HP's Hurd bends pension plans

But after wading through paragraphs about ink, storage and servers, there was a nasty sting in the tail. Let's let Hurd tell the tale himself:

U.S. RETIREMENT CHANGES: PENSION FROZEN, EER OFFER

As part of our ongoing transformation, today we are making two announcements that affect a defined portion of the United States employee population. We are making changes to the U.S. retirement program, including a freeze to the U.S. pension plans for those employees participating in the HP pension and some changes to future retiree medical eligibility.

As a result of this decision, we will have a one-time pension curtailment gain of approximately $500 million. We will use the savings from the pension freeze to offer impacted U.S. employees the option to participate in an Enhanced Early Retirement (EER) program. This is a voluntary program and will be offered to the impacted employees whose combined age and years of service equals 65 or more.

After the election period ends, we will assess projected program costs based on the number of employees who apply. If the projected costs exceed the accounting gain from freezing the U.S. pension plans, employees will be accepted starting with those that have the highest number of points. This means it is possible that not everyone who applies for EER may be accepted, which is different than programs we have offered in the past.

The changes to the U.S. retirement program are consistent with actions being taken by many of our industry peers and other large corporations, and will more closely align HP programs with industry-competitive practices. The nature of the treatment of this program has been increasingly challenging for us to deal with and inhibits our ability to grow. We are therefore making a choice not to continue to differentiate Hewlett-Packard in this area.

About a third of the employees within the United States will be affected and I want to acknowledge the personal impact that this may have. Employees included in this group will receive further details this week. Additional materials are available on the portal including how to submit a question. Finally, the benefits received by current U.S. retirees or other active employees will not be affected one bit by today's announcement.