Hp To Pay Out $810M To Employees To Cut Pension Obligations

  • clover-depot-intl-us-ca-email-signature-05-10-2017-902x1772
  • banner-01-26-17b
  • mse-big-banner-new-03-17-2016-416716a-tonernews-web-banner-mse-212
  • 05 02 2016 429716a-cig-clearchoice-banner-902x177
  • Print
  • ces_web_banner_toner_news_902x1776
  • 2toner1-2
  • 4toner4
  • cartridgewebsite-com-big-banner-02-09-07-2016
  • ncc-banner-902-x-177-june-2017

Hp To Pay Out $810M To Employees To Cut Pension Obligations

 news 2015-06-16 at 11:49:24 am Views: 161
  • #42794

    Hp to Pay Out $810M To Employees To Cut Pension Obligations
    Lump-sum takeups cut HP pension liabilities
    By Jerry Geisel

    Hewlett-Packard Co. has disclosed that its pension plan paid out $810 million to former employees who accepted the company's offer to convert their future annuity benefit to a cash lump-sum.

    About 50% of former employees who received an offer accepted it, the Palo Alto, California-based electronics giant disclosed Monday in a 10-Q filing with the U.S. Securities and Exchange Commission. The company did not disclose how many participants received the offer.

    “The program resulted in a reduction in the projected benefit obligation that was offset by a lower decrease in plan assets and the bet funded status of the plan improved,” Hewlett-Packard said in its filing.

    As of Oct. 31, 2014, Hewlett-Packard's U.S. pension plans were underfunded by $1.78 billion, with $13.75 billion in liabilities and $11.97 billion in assets.

    Annuity-to-lump-sum benefit buyout offers have become a widespread corporate pension de-risking strategy in recent years.

    The approach is intended to reduce the size of employers' pension plans. That reduction lessens the effect from interest rate fluctuations and investment results on employer contributions to their pension plans.

    In addition, with smaller pension plans, employers can reduce certain fixed costs, such as the payment of sharply rising premiums to the Pension Benefit Guaranty Corp.