Does Xerox need to make a contribution to RIGP this year to keep it funded at 80%?
Will they?
10 replies (most recent on top)
Xerox reported in Q2 earnings report 70million YTD pension contributions. Xerox reported in Q3 earnings report an additional 37 million for a total YTD 107 million in pension contributions.
Go get the earnings report on Xerox.com
RIGP lump sum values are at historic highs. Xerox is currently allowing the lump sum cash option in lieu of monthly annuity. At some point in the not too distant future, Xerox will fail to maintain the 80% funding threshold. At that point lump, sum withdrawls will be curtailed partially or entirely. My financial advisor recommends taking the cash option before May 2020 when the new RIGP formula (based on 2 month old published interest rates) kicks in permanently.
Ah OK - TRA balance. Thanks for clarifying!
Correction to my earlier post RIGP Benefits for Salaried Employees if you were hired prior to January 1, 1990, you may have a TRA balance. TRA balances are not subject to restrictions and is available as a lump sum payment.
You should be able to download related information on internal benefits or HR websites.
Before ‘89 you are in the RIGP. Not guaranteed your RIGP in a lump sum.
I just recently pulled mine with a lump sum check that I'm moving into my own IRA. It was just bit under $100k, but now it is safe. I would recommend everyone that was HCL/Layed off get a lump sum check sent out asap before the 80% funding level is breached. Hopefully everyone knows this, but just because your pension / rigp says a number (example $70k), the lump sum payout will be higher by a decent amount. You can model them up on the buckhr benefits website.
Regarding the comment a few back... "This could put lump sum withdrawals at risk, except for Xerox employees hired prior to 1989 who are guaranteed lump Doehad never heard that anyone hired before 1989 is guaranteed a lump sum. It sounds too good to be true! Can anyone point me to where I can see that in black and white? Since I was hired in 1985 this is obviously of interest to me! THANKS!!!
When the $500 Million was put into RIGP at the end of 2017, the financial guys involved expected that Xerox at a maximum would need to put $50 Million into the plan going forward to keep the plan comfortably above the 80% funding level to maintain the lump sum option. That was before Icahn. Xerox did not put $50 Million into the plan in 2018 and on the most recent quarterly investor’s webinar earlier this year, no pension contribution was noted for the 2019 financials. With no contributions for 2 years and I assume a significant uptick in withdraws due to layoffs and resignations (I have not seen a report on withdraws recently), I can only assume that the plan will be close to the 80% threshold in the near future.
The RIGP obligations are a noose around Icahn’s plans for Xerox as it drains cash and acts as a deterrent to potential suitors. By letting the plan go under 80%, the lump sum option disappears, which opens the door to ‘selling’ the plan’s obligations to an insurer. The only other route would be through bankruptcy proceedings; but due to Xerox’s annuity business, that option will take a while to get too (maybe 2021 when Xerox’s major debt note comes due) and would also eliminate any chance of Xerox’s share price getting to $40.
From my understanding Norwalk is not planning to in 2019. This could put lump sum withdrawals at risk, except for Xerox employees hired prior to 1989 who are guaranteed lump sum.
No