Does anyone have any good advice as to how best to combine a PIP/PIL (not sure I care to fight the bullsh-t anymore) with retirement planning? Does frugal vacation usage during the year play a role? Asking as an RE who fully expects it to be the endgame for the processional of downratings I’ve already seen
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I retired in 2021 due to being in NSI. You can forgo the PIP/PIL option and just turn in intent to retire. I was not interested in signing the pages of legal clauses to please EM, 3 months of pay is not worth it.
Turns out the discount rate was almost at an all time liw, rolled over pension, have not touched it and happily working elsewhere for over 2 years.
if you qualify for retirement, take the money and leave. you really want to go into the office?
@2fbw+1qQCmm2e - don't you have to have your 15 years service too in order to get the Lump Sum?
Normal 55 retiree here...
The way rates were moving in 2022, I could leave or work for free. I left.
Lump sum deposited into savings has earned 6+% so far. I have not touched it.
Savings is available to 55YO retirees without penalty. See IRS "rule of 55"
I had planned to retire at 55 since 1987.
If you are retirement eligible, just ask your V.P. to rank you NSI so that you will be eligible for the Pay in Lieu (i.e. PIL). You can exit 24 hours later, and you will continue to be on payroll including medical and life insurance benefits for the next three months.
During the three months, you can file the necessary paperwork to take the lump sum or annuity pension along with your 401K. Roll both over to an IRA using a financial advisor. Most major financial advisor companies can demonstrate that you will receive a 6% return on investment on your IRA over the next 20 years.
The only downside is that you only receive 75% of the lump sum pension at age 55. You must be 59 1/2 years old to receive 100%.
@2kwv+1qQCmm2e:
OP here. It’s not worth anything per se, it’s a matter of timing, whether or not you pass, etc.
I suppose it’s worth time, if you were already planning your exit, and you are sure that you will be NSI/PIPed. That’s kind of my situation rn.
Had not considered this strategy. Can someone please tell me how much the PIP package is worth?
@1dva You are correct if you are absolutely sure you will take the lump sum. The 5% offsets the forgone year of pension while you continue working. Loss of market return for that year is offset by one year less discount on the lump sum. So far everything offsets.
However, if interest rates stay high and you ultimately decide to take the monthly pension payment instead of the lump sum, you lose the one year less discount on the lump sum and you are net out 5%.
You might still be ok if your salary was rising with inflation. But this company discriminated against older workers so you are sc--wed.
This final salary scheme keeps exxonmobilians tied to a poor culture and the brainwashing that goes with this pension, that no company will pay more… or a final salary…
There are even small companies, smaller than ur contractors who pay more salary. If you put that increase in salary into a pension, and or invest well, it makes up for any perceived loss.
You gain in self respect, motivation, better culture to work in.
A couple of years ago during ranking season, as I approached my 55th birthday in the fall, I asked to be in the NSI rank group and my supervisor complied. This allowed me to take the PIL option and stop working a couple of months before reaching 55 and yes, be a "normal retiree" going forward. With interest rates increasing since my retirement my lump sum was more when I retired than it would be now. So far, no penalty by retiring early.
When I see comments that the 5% per year discount on the lump sum is a barrier … just an observation … if you have enough savings to get by for a few years or find another job for a few years … this barrier is not a barrier with current treasury yields 4-5% per year it really is non-consequential to worry about discounted lump sum because you can easily earn that back …. But if you have not saved to get by for a few years or don’t / can’t get another job … yeah then you kinda sc--wed by poor financial planners in your life or entitled kids or divorced once or twice. Oh well
Nobodies retires as normal retiree at 55 years old.
They are smarter than that. They will rank you NI instead in NSI since they don’t want to pay you to leave. They will make your life miserable to get you to leave voluntarily. Of course no raises or RSUs. With no raises, inflation eats your pension. The 5% reduction in early retirement factor only covers the pension you forgo by not leaving at 55 so you eat inflation on a big number by delaying benefit commencement.
When I retired in 2022, the lump sum rates were getting worse day by day.
My 55th birthday is in August.
So, I turned in my retirement notice the day before I was to be given rank results. Which canceled the PIP situation for me.
I left as a normal retiree.