If you have 5 years and are vested in the pension then does exxon pay out when you are let go or quit? If so what does that look like for a lump sum calculation when you aren't near retirement age?
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”Terminees are eligible to elect the lump sum payment option under limited circumstances. Only terminees who terminate employment with the Company as a result of a divestment or who receive benefits under a Company-sponsored or Company-funded severance program are eligible. Further, those terminees must elect to receive their benefit as of their earliest commencement date (that is, upon termination of employment if they are already age 50 or older at that time, or when they attain age 50) or they lose the right to elect the lump-sum payment option.”
The back of the Pension Policy booklet has an addendum that modifies who is eligible for a lump sum. A personal that doesn't retire may be eligible for a lump sum.
As prior posters eluded to, lump sum is only open to XOM employees that fall under the definition of "retired" - which for most people means age 55 + 15 years of service OR age 65 regardless of service. Those falling under this umbrella qualify for OPEB (post retirement medical) and lump sum. Lump sum is calculated based on PPA arcane formula. It is basically a combination of 3 different discount rates for the first five years, second five years, and any subsequent time (based on actuarial life expectancy). The rates are pretty low right now: Tier 1 0.74%; Tier 2 2.57%; Tier 3 3.32%, so NPV calculation is fairly generous (figure something like 25x the annual pension payout).
Sounds like people got their 491ks and pensions mixed up. Go to the HR site or the ExxonMobil family site. 401k you can take the sum after 5 years and roll over into an IRA. Pension, unless you have 15 yrs and are 55 or older, no lump sum or health plan, just annuity starting at 65.
I’ve heard of an employee who quit earlier this year that had less than 15 years but was vested. They received a significant lump sum check over 6 figures.
The formula for the annuity is:
- 016 x (years of service) x (monthly salary) - SS offset
Does anyone know how the lump sum is calculated?
Vested at 5, for a payment at retirement age. Oddly enough the company was selectively buying out people's pensions benefits last year. Being typical XOM and not valuing true financial skills, they offered me enough to take the buyout and buy an annuity paying 2.5x what my benefit would be. Couldn't sign paperwork fast enough. (An illustrative example of why XOM is in bad financial shape)
Just rolled into existing IRA. Rather have control over funds then trust such poor allocators of capital. Also, it's like a free bonus for surviving 5 years. Working out rather nicely.
I walked away from the company recently with more than fifteen years of continuous service. Turns out, the pension rules have changed and it is now possible to get a lump sum prior to reaching a traditional retirement age. I cannot get clarity on how much is discounted due to my age (early 40s), even after talking to a pension advisor. The company's online pension estimator suggests it's a significant amount of money coming my way. Unfortunately, I have to wait a about three months to get the check, but it's an additional amount of money I'd rather pocket now and save elsewhere instead of hoping it'll be around later. It'll get taxed as income and potentially have a penalty on it, but anything is better than my current income situation while I continue to look for a new position elsewhere. You can call the pension hotline and ask for clarity. They actually called me before my paperwork showed up telling me I had an option for lump sum. Best wishes.
@yfw+16LqNSG7 - yeah, you can keep the medical benefits, but at a potentially much higher price. Having heard from many people that the cost would be “slightly higher” upon retirement, I was shocked to see my figures. To maintain the same medical insurance, my COBRA premiums would be more that double my contributions as an employee. There are more cost-effective options on the healthcare marketplace web site.
US employees are vested in the pension after 5 years, but not considered a "retiree" until 15/55. No lump sum option at seperation, you will get a small annuity payment later. Most people have never read the details on their benefits. Don't trust random people on a message board or at work for that matter. See the document below for a more detailed description of the pension and other benefit programs provided: https://exxonmobilfamily.com/en/finance/pension/participation-vesting-and-cost
In the US, if you don’t have 15 years of service you are not vested for a pension. If you are not at least 55 when you leave you cannot collect retirement immediately. You have to wait until you are 65 and get an annuity. If you are 55 or older you can retire with medical benefits and chose when to start collecting your pension. This methodology worked well under the old philosophy of a job for life. In the new world it may no longer be practical.