Time spent by former Compaq workers at the Houston-based PC maker will count toward HP's two-year eligibility requirement for pension benefits, but will not be taken into account when calculating the level of those benefits. Most Compaq employees did not have a formal pension program, HP said. Although HP completed the deal in May, Compaq workers will not start earning pension credit until next year.
Deciding how to handle pension benefits is the first of several benefit issues the company must resolve now that the mega-merger is. Other challenges include reconciling the two firms' competing health plans.
"We are now one team," HP CEO Carly Fiorina said in a statement. "We recognize that our employees make extraordinary contributions to our success, and we are committed to investing in them. As a premier employer in our industry, we know the value of pension plans, especially in the current economic climate."
For pre-merger HP employees, the current retirement program will not change, and HP plans to use its 401(k) retirement savings program for new employees hired after Jan. 1, 2003.
HP said the cost of adding Compaq workers to the pension program will be offset by other integration savings and will not hamper the company from meeting its financial targets.