U.S. HP Pension Transition 2021
Advice and reference info from members. (Updated May 26, 2022.) Comments: firstname.lastname@example.org
Join the HPAA Finance Group. Deals with employee stock, 401(k), pensions, and other personal finance issues from an ex-HP/HPE perspective.
The independent HP Alumni Association is operated by volunteers. This note -- with more details at https://www.hpalumni.org/pension2021 -- is based on HPAA discussions with HP, DEC, and EDS retirees. Not officially endorsed or supported.
HP Inc. is the legal successor to the companies acquired by Hewlett-Packard before the company was split into HP Inc and Hewlett Packard Enterprise on Nov 1, 2005. Responsibility for commitments to former employees of Compaq, DEC, EDS, etc. remain with HP Inc. -- regardless of whether their last business unit ended up in HP or HPE. Includes employment verification and any retiree health, pension, etc. plans. HPE is responsible for commitments to former employees of companies acquired by HPE. HP Inc, Hewlett Packard Enterprise, DXC, and Perspecta are completely separate companies.
If you were employed in the U.S. by EDS or "EDS, an HP Company" before Jan 1, 2009 -- you may have an EDS pension, administered by HP: https://www.hpalumni.org/edsPension
If you have been receiving monthly payments from an HP, DEC, or EDS pension plan...
If you have been receiving monthly U.S. HP, DEC, or EDS pension payments that commenced on or before November 1, 2020 -- your pension is probably among the 41,000 converted in September 2021 from a company pension administered by Fidelity to an insured annuity provided by Prudential. The amount and terms of your benefits have not changed.
This change does not currently apply to you if you have not yet started receiving benefits or if your benefits started after November 1, 2020.
Also does not apply if there is a Qualified Domestic Relations Order on file at Fidelity.
Fidelity is HP's primary pension administrator. They have the historical records. Fidelity can verify the postal mailing address on your account and whether or not your pension was one of the 41,000 accounts that were converted. They can look up the pension option you selected. (At various times available pension options may have included lump sum, monthly payment, reduced monthly payment with survivor benefit, etc.)
Three possible courses of action -- depending on your situation:
If you have a U.S. HP, DEC, or EDS pension plan, have
been receiving monthly payments that
commenced on or before November 1, 2020
-- and did *not* receive a mailing from Prudential in
2021, log into your Fidelity account to
determine if the pension change applied to you. Also check that Fidelity has your current postal address and, if
applicable, current beneficiary information.
B. If you have received a mailing from Prudential, set up a Prudential account and fill in the enclosed form (or update the information online) with your current personal and emergency contact information. The mailing includes a Benefit Statement, "How is my annuity payment protected," and instructions on changing your beneficiary. HPAA copy: https://www.hpalumni.org/pension2021-statement.pdf
C. Everyone else: Log into your
Fidelity account to check that Fidelity has your current
contact information, terms of your plan, and current
What you need to know about pensions. The non-profit Pension Rights Center discusses the records you should keep about your pension -- and the underlying insurance coverage differences between a pension and an annuity: https://www.pensionrights.org/resources/commonly-asked-questions/
Glitches. We've heard of some corner-case issues in the conversion:
- If you have ever had an account at Prudential -- such as a life insurance account or an account that has been closed -- annuity payments work correctly, but you may need to contact Prudential support to fully set up your pension account under a different login.
- Some retirees living outside the U.S. were erroneously converted to Prudential.
HPAA's directory of financial benefits contacts for former HP employees: https://www.hpalumni.org/contacts-HPI-financial
HP notification in September 2021:
"...we are transferring the administration and payment obligation of your pension benefit to Prudential through the purchase of a group annuity contract... The group annuity contract covers most eligible retirees, their surviving beneficiaries, and alternate payees receiving monthly pension payments from the Pension Plan that commenced on or before November 1, 2020.
"The amount and terms of your benefits will remain the same
as your current benefits. This change will happen
automatically effective November 1, 2021... Payments made to your bank
via direct deposit will continue without interruption. You
will receive a Welcome Kit from Prudential in mid/late
If your pension was among those that were converted to an insured annuity provided by Prudential, Fidelity and Prudential indicated that you received two end-of-year statements for 2021: one from Fidelity, for the portion of the year they administered your pension, and from Prudential for the rest of the year. Must be mailed by Jan 31, 2022; were available online Jan 17.
HP has made no statement as to if, or when, a similar change might apply to other participants.
- EDS folks who retired from GM report that their GM company pension plans were converted to Prudential annuities many years ago -- and that the original terms are being lived up to by Prudential.
- The HP, DEC, and EDS pension plans have very different terms. Members report that HP is living up to the specific terms of each plan.
- The key document for a US employee retirement or health plan is the legal Summary Plan Description (SPD). The current SPD takes precedence over any other written, online, or verbal information you may have been given. The employer's plan administrator is required by law to provide the SPD upon request. Log into the plan administrator's website or call. How to decode an SPD
- Acquired companies. EDS and DEC pensions are legal obligations of HP Inc. -- regardless of whether their last business unit ended up in HP or HPE. DEC pensions have been paid since 1998 by Compaq and now by HP Inc. (Other acquired companies did not have pension plans and had not built up pension trust funds to pass to an acquiring company.)
HP SEC filing: "HP entered into
an agreement with The Prudential Insurance Company of
America to purchase an irrevocable group annuity contract
and transfer approximately $5.2 billion of the HP Inc. U.S.
Pension Plan obligations... Prudential will assume
responsibility for pension benefits and annuity
administration for approximately 41,000 retirees and
beneficiaries. This transaction will not change the amount
or timing of monthly retirement benefit payments."
HP July 31, 2021 10Q filing
Nov. 23, 2021 Wall Street
Journal: "HP Inc. reported strong earnings and gave an
upbeat outlook... including a one-time $1.78 billion legal
"...litigation judgment in connection with Oracle's discontinuation of software support for HP's Itanium-based line of mission-critical servers... shared equally between HP and HPE..."
"...transfer of certain pension obligations as part of an irrevocable group annuity contract with The Prudential Insurance Company of America."
If formerly a regular, direct U.S. employee of HP or HPE -- or are in the process of leaving -- join the HP Alumni Association. No charge, thanks to HPAA's Supporting Members.
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