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Pension issues for EDS alumni  (Electronic Data Systems Corporation)  (Updated Sep 2, 2021.)

Website operated by former employees. Please send comments to info@hpalumni.org

See all of HPAA's information for EDS alumni -- stock, career, benefits, networking, EDS history/culture  -- whether or not you ever worked for HP: https://www.hpalumni.org/eds

Key: Legal successor and corporate names. 

- EDS was sold to the Hewlett-Packard Company on Aug 26, 2008. Before the announcement, EDS sales were up 3% but net income was down 62% year-over-year. Stock peaked at $72 in 2001 but was down to $19. HP paid $25 per share in cash, $13.9 billion -- a 32% premium.

- HP Inc. is the legal successor to the companies acquired by the Hewlett-Packard Company before the company was split into HP Inc. and Hewlett Packard Enterprise (HPE.) Responsibility for any commitments to former employees of Autonomy, Compaq, Digital, EDS, Tandem, etc. remain with HP Inc. -- regardless of whether the employee's last business unit ended up in HP Inc. or HPE. This includes employment verification and any retiree health coverage, pension, 401(k), etc. plans. HPE is responsible for any commitments to former employees of companies acquired by HPE, such as Cray, Nimble, etc.

- EDS was temporarily structured as a wholly-owned subsidiary called "EDS, an HP Company." On Sep 23, 2009, it was renamed "HP Enterprise Services."

Which HP-related companies am I a retiree or former employee of? (Not always obvious.) Given HP's complex history of acquisitions, divestitures, and spinoffs, the company or companies that you are legally a former employee of may not be obvious. If any doubt, check here: Which Company

Make sure that every company you ever worked for has your current postal address. Even if not classified by the company as a "Retiree" or if long gone -- in case of pension plan changes, employment lawsuits, settlements, or other issues. (HP Inc. is the legal successor to companies bought by HP -- including Compaq and EDS. HPE is successor to companies it bought -- Cray, Nimble, etc.) Update address at former company

Other benefits issues for EDS alumni -- including 401(k), stock, HP and HPE retiree benefits, vehicle discounts. Report disability or a death to the company. https://www.hpalumni.org/edsBenefits

Pension change. If you have been receiving monthly U.S. HP, DEC, or EDS pension payments that commenced on or before November 1, 2020 -- your pension plan *may* have been converted from a company pension administered by Fidelity to an insured annuity provided by Prudential. Details: https://www.hpalumni.org/pension2021

Pension contacts:

- U.S. The HP Retirement Service Center administers pension and 401(k) accounts for HPInc (legal name changed from Hewlett-Packard Company to HP Inc. in 2015.) Also administers any pension or 401(k) accounts that Hewlett-Packard predecessor companies (such as Compaq, Digital, and EDS) may have had. Operated by Fidelity Investments.
1-800-457-4015, M-F 7:30 AM to 11:00 PM Central Time. Outside the U.S., call 1-508-787-9902 collect. Website: https://nb.fidelity.com/public/nb/hp/home

- UK: Administered by Equiniti.

- Outside the U.S. HPInc Worldwide HR Support Country Selector   If country not listed, contact regional headquarters: HPInc Offices Worldwide or HPInc Corporate Headquarters

"Potential Private Retirement Benefit" letter from Social Security. Reports the last transaction in a benefit plan that you were once enrolled in. If "Type of Benefit" is coded "A" -- in the previous year, you rolled the money into a different plan, bought an annuity, or took the cash. "M" if you left before vesting in that plan. How to investigate: https://www.hpalumni.org/PotentialBenefitLetter.

EDS pension:

If you were employed in the U.S. by EDS or "EDS, an HP Company" before January 1, 2009 you may have an EDS pension that you have forgotten about. If you are not collecting on (or did not cash in) an EDS pension, check for an EDS pension account with Fidelity.

"You may have a benefit in the [EDS Retirement] Plan if you were employed by EDS before HP acquired EDS on Aug 26, 2008, or if you joined "EDS, an HP Company" [quotation marks added] between Aug 26, 2008 and December 31, 2008. The plan was closed to new participants on January 1, 2009. Eligibility to earn Pay-Based Credits to Personal Pension Accounts (PPAs) under the Plan ended on December 31, 2008, although Interest Credits continue to accrue on existing PPA accounts"

"Before December 31, 2008, participation was open to full-time and part-time employees who were employed by EDS or an adopting U.S. subsidiary of EDS. Participation began immediately upon being hired into an eligible classification. Effective December 31, 2008, the Plan was closed to new participants.

"Individuals classified by EDS in the following classifications or other similar classifications were not eligible for Plan participation:
- A resident or nonresident alien not subject to U.S. federal income taxation;
- An employee eligible to participate in the EDS Puerto Rico Savings Plan;
- An employee designated and paid as a leased employee, consultant or independent contractor."

--from the HPAA's copy of the SPD.

For details of an employer retirement or health plan, obtain a copy of the legal Summary Plan Description ("SPD") -- either by logging into your account on the plan administrator's website or by calling the plan administrator's phone center. They are required by law to provide your SPD upon request. The SPD takes precedence over any other written, online, or verbal information you may be given. How to use an SPD

"EIN" = IRS Employer Identification Number.

EDS Retirement Plan: "EDS Retirement Plan, a sub-plan of the Hewlett-Packard Company Pension Plan" A defined benefit plan.

- EIN: 94-1081436 -- Plan number: 003. Abbreviated as: 94-1081436-003

- HPAA's copy, which may be out of date: EDS Retirement Plan Summary Plan Description (SPD) You can ask the Plan Administrator for a current copy. [Browser tab displays: "HA Normal" -- where "HA" means "Hewitt Associates."]

Key points:

The account is growing at 5% per year if you left EDS after July 1, 1998. (HP's own legacy pension plans do not have that feature.)

What if HP goes under? The plan is backed by a trust fund -- and is listed on the federal PBGC website as insured. (Full payout not guaranteed for larger pensions -- $5,812 per month maximum for someone who starts taking pension at 65. See this table:
https://www.pbgc.gov/wr/benefits/guaranteed-benefits/maximum-guarantee )

If employee dies before payments begin, generally payable to surviving spouse or beneficiary. (Details on SPD page 26.)

Key document: "EDS Retirement Plan Summary Plan Description" (the "SPD") -- with many key details, including annual interest credit, QDRO, and surviving spouse provisions. Our copy of the SPD is "Updated as of January 2012" Contact Fidelity to determine if there is a newer version.

There are at least two vintages of the EDS plan. Download the SPD from Fidelity that specifically applies to you -- based on when you left EDS.

For example, the "Updated as of January 2012" copy of the SPD does not apply if you left EDS before July 1, 1998. 
It says on page 1: "Benefits for participants who terminated from EDS before July 1, 1998 are subject to separate provisions not described in this SPD. For more information about these benefits, contact the HP Retirement Services Center."

If you left EDS on or after July 1, 1998 -- and have not cashed out or started taking the pension -- the account has been and will continue to grow at 5% per year. "Personal Pension Accounts ...continue to receive Interest Credits, even after ceasing to earn Pay-Based Credits. Your PPA is credited with Interest Credits at a predetermined rate thatís adjusted annually each January 1 subject to a minimum rate of 5% per year. Interest Credits continue to accumulate until your PPA is paid to you or converted to an annuity at retirement." [Page 9 of the Summary Plan Description.]

For details of an employer retirement or health plan, obtain a copy of the legal Summary Plan Description ("SPD") -- either by logging into your account on the plan administrator's website or by calling the plan administrator's phone center. They are required by law to provide your SPD upon request. The SPD takes precedence over any other written, online, or verbal information you may be given. How to use an SPD

Lump-sum payout offers. HP made several lump-sum payout offers to specific segments of EDS retirees over the years:

- 2016: A pension buyout offer was made to those with a "lump-sum present value of your accrued benefit as of Aug 1, 2016" between $5K to $100K. 2016 Pension Lump-Sum Offer

- 2019: EDS folks with small pensions were offered lump-sum payouts -- apparently to reduce admin costs. "At the present time... the Plan does not allow lump-sum distributions for amounts over $5,000. We donít speculate if that policy will change. However, if Plan provisions do change to allow lump sums over $5000, affected participants will be notified via mail." --email in response to inquiry from an EDS alum, April 19, 2019. 

- 2020: A lump-sum pension buyout offer was made to some who have legacy DEC and EDS pension plans. Deadline was July 15, 2020; extended to July 22, 2020. Details: 2020 Pension Lump-Sum Offer

The EDS pension plan has survived the sale to GM in 1984, spin-out from GM in 1996, sale to HP, and the split of HP into HP and HPE.

One person referred to EDS founder Ross Perot on the EDS Alumni LinkedIn Group: "Ross is the gift that doesn't stop giving."

EDS 2007 Early Retirement Offer. From the  2007 EDS Annual Report:

"We increased the number of employees in Best Shore locations from approximately 32,000 persons at the end of 2006 to approximately 41,000 at the end of 2007... Our 2007 initiatives to increase capabilities in Best Shore locations included the transfer of certain internal administrative functions... We expect to significantly increase our overall investment in workforce alignment in 2008 compared to 2007. [Boldface added]  During the third quarter of 2007, we announced an early retirement offer ("ERO") for approximately 12,000 U.S. employees. Approximately 2,400 employees accepted the ERO. Employees accepting the offer will receive enhanced retirement benefits payable through normal payment options under the EDS Retirement Plan."

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If formerly a regular, direct U.S. employee of HP or HPE -- or are in the process of leaving -- join the HP Alumni Association. Membership is also open to heirs with HP-related stock and to those receiving company benefits -- spouses, partners, dependents, DEC and EDS retirees. No charge, thanks to HPAA's Supporting Members.

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