Thread regarding Chevron Corp. layoffs

-27lqd: Crickets on that retirement investment calculator and magical inputs that show the annuity yielding better long-term results over an “equivalent” invested lump. Back to your doublewide my trolling friend.

@27gme is correct. Like the old saying goes— A fool and his money are soon parted.

@27rma , (last 3 posts) that's nice that you agree with yourself and take the advice of someone wanting your business and is in his best interests. Good luck with that!

27sog - “asset allocation in retirement - 60-40”, would normally indicate 60% stocks, not 40%. Such an allocation would be a normal, or even slightly aggressive, retirement portfolio: depending on the particulars, obviously. That said, I totally agree with your point that such an investment mix will historically alway beat the annuity payout long term.

“It's a personal choice” (that much is certainly true) that's different for everyone and your unique situation (not really... not at today’s interest rates...which is why almost all fiduciary investment professionals will tell you to pass on the annuity.) I do not believe you ran a 40/60 (40% stocks) portfolio in an retirement calculator and got out a probability that the annuity would do better. Period. Prove me wrong with a real reference, what calculator and what ballpark numbers... I call bullxxxx!

I am sure you jest 27dak. If you have a thirty year time window during which you wish to make fixed value withdrawals, that is by definition long term investment. Don’t be stupid. When you retire the world does not stop, everything keeps moving as before. Stick your head in a hole , if that is what you wish. I worked hard for my retirement savings and now it is time all that money continues to work hard for me. If you are too afraid of normal investment risk by all means have mama Chevron put you on an allowance, but if you actually use ANY retirement investment calculator you will find the fixed annuity is unlikely to deliver even half what a well balanced investment portfolio will provide. So troll away, but you have little credibility.

No need to be snarky guys, lighten up a bit. I too ran some online calculators and ending up choosing the annuity. I determined that with my typical asset allocation in retirement - 60-40, I would end up about the same with either choice. So naturally, I chose the annuity with the 100% survivor benefit because it's a safer back-up plan. Also, we have most of our income from other sources, the pension is only one part of it. You know, like the old "three legged stool" concept. SS, Pension, Savings. I would suspect that the pension annuity is about 1/4 of my sources at it's worse, and a bit more from the start. I could even invest it from the beginning if I want, to let it grow a bit and still reap the benefit of 100% joint survivor for DW. Good luck to you guys, and quit making it a good/bad thing. It's a personal choice that's different for everyone and your unique situation. Like when to take SS.

26eod you mentioned "long term success rate" in your wise-crack. Who in this group of pre-schoolers more knowledgeable than you do you think you are teaching anything about market trends? A post below put it best:

LONG TERM? What are you going to do in retirement while you wait long term? I plan to eat 3 square meals a day and (enjoy) life, not wait long term for my investments to catch up. Foolish thinking.

Those who made poor decisions or simply had bad luck may not have a choice and simply cannot afford the annuity, not being successful enough in their professional careers. Then there's others' like the troll here who has no mathematical backup for choosing the lump sum, who wishes that he had a nut. He's banking on that lump sum being invested in the market during the retirement years making up for his lack of investing skills throughout his life. I really feel for him. poor little tiny thing with no significant nut saved up, and no financial know-how, choosing the financially inferior loser lump buy-out. Horrible predicament to be in.

I am fascinated by the claim that “firecalc and several other retirement calculators”... conclude the annuity has the best long term success rate, because I can not find any reasonable set to numbers that would give this result. Is it just a troll, or am I missing some magical input condition. The only way to get this result is to model a very short time period (less than ten years), or make some very unlikely assumptions about inflation (zero or even negative inflation over decades). For every real scenario I can think of one is better off investing the lump. Live a short time (worse, it takes 17.5 years just to get the value of the lump out in annuity payments). Live a long time (worse, at even modest inflation rates over 30 years the annuity payment value becomes a small fraction of its current value). Have lots of money or very little money, the results stay the same. The only reason to get an annuity is if you feel more comfortable on the nibble of moms Chevron than standing up and taking control of your own life.

@26lid, Just as there’s an optimum time to when you should start taking social security, there is a defining line when it’s advantageous to take the annuity or the lump sum. Each person’s decision is based on several variables that are unique to them only. For me, the social security decision was fairly easy— it was when I retired at 62 and knew I wouldn’t be needing to work for a living ever again. As for my decision on type of pension to take, annuity or lump sum— that too wasn’t too hard for me, but did take more thought and analysis before arriving at a clear answer. I was laid off from Chevron after 28 years of service. I built up a sizable 401k portfolio of just under $1.3 million. It may sound like not enough for younger employees who have been brain washed by many so-called experts to think you need much more. But in fact, just $1MM or even $800,000 can be enough to retire comfortably if you have your own home paid off and no other serious debts or dependents to finance. If you are at the age I am and don’t live a Playboy’s life squandering money, you’ll find the annuity and social security combined should be able to take care of your needs and expenses with some leftover for a vacation getaway each year. You can keep your retirement savings growing at a conservative pace without much risk. That amount would be your emergency fund if needed and something to leave behind to your kids or family as inheritance. I think the older you are and with more years of service at Chevron, the tendency tilts toward the annuity as the most advantageous choice. It’s a guaranteed fixed income stream and provides diversity to your financial well being.

I've tried firecalc and several other retirement calculators with many different scenarios including the lump sum as well as annuity alongside the rest of my portfolio, and SS and I get the highest success rates with the plain old annuity, believe it or not. Still don't know which one that I'll end up choosing.

Yes, there is a person trolling here, and that one person is extremely jealous of those who are happily retired and have pensions, and have free time to post about how advantageous they feel the pension annuity is. They're not spreading any hatred and vitriol, but the anti-pension troll is. That's OK. Enjoy your Pension-less life and we will enjoy our rich and happy lives.

I agree, the entire annuity nonsense is nothing but trolling and contrariness, no doubt from some bitter, idle, laid off loser hoping to extract some twisted revenge by tricking others into making the same annuity mistake. Troll on!

I find that many younger employees are happy and appreciative that CVX offers a pension, which has become rarer and rarer over the years, and they also prefer the concept of taking it as an annuity, after learning that both options are actuarially equivalent. I am not surprised, many young people are very intelligent, are more wise and have more insight than a lot of older folks give them credit for.

@XQF61HS-25roh, Quite the contrary, I have no idea where you get your information but it is definitely not from people nearing retirement. I have spoken to many my age (late 50's, early 60's) in the process of making these types of decisions and the large majority of them favor taking their pension as an annuity.

Before I saw this thread, I hadn't heard of anyone considering the annuity. It seems unlikely anyone would take it so i think we can consider these trolls who claim to have interest. Let's let them have their game because they think it is fun to troll everyone by claiming the annuity is a better choice. No point in arguing with them as that is their game and they know 95% of employees will be shocked at the suggestion since it makes so little sense.

It is crystal clear, the people have spoken. They have calculated, deliberated, and crunched the numbers on Firecalc, and various other retirement calculators, spreadsheets using numerous algorithms and modeling techniques and simulations.

The 100% Joint survivor annuity is best in most situations. Then comes the single, non survivor annuity for singles. Then the lump sum for those who have not met their target goal yet and still need to work or have some capital at risk and working so that they can afford a proper burial upon their death.

Thanks for all the helpful commentary on this topic.

@XQF61HS-1Uqjr, Yes , agree with you, that's spot on, which is why I chose the 100% joint-survivor annuity. It offers the best of both worlds, flexibility and reliability.

You can't think of anyone under 45 who ever gave the pension a second glance? If they stick around long enough and embrace their time in the company as a career instead of a job, after they turn 46 or older, they’ll give that pension more than a glance and be thankful for the golden nest egg they earned and that was invented by us old Dodoes.

The "me" generation is taking over at Chevron, in case you hadn't been out of your cubicle a while. They are not interested in old-fashioned 19th century pensions nor a gold watch when they reach 50 years of service. They want portability, flexibility and control of their own finances. I can't think of anyone under 45 who ever gave the pension a second glance. It will go the way of the Dodo soon.

The younger generation are the me-generation. Most of them lack the maturity that only comes this age and wisdom. That’s why a lot of them would rather trade instant gratification (higher pay today) for long term gain (the security of a pension). When working for a major O&G company, you better understand the long game is where it’s at. Otherwise, go sell shoes or something.

The impression that I get from my younger co-workers is they all appreciate the fact that CVX has a pension and are willing and eager to participate. I find no one like the one butthurt disgruntled poster here who posted the same post 2 or 3 times. Good thing there is only one like him.

@1Zxnq, You said enough in your first sentence— “you are a young employee” and it stands to reason that you think like one too. It’s your choice if you’ve made up your mind to stay with Chevron for 5 years before moving on. The oil and gas business is essentially an old school kind of business. For the most part it aims to attract and retain employees who have a work ethic like most people’s father or grandfather— in it for the long haul. So, the pension is still an important part of the Chevron legacy and promise. It’s also important to 99% of all the employees. I have to wonder why you signed on to working here in the first place.

1Ylna, You should not compare a market priced annuity to the one offered by Chevron. One of the "pros" of the company offered one is that it's essentially "cheaper". You are getting a better value in the company provided annuity than can be obtained on the open market with the value of the lump sum. And, in general, annuities are not good deals. You can "view" it as an insurance form, "view" all you want, it's not technically insurance, it's simply not structured the same. Annuities have been around for many many years, there's no secrets about them. In general, for the avid investor/saver, annuities are not very popular. Most people (who are not selling them) do not advise getting one. It's an exception to the rule because the Chevron pension annuity is a particularly good deal on one, and at the time when you would want/need one, at retirement age.

Don't make the issue more complicated than it is. If you have not reached your target nest egg goal, and are still in the "accumulating phase" or are saddled with debt from making bad decisions, then an annuity is most likely not for you, in any form.

Yes indeed! - The pension is getting very strong from the payments(reduction in their actual take-home salary) from the young employees, Gen-X, millennials, and now we may even be seeing some gen-Z's (age 24 and less now) showing up to pay forward their share. No, there is not a discreet identifiable amount taken out of your paycheck for the pension, but it is funded by the difference in the amount of pay that would be given to you or a similar employee elsewhere, who does not have a pension, but is awarded a bigger paycheck. So yes, the employees, young, old, new, seasoned, all essentially "contribute to the pension fund" annually by accepting a nominally smaller salary for the advantage of a future pension, which the company funds, on their behalf.

And the company, finally back on solid footing, is getting very strong, and powerful, like the good ol' days. Before long they will be showing an increase in % funding in upcoming pension plan reports.

Don't get on here and spread doom and gloom for no reason. Last time I checked, Gasoline, Petroleum by-products, and NG are still essential in almost all forms of industry and transportation and the end is not quite in sight. At least not in our lifetimes.

As a young employee I am 0% motivated by a pension plan; these are an anachronistic holdover from 50 or 100 years ago when people had long careers with a single company. My generation only stays 3-5 years with the same employer so pensions are a waste for us. I think most US companies are eliminating pensions and I expect Chevron to move in this way soon as well. They may have to find some way to legally pay off the annuitants.

@1Yfpu, please understand the employees of a company don’t pay into a pension. The company funds it 100%. Its an inventive to attract and retain its employees. That’s why fewer and fewer companies offer a pension. One can argue that maybe some companies don’t offer a pension but are more lucrative with salary and 401k matching instead, but that’s a separate debate. Just understand that pensions are paid 100% by the employer, not the employees.

I heard the pension is getting really strong now from all the payments from the young employees. They may not like seeing it deducted from their paycheck, but that’s too bad!

I'm new to the whole annuities thing but my understanding is they are viewed as a type of longevity insurance. The terms improve as you age. Most people get quotes at immediateannuities.com You can get a 6% per year on your principal at age 60, about 8% at age 70 and 11% at age 80. So, if you have money to live on and can make it last to 80, do that. If you then worry about running out of money because you would live to 100, annuitize at age 80. You will be glad you did and getting about twice as much as if you started at age 60. Furthermore, you didn't have 20 years of inflation eroding the payment value.

@1Yxze, Current corporate interest rates are low, but they were lower in the last few years. The Chevron Pension Plan is in fine shape. It has been a little better before the wave of layoffs in 2015/2016, but as more and more Baby Boomers get ready to retire in the next 5 years, the pension plan will undergo a stress test, but will not wind up under funded. I think part of the reason we are seeing a noticeable influx of young hires into the company is to counter balance the rapid exodus of older retiring ones. The younger demographic will replenish the pension coffers and keep the fund healthy and growing for current and future pensioners.

With interest rates near 50 year lows, lumpers are taking advantage of Chevron and the shaky pension plan. It is outrageous, to be honest. With every talk of an interest increase we see another huge wave of retirement announcements in middle and upper management.

For all of you taking the buyout and reducing the Chevron pension plan's liability and helping to shore it up - Thanks. You guys must sincerely love Chevron, your fellow retirees and really are team players.

Thanks and God Bless.

@1Xlsf, There has been sufficient commentary posted here already that support the cases in which the annuity is an advantage over the lump sum. To provide ”proof”, there is actually none, not for the annuity or for the lump sum. Choosing one over the other is simply a strategy and a choice made by the retiree based on their individual circumstances and desire. If you want to postulate your argument for the lump sum, now is your opportunity.

If you can postulate a legit financial advantage to the annuity by direct comparison to the lump sum, we are all ears. You will be the first!

My condolences to you -1Whlj. With a shallow comment such as yours, you apparently fail to grasp the pros and cons of the pension annuity vs the lump sum. Maybe for your own situation, the annuity is not a great move, but you ignorantly dismiss the opposite side of the two choices. My condolences to you if you’re the type of person who doesn’t consider all the choices available to everyone. You’re no one to be giving advice.

My condolences to anyone who was duped into the annuity. Make the best of it!

If you already have at least 26 years of eligible service at Chevron, no mortgage, no debt burden and a minimum of $900,000 in your retirement savings, then taking the annuity pension is to your advantage. If you are able to begin collecting early social security now or within 2 years, your case for the annuity pension is even stronger. If you meet all these conditions and can also leave the company with a severance package of 1 year annual pay, it’s a no-brainer— the pension annuity is definitely the way to go.

-1Qzgs, I’m in the same fortunate boat as you. I prepared well for retirement and caught a few lucky breaks along the way. After 29 years with Chevron, I was laid off, but the timing could not have been better. I was ready to retire and gladly EOI’ed and was given a one-year severance check as a departing gift. Thanks Chevron for the glorious 29 years. I enjoyed it very much. I also took the J&S Pension Annuity since I already had it made, both in my 401k retirement savings and being completely debt free for a number of years before leaving the company. Best decision I made. I have a guaranteed income basis from the annuity and social security, and my investments have been performing very well. The steady fixed income sources allow me to continue growing my 401 and IRA savings.

There's a lot of good arguments for both choices, it depends on your individual situation. In general, inexperienced, naive investors just getting into the game without much financial expertise or much of a portfolio built up with fear of inflation and no balls tend to prefer the lump sum. It's obvious that many who did not prepare and made poor decisions, would not make it without a bailout and cannot afford to have a pension annuity, like many here have worked for, earned and deserve. Happy Father's day to all the fathers out there and good luck with your decisions!