v3.26.1
Employee Benefit Plans
 12 Months Ended
Dec. 31, 2025
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]  
Employee Benefit Plans Employee Benefit Plans
We sponsor numerous defined benefit and defined contribution pension and other post-retirement benefit plans, primarily retiree health care, in our domestic and international operations. December 31 is the measurement date for all of our post-retirement benefit plans.
Where legally possible, we have amended our major defined benefit pension plans to freeze current benefits and eliminate benefit accruals for future service, including our U.S. defined benefit plans, the Canadian Salary Pension Plan and the U.K. pension plan. In certain non-U.S. plans, we are required to continue to consider salary increases and inflation in determining the benefit obligation related to prior service.
In December 2023, the Trustees for the U.K. pension plan entered a second insurance buy-in contract, in accordance with U.K. pension regulations. Insurance buy-in contracts are group annuity contracts that are expected to provide an income stream to cover a significant majority of the cash flows arising for the plan population with future contracted payments. However, the benefit obligation remains with the plan and the Company. This contract is issued by a third-party insurance company with no affiliation to the Company or the plan. The contract was funded through existing plan assets, with a portion of the premium payments for the policy being deferred. In February 2026, the remaining portion of the premium was paid in full using proceeds from the sale of certain assets that were previously illiquid. The insurance buy-in contract is valued on an insurer pricing basis, which reflects the purchase price adjusted for changes in discount rates and other actuarial assumptions, which approximates fair value. The insurance buy-in contract is classified as a Level 3 investment in the Plan Asset tables below. This buy-in contract was similar to a contract purchased in 2022 that covered a portion of member benefit payments. The buy-in arrangement also allows for the possible future conversion into a buy-out arrangement where the insurance company would assume full responsibility for the U.K. pension plan pension obligations, at which time the Company would derecognize the assets and liabilities of the pension plan and realize a settlement gain or loss as a component of the net periodic pension cost.
In May 2023, the Dutch Parliament enacted the Future Pensions Act (Wet toekomst pensioenen), which became effective on July 1, 2023. The legislation requires employers to transition existing pension arrangements in the Netherlands that are structured as defined benefit plans or age-dependent defined contribution plans to defined contribution plans. All affected pension plans must be converted to compliant plans by January 1, 2028. The Company sponsors pension plans for certain employees in the Netherlands that are subject to this legislation, and is in the process of evaluating the required transition. The transition is expected to be completed within the statutory timeframe. The conversion of the Company’s Dutch retirement plan may result in changes to the nature of the pension obligations and could give rise to plan amendments, or settlements under ASC 715, Compensation—Retirement Benefits, depending on the final structure of the transitioned plans and the treatment of accrued benefits. Such events could require remeasurement of pension obligations and plan assets and may result in the recognition of settlement gains or losses in the period in which the transition is finalized or implemented. At December 31, 2025, the Company has not yet finalized the design of the plans and, accordingly, has not recorded any impacts related to the conversion. The Company will recognize any resulting effects on its pension obligations, net periodic pension cost, or accumulated other comprehensive income in accordance with ASC 715 when the transition is substantively enacted and the amounts are reasonably estimable.
 Pension Benefits 
U.S. PlansNon-U.S. PlansRetiree Health
 202520242025202420252024
Change in Benefit Obligation:    
Benefit obligation, January 1$2,176 $2,389 $4,097 $4,567 $173 $193 
Service cost— — 6 5 1 1 
Interest cost138 88 195 182 8 8 
Plan participants' contributions— — 2 1 5 5 
Actuarial loss (gain)(1)
38 (136)(114)(281)6 (3)
Currency exchange rate changes— — 350 (157)5 (8)
Plan amendment— — 3 54 — — 
Benefits paid/settlements(189)(165)(346)(274)(26)(23)
Acquisition(2)
399 — 155 — 7 — 
Other1 — (2)— — — 
Benefit Obligation, December 31$2,563 $2,176 $4,346 $4,097 $179 $173 
Change in Plan Assets:
Fair value of plan assets, January 1$1,407 $1,528 $4,220 $4,662 $— $— 
Actual return on plan assets189 (56)209 (42)— — 
Employer contributions112 100 28 27 21 18 
Plan participants' contributions— — 2 1 5 5 
Currency exchange rate changes— — 355 (154)— — 
Benefits paid/settlements(189)(165)(346)(274)(26)(23)
Acquisition(2)
326 — 122 — — — 
Other— — (2)— — — 
Fair Value of Plan Assets, December 31$1,845 $1,407 $4,588 $4,220 $— $— 
Net Funded Status at December 31(3)
$(718)$(769)$242 $123 $(179)$(173)
Amounts Recognized in the Consolidated Balance Sheets:    
Other long-term assets$— $— $578 $421 $— $— 
Accrued compensation and benefit costs(24)(22)(20)(18)(20)(19)
Pension and other benefit liabilities(694)(747)(316)(280)— — 
Post-retirement medical benefits— — — — (159)(154)
Net Amounts Recognized$(718)$(769)$242 $123 $(179)$(173)
Accumulated Benefit Obligation$2,563 $2,176 $4,320 $4,049 
  _____________
(1)Changes in actuarial losses (gains) are due to actual returns in excess of expected returns, as well as changes in discount rates.
(2)Reflects the Lexmark Acquisition on July 1, 2025. Refer to Note 6 - Acquisitions and Divestitures for additional information regarding the Lexmark acquisition.
(3)Includes under-funded and unfunded plans.
Pension and other benefit liabilities include the following additional accounts at December 31st:
December 31,
20252024
Pension liabilities(1)
$1,010 $1,027 
Accrued compensation liabilities45 48 
Deferred compensation liabilities(2)
13 13 
Pension and other benefit liabilities$1,068 $1,088 
__________________________
(1)Reflects pension net funded status liability for both U.S. and non-U.S. plans.
(2)Includes amounts measured at fair value on a recurring basis at December 31, 2025 and 2024 of $11 and $11, respectively. Refer to Note 17 - Fair Value of Financial Assets and Liabilities for additional information regarding deferred compensation liabilities.
Benefit plans pre-tax amounts recognized in AOCL at December 31st:
 Pension Benefits 
U.S. PlansNon-U.S. PlansRetiree Health
202520242025202420252024
Net actuarial loss (gain)$640 $700 $1,344 $1,405 $(46)$(63)
Prior service cost (credit)— — 186 177 (53)(66)
Total loss (gain) - Pre-tax$640 $700 $1,530 $1,582 $(99)$(129)
Aggregate information for pension plans with an accumulated benefit obligation in excess of plan assets is presented below. Information for Retiree Health plans with an accumulated post-retirement benefit obligation in excess of plan assets has been disclosed in the preceding table on Benefit obligations and Net funded status as all Retiree Health plans are unfunded.
December 31, 2025December 31, 2024
Accumulated Benefit ObligationFair Value of Plan AssetsAccumulated Benefit ObligationFair Value of Plan Assets
Underfunded Plans:
U.S.$2,338 $1,845 $1,956 $1,407 
Non-U.S.212 165 13 39 
Unfunded Plans:
U.S.$225 $— $220 $— 
Non-U.S.263 — 286 — 
Total Underfunded and Unfunded Plans:
U.S.$2,563 $1,845 $2,176 $1,407 
Non-U.S.475 165 299 39 
Total$3,038 $2,010 $2,475 $1,446 
Aggregate information for pension plans with a projected benefit obligation in excess of plan assets is presented below:
December 31, 2025December 31, 2024
Projected Benefit ObligationFair Value of Plan AssetsProjected Benefit ObligationFair Value of Plan Assets
Underfunded Plans:
U.S.$2,338 $1,845 $1,956 $1,407 
Non-U.S.225 165 45 39 
Unfunded Plans:
U.S.$225 $— $220 $— 
Non-U.S.267 — 292 — 
Total Underfunded and Unfunded Plans:
U.S.$2,563 $1,845 $2,176 $1,407 
Non-U.S.492 165 337 39 
Total$3,055 $2,010 $2,513 $1,446 
Pension plan assets and benefit obligations by country were as follows:
December 31, 2025December 31, 2024
Fair Value of Pension Plan AssetsProjected Benefit ObligationNet Funded StatusFair Value of Pension Plan AssetsProjected Benefit ObligationNet Funded Status
U.S. funded$1,845 $2,338 $(493)$1,407 $1,956 $(549)
U.S. unfunded— 225 (225)— 220 (220)
Total U.S.1,845 2,563 (718)1,407 2,176 (769)
U.K.2,779 2,502 277 2,528 2,310 218 
Netherlands872 720 152 808 732 76 
Canada547 505 42 535 503 32 
Germany4 241 (237)— 220 (220)
Other386 378 8 349 332 17 
Total$6,433 $6,909 $(476)$5,627 $6,273 $(646)
The components of Net periodic benefit cost and other changes in plan assets and benefit obligations were as follows:
Year Ended December 31,
 Pension Benefits
 U.S. PlansNon-U.S. PlansRetiree Health
 202520242023202520242023202520242023
Components of Net Periodic Benefit Costs:
Service cost$— $— $— $6 $5 $5 $1 $1 $1 
Interest cost(1)(2)
138 88 116 195 182 188 8 8 10 
Expected return on plan assets(1)(3)
(111)(71)(103)(209)(193)(217)— — — 
Recognized net actuarial loss (gain)(1)
19 18 16 53 62 11 (11)(12)(12)
Amortization of prior service cost (credit)(1)
— — — 9 8 5 (13)(15)(15)
Recognized settlement loss(1)
— 5 19 — — 1 — — — 
Defined Benefit Plans46 40 48 54 64 (7)(15)(18)(16)
Defined contribution plans3 17 19 23 23 21 n/an/an/a
Net Periodic Benefit Cost (Credit)$49 $57 $67 $77 $87 $14 $(15)$(18)$(16)
Other changes in plan assets and benefit obligations recognized in Other Comprehensive Income (Loss):
Net actuarial (gain) loss
$(41)$(8)$74 $(113)$(44)$298 $6 $(3)$(5)
Prior service cost (credit)— — — — 52 36 — — (3)
Amortization of net actuarial (loss) gain(19)(23)(35)(53)(62)(12)11 12 12 
Amortization of net prior service (cost) credit— — — (9)(8)(5)13 15 15 
Total Recognized in Other Comprehensive Income (Loss)(4)
(60)(31)39 (175)(62)317 30 24 19 
Total Recognized in Net Periodic Benefit Cost (Credit) and Other Comprehensive Income (Loss)$(11)$26 $106 $(98)$25 $331 $15 $6 $3 
_____________
(1)Included in Other expenses, net in the Statements of (Loss) Income.
(2)Interest cost for Pension Benefits includes interest expense on non-TRA obligations of $358, $279 and $284 and interest (income)/expense directly allocated to TRA participant accounts of $(25), $(9) and $20 for the years ended December 31, 2025, 2024 and 2023, respectively.
(3)Expected return on plan assets includes expected investment income on non-TRA assets of $295, $273 and $300 and actual investment income/(loss) on TRA assets of $25, $(9) and $20 for the years ended December 31, 2025, 2024 and 2023, respectively.
(4)Amounts represent the pre-tax effect included in Other comprehensive income (loss). Refer to Note 24 - Other Comprehensive Income (Loss) for the related tax effects and the net of tax amounts.
Plan Amendments
Pension:
Netherlands
In January 2024, the pension board of our Netherlands pension plan transferred the plan’s assets and projected benefit obligation (PBO) to a single client section in a general pension fund. In addition to this transfer, the indexation target was increased from 75% of price inflation to 100% of price inflation. This plan amendment increasing the indexation target resulted in an increase of approximately $48 (approximately EUR 44 million) in the PBO for this Collective Defined Contribution (CDC) plan, approximately 6% of the plan PBO as of December 31, 2023. From a Company risk perspective, this CDC plan operates just like a frozen defined contribution plan. Although the Company's risk has been mitigated, under U.S. GAAP this CDC plan does not meet the definition of a defined contribution plan and therefore continues to be accounted for as a defined benefit plan.
United Kingdom
In December 2025, April 2024, and April 2023, our U.K. defined benefit pension plan was amended, at the sole discretion of the Plan Trustees as legally allowed, to increase the capped inflation indexation for the April 2026, 2024 and 2023 pension increase award to 4.0%, 5.0% and 6.5%, respectively. The December 2025 plan amendment resulted in an increase of $3 in the projected benefit obligation (PBO) for this plan, the April 2024 plan amendment resulted in an increase of $6 in the PBO for this plan, and the April 2023 plan amendment resulted in an increase of $36 in the PBO for this plan, with all amounts inclusive of other remeasurement adjustments for changes in actuarial assumptions.
In October 2018, the High Court of Justice in the United Kingdom (the High Court) ruled that Lloyds Bank PLC was required to equalize benefits payable to men and women under its U.K. defined benefit pension plans by amending those plans to increase the pension benefits payable to participants that accrued such benefits during the period from 1990 to 1997. The inequalities arose from statutory differences in the retirement ages and rates of accrual of benefits for men and women related to Guaranteed Minimum Pension (GMP) benefits that are included in U.K. defined benefit pension plans.
At December 31, 2025, the aggregate cost for this matter was estimated to be approximately GBP 15 million (approximately USD $20). This latest estimate is consistent with the prior year, adjusted for market conditions at December 31, 2025. The equalization method was agreed between the Company and Trustee and is in the process of being implemented.
Plan Assets
Current Allocation
As of the 2025 and 2024 measurement dates, the global pension plan assets were $6,433 and $5,627, respectively. These assets were invested among several asset classes.
The following tables present the defined benefit plans assets measured at fair value and the basis for that measurement.
December 31, 2025
U.S. PlansNon-U.S. Plans
Asset Class Level 1Level 2Level 3
Assets measured at NAV(1)
TotalLevel 1Level 2Level 3
Assets measured at NAV(1)
Total
Cash and cash equivalents$4 $— $— $— $4 $445 $— $— $— $445 
Equity Securities:
U.S.(2)
74 — — 74 148 12 19 — — 31 
International(2)
99 — — 181 280 372 18 — 21 411 
Fixed Income Securities:
U.S. treasury securities(2)
— 84 — 69 153 — 2 — — 2 
Debt security issued by government agency— 163 — — 163 — 661 — 2 663 
Corporate bonds(2)
— 623 — 116 739 — 266 — — 266 
Asset backed securities— — — — — — 4 — — 4 
Derivatives— 2 — — 2 — (11)— — (11)
Real estate— — 23 32 55 — — 70 44 114 
Private equity/venture capital— — — 158 158 — 3 — 42 45 
Guaranteed insurance contracts— — — — — — — 2,498 — 2,498 
Other(3)(4)(5)
— 1 — 142 143 28 5 — 87 120 
Total Fair Value of Plan Assets$177 $873 $23 $772 $1,845 $857 $967 $2,568 $196 $4,588 
 _____________
(1)Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.
(2)Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient include investments in common collective trusts.
(3)Other Level 1 includes net non-financial assets, such as due to/from broker, interest receivables and accrued expenses. The U.S. Plans had no net assets, while the non-U.S. plans had net assets of $28.
(4)Other NAV for U.S. Plans (measured at NAV) includes common collective trust funds of $104, which are invested approximately 30% in fixed income securities and approximately 70% in equity securities.
(5)Other NAV for the non-U.S. Plans (measured at NAV) includes mortgage funds of approximately $87 in our Netherlands plans.
December 31, 2024
U.S. PlansNon-U.S. Plans
Asset Class Level 1Level 2Level 3
Assets measured at NAV(1)
TotalLevel 1Level 2Level 3
Assets measured at NAV(1)
Total
Cash and cash equivalents$1 $— $— $— $1 $246 $— $— $— $246 
Equity Securities:
U.S. 72 — — — 72 15 19 — — 34 
International 72 — — 125 197 314 — — 18 332 
Fixed Income Securities:
U.S. treasury securities— 67 — — 67 — 2 — — 2 
Debt security issued by government agency— 139 — — 139 — 670 — — 670 
Corporate bonds— 599 — — 599 — 236 — — 236 
Derivatives— (30)— — (30)— 13 — — 13 
Real estate— — 24 11 35 — — 87 31 118 
Private equity/venture capital— — — 167 167 — — — 258 258 
Guaranteed insurance contracts— — — — — — — 2,184 — 2,184 
Other(2)(3)(4)
(3)— — 163 160 51 12 — 64 127 
Total Fair Value of Plan Assets$142 $775 $24 $466 $1,407 $626 $952 $2,271 $371 $4,220 
 _____________
(1)Certain assets that are measured at fair value using the NAV per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.
(2)Other Level 1 includes net non-financial (liabilities)/assets, such as due to/from broker, interest receivables and accrued expenses. The U.S. Plans had net liabilities of $(3), while the non-U.S. plans had net assets of $51.
(3)Other NAV for the U.S. Plans includes common collective trust funds of $116 (measured at NAV) which are invested approximately 70% in fixed income securities and approximately 30% in equity securities.
(4)Other NAV for the non-U.S. Plans (measured at NAV) includes mortgage funds of approximately $64 in our Netherlands plans.
The following tables represents a roll forward of the defined benefit plans assets measured at fair value using significant unobservable inputs (Level 3 assets):
U.S.Non-U.S.
Real EstateReal EstatePrivate Equity/Venture CapitalGuaranteed Insurance ContractsTotal
Balance at December 31, 2023$47 $106 $4 $2,481 $2,591 
Purchases— — — 1 1 
Sales(22)— — (3)(3)
Unrealized losses(1)(12)(4)(253)(269)
Currency translation— (7)— (42)(49)
Balance at December 31, 2024$24 $87 $— $2,184 $2,271 
Purchases— — — — — 
Sales(2)— — — — 
Unrealized gains (losses)1 (31)— 20 (11)
Acquisition(1)
— — — 131 131 
Currency translation— 14 — 163 177 
Balance at December 31, 2025$23 $70 $— $2,498 $2,568 
 _____________
(1)Reflects the Lexmark Acquisition on July 1, 2025. Refer to Note 6 - Acquisitions and Divestitures for additional information regarding the Lexmark acquisition.
Level 3 Valuation Method
Our primary Level 3 assets are Real Estate, Private Equity/Venture Capital investments, and Guaranteed Insurance Contracts. The fair value of our real estate investment funds is based on the Net Asset Value (NAV) of our ownership interest in the funds. NAV information is received from the investment advisers and is primarily derived from third-party real estate appraisals for the properties owned. The fair value for our private equity/venture capital partnership investments are based on our share of the estimated fair values of the underlying investments held by these partnerships as reported (or expected to be reported) in their audited financial statements. Purchases of Guaranteed Insurance Contracts (GICs) include the purchases of buy-in annuity contracts, which have been valued based on the member benefits covered by the contracts adjusted for current market factors. The valuation techniques and inputs for our Level 3 assets have been consistently applied for all periods presented.
Investment Strategy
The target asset allocations for our worldwide defined benefit pension plans were:
20252024
 U.S.Non-U.S.U.S.Non-U.S.
Equity investments(1)
26%10%27%9%
Fixed income investments60%20%60%22%
Real estate6%3%4%3%
Private equity/venture capital5%1%7%7%
Other(1)
3%66%2%59%
Total Investment Strategy100%100%100%100%
 _____________
(1)Target allows for an additional allocation to synthetic equity which is offset by cash, which resulted in a negative cash position in Other.
We employ a total return investment approach whereby a mix of equities and fixed income investments are used to maximize the long-term return of plan assets for a prudent level of risk. The intent of this strategy is to minimize plan expenses by exceeding the interest growth in long-term plan liabilities. Risk tolerance is established through careful consideration of plan liabilities, plan funded status and corporate financial condition. This consideration involves the use of long-term measures that address both return and risk. The investment portfolio contains a diversified blend of equity and fixed income investments. Furthermore, equity investments are diversified across U.S. and non-U.S. stocks, as well as growth, value and small and large capitalizations. Other assets such as real estate, private equity, and hedge funds are used to improve portfolio diversification. Derivatives may be used to hedge market exposure in an efficient, timely and cost-effective manner; however, derivatives may not be used to speculate or leverage the portfolio beyond the market value of the underlying investments. Investment risks and returns are measured and monitored on an ongoing basis through annual liability measurements and quarterly investment portfolio reviews.
Expected Long-term Rate of Return
We employ a “building block” approach in determining the long-term rate of return for plan assets. Historical markets are studied and long-term relationships between equities and fixed income are assessed. Current market factors such as inflation and interest rates are evaluated before long-term capital market assumptions are determined. The long-term portfolio return is established giving consideration to investment diversification and rebalancing. Peer data and historical returns are reviewed periodically to assess reasonableness and appropriateness.
Contributions Disclosure
The following table summarizes cash contributions to our defined benefit pension plans and retiree health benefit plans.
Year Ended December 31,
2025
Estimated 2026
U.S. Plans$112 $115 
Non-U.S. Plans28 30 
Total Pension Plans$140 $145 
Retiree Health21 20 
Total Retirement Plans$161 $165 
Approximately $89 of the 2025 contributions for our U.S. plans were for our tax-qualified defined benefit plans. Approximately $95 of estimated contributions for 2026 are for our U.S. tax-qualified defined benefit plans. However, once the next actuarial valuations and projected results are available, actual contributions required to meet minimum funding requirements will be determined and finalized and may change from the current estimate.
Estimated Future Benefit Payments
The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid during the following years:
 Pension Benefits
U.S.Non-U.S.TotalRetiree Health
2026$239 $313 $552 $20 
2027221 318 539 18 
2028222 325 547 17 
2029221 333 554 15 
2030250 341 591 14 
Years 2031-20351,072 1,801 2,873 58 
Assumptions
Weighted-average assumptions used to determine benefit obligations at the plan measurement dates:
Pension Benefits 
 202520242023
U.S.Non-U.S.U.S.Non-U.S.U.S.Non-U.S.
Discount rate5.3 %4.8 %5.6 %4.5 %4.9 %4.1 %
Rate of compensation increase— %2.2 %— %2.3 %— %2.7 %
Interest crediting rate4.5 %2.4 %4.6 %2.5 %4.5 %1.5 %
 
Retiree Health 
 202520242023
Discount rate4.8 %4.9 %4.7 %
Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31:
 Pension Benefits 
2026202520242023
 U.S.Non-U.S.U.S.Non-U.S.U.S.Non-U.S.U.S.Non-U.S.
Discount rate5.3 %4.8 %5.6 %4.5 %4.9 %4.1 %5.1 %4.5 %
Expected return on plan assets7.5 %5.0 %7.8 %4.8 %8.1 %4.3 %8.1 %4.3 %
Rate of compensation increase— %2.2 %— %2.3 %— %2.7 %— %2.9 %
Interest crediting rate4.5 %2.4 %4.6 %2.6 %4.5 %2.5 %4.5 %2.1 %
 
 Retiree Health 
 2026202520242023
Discount rate4.8 %4.9 %4.7 %5.0 %
_____________
Note: Expected return on plan assets is not applicable to retiree health benefits as these plans are not funded. Rate of compensation increase is not applicable to retiree health benefits as compensation levels do not impact earned benefits.
Assumed health care cost trend rates were as follows:
December 31,
 20252024
Health care cost trend rate assumed for next year6.5 %6.0 %
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)4.2 %4.2 %
Year that the rate reaches the ultimate trend rate20292028
Defined Contribution Plans
We have defined contribution savings and investment plans in several countries, including the U.S., the U.K. and Canada. In many instances, employees who participated in the defined benefit pension plans that have been amended to freeze future service accruals were transitioned to an enhanced defined contribution plan. In these plans, employees are allowed to contribute a portion of their salaries and bonuses to the plans, and we match a portion of the employee contributions. We recorded charges related to our defined contribution plans of $26 in 2025, $40 in 2024 and $40 in 2023.
During 2025, the Company suspended its full year employer matching contribution for its legacy Xerox U.S. based 401(k) plan for salaried (non-union) employees. The employer matching contribution was reinstated for 2026 and began to be paid on a per-pay-period basis.