Is there a reason behind deciding to remove company matching (401k matching is very common) vs removing pension contributions in future (pension is less common in other industry).
This doesn't seem like a straightforward decision. Maybe someone has more insight on such startegies?
Salary is not as competitive as I thought after reading these boards. It seems pension is biggest incentive.
xom salary and benefits must be competitive. If not people will quit. Conversely if people are not quitting, then salaries may be above market. I suspect xom oil and gas salaries are above market, or we would be seeing massive voluntary resignation, like we saw in 2005-2009.
Firing low performers (8%) this year and 8% next year. Also keeps future salaries from growing because next year a new group of people who were on a higher salary curve will drop down to a lower curve. The people that drop down will not be eligible for promotions either. So the corporate average salary growth slows down and it reduces the amount of cash required to fund the federal required contribution to the pension plan. If they change the pension formula, then smaller cash contributions will be needed along with lower average pension benefits to fund. The SEC 10k shows a small part of the assumption on average salary growth (if I remember it was 6%). Dropping this down to 4% save cash. Dropping pension formula save more cash. Eventually salary and market competition for talent from other oil companies keeps XOM honest if total compensation/benefits drops too low. Many young people do not appreciate the value of XOM defined benefit plan (pension)
Pension termination requires federal guidelines and can take longer than a stroke of a pen to stop 401K matching
Changing the pension formula is much more complicated. I suspect they will restore the match in future combined with changes to pension formula. XOM has not changed the pension formula in nearly 50 years. Right now all XOM employees are overpaid relative to competition. So Total cash plus benefits much be adjusted downward through a mix of salary and benefit cuts. Unfortunately this process is slow because it affect union contracts and pension regulations. It is easier to fire low performers who have no contract
Company can save money by removing pension contribution as well. It is their choice I guess.
You are an id–t if you don't change your contributions for 401k and default chose to XOM. Did they not learn from ENRON?
How many stupid people does @mnq think works for this company that only contributes to default. if there are people, they are incredibly few.
"401k match defaults to xom stock".
Trolling? Your info is >10 yrs old.
401k match affects lower salary minion employees whereas pension affects c suite executives
401k match defaults to xom stock, no extra internal purchasing of stock lessens the dividend payout they have to pay.
Essentially they aren’t matching to reduce how much they have to pay you back in dividends on shares they technically purchased for your accounts.