v3.26.1
Employee Pension and Other Benefit Plans
 12 Months Ended
Jun. 27, 2026
Retirement Benefits [Abstract]  
Employee Pension and Other Benefit Plans
Note 17. Employee Pension and Other Benefit Plans
Employee 401(k) Plans
The Company sponsors the Viavi Solutions 401(k) Plan (the 401(k) Plan), a defined contribution plan under ERISA, which provides retirement benefits for its eligible employees through tax deferred salary deductions. The 401(k) Plan allows employees to contribute up to 50% of their annual compensation, with contributions limited to $24,500 (or $32,500 for employees over 50 years of age) in calendar year 2026 as set by the Internal Revenue Service.
For all eligible employees, the Company offers a 401(k) Plan that provides a 100% match of employees’ contributions up to the first 3% of annual compensation and 50% match on the next 2% of compensation. All matching contributions are made in cash and vest immediately. The Company’s matching contributions to the 401(k) Plan were $6.5 million, $5.2 million and $5.3 million in fiscal 2026, 2025 and 2024, respectively.
Employee Defined Benefit Plans
The Company is responsible for a non-pension post-retirement benefit obligation assumed from a past acquisition, which is closed to new participants. As of June 27, 2026 and June 28, 2025, the liability balances related to the non-pension post-retirement benefit plan were $0.3 million. The liability balances were included in Other non-current liabilities on the Consolidated Balance Sheets.
The Company sponsors significant qualified and non-qualified pension plans for certain past and present employees in the U.K. and Germany including the plan assumed in a prior acquisition. The U.K. and German pension plans have been closed to new participants and no additional service costs are being accrued, except for certain plans in Germany assumed in connection with an acquisition in fiscal 2010. The Company also is responsible for a defined benefit plan comprising of gratuity payments open to current and new employees in India and includes an accrual for service costs. During fiscal 2026, the Government of India implemented four new labor codes which consolidated existing labor laws into a unified legislative framework. The implementation of the new labor codes had an approximate $0.6 million impact on the Company’s Indian plan, which was recognized as a service cost in Cost of revenues, R&D and SG&A in the Consolidated Statements of Operations.
Benefits are generally based upon years of service and compensation or stated amounts for each year of service. As of June 27, 2026, the U.K. plan was fully funded, the Indian plan was partially funded and the German plans were unfunded. The Company’s policy for funded plans is to make contributions equal to or greater than the requirements prescribed by law or regulation. For unfunded plans, the Company pays the post-retirement benefits when due. Future estimated benefit payments are summarized under the Future Benefit Payments section below. Except our Indian plan, no other required contributions are expected in fiscal 2027, but the Company, at its discretion, can make contributions to one or more of the defined benefit plans.
In July 2024, the U.K. Court of Appeal upheld a ruling in the matter of Virgin Media Limited v NTL Pension Trustees II Limited, a decision that VIAVI was not a party to or involved in, that certain historical amendments for contracted out defined benefit schemes were invalid if they were not accompanied by the correct actuarial confirmation. The Pension Schemes Act 2026 introduced legislation to allow affected schemes to retrospectively obtain written actuarial confirmation that historic changes did not reduce benefits below the minimum statutory level. The Financial Reporting Council and the Pensions Regulator have also published guidance on remediating missing historical contracting-out confirmations. The Company and Scheme Trustees will continue to monitor the implications of this case. The Company expects minimal, if any, impact on Scheme liability as a result of the initial ruling, given the recent legislation and accompanying guidance.
The Company accounts for its obligations under these pension plans in accordance with the authoritative guidance which requires the Company to record its obligation to the participants, as well as the corresponding net periodic cost. The Company determines its obligation to the participants and its net periodic cost principally using actuarial valuations provided by third-party actuaries. The amount recognized on the Consolidated Balance Sheets reflects the funded status of the plans, measured as the difference between the total PBO and the fair value of plan assets.
The following table presents the components of the net periodic benefit cost for the pension and benefits plans (in millions):
Years Ended
June 27, 2026June 28, 2025June 29, 2024
Service cost$1.0 $— $— 
Interest cost3.5 3.3 3.3 
Expected return on plan assets(1.7)(1.8)(1.9)
Recognized net actuarial losses0.3 0.2 0.1 
Net periodic benefit cost$3.1 $1.7 $1.5 
The components of net periodic pension cost are included in Cost of revenues, R&D and SG&A in the Consolidated Statements of Operations.
The Company’s accumulated other comprehensive (loss) income includes unrealized net actuarial losses. The amount of unrealized net actuarial loss expected to be recognized in net periodic benefit cost during fiscal 2027 is $0.1 million.
The changes in the benefit obligations and plan assets of the pension and benefits plans were (in millions):
Pension Benefit Plans
June 27, 2026June 28, 2025
Change in benefit obligation:
Benefit obligation at beginning of year:$84.9 $83.7 
Service cost1.0 — 
Interest cost3.5 3.3 
Actuarial gains(3.0)(3.1)
Acquisition(1)
0.6 — 
Other(2)
1.0 — 
Benefits paid(6.9)(6.2)
Foreign exchange impact(2.6)7.2 
Benefit obligation at end of year$78.5 $84.9 
Change in plan assets:
Fair value of plan assets at beginning of year$32.9 $32.0 
Actual return on plan assets(0.1)(1.5)
Other(2)
0.8 — 
Employer contributions7.3 6.0 
Benefits paid(6.8)(6.2)
Foreign exchange impact(1.3)2.6 
Fair value of plan assets at end of year32.8 32.9 
Funded status(45.7)(52.0)
Accumulated benefit obligation$78.5 $84.9 
(1) Represents the gratuity liability related to the Spirent HSE and CE business acquisition during fiscal 2026.
(2) Other represents balance for the Indian plan not included in the Accumulated benefit obligation or plan assets amounts as of June 28, 2025 in the table above.
Pension Benefit Plans
June 27, 2026June 28, 2025
Amount recognized on the Consolidated Balance Sheets at end of year:
Non-current assets$7.1 $7.6 
Current liabilities5.8 5.8 
Non-current liabilities47.0 53.8 
Other changes in plan assets and benefit obligations recognized in other comprehensive (loss) income:
Net actuarial gain$1.0 $0.1 
Amortization of accumulated net actuarial losses0.2 0.2 
Total recognized in other comprehensive (loss) income$1.2 $0.3 
During fiscal 2026, the Company contributed £0.8 million or approximately $1.0 million, while in fiscal 2025, the Company contributed £1.0 million or approximately $1.3 million to its U.K. pension plan. These contributions allowed the Company to comply with regulatory funding requirements. In addition, during fiscal 2026, the Company contributed Rs90.7 million or approximately $1.0 million, while in fiscal 2025, the Company contributed Rs16.4 million or approximately $0.2 million to its Indian plan.
Assumptions
Underlying both the calculation of the PBO and net periodic cost are actuarial valuations. These valuations use participant-specific information such as salary, age, years of service, and assumptions about interest rates, compensation increases and other factors. At a minimum, the Company evaluates these assumptions annually and makes changes as necessary.
The discount rate reflects the estimated rate at which the pension benefits could be effectively settled. In developing the discount rate, the Company considered the yield available on an appropriate AA corporate bond index, adjusted to reflect the term of the scheme’s liabilities as well as a yield curve model developed by the Company’s actuaries.
The expected return on assets was estimated by using the weighted average of the real expected long-term return (net of inflation) on the relevant classes of assets based on the target asset mix and adding the chosen inflation assumption.
The following table summarizes the weighted average assumptions used to determine net periodic cost and benefit obligation for the Company’s U.K., German and Indian pension plans:
Pension Benefit Plans
June 27, 2026June 28, 2025June 29, 2024
Used to determine net periodic cost at end of year:
Discount rate4.6 %4.2 %4.1 %
Expected long-term return on plan assets5.4 %5.3 %5.9 %
Rate of pension increase2.5 %2.4 %2.5 %
Used to determine benefit obligation at end of year:
Discount rate4.7 %4.2 %4.1 %
Rate of pension increase2.7 %2.4 %2.5 %
Investment Policies and Strategies
The Company’s investment objectives for its funded pension plan are to ensure that there are sufficient assets available to pay out members’ benefits as and when they arise and that, should the plan be discontinued at any point in time, there would be sufficient assets to meet the discontinuance liabilities.
To achieve these objectives, the trustee of the U.K. pension plan is responsible for regularly monitoring the funding position and managing the risk by investing in assets expected to perform approximately in line with the liabilities and help minimize volatility in the funding position. The trustee invests in a range of frequently traded funds (pooled funds) rather than direct holdings in individual securities to maintain liquidity, achieve diversification and reduce the potential for risk concentration. The funded plan assets are managed by professional third-party investment managers.
Fair Value Measurement of Plan Assets
The following table sets forth the plan assets at fair value and the percentage of assets allocations as of June 27, 2026 (in millions):
Target AllocationTotalPercentage of Plan AssetsLevel 1Level 2
Assets:
Fixed income100 %$26.3 80.2 %— $26.3 
Cash— %6.5 19.8 %6.5 — 
Total assets$32.8 100.0 %$6.5 $26.3 
The following table sets forth the plan’s assets at fair value and the percentage of assets allocations as of June 28, 2025 (in millions):
Fair value as of
June 28, 2025
Target AllocationTotalPercentage of Plan AssetsLevel 1Level 2
Assets:
Fixed income100 %$32.5 98.8 %— $32.5 
Cash— %0.4 1.2 %0.4 — 
Total assets$32.9 100.0 %$0.4 $32.5 
The Company’s pension assets consist of a cash accumulation gratuity fund with value growing through guaranteed interest accumulation managed by an insurer for the Indian plan and multiple institutional funds (pension funds) of which the fair values are based on the quoted prices of the underlying securities for the U.K. Plan. Pension funds are classified as Level 2 assets since such funds are not directly traded in active markets.
Fixed income consists of a cash accumulation gratuity fund for our Indian plan and several funds that invest primarily in index-linked Gilts (over 5 years), Gilts index (over 15 years), sterling-denominated investment grade corporate bonds and overseas government bonds for our U.K. plan.
Future Benefit Payments
The following table reflects the expected benefit payments to defined benefit pension plan participants. These payments have been estimated based on the same assumptions used to measure the Company’s PBO at fiscal year end and include benefits attributable to estimated future compensation increases (in millions):
Fiscal Years
2027$6.8 
20286.7 
20296.6 
20306.0 
20316.0 
2032-203628.6