Since some think that Icahn is trying to goad HP into acquiring Xerox, what would happen to the Xerox defined benefit plan if that happened? I know ERISA stipulates that benefits you've earned cannot be taken away. But would HP be required to honor Xerox's early retirement benefit, which allows one to start collecting at age 62 instead of age 65?
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One lesson learned ,”Don’t trust the X.”
I think this can be broken-down into two parts.
First, Early Retirement as a policy that can be changed at any time by one's employer, whether it be Xerox, HP , etc., unless the early retirement is part of a collective agreement of some sort. Then, the employer would have to negotiate with the Union to change it.
ERISA only covers qualified benefit plans, such as the 401K and RIGP and does not address 'policies.' At a glance, @11UEv2yA-dns covered how these plans are impacted should a company be bought.
I did interpret OP’s question being about actually retiring now. I thought OP was asking if early retirement per current Xerox policies would still be available if HP bought Xerox. OP may be months, 1-2 years away from actually meeting criteria to take early retirement.
If my interpretation of the question is correct; then, answer thus far have not answered OP’s question.
I would expect that Xerox would have to honor agreements they already had in place. Definitely talk with an employment specialist of some sort if you are nearing retirement and considering options. There are of course pros and cons about taking the lump sum vs the annuity. In theory the annuity is safe as it's guaranteed up to a certain dollar amount by the federal government. That said, I would worry about some unexpected clause that might not be clear that allows them to screw you. Personally I would opt for the lump sum to be free and clear of Xerox when I leave. But many like the steady guaranteed income of the annuity which "should" be safe, but I like having complete control.
Yes, take the cash ... if you can as it would depend where you are.
Take the cash.
Should HP buy Xerox, I mean Xerox buy HP, the new entity, call it XHP, could be considered a successor employer for all Xerox employees (if there are any left) and would inherit all of the funds, liabilities, and rules of Xerox’s legacy qualified retirement plans such as RIGP and the 401K. XHP could make changes to the rules and funding in the future; but the same process as before would have to be followed. The primary exception to this rule is when the acquired company was in bankruptcy before being bought, which does not (yet) appear to be the case here.