April 13, 2021 - No Comments!

The Xerox Corporation Trust Agreement To Fund Retirement Plans

Participants can borrow at least $1,000 from their fund accounts through a credit transaction, or up to $50,000, so as not to exceed 50% of their balance. Since the salary is not added to the employee`s cash account after he or she leaves Xerox, the key question, as to the suitability of the package he receives when choosing a lump sum payment, arises as to whether future interest credits are part of his accumulated benefit.   If this is the case, when determining pension entitlement (of course, a future value, since we are dealing with employees who leave Xerox before retirement age), the plan must add the credits to the employee`s cash account.   The resulting balance, which is reduced to the prescribed discount rate on the date the worker left Xerox`s job, would then be the lump sum to which ERISA is entitled to the worker.   The Xerox plan calculated the package differently.   Instead of adding future interest credits to the outgoing employee`s cash credit at the future interest rate of the plan (i.e.dem T-Bill rate plus 1 per cent), the interest rate was added to an interest rate exactly in line with the discount rate prescribed by the Pension Benefit Guaranty Corporation.   The two interest rates, the interest rate and the discount rate, which are identical, were cancelled, so that the package received by the outgoing worker was his cash balance at the time of his departure. The plan includes investments in a private equity fund, the Xerox Stock Fund (the fund), which consists primarily of common shares of Xerox Corporation. The unit values of the fund are registered and managed by the agent.

During the past fiscal year, on December 31, 2015, the plan purchased common shares in the fund for approximately $11,913,000, sold common shares for approximately $25,446,000 and received net amortization in the fund of approximately $12,338,529. The total value of the plan`s investment in the Fund at December 31 was approximately $21,932,842 and $45,444,355. 2015 and 2014 respectively. In 2015 and 2014, dividends on Xerox Corporation`s common shares were $761,750 and $800,697, respectively. These transactions, as well as the loans of participants, are considered interest rate transactions. However, these transactions are excluded from prohibited transaction rules. The assets of ISG Services, LLC 401 (k) Plans were transferred to the XBS Savings Plan on March 1, 2015.

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