i read that IRS is planning to implement new Mortality tables that may have increase lump sum payments from 2017. I was planning to send my paperwork this month, but now Iam considering waiting till 2017
Appreciate if anyone that has information on this , thanks
Yes, 2fcn. The new tables take effect in January 2017, but the IRS allows large employers like Chevron time to integrate the tables into their defined pension plans. So, it's safe to assume waiting until June or July 2017 to be sure it benefits the retiree. Don't expect Chevron to volunteer or advertise this information. You'd have to ask the right people at the right time. Normally, Chevron will respond to written requests for information. In January 2017, I would suggest writing a letter to them at:
Chevron HR Service Center, P. O. Box 199708, Dallas, TX 75219.
Why wait till mid 2017 ?, if the new tables are implemented in 2017, it should start from January ?
Correct, 2gzu. The new mortality tables are coming in 2017. If you are able to wait until sometime in mid 2017 to request your lump sum pension, you are apt to benefit with a higher payout. Run a Retirement Estimator scenario now for a date in mid 2017, then run the same report scenario again later in mid 2017. See if in fact, you notice an increase in your lump sum payout. The only thing that can counter your expected gain would be an increase in the 3-month average of the corporate bond rates. But, as you intelligently anticipate, those rates are not going up anytime soon. If Hillary wins in November, don't expect rates to go up for another 4 years since she will have her sights set on another 4 years from Day 1.
So, bottom line waiting till 2017 to claim your lump sum benefit is a pretty good idea, of course if interest start to spike, then all bets are off, but that seems to be a very low probability to happen
As far as Chevron's adopting the new mortality tables, I've not heard a thing. You should expect to hear anything from Chevron in any communication. You'll need to ask the right people to get an answer on that. Besides, Chevron uses a "unisex" mortality table to figure our pension benefits.
I expect an announcement from the IRS to be made soon concerning the new mortality tables for males and females. You should follow the news about this at www.irs.gov. Once an adoption date is made known, all employers with defined pension plans will need to adopt it at some point.
Once adopted by Chevron, the new mortality tables will surely lead to increased payouts for lump sum pensions because the updated tables will indicate longer life spans for the average American.
Is there any confirmation that the new mortality tables will be implemented in 2017 ?
@2wki, You appear to be correct. If anyone can afford to wait into 2017 to start their pension, they would benefit from the changes the new mortality tables will bring. I would also encourage everyone to also study how the Social Security Offset is calculated. By my estimates, over 90% of employees entering retirement with 26 years or less of service, will benefit from a small to great degree if they supply Chevron with their SS earnings statement. The fewer years of service an employee has, the greater their pension benefit should increase. Reducing the SS Offset amount is the only way an employee has to affect the pension benefit to their favor. Consider this well.
I am holding off and not taking my lump sum until 2017. We have been watching it closely and yes it certainly predicts and increase in the lump sum payment in 2017. We will wait until June 2017. It is over $100,000 more than what was predicted at first.... A lot of my coworkers and friends don't trust Chevron staying solvent...and took theirs out. I trust it more than the stock market. So we are for sure there unit June of 2017.
1bag, you can submit your social security earnings statement at any time. Chevron will substitute their estimates, used the calculate your SS Offset, with your actual earnings. You can decide to take your pension at anytime also. For those retirees who have already taken their pension within the last 6 months, you can still submit your SS earnings statement if you determine it would boost your pension benefit. After 6 months into your pension, it would not be accepted by Chevron.
Ian also going to submit my actual social security earnings along with my pension paperwork
Is there any impact if I wait till 2017 instead of submitting it now i.e. Social Security will include 2916 earnings as well ?
OP, you are correct about the new mortality tables. The IRS will be implementing them in 2017. I'm not sure how if it will be phased in over a short period of time or if pension plan administrators will have to switch over to them immediately. Either way, it will present a higher lump sum for us Chevron retirees. Do try to find out more about the upcoming change, but if you can hold off until 2017 before taking your pension lump sum, the better it should be for you. If you're not 60 years old yet, you will also benefit by reducing your "early retirement factor" that is subtracted from your total benefit. Keep in mind that the lump sum increases with lower corporate bond rates. If while waiting, the average bond rates start to increase, it will lessen your payout. IMO, I think you won't have to worry about this much. Interest rates are likely to remain low for some time still. Who knows, rates may still move lower.
What could be worse than reading IRS mortality tables? The only guarantees in life are death and taxes.