After nine years with cvx, I am planning to move on. I just have a perhaps stupid question: since our pension is vested after 5 years of service, will we get all the lump sum number shown in total awards webpage if we choose to take it out? and if we choose to let company manage it, the number will continue to grow as we approach 65 right?
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You may also want to contact the IRS to get the actual income you earned in your youth because Chevron and other companies make estimations based upon set assumptions of earnings that may be more than what you earned. (It’s better to be poor in this case) Search the site for previous discussions on this topic.
What is the minimum number of points to be considered a retiree to get the prorated CIP? Is there a minimum age to be considered a retiree regardless of points?
I joined late so will not hit 90 points until well after 65. I want to retire around 60. Do I need to wait for a package?
@v2 yes, if you have enough points when you quit, you are considered a “retiree” from the benefits standpoint.
@td actually if you have enough points you will get a prorated cip if you quit. Pretty much means retirees, but they don’t penalize you for not picking a date right after cip payout.
@t2 Chevron pension is cliff vested at 5 years. Leave a day before and get nothing, leave a day after and get everything you have already earned in the pension plan. The longer you work and the more you get paid, the higher the pension.
Total Rewards shows your vested amount (as of January 1 that year). And you can also play around with various scenarios on our pension planner on the intranet.
For CIP, that’s only true for retirees. Quit (not retire) before CIP is paid out and you get nothing (not including severance / EOI times which have separate rules).
The pension and ESIP is detailed in the Summary Plan Descriptions (SPD) on HR2 website. CIP info is on the intranet.
what is the optimal time to retire and get the chevron portion paid into the pension? With CIP a recent retiree learned you have to be here at the end of the quarter to get that portion the following year (April, July, Oct, Dec). Previously it was by month. Does anything similar exist for pension amounts paid in by Chevron?
@b3 this may be the case for the pre-2008 pension, but post-2008 pension (for OP with 9 years at CVX), lump sum is the basis not annuity, as it is based on 11% x average of last 3 years compensation, less the pre-60 reduction where the benefit is discounted by 4.5% annually compounded).
Just make sure you get the lump sum, trying to get it has been like pulling teeth. I'm about to file a complaint with the Dept of Labor against Chevron for failure to pay it.
It doesn’t grow if you leave it there. Give careful consideration to the pension option as well. It has risks, as does the market. It all depends on what percentage of your total egg is tied up in it.
Take the money and run. Get it all invested asap. You will come out way ahead in the long run.
After leaving you will get an email with details about your options, including the lump sum amount that you can choose to receive immediately. If you look at what it shows you’ll get in Fidelity, they take that number and discount it to the current value using about a 5% discount rate.
For example you may see that you’ll get $250k once you reach 65. You can leave it there as is and get the money when you turn 65, or you can choose to take $80k (for example) now and move it into your own personal IRA with the assumption that when you reach 65 it will have grown to around $250k.
You don’t have to decide right away after you leave. You can request the lump sum payout anytime after separation. HTH
Use the benefitconnect tool. When you take the lump you can roll it into an IRA without a penality. Obviously you will need to pay taxes eventially when you withdraw the money, but not with early withdraw penality if you wait to after 60.
Make sure you evaluate the risk of letting Chevron keep that money for X number of years. If you trust it will be around either as a company or bought out by a long-term company that will honor the pension, keep it in until the early penalty goes away (age 60?). If you think the pension might not be around when you hit 60, take the money and roll it into an IRA. Remember GM and others where pensioners got pennies on the dollar. They all thought their companies were invincible.
Pretty much… to be most precise, the maximum lumpsum amount is on one’s 60th birthday… it declines after that (actuarial tables)… monthly’s are calculated differently.
Bottom line, take the lump sum… or if don’t need it immediately, just make sure that your beneficiaries are identified so your family gets the benefit that you earned/worked for.
The date that you see in Fidelity etc is the amount you would receive at 65 yo. You have to model it with your end date and date which you want to take it. If you leave it in the it just grows like a CD. 3-5% per year
Hey OP: good for you. I wish you the best. This place is a sinking ship.
I want to make sure you understand the difference between the ESIP (defined contribution plan to which you and CVX contribute; that’s where CVX’s match goes) and the pension plan (funded solely by CVX).
Your pension plan is based on a formula that takes into account your age & years of service. Pre-2008 hires have one formula, but you were hired after 2008, so I don’t recall offhand what your pension calculation is.
The basic premise of the pension plan, though, and I think this is true also for your benefit, is that if you take it before age 60, you get a discounted benefit. My advice is to use the pension plan modeler in BenefitConnect and try different scenarios to see how different dates for your last day of employment and start date of your benefit affect the lump sum (or the annuity, if you prefer that option).
Taxes are also an important consideration in this.
In the benefitconnect tool, you should be able to add dates for it to calculate the offering. One of the features shows the lump sum vs monthly payments after 65.