding actuarial valuation on a triennial basis.

Components of net periodic pension (income) costs for the defined benefit pension plans (in millions):


		Three months ended May 31,				Nine months ended May 31,
	Location in Consolidated Condensed Statements of Earnings	2023		2022		2023		2022
Service costs	Selling, general and administrative expenses	$	1	$	1	$	3	$	4
Interest costs	Other income, net	64		37		186		115
Expected returns on plan assets/other	Other income, net	(81)		(70)		(237)		(216)
Total net periodic pension income		$	(17)	$	(32)	$	(48)	$	(97)

The Company made cash contributions to its defined benefit pension plans of $19 million for the nine months ended May 31, 2023, which primarily related to committed payments. The Company plans to contribute an additional $17 million to its defined benefit pension plans during the remainder of fiscal 2023.

Defined contribution plans

The principal retirement plan for U.S. employees is the Walgreen Profit-Sharing Retirement Trust, to which both the Company and participating employees contribute. The Company’s contribution is in the form of a guaranteed match which is made pursuant to the applicable plan document approved by the Walgreen Co. Board of Directors. Plan activity is reviewed periodically by certain Committees of the Walgreens Boots Alliance Board of Directors. The profit-sharing provision is an expense of $59 million and $184 million for the three and nine months ended May 31, 2023, respectively, compared to an expense of $58 million and $181 million for the three and nine months ended May 31, 2022, respectively.

The Company also has certain contract based defined contribution arrangements. The principal one is UK based to which both the Company and participating employees contribute. The cost recognized in the Consolidated Condensed Statement of Earnings was $21 million and $62 million for the three and nine months ended May 31, 2023, respectively, compared to an expense of $21 million and $69 million for the three and nine months ended May 31, 2022, respectively.