Is this rumor true? Were employees notified? When/how?
28 replies (most recent on top)
It must be true it’s ending in February. It’s March 17th and nothing has changed. Same rumor for ten years. UGH!
Those generational remarks are a telltale of pre -Carl workplace toxicity, not by all but too large of a portion.
Xerox is required by law to announce to it's employees the funding level for the pension fund in the spring of each year, which they usually do in early April. Then, and only then, will we know if the lump sum will still be possible. If the funding level is below 80%, then we can only get half lump sum and half annuity.
Must not be "null and void" as I just received my full lump sum from my TRA balance (the larger of the two in my case) this week (2/13/22)
That letter is null and void. You can't get your lump sum anymore, sorry. You snooze, you lose...
Ok....Here is the official letter from Xerox that covers Xerox Direct (may cover others but not sure). Read the second page concerning employees hired before Jan 1, 1990 and the TRA balance of your retirement account that is NOT subject to levels of funding. This is still active to this day...
U.S. Retirement Income Guarantee Plan (RIGP) Benefit Funding FAQs
April 2020
This FAQ document is effective April 7. For additional questions, refer to the resources available on BenefitsWeb, such as Summary Plan Descriptions, Plan Guidelines, helpful hints and links, Pension Glossary, additional FAQs and the Benefit Projections tool.
In addition, you can call the Xerox Benefits Center at 1.800.428.2203, select option 1 to speak with a representative.
Note: Xerox does not make any recommendations about legal, financial or tax matters. Xerox urges you to seek professional advice on the treatment of funds distributed to you.
What pension benefits does Xerox fund?
There are three types of pension benefits that were offered to Xerox employees under the Xerox Retirement Income Guarantee Plan (RIGP or the “plan”): the formula benefit; the Transitional Retirement Account (TRA) benefit; and/or the Cash Balance Retirement Account (CBRA) benefit.
These benefits depend upon your hire date.
If you were hired prior to 1989, you are generally eligible for a RIGP formula benefit, a CBRA benefit or a TRA benefit, whichever is highest.
Salaried employees hired from 1989 through 2002 are generally eligible for a RIGP formula benefit or a CBRA benefit, whichever is higher. Union employees hired from 1989 through 2005 are generally eligible for a RIGP formula benefit or a CBRA benefit, whichever is higher.
Salaried employees hired in 2003 or 2004 are generally eligible for a CBRA benefit only.
Salaried employees hired on or after January 1, 2005, are not eligible for any benefit under RIGP. Union employees hired on or after January 1, 2006 are not eligible for any benefit under RIGP (April 1, 2006 for members of 14Z).
Is Xerox legally required to fund RIGP?
Yes. Xerox must make funding contributions to RIGP at least equal to the minimum contributions required by Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code.
Can Xerox eliminate RIGP?
Xerox is required by ERISA and the Internal Revenue Code to maintain RIGP until all benefits are paid to all participants and their beneficiaries.
Xerox may terminate RIGP only if Xerox first buys annuity contracts from a state-regulated insurance company, sufficient to pay all RIGP benefits to all RIGP participants and their beneficiaries. The annuity contracts would be required to include all RIGP distribution options, including the lump sum payment option.
Can Xerox reduce my RIGP benefit?
No. Under ERISA and the Internal Revenue Code, Xerox cannot amend RIGP to reduce or eliminate the benefit you have earned under RIGP.
This document does not create a contract between Xerox and any employee. All information contained in this document is
subject to the Xerox Corporation Retirement Income Guarantee Plan (“RIGP”) plan document. In the event of a discrepancy
between the information contained in this document and the official RIGP plan documents, the official plan documents
govern.
Can Xerox eliminate my lump sum payment option?
No. Under ERISA and the Internal Revenue Code, Xerox cannot amend RIGP to eliminate your lump sum payment option. If plan funding falls below a certain level, however, RIGP may be required to restrict lump sum payments.
What happens to the availability of lump sum payments if RIGP funding falls below certain levels?
Under the Pension Protection Act, if plan funding falls below certain levels (for benefit restriction purposes), RIGP must restrict lump sum payments until funding is restored. If a participant takes a distribution when RIGP is funded:
Between 60 – 80%, the participant can only take up to 50% of the benefit as a lump sum payment and must take the remaining benefit as an annuity payout under one of RIGP’s annuity payout options.
Below 60%, none of the benefit is available as a lump sum payment and the participant can take the benefit only as an annuity payout under one of RIGP’s annuity payout options.
Page 2...>>>>>
Note: If you were hired prior to January 1, 1990, you may have a TRA balance. The TRA balance is not subject to benefit restrictions and is available as a lump sum payment even if the above benefit restrictions otherwise apply. This applies to the amount of your TRA balance even if the TRA is not your highest (“winning”) benefit. For example, if you have a TRA balance but your formula benefit is the winning benefit, your TRA balance can be paid as a lump sum even if the benefit restrictions apply, but distribution of the portion of your formula benefit that exceeds your TRA balance will be subject to any applicable benefit restrictions.
What is RIGP’s current funding level?
RIGP’s December 1, 2018, funding level for benefit restriction purposes was over 80%. The December 1, 2018 funding level for benefit restriction purposes was certified by the Plan’s actuary on August 30, 2019. The certified December 1, 2018, funding level applies for RIGP’s plan year beginning December 21, 2018, and ending November 30, 2019.
Will current market volatility cause RIGP funding to fall below 80%?
RIGP’s December 1, 2018 funding level for benefit restriction purposes was certified at over 80% and applies for RIGP’s plan year beginning December 1, 2018, and ending November 30, 2019.
When will RIGP’s funding level for benefit restriction purposes be determined for the current plan year (beginning December 1, 2019, and ending November 30, 2020)?
The 2019 Annual Funding Notice includes the actuary’s estimate for the current plan year (in the “Year-End Assets and Liabilities” section of the Notice), which states that the funding level for benefit restriction purposes has been estimated by the Plan's actuary to be in excess of 80%. On or about August 31, 2020, the Plan’s actuary will certify RIGP’s December 1, 2019 funding level for benefit restriction purposes.
The certified December 1, 2019 funding level for benefit restriction purposes will apply through February 28, 2021.
Regardless of what the rules were …
Xerox no longer plays fair …They will sc--w the employee every which way to show a profit..
This is not accurate. If the pension drops below 80% the cost to Xerox for Pension Guarantee Insurance goes way up. Last year the Stock Market was up so the fund is well funded. And l MOST importantly they don't want Xerox to look distressed as they are trying to sell / merge the company. They may cut our pay and benefits - but, they don't want something to look poorly from and investor / financial managment standpoint - so they will NOT let the funding percentage drop.
It used to be determined by the funding level. If it fell below 85 or 80% (I forgot which) you were restricted in how much you could take as a lump sum, last I knew it was 50% cash, the rest as an annuity. If funding was below another threshold, you couldn't take any cash.
The most recent data I could find is that the US pension was funded at about 75%, that was from middle of last year. At that level people shouldn't be able to take a full lump sum.
Obviously this hasn't been the case as I have yet to hear of somebody being denied a full lump sum. Hard to find the rules now.
Interestingly the European pension is funded at over 100% because of additional protections in place required by EU countries.
Whoever posted this must have started when when they were 14 as a mail clerk and is still there shoveling the parking lot because they can’t type or put together a coherent thought - it’s like reading a memo from Milton on Office Space. They took my swingline stapler!
I can't answer your original question but I can share my experience, for what it's worth. I retired the end of 2020. Among other reasons I was also worried about the lump sum. I didn't find HR particularly informative while I was trying to decide but once I decided to pull the trigger they were on the ball. I was assigned a representative and she was able to answer any questions I had. We have been working with a financial advisor for many years and rolled my pension over with no issues whatsoever. Remember, this was at the height of COVID and it still was very smooth. So far we haven't needed the money as my wife continued working until the end of 2021 and we had planned ahead for that. While the interest rate does affect the amount of the lump sum you receive it doesn't have that much to do with your money after it's invested. That usually has more to do with the stock market. We had a great 2021 but have unfortunately given a lot of it back already this year, but its a long haul game. After my wife retired the end of last year we decided to both take social security and her pension as an annuity. We felt this was a safe option since the employer she retired from is not a risk. That way a portion of our income is guaranteed, no matter the follies of the market. This is where a financial advisor you trust comes in. They can point out things you may not think of. I highly recommend retirement if you can swing it.
You are such a dope. You write so poorly it’s amazing you ever had a job.
tHiS MaKeS No sEnSe:
There is still time to get that lump sum if you could quit but you're obviously stuck there.
Make sense now? Duh.
There is no question that HR is pretty useless, but its their job.
THis makes no sense: "The real problem is that you're going to lose your pension because you have no transferable skills."
Looks like we'll find out here once the first person is denied a full lump. I'd expect that the CI team would have a lock on the ongoing status of this but of course no one on the receiving end is allowed to know. If it weren't for u.s. and other governmental laws, this money would have been scooped by now.
When I left a couple years ago HR was pretty useless for help with pension evaluation. I cashed out and rolled it into a retirement account. You'd be best off finding an advisor familiar with the xerox plan.
The real problem is that you're going to lose your pension because you have no transferable skills.
And now that interest rates are higher you will get a better return on that cash. The real problem is that $10k is material enough for you to complain about it.
It is a fact that the amount of your lump sum drops as interest rates go up. I applied for a lump sum in November by the time I received it in January the lump sum was $10,000 less than the estimate I got in November due to the rise in interest rates.
I said it before but anyone soliciting retirement advise on this ridiculous site gets the answers they deserve.
Not as worthless as the information on this site. Talk to Corporate HR. Don't trust the call center for anything.
Shhhhhh… go back to sleep.
HR is outsourced and seemingly worthless at this point.
Talk to HR. Don’t ask that here. The interest rate comment has to stop too. While accurate, rates do not change that fast, and, you will then do better more safely when you invest the cash.
I don’t know if it’s true but what I do know is as interest rates go up lump sums go down.
How do you know that?
Not true.