2021 Q4 corporate interest rates are likely to stay low, at levels comparable to Q3, but will likely go back to at least normal in the first part of 2022, so there will be a strong incentive for whatever REs are left to retire by the end of this year. Given this, it makes no sense this year to use “valuable” NSI slots to get rid of people who would retire anyway in the same time frame; they will likely go for younger people this time. However, next year the rate will likely be high, resulting in diminished lump sums. Any REs left will have worked the year for essentially nothing and will be desperate to keep working a few more years. That’s when the company who counts people as it’s most valuable resource will strike them mercilessly.
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@8jgq+1bKO0UlP
If you’re speaking from “the other side”, it means you retired in a very different time, when you could choose when to retire.
Today, if you’re an RE, the question is only when will the company force you to retire using the PIP, and how to lessen the impact. It’s all about minimizing losses now, not maximizing benefits - a world of difference compared to just a few years ago.
Speaking from the "other side", be real cautious with that lump sum business. Sure, interest rates are low so it's a nice fat distribution, but then you have to turn around and pour it into an overheated stock market - and start living off of it. Then the stock market corrects - but you're still having to pull money out. That's not so bad 10-15 years into retirement but it is real nasty if it happens in the first 2-3 years. Run the spreadsheet before you decide.
I turn 59 at the end of July and am praying I make it to 60. 1 more year ....
I'll have 23 years of service, so I'm not in that 30+ years of service category.
Good luck to everyone. It's a tough time to be @ EM. This is the worst I have seen in all of my career, save for the time I was @ Amoco and lived through the merger with BP. At least there, BP handed out nice separation packages. EM isn't handing out anything.
The RE’s were, and will continue to be, targeted with the PIP insertion. The company tried to mask the clear age discrimination by whacking a few unlucky younger people that had bad bosses or got caught between groups. And I’d hate to be someone that’s in their late 40’s at a high CL that doesn’t have a sponsor or have an I&D free pass. Next to the RE’s, you are the weakest antelope in the herd, and will be fodder for the next layoff they aren’t calling a layoff.
Unless you’re one of the very few people who wants to get an annuity, retiring with a lump sum after 61, max 62 doesn’t make any sense because at that point even a high salary does not offset anymore the lump sum decrease due to age - and that in normal times.
The traditional recommandation of financial advisors to work as long as possible is absolutely useless in an environment in which the company specifically targets “high cost” employees, that is first and foremost REs - that’s why the oversized MLRP circus is going to continue for a total of up to 7 years. Normally nobody would think of retiring before 60, but now it’s not about when you WANT to retire, it’s about minimizing your unavoidable losses, and the temporarily low interest rates give an unusual opportunity. From now on anybody who makes it to 55 and gets their shrunk pension at 75% will consider themselves incredibly lucky. Only fools will get caught by the PIP at a time when the interest might increase abruptly. It’s a brave new world, and full pension is not a part of it.
If you talk to any financial adviser, they would recommend that you continue working beyond 55 to at least 65 if you wish to max out your retirement benefits longterm.
Remember that you can be making $200K+ a year between the age of 60 and 65 plus the matching 7% in your 401K. You are also on the XOM medical benefits plan as an employee until you are eligible for Medicare at the age of 65.
If maximum retirement cash flow is not your goal then retiring with a significant penalty before 65 is something company management would love for you to do.
@xdy+1bKO0UlP
“ There is no financial incentive for employees to retire unless you are 59 1/2 with 15 years of service.”
Wrong. You didn’t read the original post: in 2021, historically low rates mean that temporarily REs that are 57-59 can get lump sums equal or higher than at 60, with normal rates. On top of that there’s the negative incentive of very likely getting PIPed off in the next years.
CORRECTION: NREs are in a better position..... NOT NSIs. OP of previous post.
I would think NSIs are in a much better position than the REs. Those retirement eligible folks who have completely "paid their dues" don't enjoy the protection and exclusions that NRE folks do. It's much easier to just push out an RE. I think it is disgraceful how they treat the RE employees. I'm NRE (2 years away from RE) and believe me when I say I won't be doing any more than it takes to stay on the payroll because I know what fate awaits the moment I reach RE status. FUEM
That’s why NRE has such a big azz target on our back. Managers not leaders are probably receiving pds bonus points for cutting people between 55 and 59.5. Getting really creative at the manufacturing sites. New jobs, no training and dropping ranking. Save Dat Money competition!
Good analysis - exactly the thoughts of the consultants designing the removal system.
Retirement eligible is 55 years old with 15 years of service. At age 55, you will lose 25% of your lump sum pension. Retirement eligible employees would be wise to stay until age 59 1/2 since you are guaranteed 100% of your lump sum pension (5% per year added between age 55 and 60). Also, you will also receive an additional 5 years of matching 401K at 7% match.
There is no financial incentive for employees to retire unless you are 59 1/2 with 15 years of service.
Good analysis - exactly the thoughts of the consultants designing the removal system.