Does anyone have any thoughts or insight to offer on the effects of the upcoming layoffs on the pension fund, the availability of the various options, and if would be a good idea to cash out. The price of oil seems to be on the rocks again and like staff reductions the pension fund is likely to be affected negatively as well.
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@axqf, No. That comment with the "Gotcha" was the sarcastic indicator and obviously sarcastic. Wealth is wealth. It would not be a good idea to consider any assets, particularly investment accounts of any type, as not included as wealth for SS means testing or a wealth tax. All a rollover 401k then tax paid and Roth converted account is just a converted 401k in different clothes. Same thing for any after tax brokerage account. Plan on hiding that from the IRS?
Also the proposed wealth tax was anything over $32mm from NPR; "Sanders' tax would only affect people with wealth of over $32 million, and Warren's tax would affect only people with $50 million and over."
Not only is it unlikely that a wealth tax would occur since it is reported as unconstitutional by some, it is also highly unlikely that the individuals holding these amounts would have it all in retirement accounts like you reference, or in bank accounts alone. These amounts are commonly spread about different assets including and in many cases, primarily real estate. The tracking and accounting of such would be a global nightmare that most economists say would be a futile attempt.
Do your distributions, Roth conversions if that's your thing, etc., as you please and like and for your own personal liking and tax convenience. Forget about the wealth tax or means testing affecting your strategy. Simply having your assets in a different account is meaningless.
Planning your retirement with 30-40 year confidence on SS or pension would be quite nerve-wracking for me. Both are forecast to have trouble ahead. The PBGC is funded by pensions, which are going away, which means PBGC will be out of money within five years. Congress can not allocate more, by law.
You may have a point there @adap. I’m expecting that the means testing the SSA will focus on are tax deferred retirement account like 401k and IRA accounts. But, thanks for the tip. The Progressive Democrats are apt to be in power by 2035, so maybe I should change up my strategy a bit and invest my money in a different stock market overseas. Either way, it’s more likely to see the means testing of individuals with traditional retire accounts and not other forms of wealth.
@9xbd, I agree with most all you say except for any chance of social security going belly up. If you are already 60 years old, social security will remain intake the rest of our lifetimes. It’s already funded well enough through 2035, then there’s the possibility of benefits being cut by 21%. I don’t think that by 2035, the older generation will see any reduction in their SS payment. That demographic, more than younger age groups, will be more dependent on social security. The most likely outcome by 2035 is that the social security administration will begin means testing all eligible SS recipients to see who can afford a reduced benefit and who cannot. My plan is to slowly take distributions from my retirement accounts over the next 14 years, between 2021 and 2035 to avoid being means tested by the SSA and having my benefits reduced in any form or fashion. I’ll pay my taxes over the 14 year period and continue to keep my money invested in the stock market and real estate.
That is pretty much how I have handled my savings and investments as we have been living on the monthly pension, @9smc although your predicted growth seems a bit exaggerated. Because of the pension coming in every month, I have not had to touch my savings and investments and have even have quite a bit left over from the monthly pension. I think that the pension fund as well as the PBGC are as vulnerable to insolvency as anything, however. That makes no difference to me, though with the amount of my savings and investments. We don't live forever and there's no way that I could spend it all, even if Social Security goes belly up, which could also happen.
No indeed, the pension fund is not in any particular risk for the foreseeable future. In addition accepting the pension as a lump sum remains a particularly ignorant financial choice compared with taking the annuity and remaining invested with the remainder of your assets with as much risk as you like. The p50 result (for male, age 60, in reasonable health) in remaining invested without having to draw income, as many will with the lump will return 6-8 times the amount of taking the lump, investing and having to simultaneously draw living expenses from it. If you pathetically fear normal investment risk in the market, and have made poor financial decisions and are in debt, then accept the lower or relatively non-existent returns, and take the lump sum. Easy choice. Run along, junior and take the bail-out.
It is true that PBGF is unlikely to have the cash needed in a few years to bail out pensioneers. But that is a government decision, so a well organized gray lobby could perhaps get the program restored at some point. Join AARP and organize notw!
The pension fund is not in any particular risk for the foreseeable future. That said, accepting the pension annuity remains a dumb financial choice compared with taking the lump and investing it in a diversified account. The p50 result (for male, age 60, in reasonable health) is an invested lump will return 2-3 times the amount of the annuity payments over your lifetime. If you fear normal investment risk and expect inflation to remain low, then accept the discount on returns, and take the annuity. Easy choice. Move on. Nothing to see here.
Yes, It's important that one consider that the pension fund is guaranteed by the PBGC , which does not apply if you opt for the mathematically inferior option, the lump sum buyout. No other investment vehicles offers such guarantees, other than the FDIC insurance of a bank savings account with very low return by comparison.
Uhhhh,..... OK. Whatever you say...........
Not only is the pension in serious doubt, now the GAO estimates the PBGF will be bankrupt within five years, so no government backup. Choose carefully!
That would be "Effects", not effects.. And yes, the fossil fuel, and even more important and crucial to modern tech industry, the Hydrocarbon (crude and NG) and petrochemical industries will be around for not only as long as fossil fuels, but most likely much longer. And as many have alluded to, most of the so-called green energy options require fossil fuels as well as HC for construction, such as Electric vehicles. So, you/re only reducing the amount of fossil fuels. HC,s, not eliminating them. For those and many other reasons I would suggest that the pension is in no danger. I would recommend the monthly annuity as the best choice mathematically for the long term, if you have saved and invested well enough and can afford it.
The fossil fuel industry will around for a very long time. Quit listening to the leftist narrative. The Chevron pension will be safe and paying out for my entire lifetime and well beyond. Maybe by the year 3000, your idea of a fossil free world may become a reality.
"the days of fossil fuel are numbered" lol. Not in your lifetime, junior, and definitely not in mine. Get back to work, slacker, if you even do any work. you're not getting a break anytime soon.
The CEO compares Chevron to Kodak every chance he gets. They failed to respond to a changing market, had the rug pulled out from under them and disappeared. Employees lost their pensions. And jobs.
@5jku, What’s your silly point except to be trolling? Chevron is not Kodak in any shape or form. Like being called an id–t? just keep it up.
Is there a thread here somewhere discussing the effects of the recent downturn and expected staff reductions on the CHEVRON(CVX) pension fund? I mistakenly must have clicked the Kodak thread, lol!
“More than 1,100 retired Kodak workers — many had been upper management — saw their Kodak Excess Retirement Income Plans (KERIP) or Kodak Unfunded Retirement Income Plans (KURIP) end when the company filed for bankruptcy in January 2012. Those pensioners ended up receiving a few pennies on the dollar last fall in the form of new Kodak stock for the estimated $200 million they were owed, Roberts said.
“Someone who had funds in there was depending on that as part of your retirement all of a sudden had 5 percent,” Roberts said. “I think it’s limiting or downsizing your expectations.”
The Chevron Pension fund is directly funded by Chevron 100%. Not a single Dollar is directly contributed by the employee. The pension is adequately funded per government rules in order to also qualify to be insured by the PBGC. The fund must always remain funded to regulated thresholds which guarantee stability and solvency. Chevron is responsible for maintaining its proper funding level. Our retirement fund is sufficiently healthy to cover current and future retirees without worry. If it can no longer guarantee the stable pension payouts for future retirees, it will change the Pension Plan rules to accommodate its funding requirements well ahead of reaching an underfunded position. As things stand now, you can bank on receiving everything in your pension you’ve been promised.
Welcome back Annuity Troll! We missed you.
Contrary to popular belief on millennial threads, nearly all employees opt for the monthly annuity, as there are no serious threats to the survival of an industry that all aspects of our life rely on, primarily transportation, including electric vehicles, as well as all consumer electronics. I also don’t think the pension fund will be affected near term by the layoffs. Anyone successful enough to be living on their large pension annuity alone most likely has a considerably sized 401k as well as after-tax investments which are growing significantly and need to be cautious of hints at future administrations imposing a wealth tax, albeit theoretically unconstitutional.
Nearly all employees opt for the lump sum, especially with the very real threats to the survival of the industry. So, I don’t think the pension fund will be affected near term by the layoffs. I expect the Chevron headcount to fall below 20,000 so there is that. Long term I think anyone living on the pension annuity may need to rely on government bailout. But by that time most will be living on social security.
The Chevron pension fund is sufficiently funded to satisfy all employees. Don’t you read the annual statements Chevron mails to everyone’s house?
No kidding, my monthly pension check pays for much more now than it used to. It's amazing, but some of the lawn and garden equipment that I use, Weed-eaters, Tillers, Chainsaws, etc, are the same price as they were 20-30 years ago. I have a small chainsaw that still runs and I paid the same for it 25 years ago as they sell them for now. The same goes for many things, except for TV's of course. I can replace mine for a quarter of the price, as well as Computers. The cost of food and things have gone up modestly but not as much as the typical "inflation" that they all reference. I'm wondering what they tie to inflation and the CPI, because it certainly is not the majority of what I buy. Everyone gets all excited about inflation. Like Russia, Russia, Russia. Not me. I don't give a flip. My pension is several times what I need. Anywho, I hope you guys make out OK with the upcoming potential layoffs.
I took the same route, @1ird+13megeXV. Haven't had any regrets and consider it the best decision that I've ever made. I love the fact that a paycheck gets deposited into my account every month and I get up without going to work, except maybe in my garden, or on my hobbies, lol. I have also been spending like a sailor and the portfolio keeps growing and growing like a banshee unfettered since the monthly pension amount is much more than I could ever spend. Thanks, Chevron!
It’s as safe as a Kodak pension!
I agree. The industry has always had it's ups and downs I took the 100% joint survivor annuity and have no regrets. Have had no problem with inflation of things that I normally buy. many things I buy go down in price. remarkably. Home & cars paid off, and I have more than I can spend and a 401k balance that's doing extremely well that we've hadn't had to touch. Hope that everyone who wants the package gets one like so many of us were offered. It sure makes layoffs and reductions a lot easier.
I really don't think that there is any cause for concern above the usual ups and downs of the industry, which has been this way for decades. there have been far worse downturns. business as usual. take your pension without fear.
MYTH: The days of fossil fuel are numbered.
MYTH: The days of investor interest in fossil fuel companies are even more numbered.
OPINION: I don't see the stock price ever recovering.
MORE OPINION: And oil and gas prices are going to be low as long as the Permian is operating. Protect yourself against the downside!
The days of fossil fuel are numbered. The days of investor interest in fossil fuel companies are even more numbered. I don't see the stock price ever recovering. And oil and gas prices are going to be low as long as the Permian is operating. Protect yourself against the downside!
You should not worry about pension funds. Oil and gas is a cyclic business and in commodity business there will be swings all the time, you just need to ride out the down turn and wait for the upside which might come in fourto five years from now. If you need money now you do what you have to do but if not do not touch it.