HPQ » Topics » Defined Benefit Plans

This excerpt taken from the HPQ 10-K filed Dec 17, 2009.

Defined Benefit Plans

        HP sponsors a number of defined benefit pension plans worldwide, of which the most significant are in the United States. Both the HP Retirement Plan (the "Retirement Plan"), a traditional defined benefit pension plan based on pay and years of service, and the HP Company Cash Account Pension Plan (the "Cash Account Pension Plan"), under which benefits are accrued pursuant to a cash accumulation account formula based upon a percentage of pay plus interest, were frozen effective January 1, 2008. The Cash Account Pension Plan and the Retirement Plan were merged in 2005 for certain funding and investment purposes. The merged plan is referred to as the HP Pension Plan.

        Following the acquisition of EDS, HP announced that it was modifying the EDS U.S. qualified and non-qualified plans for employees accruing benefits under the programs. Effective January 1, 2009, EDS employees in the U.S. ceased accruing pension benefits. The final pension benefit amount was calculated based on pay and service through December 31, 2008.

        Effective October 30, 2009, the EDS U.S. qualified pension plan was also merged into the HP Pension Plan. The EDS U.S. qualified pension plan, like the Cash Account Pension Plan and the Retirement Plan, remains a separate sub-plan within the HP Pension Plan for purposes of determining benefit amounts. As a result, the merger had no impact on the separate benefit structures of the plans.

        HP reduces the benefit payable to a U.S. employee under the Pension Plan for service before 1993, if any, by any amounts due to the employee under HP's frozen defined contribution Deferred Profit-Sharing Plan (the "DPSP"). HP closed the DPSP to new participants in 1993. The DPSP plan obligations are equal to the plan assets and are recognized as an offset to the Pension Plan when HP calculates its defined benefit pension cost and obligations. The fair value of plan assets and projected

135


Table of Contents


HEWLETT-PACKARD COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Note 16: Retirement and Post-Retirement Benefit Plans (Continued)


benefit obligations for the U.S. defined benefit plans combined with the DPSP is as follows for the following fiscal years ended October 31:

 
  2009(1)   2008(1)  
 
  Plan Assets   Projected
Benefit
Obligation
  Plan Assets   Projected
Benefit
Obligation
 
 
  In millions
 

U.S. defined benefit plans

  $ 8,371   $ 10,034   $ 7,313   $ 7,654  

DPSP

    872     872     910     910  
                   
 

Total

  $ 9,243   $ 10,906   $ 8,223   $ 8,564  
                   

(1)
2009 and 2008 plan assets and projected benefit obligation include the EDS U.S. pension plans.
These excerpts taken from the HPQ 10-K filed Dec 18, 2008.

Defined Benefit Plans

        HP sponsors a number of defined benefit pension plans worldwide, of which the most significant are in the United States. The HP Retirement Plan (the "Retirement Plan") is a defined benefit pension plan for U.S. employees hired on or before December 31, 2002. Benefits under the Retirement Plan generally are based on pay and years of service, except for eligible pre-acquisition Compaq employees, who do not receive credit for years of service prior to January 1, 2003. Effective December 31, 2005, participants whose combination of age plus years of service was less than 62 ceased accruing benefits under the Retirement Plan. For U.S employees hired or rehired on or after January 1, 2003, HP sponsors the Hewlett-Packard Company Cash Account Pension Plan (the "Cash Account Pension Plan"), under which benefits accrue pursuant to a cash accumulation account formula based upon a percentage of pay plus interest. Effective December 31, 2005, the Cash Account Pension Plan was closed to new participants, and participants whose combination of age plus years of service was less than 62 ceased accruing benefits.

        Effective November 30, 2005, HP merged the Cash Account Pension Plan into the Retirement Plan; the merged plan is treated as one plan for certain legal and financial purposes, including funding requirements. The merger has no impact on the separate benefit structures of the plans.

        On February 20, 2007, HP announced it was modifying its U.S. defined benefit pension plans for the remaining number of U.S. employees still accruing benefits under the program. Effective January 1, 2008, these employees ceased accruing pension benefits, and HP calculated the final pension benefit amount on pay and service through December 31, 2007.

        HP reduces the benefit payable to a U.S. employee under the Retirement Plan for service before 1993, if any, by any amounts due to the employee under HP's frozen defined contribution Deferred Profit-Sharing Plan (the "DPSP"). HP closed the DPSP to new participants in 1993. The DPSP plan obligations are equal to the plan assets and are recognized as an offset to the Retirement Plan when HP calculates its defined benefit pension cost and obligations. The fair value of plan assets and

134


Table of Contents


HEWLETT-PACKARD COMPANY AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Note 15: Retirement and Post-Retirement Benefit Plans (Continued)


projected benefit obligations for the U.S. defined benefit plans combined with the DPSP as of the September 30 measurement date is as follows for the following fiscal years ended October 31:

 
  2008(1)   2007  
 
  Plan Assets   Projected
Benefit
Obligation
  Plan Assets   Projected
Benefit
Obligation
 
 
  In millions
 

U.S. defined benefit plans

  $ 7,313   $ 7,654   $ 4,258   $ 3,982  

DPSP

    910     910     1,029     1,029  
                   
 

Total

  $ 8,223   $ 8,564   $ 5,287   $ 5,011  
                   

(1)
2008 plan assets and projected benefit obligation include the EDS U.S. pension plans.

Defined Benefit Plans





        HP sponsors a number of defined benefit pension plans worldwide, of which the most significant are in the United States. The HP
Retirement Plan (the "Retirement Plan") is a defined benefit pension plan for U.S. employees hired on or before December 31, 2002. Benefits under the Retirement Plan generally are based on pay
and years of service, except for eligible pre-acquisition Compaq employees, who do not receive credit for years of service prior to January 1, 2003. Effective December 31,
2005, participants whose combination of age plus years of service was less than 62 ceased accruing benefits under the Retirement Plan. For U.S employees hired or rehired on or after January 1,
2003, HP sponsors the Hewlett-Packard Company Cash Account Pension Plan (the "Cash Account Pension Plan"), under which benefits accrue pursuant to a cash accumulation account formula based upon a
percentage of pay plus interest. Effective December 31, 2005, the Cash Account Pension Plan was closed to new participants, and participants whose combination of age plus years of service was
less than 62 ceased accruing benefits.



        Effective
November 30, 2005, HP merged the Cash Account Pension Plan into the Retirement Plan; the merged plan is treated as one plan for certain legal and financial purposes,
including funding requirements. The merger has no impact on the separate benefit structures of the plans.



        On
February 20, 2007, HP announced it was modifying its U.S. defined benefit pension plans for the remaining number of U.S. employees still accruing benefits under the program.
Effective January 1, 2008, these employees ceased accruing pension benefits, and HP calculated the final pension benefit amount on pay and service through December 31, 2007.




        HP
reduces the benefit payable to a U.S. employee under the Retirement Plan for service before 1993, if any, by any amounts due to the employee under HP's frozen defined contribution
Deferred Profit-Sharing Plan (the "DPSP"). HP closed the DPSP to new participants in 1993. The DPSP plan obligations are equal to the plan assets and are recognized as an offset to the Retirement Plan
when HP calculates its defined benefit pension cost and obligations. The fair value of plan assets and



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HREF="#bg72001a_main_toc">Table of Contents





HEWLETT-PACKARD COMPANY AND SUBSIDIARIES



Notes to Consolidated Financial Statements (Continued)



Note 15: Retirement and Post-Retirement Benefit Plans (Continued)






projected
benefit obligations for the U.S. defined benefit plans combined with the DPSP as of the September 30 measurement date is as follows for the following fiscal years ended
October 31:


























































































































 
 2008(1)  2007  
 
 Plan Assets  Projected

Benefit

Obligation
 Plan Assets  Projected

Benefit

Obligation
 
 
 In millions
 

U.S. defined benefit plans

 $7,313 $7,654 $4,258 $3,982 

DPSP

  910  910  1,029  1,029 
          
 

Total

 $8,223 $8,564 $5,287 $5,011 
          










(1)
2008
plan assets and projected benefit obligation include the EDS U.S. pension plans.



This excerpt taken from the HPQ 10-K filed Dec 18, 2007.

Defined Benefit Plans

        HP sponsors a number of defined benefit pension plans worldwide, of which the most significant are in the United States. The HP Retirement Plan (the "Retirement Plan") is a defined benefit pension plan for U.S. employees hired on or before December 31, 2002. Benefits under the Retirement Plan generally are based on pay and years of service, except for eligible pre-acquisition Compaq employees, who do not receive credit for years of service prior to January 1, 2003. Effective December 31, 2005, participants whose combination of age plus years of service is less than 62 ceased accruing benefits under the Retirement Plan. Effective January 1, 2008, the remaining number of U.S. employees still accruing benefits under the program will cease accruing pension benefits.

        For U.S employees hired or rehired on or after January 1, 2003, HP sponsors the Hewlett-Packard Company Cash Account Pension Plan (the "Cash Account Pension Plan"), under which benefits accrue pursuant to a cash accumulation account formula based upon a percentage of pay plus interest. Effective November 30, 2005, HP merged the Cash Account Pension Plan into the Retirement Plan; the merged plan is treated as one plan for certain legal and financial purposes, including funding requirements. The merger has no impact on the separate benefit structures of the plans. Effective December 31, 2005, the Cash Account Pension Plan was closed to new participants, and participants whose combination of age plus years of service is less than 62 will cease accruing benefits.

123



        HP reduces the benefit payable to a U.S. employee under the Retirement Plan for service before 1993, if any, by any amounts due to the employee under HP's frozen defined contribution Deferred Profit-Sharing Plan ("the DPSP"). HP closed the DPSP to new participants in 1993. The DPSP plan obligations are equal to the plan assets and are recognized as an offset to the Retirement Plan when HP calculates its defined benefit pension cost and obligations. The fair value of plan assets and projected benefit obligations for the U.S. defined benefit plans combined with the DPSP as of the September 30 measurement date is as follows for the following fiscal years ended October 31:

 
  2007
  2006
 
  Plan
Assets

  Projected
Benefit
Obligation

  Plan
Assets

  Projected
Benefit
Obligation

 
  In millions

U.S. defined benefit plans   $ 4,258   $ 3,982   $ 4,325   $ 4,688
DPSP     1,029     1,029     1,095     1,095
   
 
 
 
  Total   $ 5,287   $ 5,011   $ 5,420   $ 5,783
   
 
 
 
This excerpt taken from the HPQ 10-K filed Dec 22, 2006.

Defined Benefit Plans

        HP sponsors a number of defined benefit pension plans worldwide, of which the most significant are in the United States. The HP Retirement Plan (the "Retirement Plan") is a defined benefit pension plan for U.S. employees hired on or before December 31, 2002. Benefits under the Retirement Plan generally are based on pay and years of service, except for eligible pre-acquisition Compaq employees, who do not receive credit for years of service prior to January 1, 2003. Effective December 31, 2005, participants whose combination of age plus years of service was less than 62 ceased accruing benefits under the Retirement Plan. For U.S employees hired or rehired on or after January 1, 2003, HP sponsors the Hewlett-Packard Company Cash Account Pension Plan (the "Cash Account Pension Plan"), under which benefits accrue pursuant to a cash accumulation account formula based upon a percentage of pay plus interest. Effective December 31, 2005, the Cash Account Pension Plan was closed to new participants, and participants whose combination of age plus years of service is less than 62 ceased accruing benefits.

        Effective November 30, 2005, HP merged the Cash Account Pension Plan into the Retirement Plan; the merged plan is treated as one plan for certain legal and financial purposes, including funding requirements. The merger has no impact on the separate benefit structures of the plans.

        HP reduces the benefit payable to a U.S. employee under the Retirement Plan for service before 1993, if any, by any amounts due to the employee under HP's frozen defined contribution Deferred Profit-Sharing Plan ("the DPSP"). HP closed the DPSP to new participants in 1993. The DPSP plan

118



obligations are equal to the plan assets and are recognized as an offset to the Retirement Plan when HP calculates its defined benefit pension cost and obligations. The fair value of plan assets and projected benefit obligations for the U.S. defined benefit plans combined with the DPSP as of the September 30 measurement date is as follows for the following fiscal years ended October 31:

 
  2006
  2005
 
  Plan
Assets

  Projected
Benefit
Obligation

  Plan
Assets

  Projected
Benefit
Obligation

 
  In millions

U.S. defined benefit plans   $ 4,325   $ 4,688   $ 4,775   $ 5,296
DPSP     1,095     1,095     1,295     1,295
   
 
 
 
  Total   $ 5,420   $ 5,783   $ 6,070   $ 6,591
   
 
 
 
This excerpt taken from the HPQ 10-K filed Dec 21, 2005.

Defined Benefit Plans

        HP sponsors a number of defined benefit pension plans worldwide, of which the most significant are in the United States. The HP Retirement Plan (the "Retirement Plan") is a defined benefit pension plan for U.S. employees hired on or before December 31, 2002. Benefits under the Retirement Plan generally are based on pay and years of service, except for eligible pre-acquisition Compaq employees,

111


who do not receive credit for years of service prior to January 1, 2003. Effective December 31, 2005, participants whose combination of age plus years of service is less than 62 will cease accruing benefits under the Retirement Plan. For U.S employees hired or rehired on or after January 1, 2003, HP sponsors the Hewlett-Packard Company Cash Account Pension Plan (the "Cash Account Pension Plan"), under which benefits accrue pursuant to a cash accumulation account formula based upon a percentage of pay plus interest. Effective December 31, 2005, the Cash Account Pension Plan will be closed to new participants, and participants whose combination of age plus years of service is less than 62 will cease accruing benefits.

        Effective November 30, 2005, HP merged the Cash Account Pension Plan into the Retirement Plan; the merged plan is treated as one plan for certain legal and financial purposes, including funding requirements. The merger has no impact on the separate benefit structures of the plans.

        HP reduces the benefit payable to a U.S. employee under the Retirement Plan for service before 1993, if any, by any amounts due to the employee under HP's frozen defined contribution Deferred Profit-Sharing Plan ("the DPSP"). HP closed the DPSP to new participants in 1993. The DPSP plan obligations are equal to the plan assets and are recognized as an offset to the Retirement Plan when HP calculates its defined benefit pension cost and obligations. The fair value of plan assets and projected benefit obligations for the U.S. defined benefit plans combined with the DPSP as of the September 30 measurement date is as follows for the following fiscal years ended October 31:

 
  2005
  2004
 
  Plan
Assets

  Projected
Benefit
Obligation

  Plan
Assets

  Projected
Benefit
Obligation

 
  In millions

U.S. defined benefit plans   $ 4,775   $ 5,296   $ 3,244   $ 4,970
DPSP     1,295     1,295     1,197     1,197
   
 
 
 
  Total   $ 6,070   $ 6,591   $ 4,441   $ 6,167
   
 
 
 
This excerpt taken from the HPQ 10-K filed Jan 14, 2005.

Defined Benefit Plans

        HP sponsors a number of defined benefit plans worldwide, of which the most significant are in the United States. For U.S employees hired or rehired on or after January 1, 2003, HP sponsors the Hewlett-Packard Company Cash Account Pension Plan (the "Cash Account Pension Plan"), a defined benefit plan under which benefits accrue pursuant to a cash accumulation account formula based upon a percentage of pay plus interest. The HP Retirement Plan (the "Retirement Plan") is a defined benefit pension plan for U.S. employees hired on or before December 31, 2002. Benefits under the Retirement Plan generally are based on pay and years of service, except for eligible pre-acquisition Compaq employees, who do not receive credit for years of service prior to January 1, 2003.

        The benefit payable to a U.S. employee under the Retirement Plan for service before 1993, if any, is reduced by any amounts due to the employee under HP's frozen defined contribution Deferred Profit-Sharing Plan ("the DPSP"). The DPSP was closed to new participants in 1993. The DPSP plan obligations are equal to the plan assets and are recognized as an offset to the Retirement Plan when HP calculates its defined benefit pension cost and obligations. The fair value of plan assets and projected benefit obligations for the U.S. defined benefit plans combined with the DPSP as of the September 30 measurement date is as follows:

 
  2004
  2003
 
  Plan
Assets

  Projected
Benefit
Obligation

  Plan
Assets

  Projected
Benefit
Obligation

 
  In millions

U.S. defined benefit plans   $ 3,244   $ 4,970   $ 3,070   $ 4,408
DPSP     1,197     1,197     1,151     1,151
   
 
 
 
  Total   $ 4,441   $ 6,167   $ 4,221   $ 5,559
   
 
 
 
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