We sponsor several pension plans for our associates, including our principal plan (the “Retirement Plan”), which is a non-contributory defined benefit pension plan covering substantially all domestic non-union associates. Pension benefits are provided for certain domestic union associates through separate plans. Associates of our foreign subsidiaries receive pension coverage, to the extent deemed appropriate, through plans that are governed by local statutory requirements.

The Retirement Plan provides benefits that are based upon years of service and average compensation with accrued benefits vesting after five years. Benefits for union associates are generally based upon years of service, or a combination of years of service and average compensation. Our pension funding policy considers contributions in an amount on an annual basis that can be deducted for federal income tax purposes, using a different actuarial cost method and different assumptions from those used for financial reporting. For the fiscal year ending May 31, 2026, we are required, based on minimum funding rules, to contribute approximately $6.1 million to our foreign plans. Required contributions, based on minimum funding rules, to the retirement plans in the United States for fiscal 2026 are immaterial. During the year, we will evaluate whether to make contributions in excess of the minimum required amounts. During fiscal 2025, we contributed $45.5 million to the pension plans in the United States which was in excess of the required immaterial contributions but serves to improve the funded status of the plans.

Net periodic pension cost consisted of the following for the year ended May 31:


	U.S. Plans									Non-U.S. Plans
(In thousands)	2025			2024			2023			2025			2024			2023
Service cost	$	43,217		$	43,652		$	43,558		$	4,427		$	3,534		$	3,633
Interest cost		39,180			35,967			28,692			7,836			7,667			6,619
Expected return on plan assets		(48,069	)		(42,072	)		(38,144	)		(9,490	)		(9,588	)		(6,581	)
Amortization of:
Prior service cost (credit)		2			2			1			159			(127	)		(116	)
Net actuarial losses recognized		8,613			16,822			17,948			1,189			833			473
Curtailment/settlement (gains) losses		-			-			(3	)		7			(50	)		188
Net Pension Cost	$	42,943		$	54,371		$	52,052		$	4,128		$	2,269		$	4,216

The changes in benefit obligations and plan assets, as well as the funded status of our pension plans at May 31, 2025 and 2024, were as follows:


	U.S. Plans						Non-U.S. Plans
(In thousands)	2025			2024			2025			2024
Benefit obligation at beginning of year	$	719,663		$	697,173		$	166,060		$	158,812
Service cost		43,217			43,652			4,427			3,534
Interest cost		39,180			35,967			7,836			7,667
Benefits paid		(45,237	)		(40,540	)		(9,162	)		(8,102	)
Participant contributions		-			-			1,414			1,149
Plan amendments		-			-			299			(2	)
Plan settlements/curtailments		-			-			(256	)		(1,090	)
Plan combinations		-			-			10,550			-
Actuarial (gains) losses		(7,137	)		(16,589	)		3,323			3,461
Premiums paid		-			-			(90	)		(83	)
Currency exchange rate changes		-			-			2,216			714
Benefit Obligation at End of Year	$	749,686		$	719,663		$	186,617		$	166,060
Fair value of plan assets at beginning of year	$	720,079		$	631,486		$	174,260		$	166,120
Actual gain on plan assets		50,324			87,205			9,365			9,973
Employer contributions		45,537			41,928			4,537			5,449
Participant contributions		-			-			1,414			1,149
Benefits paid		(45,237	)		(40,540	)		(9,162	)		(8,102	)
Assets related to plan combinations		-			-			6,630			-
Premiums paid		-			-			(90	)		(83	)
Plan settlements/curtailments		-			-			(256	)		(1,090	)
Currency exchange rate changes		-			-			2,286			844
Fair Value of Plan Assets at End of Year	$	770,703		$	720,079		$	188,984		$	174,260
Surplus of plan assets versus benefit obligations at end of year	$	21,017		$	416		$	2,367		$	8,200
Net Amount Recognized	$	21,017		$	416		$	2,367		$	8,200
Accumulated Benefit Obligation	$	650,986		$	618,413		$	175,236		$	156,571

The fair value of the assets held by our pension plans has increased at May 31, 2025 since our previous measurement date at May 31, 2024, due to contributions and market returns. Total plan liabilities increased due to benefit accruals, an increase in interest cost caused by an increase in the discount rate, as well as a smaller actuarial gain than in the prior year. We have recorded an overfunded position for the net status of our pension plans. We expect pension expense in fiscal 2026 to be lower than our fiscal 2025 expense level due to an increase in discount rates, an increase in the market value of assets, an increase in expected return on plan assets and a reduction in the amortization of the net actuarial loss to be recognized. Any future declines in the value of our pension plan assets or increases in our plan liabilities could require us to decrease our recorded asset for the net funded status of our pension plans and could also require accelerated and higher cash contributions to our pension plans.

The following table summarizes the relationship between our plans' benefit obligations and assets:


	U.S. Plans
	2025				2024
(In thousands)	Benefit Obligation		Plan Assets		Benefit Obligation		Plan Assets
Plans with projected benefit obligations in excess of plan assets	$	4,756	$	4,136	$	712,123	$	711,245
Plans with accumulated benefit obligations in excess of plan assets		40		-		41		-
Plans with assets in excess of projected benefit obligations		744,930		766,567		7,540		8,834
Plans with assets in excess of accumulated benefit obligations		650,946		770,703		618,372		720,079

	Non-U.S. Plans
	2025				2024
(In thousands)	Benefit Obligation		Plan Assets		Benefit Obligation		Plan Assets
Plans with projected benefit obligations in excess of plan assets	$	35,864	$	22,399	$	28,469	$	19,988
Plans with accumulated benefit obligations in excess of plan assets		31,513		20,117		25,001		17,730
Plans with assets in excess of projected benefit obligations		150,753		166,585		137,591		154,272
Plans with assets in excess of accumulated benefit obligations		143,723		168,867		131,570		156,530

The following table includes the changes recognized in other comprehensive income:


		U.S. Plans						Non-U.S. Plans
(In thousands)		2025			2024			2025			2024
Changes in plan assets and benefit obligations recognized in other comprehensive income:
	Prior service cost (credit)	$	-		$	-		$	299		$	(1	)
	Net (gain) loss arising during the year		(9,393	)		(61,722	)		5,129			3,075
	Effect of exchange rates on amounts included in AOCI		-			-			570			133
Amounts recognized as a component of net periodic benefit cost:
	Amortization or curtailment recognition of prior service (cost) benefit		(2	)		(2	)		(159	)		127
	Amortization or settlement recognition of net (loss)		(8,613	)		(16,822	)		(1,196	)		(783	)
	Total recognized in other comprehensive (income) loss	$	(18,008	)	$	(78,546	)	$	4,643		$	2,551

In measuring the projected benefit obligation and net periodic pension cost for our plans, we utilize actuarial valuations. These valuations include specific information pertaining to individual plan participants, such as salary, age and years of service, along with certain assumptions. The most significant assumptions applied include discount rates, expected return on plan assets and rate of compensation increases. We evaluate these assumptions, at a minimum, on an annual basis, and make required changes, as applicable. In developing our expected long-term rate of return on pension plan assets, we consider the current and expected target asset allocations of the pension portfolio, as well as historical returns and future expectations for returns on various categories of plan assets. Expected return on assets is determined by using the weighted-average return on asset classes based on expected return for the target asset allocations of the principal asset categories held by each plan. In determining expected return, we consider both historical performance and an estimate of future long-term rates of return. Actual experience is used to develop the assumption for compensation increases.

The following weighted-average assumptions were used to determine our year-end benefit obligations and net periodic pension cost under the plans:


	U.S. Plans						Non-U.S. Plans
Year-End Benefit Obligations	2025			2024			2025			2024
Discount rate		5.65	%		5.58	%		4.78	%		4.81	%
Rate of compensation increase		3.38	%		3.39	%		3.03	%		2.98	%


	U.S. Plans									Non-U.S. Plans
Net Periodic Pension Cost	2025			2024			2023			2025			2024			2023
Discount rate		5.59	%		5.26	%		4.43	%		4.81	%		4.88	%		4.02	%
Expected return on plan assets		7.00	%		7.00	%		6.50	%		5.49	%		5.79	%		3.58	%
Rate of compensation increase		3.39	%		3.39	%		3.21	%		2.98	%		2.97	%		2.94	%

The following tables illustrate the weighted-average actual and target allocation of plan assets:


	U.S. Plans
	Target Allocation			Actual Asset Allocation
(Dollars in millions)	as of May 31, 2025			2025		2024
Equity securities		55	%	$	429.2	$	399.0
Fixed income securities		20	%		166.3		151.2
Multi-class		20	%		155.8		141.2
Cash		5	%		19.3		28.5
Other					0.1		0.2
Total assets		100	%	$	770.7	$	720.1

	Non-U.S. Plans
	Target Allocation			Actual Asset Allocation
(Dollars in millions)	as of May 31, 2025			2025		2024
Equity securities		34	%	$	66.1	$	60.4
Fixed income securities		45	%		83.9		82.9
Cash					0.5		0.2
Property and other		21	%		38.5		30.8
Total assets		100	%	$	189.0	$	174.3

The following tables present our pension plan assets as categorized using the fair value hierarchy at May 31, 2025 and 2024:


U.S. Plans
(In thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value at May 31, 2025
U.S. Treasury and other government	$	-	$	57,763	$	-	$	57,763
State and municipal bonds		-		213		-		213
Foreign bonds		-		3,365		-		3,365
Mortgage-backed securities		-		17,964		-		17,964
Corporate bonds		-		15,750		-		15,750
Stocks - large cap		51,743		-		-		51,743
Mutual funds - equity		-		377,516		-		377,516
Mutual funds - multi-class		-		155,782		-		155,782
Mutual funds - fixed		-		2,900		-		2,900
Cash and cash equivalents		19,327		-		-		19,327
Futures contracts		-		-		64		64
Investments measured at NAV (1)								68,316
Total	$	71,070	$	631,253	$	64	$	770,703

(1)

In accordance with Subtopic 820-10, Fair Value Measurements and Disclosures, certain investments that are measured at fair value using the net asset value ("NAV") per share practical expedient have not been classified in the fair value hierarchy. The investments that are measured at fair value using NAV per share included in the table above are intended to permit reconciliation of the fair value hierarchy to the fair value of the plan assets at the end of each period.


Non-U.S. Plans
(In thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value at May 31, 2025
Pooled equities	$	-	$	66,101	$	-	$	66,101
Pooled fixed income		-		82,844		-		82,844
Foreign bonds		-		1,050		-		1,050
Insurance contracts		-		-		28,121		28,121
Mutual funds - Real Estate		-		10,392		-		10,392
Cash and cash equivalents		476		-		-		476
Total	$	476	$	160,387	$	28,121	$	188,984


U.S. Plans
(In thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value at May 31, 2024
U.S. Treasury and other government	$	-	$	53,751	$	-	$	53,751
State and municipal bonds		-		210		-		210
Foreign bonds		-		2,480		-		2,480
Mortgage-backed securities		-		14,922		-		14,922
Corporate bonds		-		14,904		-		14,904
Stocks - large cap		44,392		-		-		44,392
Mutual funds - equity		-		354,599		-		354,599
Mutual funds - multi-class		-		141,183		-		141,183
Mutual funds - fixed		-		2,317		-		2,317
Cash and cash equivalents		28,523		-		-		28,523
Limited partnerships		-		-		74		74
Futures contracts		-		-		120		120
Investments measured at NAV (2)								62,604
Total	$	72,915	$	584,366	$	194	$	720,079

(2)


Non-U.S. Plans
(In thousands)	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Fair Value at May 31, 2024
Pooled equities	$	-	$	60,455	$	-	$	60,455
Pooled fixed income		-		81,798		-		81,798
Foreign bonds		-		1,066		-		1,066
Insurance contracts		-		-		20,283		20,283
Mutual funds - Real Estate		-		10,483		-		10,483
Cash and cash equivalents		175		-		-		175
Total	$	175	$	153,802	$	20,283	$	174,260

The primary objective for the investments of the Retirement Plan is to provide for long-term growth of capital without undue exposure to risk. This objective is accomplished by utilizing a diversified portfolio strategy of equities, fixed-income securities and cash equivalents in a mix that is conducive to participation in a rising market, while allowing for adequate protection in a falling market. Our Investment Committee oversees the investment allocation process, which includes the selection and evaluation of investment managers, the determination of investment objectives and risk guidelines, and the monitoring of actual investment performance. In order to manage investment risk properly, Plan policy prohibits short selling, securities lending, financial futures, options and other specialized investments, except for certain alternative investments specifically approved by the Investment Committee. The Investment Committee reviews, on a quarterly basis, reports of actual Plan investment performance provided by independent third parties, in addition to its review of the Plan investment policy on an annual basis. The investment objectives are similar for our plans outside of the United States, subject to local regulations.

The goals of the investment strategy for pension assets include: the total return of the funds shall, over an extended period of time, surpass an index composed of the MSCI World Stock Index (equity), the Barclays Long-Term Government/Credit Index (fixed income), and 30-day Treasury Bills (cash), weighted appropriately to match the asset allocation of the plans. The equity portion of the funds shall surpass the MSCI World Stock Index over a full market cycle, while the fixed-income portion shall surpass Barclays Long-Term Government/Credit Index over a full market cycle. The purpose of the fixed-income fund is to reduce the overall volatility of the plan liabilities and provide a hedge against interest rate fluctuations. Therefore, the primary objective of the fixed-income portion is to match the Barclays Long-Term Government/Credit Index.

We expect to pay the following estimated pension benefit payments in the next five years (in millions): $75.3 in 2026, $77.5 in 2027, $81.5 in 2028, $89.2 in 2029 and $89.1 in 2030. In the five years thereafter (2031-2035), we expect to pay $448.3 million.

In addition to the defined benefit pension plans discussed above, we also sponsor associate savings plans under Section 401(k) of the Internal Revenue Code, which cover most of our associates in the United States. We record expense for defined contribution plans for any employer-matching contributions made in conjunction with services rendered by associates. The majority of our plans provide for matching contributions made in conjunction with services rendered by associates. Matching contributions are invested in the same manner that the participants invest their own contributions. Matching contributions charged to income were $31.3 million, $29.8 million and $27.6 million for the years ending May 31, 2025, 2024 and 2023, respectively.