What happens to any supplemental pension or supplemental 401K savings if you are forced out at 52 and would have been NRE before (I know that is now removed). Would the company really just keep it and say tough luck?
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Remember the supplemental is taxed at a very high tax rate, when you are sent the supplemental check. It is taxed at your highest marginal tax bracket and for many people it is at 37% plus State income tax if you are in a state with SIT. Many times you are better off taking in early in the year, so your base salary earned is less, hence you are in a lower bracket. That is why many people wait to Jan 1 for retirement
No, the 360k$ limit is not the same as the 290k$ (formerly 270 k$) limit.
The 360k$ is the maximum average salary that can be used as an INPUT to the pension formula. The 290k$ is the maximum payable OUTPUT from the pension for a Qualified Plan. Highly paid EM employees can hit the 360k$ salary input limit and therefore must take the excess as unqualified Supplemental Pension in a lump sum. But it’s impossible for EM employees to hit the 290k$ annual payout limit because our pension formula pays only 1.6% per year of service. Even DW can’t hit it because the salary INPUT to his qualified pension is capped at 360 k$ just like everyone else. At 1.6% per year of service, he won’t get enough years to hit the 290k$ payout cap. So why does the 290k$ payout cap exist? It typically applies to government workers who earn pension at a percentage much higher than our 1.6% per year of service.
I hope we are all clear on this now!
Both people below are correct.
Every year IRS has a limit to what is basic pension max.
For example: 2026 it’s 360K. 2020 it was 270K (say). Each year, whatever more you are making over the IRS limit, Exxon gives pension on that as “supplemental” pension.
Two important things to note.
- Unlike basic pension, supplemental pension isn’t something you get if you are terminated.
- Terminated employees discounting using the 3 interest rates starts from age 65 back to the age they got terminated but using only basic pension amount.
- $200K employee, 20 years, 45 year old. Likely pension lump sum you will get would be $200K.
- $400K employee age 54 with 25 year service, terminated. You likely get $500K as terminee. At 55, as retiree you get $1.5M plus medical benefits. For you and your family sake, don’t get yourself PIP’ed out at 54
@OP Answers are all over the place, I will give you direct answer.
You lose your supplemental pension if you are terminated and not retired. If you leave anytime before retirement, you DON’T get supplemental pension, lose invested RSU’s. If you are Exec, you also lose your Additional Pension.
Also, your discounting starts from age 65, instead of 60 for retirees.
For simple math. If you are let go at 54, you get 35% lump sum of “basic pension” (salary capped at 270K) . At 55, if you retire, you get 75% of total pension (your total salary with anything above 270K classified as supplemental pension).
Many a times depending on your salary, additional pension is a meaningful amount.
VG can get you there. RSUs don’t count toward pension.
A CL29 riding below the midpoint, but also ranks E or O will get RSUs that bump thier salary above 360k.
More than you would think.
@ed Fair enough. How many CL29 employees are making over $360K?
@e2, take your own advice my clueless comrade. It has nothing to do with executive status.
Our pension is based on the average of the highest three years salary, but there is a federal cap on that number for the purposes of determining your Qualified Pension. For 2026, the cap is 360k$. Any salary above that is used to calculate your non-qualified supplemental pension, which must be taken as a lump sum in the year you retire.
@e1 If you don't know what it means, it means it doesn't pertain to you. Supplemental pensions are restricted to executives, e.g. CL30+.
@br
I have the same question. I've never heard the term "supplemental pension". Can someone explain? No sarcasm here; genuine question.
That stinks.
I got asked to leave at 53 and only got my lump sum or pension choice. No medical or supplements. My a hole got a good reaming before I got piped out. I felt like a criminal. Lump sum was 65 percent so not much.
Can someone explain supplemental Savings?
Yes, you lose them. Those are unfunded promises to pay. They are not part of the pension or 401k and you have no protections under ERISA.
they pay you the supplemental 401k with a check .... i assume the same is done with the supplemental pension as this is due to pay over the IRS limits and the company can't withhold this
That is a good question. In 2015 or so they did change the wording saying the supplemental pension was forfeited if fired not retired. I don't know how they legally can do that because it is part of your pension just moved to separate account due to IRS income rules. You do take it right away at retirement and pay taxes on it. Hopefully someone who has experience with this will answer
You keep what is vested in 40lk. There is chart in retirement benifits on what you get if seperate before retirement for pension. At one time you could start drawing annuity at 50 without retirement benifits. If force out due to health issues, you may be eligible for disability retirement.