Company contributions expected for next fiscal year

[Table of Contents](#ie3b4dd133255408488aec6011c49b801_10)APPLIED MATERIALS, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)A summary of the components of net periodic benefit costs and the weighted average assumptions used for net periodic benefit cost calculations for each fiscal year is presented below: 

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 2021 |  | 2020 |  | 2019 |
|  |  |  |  |  |  |
|   | (In millions, except percentages) |
| Components of net periodic benefit cost |  |  |  |  |  |
| Service cost | $ | 15  |  |  | $ | 13  |  |  | $ | 11  |  |
| Interest cost | 8  |  |  | 8  |  |  | 10  |  |
| Expected return on plan assets | (21) |  |  | (22) |  |  | (20) |  |
| Amortization of actuarial loss and prior service credit | 14  |  |  | 12  |  |  | 7  |  |
|  |  |  |  |  |  |
| Net periodic benefit cost | $ | 16  |  |  | $ | 11  |  |  | $ | 8  |  |
| Weighted average assumptions |  |  |  |  |  |
| Discount rate | 1.18  | % |  | 1.23  | % |  | 1.98  | % |
| Expected long-term return on assets | 4.80  | % |  | 5.10  | % |  | 5.40  | % |
| Rate of compensation increase | 2.74  | % |  | 2.69  | % |  | 2.74  | % |

Asset return assumptions are derived based on actuarial and statistical methodologies, from analysis of long-term historical data relevant to the country in which each plan is in effect and the investments applicable to the corresponding plan. The discount rate for each plan was derived by reference to appropriate benchmark yields on high quality corporate bonds, allowing for the approximate duration of both plan obligations and the relevant benchmark yields.Future expected benefit payments for the pension plans and the postretirement plan over the next ten fiscal years are as follows:

|  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |
|   | Benefit Payments |
|  | (In millions) |
| 2022 | $ | 11  |  |
| 2023 | 13  |  |
| 2024 | 15  |  |
| 2025 | 14  |  |
| 2026 | 15  |  |
| 2027-2031 | 99  |  |
| Total | $ | 167  |  |

Company contributions to these plans for fiscal 2022 are expected to be approximately $7 million.Executive Deferred Compensation PlansApplied sponsors two unfunded deferred compensation plans, the Executive Deferred Compensation Plan (Predecessor EDCP) and the 2016 Deferred Compensation Plan (2016 DCP) (formerly known as the 2005 Executive Deferred Compensation Plan), under which certain employees may elect to defer a portion of their following year’s eligible earnings. The Predecessor EDCP was frozen as of December 31, 2004 such that no new deferrals could be made under the plan after that date and the plan would qualify for “grandfather” relief under Section 409A of the Code. The Predecessor EDCP participant accounts continue to be maintained under the plan and credited with deemed interest. The 2016 DCP was originally implemented by Applied effective as of January 1, 2005, and amended and restated as of October 12, 2015, and is intended to comply with the requirements of Section 409A of the Code. In addition, Applied also sponsors a non-qualified deferred compensation plan as a result of the acquisition of Varian. Amounts payable for all plans, including accrued deemed interest, totaled $206 million and $151 million at October 31, 2021 and October 25, 2020, respectively, which were included in other liabilities in the Consolidated Balance Sheets.  
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