Retirement benefits

9 Months Ended

May 31, 2025

The Company sponsors several retirement plans, including defined benefit plans, defined contribution plans and a post-retirement 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.

On November 23, 2023, with financial support from the Company, Boots Pensions Limited (“Trustee”), in its capacity as trustee of the Boots Plan, entered into a Bulk Purchase Annuity Agreement (“BPA”) with Legal & General Assurance Society Limited (“Legal & General”) to insure the benefits of all 53,000 of its members.

Under the BPA, the Trustee acquired a bulk annuity policy (the “Buy-In”) from Legal & General which will fund ongoing and future pension benefit payments to the Boots Plan members. The BPA is being funded through the existing Boots Plan assets, as well as accelerated and incremental pre-tax contributions by the Company to the Boots Plan. As of May 31, 2025, the Company has made approximately $448 million of contributions related to the Buy-In. The Company estimates it will make remaining contributions of approximately $450 million by the end of fiscal 2026.

Components of net periodic pension cost (income) 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	2025		2024		2025		2024
Service costs	Selling, general and administrative expenses	$	1	$	1	$	2	$	3
Interest costs	Other income (expense), net	63		68		187		202
Expected returns on plan assets/other	Other income (expense), net	(62)		(70)		(185)		(206)
Total net periodic pension cost (income)		$	2	$	(1)	$	5	$	(1)