Thread regarding Xerox Corp. layoffs

Took my money and ran. Paid the 5% penalty for each early year. Best move I ever made. Invested it wisely and live like when I was working, without touching the initial investment to any degree.

There are two different points being discussed in this thread.

1. RIGP Pension annuity and full retirement age: Depending on when you were hired, you may be eligible for full retirement at 62 or 65. The pension annuity will be reduced by 5% per year if you retire early after you are eligible at 55 years old. As an example, if your full retirment age is 62 and your annuity is $2,000 a month, but you retire early at age 60, then you would get $1,800/ month $2,000 - 10%(2000). You would pay taxes as normal income depending on where you live. Some States don’t tax pensions.
2. RIGP annuity converted to lump sum. IRS segment rates and your life expectancy are used to compute the annuity stream to a present value lump sum. If you take that lump sum and do not roll it over, then you’ll be taxed on all of it as normal income. If you roll it into an IRA, then you won’t be taxed. But if you start to withdraw money from the IRA, then you will need to claim that as income. If you are less than 59.5yrs old, then you may have to pay an additional 10% early withdrawal penalty. There are provisions that allow a set amount of money to be withdrawn without the additional penalty if you are between 55 and 59.5 . Those are spelled out in IRS publications.
3. Don’t take what you read here as gospel, consult with a financial advisor who is a fiduciary, knows about pensions and read the HR publications on eligibility.

@2mpt+1bBQ8qr3 Not false, 100% no penalty when rolled over entirely to the correct type of plan. I did it too. USA. If you take cash before a certain date then yes you’d have to pay a penalty.

In the US I rolled mine over to an IRA at age 47 @2mpt+1bBQ8qr3 checked with my accountant and my investment guy. NO PENALTY — I read the plan and consulted the experts. 🙄 but if you still want to argue with those of us saying you can do so go ahead.

If you quit/retire/Irif/Vrif no matter what your age you can roll over your CBRA/TRA to an IRA without penalty. Now if you decide to take some in cash and roll over the remaining, the cash will have a 10 percent penalty taken if you are not 59 1/2. Of course federal/state taxes will be taken no matter what your age....I did this a year ago at 53 and 20 years of service and there was no 5 percent penalty per year at least in the US of A...

1sww+1bBQ8qr3, that is totally false, and is a perfect example of why people should not take advice from this board under any circumstances. You pay a penalty of 5% for each year under age 65 (or 62, depending on your hire date) if you try to take the money early. Read your plan!

From the 10K for Q4 2020:
Estimated contributions to our U.S. Defined benefit plans in 2021 are associated with our non-qualified plan as no other amounts were required to meet the minimum funding requirements for our tax qualified plans.

So what I'm reading from this web site the US funds are way under 80 percent thus now maybe 1/2 annuity and 1/2 lump sum??? Am I reading this correctly??

https://www.pionline.com/pension-funds/xerox-send-130-million-global-pension-plans

And if you leave you can take it with you and roll it over into an ira or other qualifying plan with no penalty no matter what your age!!!

Non US plans have always been much higher funded than US plans.

The following indicates it's already under 80% but I can't imagine that is right. I thought it was in the mid 80s last I knew.

https://www.pionline.com/pension-funds/xerox-send-130-million-global-pension-plans

As of 12/31/2010, the pension plan was funded at 100.6%, with an additional 25 million being added in 2021. Pretty easy to find out for yourself. Unless you had another motive...

No. The unknown intention of the poster causes me to throw out two different reactions.

Management intent: this could be a post designed to further reduce headcount by scaring people to retire now and take the lump sum while they can.

Innocent intent: it’s been getting uncomfortably close to the 80% mark over the Icahn years. If you aren’t Xerox retirement eligible it doesn’t matter, other than to limit your future options when you become eligible. If you are eligible but on the fence, rising interest rates will make the lump sum less attractive over time so think about getting out now unless you just want the annuity payouts.