HP 2014 Annual Report Download - page 116
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HEWLETT-PACKARD COMPANY AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Note 4: Retirement and Post-Retirement Benefit Plans (Continued)
Post-Retirement Benefit Plans
HP sponsors retiree health and welfare benefit plans, of which the most significant are in the U.S.
Under the HP Retiree Welfare Benefits Plan, certain pre-2003 retirees and grandfathered participants
with continuous service to HP since 2002 are eligible to receive partially-subsidized medical coverage
based on years of service at retirement. Former grandfathered employees of Digital Equipment
Corporation also receive partially-subsidized medical benefits that are not service-based. HP’s share of
the premium cost is capped for all subsidized medical coverage provided under the HP Retiree Welfare
Benefits Plan. HP currently leverages the employer group waiver plan process to provide HP Retiree
Welfare Benefits Plan post-65 prescription drug coverage under Medicare Part D, thereby giving HP
access to federal subsidies to help pay for retiree benefits.
Certain employees not grandfathered under the above programs, as well as employees hired after
2002 but before August 2008, are eligible for credits under the HP Retirement Medical Savings
Account Plan (‘‘RMSA’’) upon attaining age 45. Credits offered after September 2008 are provided in
the form of matching credits on employee contributions made to a voluntary employee beneficiary
association. On retirement, former employees may use these credits for the reimbursement of certain
eligible medical expenses, including premiums required for coverage.
Defined Contribution Plans
HP offers various defined contribution plans for U.S. and non-U.S. employees. Total defined
contribution expense was $573 million in fiscal 2014, $603 million in fiscal 2013 and $628 million in
fiscal 2012. U.S. employees are automatically enrolled in the Hewlett-Packard Company 401(k) Plan
(‘‘HP 401(k) Plan’’) when they meet eligibility requirements, unless they decline participation.
The quarterly employer matching contributions in the HP 401(K) Plan are 100% of an employee’s
contributions, up to a maximum of 4% of eligible compensation.
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