Pension and Other Benefit Plans

3 Months Ended

Jun. 30, 2019

The Company offers a number of pension and other post-retirement benefit ("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 represent an insignificant portion of the Company's pension and other post-retirement benefits. As a result, the disclosures below include the Company's U.S. and non-U.S. pension plans on a global consolidated basis.

The Company contributed $10 million to the defined benefit pension and other post-retirement benefit plans during the three months ended June 30, 2019. The Company expects to contribute an additional $71 million during the remainder of fiscal 2020, which does not include certain salary deferral programs and future potential termination benefits related to the Company's potential restructuring activities.

As additional contractual termination benefits for certain employees are part of the restructuring plans (see Note 14 - "Restructuring Costs"), the Company accrued $11 million for fiscal 2020. This amount is reflected in the projected benefit obligation and in the net periodic pension cost.

The components of net periodic pension expense were:



	Three Months Ended
(in millions)	June 30, 2019			June 30, 2018
Service cost	$	23		$	23
Interest cost	60			65
Expected return on assets	(161		)	(149		)
Amortization of prior service costs	(2		)	(1		)
Contractual termination benefit	11			—
Curtailment gain	—			(1		)
Net periodic pension income	$	(69	)	$	(63	)

The service cost component of net periodic pension income is presented in cost of services and selling, general and administrative and the other components of net periodic pension income are presented in other income, net in the Company’s statements of operations.

The weighted-average rates used to determine net periodic pension cost were:



	Three Months Ended
	June 30, 2019		June 30, 2018
Discount or settlement rates	2.4	%	2.3	%
Expected long-term rates of return on assets	5.8	%	5.3	%
Rates of increase in compensation levels	2.0	%	2.1	%

Deferred Compensation Plans

Effective as of the HPES Merger, DXC assumed sponsorship of the Computer Sciences Corporation Deferred Compensation Plan, which was renamed the “DXC Technology Company Deferred Compensation Plan” (the “DXC DCP”) and adopted 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, which is included in other long-term liabilities in the Company's balance sheets, amounted to $54 million as of June 30, 2019 and $59 million as of March 31, 2019.