Mar 1st is when the funding of the US pension will be announced. What are the chances in underfunding, forcing everyone to take the annuity vs the 50% lump sum? Did they really back date the last notice when the took the 100% lump sum down to 50% option away?
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@vm not true. Stop posting.
@at 120 m per year in annual funding public info form 5500
@a8 if ch 11 you may get 50% of your pension vs lump sum you get 100%
@sc Thats exactly right. The lump sum is not like a savings account balance, it is the present value of your earned annuity at current rates. The annuity delivers a predictable, reliable income, the lump sum allows to leave an estate, but the income is dependent upon your investment choices.
@h9 lump sums say longer term employee gets 1 million if rates are higher like they are now paying cash out could improve funding percentage. The liability comes off right away. If they take the annuity the liability say 1 million stays on the books. When rates were 3% 3 years ago you could argue the cash lump sum is higher and could reduce funding percentage.
Remember your annuity never changes, the goal of lump sum is to equal the annuity so if rates are 3% low you need more lump sum to equal annuity. If rates were high say 9% you need much less lump sum to equal annuity. So annuity never changes and lump sum is always changing.
@rm The Kodak pension is not relevant. All plans are different.
How did Kodaks pension work out for those folks? For the few still working at Xerox get your ducks in a row.
The trust is funded by cash from XRX, and return on investment. There is no set payment schedule. Theoretically, once 100% funded, and if assumptions were correct (never happened at XRX), XRX would never have to add any funds.
@kz Theoretically, if the fund was ever at 100%, all things being equal, XRX should never have to make another contribution. Investments have been doing great for the last 3 years and more. Keep in mind that at 100% withdrawals do not change the funding ratio because the fund liability declines by an equal amount. Something unusual happened at the end of 2023 to cause the funding ratio to decline. I have not heard any lucid explanation for the decline. Most laypeople assume the money is being used by retirees, and don't ask. That is NOT how the math works. Hopefully it was not that the fund was invested in XRX...
@h9 Just to be clear this is the trust funding itself though investments? or is this down due to lack of contributions (that were expected and technically required) that Xerox failed to make into the pension plan?
Reality is its a mixture of them both (if both requirements exist) but I still don't understand if Xerox has a pension forward liability (as they have to pay into it still each quarter) and if they are meeting that liability.
in February 2024, the US pension funding went way down, it was 90%+++ funded and dropped into the 60% range and required the lump sum MAXIMUM to be reduced to the 50% level. The funding was dropped the same day they laid off a few thousand workers who would have taken the 100% lump sum option. VERY sneaky since the executive grade SVPs that were let go the prior month all seemed to know they had better take the 100% immediately. The pension funding in the US would need to go way down to eliminate the 50%, I think to 40% funded or less, if that happened, we would all know the company is heading to insolvency. No one really trusts or supports SB so it's amazing that he's still in his role, especially at $1.86 per share.
@ev Yes, leaving it to my children was a factor in taking the lump sum. Though I hope to spend it all before I leave this realm.
We should see soon march 1. 2025: Estimated ~$110 M U.S. pension funding plus ~$30 M non-U.S., totaling ~$140 M worldwide pensions.
@em The annuity is fine from an investment perspective, and if you are conservative. The issue with it is that you have nothing to leave to your heirs if that is important. Several who were IRIF'ed early 2024 were very disappointed they could not choose the lump sum and leave it to their children.
When I left, I took the 100% lump sum and rolled it into my 401k. It wasn't super clear to me whether the lump sum would be better than an annuity, it really depends on your individual circumstances.
So while it does su-k to not be able to make that choice of lump sum options are eliminated, the annuity isn't a terrible option. I wanted flexibility, but I know many people that did a combination of lump sum and annuity.
A day late and a dollar short.
Working at xerox defined …
The best thing about leaving Xerox many years ago was getting 100% lump sum.
SB is using it for his c level parachute.
@c2 this is gibberish. Please don’t post anymore.
@a8 let’s say a unity is $2000 mo, ch 11 it goes to $100 month you loose half your pension. On the other hand you take the lump sum, then xerox files ch 11 you already got 100% of pension. Id--ts take annuity dump id--ts
@bm I logged in to select lump sum the day of IRIF, and the option was gone.
@OP When they reduced the lump sum option from 100% to 50% there was no advance warning -- literally it was the day before the reduction took effect. Luckily I had everything lined up so I could react quickly, but if you don't have things set up in advance, one day is not enough time to take your money out. If you have any thought of retiring, or taking the lump sum, get things set up in advance. Also, the announcement was made on the last work day of February.
@at some senior management had access to a different plan where the liability was held by XRX. Its a separate plan from general pension. I think it was called something like unfunded rigp.
@a8 you are right about the return although I’m over 22% ytd I know that won’t sustain. If you want to leave an estate though, as some do, now you can’t.
What is the pension liability that Xerox holds on funding the Pension. In other posts it has been said that the pension is in a trust and can't be touched when someone mentioned the pension and changes in future funding in chapter 11.
If its a huge liability (as in future payments into the fund) I believe that can goes away with Chapter 11; or I believe it has for other companies.
At this point does it matter. If you were to take the 50% lump and reinvest it, even at an 8% return, does that outperform just taking the lifetime annuity. Probably not, unless you’ve been at xerox for 40 years and had a well paid position early on. For most, just taking the annuity is going to be the chosen option.
so glad the company can’t have any control over the UK pension arrangements. The Final Salary Scheme is funded and since 2014 they flipped everyone out to personal pensions schemes, so it is ‘our’ money that we decide how to manage.
@OP Not sure if it was back dated but the reduction was not communicated and many caught in the early 2024 IRIF were not able to take 100% lump sum. Many asked and asked but only received vague answers. It's clear the plan managers have been instructed to not share information. The next step will be 100% annuity if it hasn't already happened.