HP 2007 Annual Report Download - page 138

HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 15: Retirement and Post-Retirement Benefit Plans (Continued)
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
Post-Retirement Benefit Plans
Through fiscal 2005, substantially all of HP’ s U.S. employees at December 31, 2002 could become eligible for partially
subsidized retiree medical benefits and retiree life insurance benefits under the Pre-2003 HP Retiree Medical Program (the
“Pre-2003 Program”) and certain other retiree medical programs. Plan participants in the Pre-2003 Program make
contributions based on their choice of medical option and length of service. U.S. employees hired or rehired on or after
January 1, 2003 may be eligible to participate in a post-retirement medical plan, the HP Retiree Medical Program but must
bear the full cost of their participation. Effective January 1, 2006, employees whose combination of age and years of service
is less than 62 no longer will be eligible for the subsidized Pre-2003 Program, but instead will be eligible for the HP Retiree
Medical Program. Employees no longer eligible for the Pre-2003 Program, as well as employees hired on or after January 1,
2003, are eligible for certain credits under the HP Retirement Medical Savings Account Plan (“RMSA Plan”) upon attaining
age 45. Upon retirement, former employees may use credits under the RMSA Plan for the reimbursement of certain eligible
medical expenses, including premiums required for participation in the HP Retiree Medical Program. Also, HP limited future
eligibility for the pre-2003 HP Retiree Medical Program to those employees who were within five years of satisfying the
program’ s retirement criteria on June 30, 2007.
Defined Contribution Plans
HP offers various defined contribution plans for U.S. and non-U.S. employees. Total defined contribution expense was
$481 million in fiscal 2007, $430 million in fiscal 2006 and $422 million in fiscal 2005. U.S. employees are automatically
enrolled in the Hewlett-Packard Company 401(k) Plan (the “HP 401(k) Plan”) when they meet eligibility requirements,
unless they decline participation.
During fiscal 2007, HP matched employee contributions to the HP 401(k) Plan with cash contributions up to a maximum
of 6% of eligible compensation. Effective January 1, 2008, all U.S. employees will be eligible for a 6% HP matching
contribution.
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