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RETIREMENT PLANS
 4 Months Ended
Sep. 30, 2026
Retirement Benefits [Abstract]  
RETIREMENT PLANS RETIREMENT PLANS
ESTABLISHMENT AND TRANSFER OF THE DEFINED BENEFIT PLANS. At June 1, 2026, the projected benefit obligation and fair value of plan assets transferred or otherwise attributable to the Company-sponsored defined benefit pension plans were as follows (in millions):
Projected benefit obligation
$(1,266)
Fair value of plan assets
1,259 
Funded status
$(7)
The transfer of the related net pension obligation and accumulated other comprehensive income was recorded as a transfer from the former parent within additional paid-in capital. As of September 30, 2026, net pension liabilities of $22 million are included within “Other liabilities” in the Condensed Consolidated Balance Sheets.
NET PERIODIC PENSION COST. The components of net periodic pension cost were as follows:
Three Months Ended September 30, 2026Four Months Ended September 30, 2026
Service cost
$14 $19 
Other retirement plans expense (income):
Interest cost18 24 
Expected return on plan assets(21)(28)
Amortization of prior service credit and other— — 
Other retirement plans income, net(3)(4)
Net periodic pension cost
$11 $15 
For the three- and four-month periods ended September 30, 2025, allocated defined benefit plan expense associated with our employees' participation in FedEx-sponsored plans was $9 million and $11 million, respectively. Those amounts were determined under the historical cost-allocation methodology and do not represent the cost of a separate FedEx Freight-sponsored plan. Accordingly, the historical allocated costs are not directly comparable to net periodic pension cost recognized after the Spin-Off.
PENSION PLAN ASSUMPTIONS. The determination of benefit obligations and net periodic benefit cost requires the use of assumptions, including discount rates, expected long-term rates of return on plan assets, rates of compensation increases, mortality, retirement, and employee turnover. The measurement date for our defined benefit plans is December 31.
Weighted-average actuarial assumptions used to determine the benefit obligation as of June 1, 2026 and net periodic benefit cost for the period ending September 30, 2026 are as follows:
Discount rate used to determine benefit obligation5.76 %
Discount rate used to determine net periodic benefit cost5.78 
Rate of increase in future compensation levels used to determine benefit obligation and net periodic benefit cost5.46 
Expected long-term rate of return on assets7.00 
Interest crediting rate used to determine benefit obligation and net periodic benefit cost4.07 %
The investment strategy for our U.S. pension plan assets is to utilize a diversified mix of public equities, fixed-income, and alternative investments to earn a long-term investment return that meets our pension plan obligations. Our largest asset classes are Corporate Fixed Income Securities and Government Fixed Income Securities (which are largely benchmarked against the Bloomberg Barclays Long Government, Bloomberg Barclays Long Corporate, or the Bloomberg Barclays 20+ STRIPS indices), and U.S. and non-U.S. Equities (which are mainly benchmarked to the MSCI and ACWI indices). Accordingly, we do not have any significant concentrations of risk. Active management strategies are utilized within the plan in an effort to realize investment returns in excess of market indices.
CONTRIBUTIONS. No contributions are required for our tax-qualified U.S. pension plan during 2026 under applicable minimum-funding requirements. The absence of a required contribution under those requirements does not necessarily indicate that the plan is fully funded under the accounting provisions of ASC 715.
We did not contribute to our defined benefit pension plans during the four months ended September 30, 2026. We do not currently expect to contribute during the remainder of 2026. Actual contributions may differ from current estimates based on changes in funded status, regulatory requirements, investment performance, and other factors.
DEFINED CONTRIBUTION PLANS. The U.S. defined contribution plans provide matching contributions based on a percentage of eligible employee compensation and elective deferrals. Eligible Canadian employees participate in a separate Company-sponsored defined contribution arrangement.
In connection with the Spin-Off, account balances attributable to eligible active U.S. employees were transferred from the applicable FedEx-sponsored plans to the FedEx Freight-sponsored plans. The transfer of participant account balances did not affect the Company's results of operations.
Defined contribution plan expense is included in “Salaries and employee benefits” and was $40 million and $38 million for the three-month periods ended September 30, 2026 and 2025, respectively, and $53 million and $49 million for the four-month periods ended September 30, 2026 and 2025, respectively. Amounts for periods prior to the Spin-Off include directly attributable plan costs and, where applicable, allocated shared employee-benefit costs.