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.

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 plans on a global consolidated basis.

Eligible employees are enrolled in defined benefit pension plans in their country of domicile. The Contributory defined benefit pension plan in the United Kingdom represents the largest plan. 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.

The Company accrued $10 million, $3 million and $13 million, for fiscal 2020, 2019 and 2018, respectively, as additional contractual termination benefits for certain employees are part of the Company's restructuring plans. These amounts are reflected in the projected benefit obligation and in the net periodic pension cost.



	As of
(in millions)	March 31, 2020			March 31, 2019
Projected benefit obligation at beginning of year	$	11,016		$	11,384
Service cost	92			88
Interest cost	237			253
Plan participants’ contributions	30			13
Amendments	—			27
Business/contract acquisitions/divestitures	12			—
Contractual termination benefits	10			3
Settlement/curtailment	(60		)	(49		)
Actuarial loss (gain)	(362		)	286
Benefits paid	(359		)	(344		)
Foreign currency exchange rate changes	(457		)	(818		)
Other	(9		)	173
Projected benefit obligation at end of year	$	10,150		$	11,016



	As of
(in millions)	March 31, 2020			March 31, 2019
Fair value of plan assets at beginning of year	$	11,343		$	11,574
Actual return on plan assets	526			700
Employer contribution	108			78
Plan participants’ contributions	30			13
Benefits paid	(359		)	(344		)
Business/contract acquisitions/divestitures	7			—
Contractual termination benefits	15			17
Plan settlement	(63		)	(38		)
Foreign currency exchange rate changes	(507		)	(837		)
Other	(10		)	180
Fair value of plan assets at end of year	$	11,090		$	11,343

Funded status at end of year	$	940		$	327



	As of
(in millions)	March 31, 2020			March 31, 2019
Other assets	$	1,735		$	1,157
Accrued expenses and other current liabilities	(16		)	(20		)
Non-current pension obligations	(761		)	(790		)
Other long-term liabilities - OPEB	(18		)	(20		)
Net amount recorded	$	940		$	327

Accumulated benefit obligation	$	10,072		$	10,893



	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, 2020		March 31, 2019		March 31, 2020		March 31, 2019
Projected benefit obligation	$	2,191	$	2,329	$	2,159	$	2,070
Accumulated benefit obligation	$	2,131	$	2,230	$	2,108	$	2,004
Fair value of plan assets	$	1,397	$	1,494	$	1,369	$	1,255



	Fiscal Years Ended
(in millions)	March 31, 2020			March 31, 2019			March 31, 2018
Service cost	$	92		$	88		$	121
Interest cost	237			253			249
Expected return on assets	(651		)	(570		)	(534		)
Amortization of transition obligation	—			—			1
Amortization of prior service costs	(9		)	(15		)	(18		)
Contractual termination benefit	10			3			13
Settlement/curtailment gain	7			(10		)	(42		)
Recognition of actuarial (gain) loss	(252		)	153			(178		)
Net periodic pension (income) expense	$	(566	)	$	(98	)	$	(388	)

The service cost component of net periodic pension (income) expense 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. See Note 1 - "Summary of Significant Accounting Policies," for further discussion of the Company's adoption of ASU 2017-07 and its impact on the presentation of net periodic pension costs.

Estimated prior service credit of $8 million will be amortized from AOCI into net periodic pension cost over the next fiscal year. The weighted-average rates used to determine net periodic pension cost were:



	Fiscal Years Ended
	March 31, 2020		March 31, 2019		March 31, 2018
Discount or settlement rates	2.4	%	2.5	%	2.5	%
Expected long-term rates of return on assets	5.8	%	5.3	%	4.9	%
Rates of increase in compensation levels	2.0	%	2.1	%	2.7	%



		As of March 31, 2020
(in millions)		Level 1		Level 2		Level 3		Total
Equity:
	US Domestic Stocks	$	—	$	3	$	—	$	3
	Global Stocks	—		3		—		3
	Global/International Equity commingled funds	315		1,763		—		2,078
	Global equity mutual funds	8		—		—		8
	U.S./North American Equity commingled funds	1		4		—		5
Fixed Income:
	Non-U.S. Government funds	136		—		—		136
	Fixed income commingled funds	55		71		—		126
	Fixed income mutual funds	3		—		—		3
	Corporate bonds	1		4,807		—		4,808
Alternatives:
	Other Alternatives ⁽¹⁾	—		2,038		1,297		3,335
	Hedge Funds⁽²⁾	2		7		2		11
Other Assets		87		229		59		375
Insurance contracts		—		136		—		136
Cash and cash equivalents		61		2		—		63
Totals		$	669	$	9,063	$	1,358	$	11,090



		As of March 31, 2019
(in millions)		Level 1		Level 2		Level 3		Total
Equity:
	US Domestic Stocks	$	1	$	—	$	—	$	1
	Global Stocks	10		13		—		23
	Global/International Equity commingled funds	399		2,156		—		2,555
	Global equity mutual funds	49		325		—		374
	U.S./North American Equity commingled funds	1		10		—		11
Fixed Income:
	Non-U.S. Government funds	215		29		—		244
	Fixed income commingled funds	6		4,807		—		4,813
	Fixed income mutual funds	2		1		—		3
	Corporate bonds	—		2		—		2
Alternatives:
	Other Alternatives ⁽¹⁾	6		1,880		982		2,868
	Hedge Funds⁽²⁾	—		8		—		8
Other Assets		—		—		36		36
Insurance contracts		—		108		14		122
Cash and cash equivalents		99		184		—		283
Totals		$	788	$	9,523	$	1,032	$	11,343



(in millions)
Balance as of April 1, 2018	$	887
Actual return on plan assets held at the reporting date	(13		)
Purchases, sales and settlements	217
Transfers in and / or out of Level 3	5
Changes due to exchange rates	(64		)
Balance as of March 31, 2019	1,032
Actual return on plan assets held at the reporting date	83
Purchases, sales and settlements	282
Transfers in and / or out of Level 3	8
Changes due to exchange rates	(47		)
Balance as of March 31, 2020	$	1,358

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 United Kingdom and certain U.K. pension plans as a financing transaction.

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 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.

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.

On October 26, 2018 the High Court of Justice in the United Kingdom (the "High Court") issued a ruling related to the equalization of benefits payable to men and women for the effect of guaranteed minimum pensions under U.K. defined benefit pension plans. As a result of this ruling, the Company estimated the impact of retroactively increasing benefits in its U.K. plans in accordance with the High Court ruling. The Company treated the additional benefits as a prior service cost which resulted in an increase to its projected benefit obligation and accumulated other comprehensive loss of $28 million. The Company will amortize this cost over the average remaining life expectancy of the U.K. participants. Given the immaterial effect on the U.K. plan's projected benefit, an interim remeasurement was not performed.

The Company sponsors defined contribution plans for substantially all U.S. employees and certain foreign employees. The plans allow employees to contribute a portion of their earnings in accordance with specified guidelines. Matching contributions are made annually in January to participants employed on December 31 of the prior year and vest in one year. However, if a participant retires from the Company or dies prior to December 31, the participant will be eligible to receive matching contributions approximately 30 days following separation from service. During fiscal 2020, 2019 and 2018, the Company contributed $192 million, $219 million and $245 million, respectively, to its defined contribution plans. As of March 31, 2020, plan assets included 3,393,616 shares of the Company’s common stock.

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 under the plan, which is included in other long-term liabilities in the Company's balance sheets, amounted to $48 million as of March 31, 2020 and $59 million as of March 31, 2019. The Company's expense under the Plan totaled $0 million, $2 million and $4 million, for fiscal 2020, 2019 and 2018, respectively.