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McKESSON CORPORATION
FINANCIAL NOTES (Continued)
82
13. Pension Benefits
We maintain a number of qualified and nonqualified defined pension benefit plans and defined contribution
plans for eligible employees.
Defined Pension Benefit Plans
Eligible U.S. employees who were employed by the Company prior to December 31, 1996 are covered under
the Company-sponsored defined benefit retirement plan. In 1997, we amended this plan to freeze all plan benefits
based on each employee’s plan compensation and creditable service accrued to that date. The Company has made
no annual contributions since this plan was frozen. The benefits for this defined benefit retirement plan are based
primarily on age of employees at date of retirement, years of service and employees’ pay during the five years prior
to retirement. We also have defined benefit pension plans for eligible Canadian and United Kingdom employees as
well as an unfunded nonqualified supplemental defined benefit plan for certain U.S. executives. We also assumed a
frozen qualified defined benefit plan through our acquisition of Per-Se Technologies, Inc. (“Per-Se”) in 2007. The
Per-Se plan was merged into our retirement plan in 2008. We adopted the measurement provisions of new
accounting standards for benefit provisions in the fourth quarter of 2009. As required, our defined benefit plan
assets and obligations are now measured as of the Company’s fiscal year-end. We previously performed this
measurement at December 31.
The net periodic expense for our pension plans is as follows:
Years Ended March 31,
(In millions) 2010 2009 2008
Service cost—benefits earned during the year $ 4 $ 6 $ 7
Interest cost on projected benefit obligation 35 33 31
Expected return on assets (24) (39) (39)
Amortization of unrecognized actuarial loss, prior
service costs and net transitional obligation 25 10 11
Settlement charges and other — 1 4
Net periodic pension expense $ 40 $ 11 $ 14
The projected unit credit method is utilized in measuring net periodic pension expense over the employees’
service life for the U.S. pension plans. Unrecognized actuarial losses exceeding 10% of the greater of the projected
benefit obligation or the market value of assets are amortized straight-line over the average remaining future service
periods.