Please chime in - is my Chevron pension at risk?
12 replies (most recent on top)
You heard it from the CEO today - Chevron is on a Kodak trajectory! Transform or die.
Not right now, but at some point the same thing that played out with General Motor’s pension will play out here. The promise of the pension made GM employees hang on until it was too late to pivot their career.
I would be perfectly willing to bet YOUR retirement on a dying industry, just not mine.
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.
Those who are afraid of the solvency of CVX and any other corporations/investments, for that matter should most likely opt for the lump sum upon retirement which should relieve them of their fears & uncertainty of investing and the market. That way they will have the cash in hand, which they can use to pay off debt, or put under their mattress, etc. if that's your comfort zone. In addition, that helps to shore up the pension fund for those who are ok with it and the risks involved, by reducing liabilities for the plan itself.
In an insolvency, secured creditors, asset holders, proprietary interest holders and the administrators’ expenses get paid first. What’s left is paid to unsecured creditors which usually isn’t much if anything because an insolvent company can’t pay Its debt so it’s assets need to be liquidated.
It would be foolhardy to pin your retirement hopes on Chevron or the government, including social security.
Nothing is guaranteed, especially with time lines out 30-40 years. Same goes for PBGC. Do you think the government is going to shore up fat pensions to the well off when SS and Medicare are broke?
Unfortunately, the world is turning against fossil fuels. The next 30 years will be nothing like the last 30. It is likely the oil companies will disappear faster than any of us are expecting. I see nothing reversing the trend away from our industry. So, yes, your pension could be at risk of disappearing when you most need it.
The good news is, you can take it as a lump sum when you retire and if the company teeters near bankruptcy, you can retire and get it before all the money is gone.
No
Is your pension at risk? Although nothing is guaranteed in life, the Chevron pension is quite safe as of today. First off, it’s a Chevron pension. Second, it’s the 2nd largest private oil & gas company in the United States with multi-national exposure. It’s a financially strong and well-positioned company with a very high probability of continuing success for the rest of your lifetime. Thirdly, the money in the Chevron pension fund is managed outside of Chevron itself. The trustee is State Street Bank and the Investments the pension fund has are diversified and invested in solid holdings. So, your pension investments are very safe. As a security backup to the the pension fund, the pension fund is insured by the Pension Benefits Guaranty Corporation (PBGC). Your payout is protected in the form of a lifetime annuity to certain maximum monthly limits dependent on your age. See here for the limits in 2020; https://www.pbgc.gov/wr/benefits/guaranteed-benefits/maximum-guarantee. Bottom line is you shouldn’t be concerned that your accrued pension benefits are in any danger for the foreseeable future. Continue socking away as much in your 401k and sleep easy at night about your retirement pension.
Try this (lengthy) old thread as it may help: https://www.thelayoff.com/t/EBvQOkT
link: @EBvQOkT