A reply to one of the posts below said as of February no one will be able to take a lump sum on their pension.
Anyone have facts on that and a reliable source?
19 replies (most recent on top)
Still waiting on reliable source for the Feb 2022 rumor.
Yes, the rules around pension funding outside of the US are a lot different and have more bite, specially in Europe. In the States, a company can go bankrupt and push their plan off to the Federal PBGC with very little pain with participants usually getting 60% of less of their benefit. The PBGC rule about no lump sums if a pension goes under 80% comes from that as it preserves the plan's cash longer. In the UK for example, if a company goes bankrupt, the pension obligation are actually first in line for any remaining cash instead of at the bottom as it is in the US. As a result, the independent third party that takes over the pension often winds-up in control of the company itself to secure the funds needed for the pension. Icahn learned this the hard way with Federal-Mogal back in the 90's. No way he let's some ministry bureaucrat take-over his company now. Thus, Xerox will make sure UK and other European pension funds are at 100%.
That is false info that you are guaranteed 100% lump sum if hired before 1999.
You have to be Xerox Direct to enjoy that option. Not sure if other organizations received that email. All my co-workers and I received it and it's real. I'm away from home enjoying my retirement (No cold in Florida!) but I will e-mail co-workers who are still working and see if they can send me the email.
People who make fear based decisions usually make bad ones. That is false info that you are guaranteed 100% lump sum if hired before 1999. That is false info that any statement has been made that the lump sum in going away. Yes, if funding slips below 80% the lump sum option could change. But if funding slips Xerox must pay a MUCH higher PBGC (Pension Board Guarantee Corporation) insurance fee. Pensions are highly regulated. Yes, beware, be vigilant, but don’t make a decision based upon fear and speculation. My highly knowledgeable sources say the 100% option is good for another year.
@3spe+1eEXJNpd
Whats the bad info?? The last few posts are TRUE
Enlighten us then
So much bad info here.
The pension for Xerox directs was frozen in 2012.
I never heard about the Jan 1 1999 part. Didn't Xerox stop pensions for new employees a short time after that? Then after that they stopped contributing to our pensions for long term employees.
If you wanted to leave in January it would be to late to escape the 50 percent lump sum 50 percent annuity (I heard that also that starting February 2022 that would apply because the fund is less than 80 percent) as they "valuate" your retirement the following month after you declare that you want to retire etc. Not sure why it is that way but that is how its been for a few years (that I know of). So retire in June it's valuated in July etc.
There is good reasoning for not funding the retirement account above 80 percent (could be 50 percent one of these days) as it stops the "run on the bank" syndrome. Everyone seems to be taking the lump sum option (can't blame them) so instead of depletion of mass amounts of money they start giving out small amounts (annuity) which by law and the plans contract allows them to do.
Also....the poster below is correct that if you started Xerox (direct) before January 1st, 1999 you are allowed to take a full lump sum no matter what the percentage of funding is. After January 1st, 1999 you are at the mercy of the funding values (80 percent and 50 percent)
If you have a large amount of money in the pension fund you should leave Xerox immediately! Don't take risks with that money, get it moved to a wealth advisor that can grow your money for you.
Icahn & Johnny are taking every dollar they can from employees. You will lose out on the interest that money could earn instead of watching erode to inflation.
Read the other posts employees have made, it's proven that the leadership of this company is the absolute worst its history.
@hhb+1eEXJNpd
I don't know who your financial planner is but his/her information is false. I spoke to HR directly and they said " as of February the lump sum is going to be 50% because the fund will be below 80% funded." That was told to me in September 2021.
Got laid off last month, lump sum rollover check is in process. Assuming they don't sc--w me midway through the process, lump sum is still in play for now...
Last March, the non US plans were funded at over 100%, while the US plans were funded at 74.8%.
I assume non US have legal implications in the EU that explain the differences.
I always thought when it's under 80% funded you lose the ability to take it all as a lump sum.
https://www.pionline.com/pension-funds/xerox-send-130-million-global-pension-plans
There was an email that came out awhile back (I recently retired from Xerox Direct) that if you were hired before January 1, 1999 that you were eligible for a 100 percent lump sum no matter what the funding. After January 1, 1999 you were at the mercy of what the funding was ie at 80 percent funding you got half annuity and half lump sum. At 50 percent funding that changed to 100 percent annuity.
Xerox is not obligated to fund the retirement account. It just happens luckily they have been putting money in there. Problem is when huge amounts of people quit/retire/laid off etc. and TAKE lump sums (the only way to do it in my opinion!!) the fund is rapidly depleted. Take into account share holders are the most important people (used to be the customer and employees) they get their money first and the funding is secondary.
I'm not sure how the comment below that says their financial planner says the lump sum will be available for another year unless their financial planner is working for Xerox or a subsidiary of the financial end of Xerox. Xerox as we all well know has a way of mysteriously changing things mid-stream (think about the 401k sc--w job that happened late 2021). They have to report the funding to everyone but that doesn't mean it's in favor of the employee wanting to take a lump sum.
The only way to know is go on the Xerox web portal and pick a date 30 days from now and see if your still eligible for a 100 percent lump sum. Or that you were hired before January 1, 1999. Good luck to all...
I just filed for my lump sum today.... big check coming in February. As long as you are 55 or older this year there is no 10% penalty
Don’t trust anything you hear from Xerox…This company is famous for their use of “doublespeak.”
Extremely difficult to get HR to comment on this but my financial planner is saying the lump will be available for at least another year.
Someone will come along soon with the details. If I remember correctly, under 85% funded, it moves to 50% lump sum & 50% annuity and if below 50% funded, it moves to 100% annuity (which in most cases is bad for employee). I would rather control my own rightfully earned money and have the option to pass it to my heirs ( take lump sum)