And why did Xerox do this.
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They froze pensions awhile ago. They don't care about your retirement, only their pockets getting lined. Took Life Cycle away when you retire. What's next, eliminate vacations? Working at X is just putting yourself in a downward spiral.
When Icahn’s team walked in the door after their coup, the walls in Norwalk rattled from the JV and his team screaming after they learned that Jacobson and invested about $500 Million into the RIGP at the end of 2017. Just search ‘Icahn’ and ‘pension’ on the web to see his history with such plans.
That said, I did catch on Pension & Investments that Xerox is going to do the following:
“Xerox Corp., Norwalk, Conn., expects to contribute $135 million to its global pension plans in 2020, according to a 10-K filing with the Securities and Exchange Commission.
The amount includes $25 million to its U.S. plans and $110 million to its non-U.S. plans.
The firm contributed $141 million to its plans in 2019, including $26 million to its U.S. plans and
$115 million to its non-U.S. plans, according to the Feb. 28 regulatory filing.
Xerox had $2.5 billion in U.S. plan assets as of Dec. 31 and a benefit obligation of $3.6 billion, giving it a funded status of 69.4%, down from 75% the year before. Meanwhile, its non-U.S. plans had $6.4 billion during the same period, with $6.5 billion in benefit obligations, giving it a funded status of 98.5%, down from 95% a year earlier.”
The $114 Million into non-US pension is likely aimed to keep those plans solvent as the rules and penalties around pension funding in Europe are a lot harsher than in the US. No idea what the benefit of putting $25 Million in the US pension as it won’t come close to getting it back to the 80% funding requirement for the Annuity option.
When combined, the Union and Non-Union US Pension plan (RIGP) has larger liabilities that the next biggest plan, which is the UK plan. The Canadian pension plan is next; but, it’s like a quarter the size of the other two. The rest are very small. Of course, currency rates can affect those numbers.
This is not a good answer:
- Because pensions are a thing of the past. Most all companies have done this...
Employers figured out that it's cheaper for them to offer 401k plans than to fund your pensions and they did that.
keep in mind, that xerox takes cut from fees that 401k funds charge you every year.
Because pensions are a thing of the past. Most all companies have done this...
Because pensions are a thing of the past. Most all companies have done this...
Pensions were frozen 12.31.2012. As the previous poster said, it was a cost cutting measure. New hires brought on board after (I think) 1/1/2005 were never offered a pension. Retirement savings for those folks was 401K only.
It is important to keep in mind this was for US only, direct Xerox. If you look at recent financial reports, the pension exposure for non-US locations is higher than for the US.
Many companies started doing away with pensions in the early 2000's. In fairness, at the time, Xerox gave ample notice (in my opinion) to employees on what the process, and impact, would be. An example of better leadership at the time.
2013 it was a cost cutting measure.