Word going around that there will no longer offers Lump sum on pensions, they would rather hold onto your millions and make money off of it. They are going strictly Annuity. We all have seen this coming.....
30 replies (most recent on top)
I doubt very much that Lump Sum pensions will ever go away. I think there's a better chance the annuity option could be eliminated first. All pension money is not held in the Chevron general fund. Every month, pension obligations are set aside where Chevron can't touch it. When an employee retires, their pension is paid out. Chevron would rather liquidate the employee with a lump sum and say goodbye, rather than be responsible for paying a fixed monthly annuity for the rest of their life.
"Obnoxious dork", Thanks for your candor, I am very happy to meet you. I am Rotten Deadwood Loser, rotting on the tree waiting to be cut. Happy to make your acquaintance. I just hope that I will be of some good and bring warmth to someone's fireplace.
9jbi, yes thanks for the clarification.
'Obnoxious dork' here, clarifying that I was talking about the single life annuity which is not impacted by mortality factors. The other forms of payment including the joint annuity are impacted by changes in mortality factors, and I was wrong on that point. So thanks for correcting.
-9jbi, Yes, thanks for that info. There is a lot of bad info being passed around on this site, like the obnoxious dork below who keeps on repeating that mortality tables have nothing to do with annuities.
@Gmgz00m-9nll, Thanks for that useful info. I also thought that your age affects the annuity. And particularly the joint and survivor one, the most popular. There is very little drawback, if any, to not opt for the 100% joint and survivor.
@9swa - I wouldn't necessarily expect your HR Business Partner to understand how retirements are calculated. Here is from the SPD page 32 (pre-2008 only of course).
"Chevron Benefit Formula
1.6 percent of your monthly Highest Average Earnings
TIMES
Years of Benefit Accrual Service
LESS
Social Security offset
A retirement benefit is first calculated as a monthly age-65 Single Life Annuity. " This may be reduced by a multiplicative factor for early commencement depending on age and points.
So the basic single-life annuity does not depend on an any mortality factors. All other forms of payment are derived from this one, and these conversions do depend an actuarial tables. So not only the Lump Sum but Joint and Survivor Annuity Option (which is the default for those who are married) as well (that's why they ask for spouse's birth day on the retirement estimator).
So all the forms of payment do depend on actuarial tables EXCEPT the single life annuity.
9swa,
For the old Chevron Pension Plan, (for hires in the old plan) mortality facits do not influence the annuity amount.
For recent hires, in the new Plan, yes, mortality factors would influence annuity rates.
Which plan are you talking about?
@Gmgz00m-7vhq, No, You are wrong, sweetheart. Mortality factors do influence the annuity as well as the lump sum. However, they don't change very frequently, I just clarified that with my HR Business Partner. You should research these things before you make posts so that you don't sound like an idiot.
1eiw is correct, Mortality factors do not influence the annuity (for persons in the older plan, not current hires). Mortality figures are used to calculate a lump sum.
7jho, you are a moron.
Remember though guys, if -1eiw hasn't heard of that, it probably isn't true -
This is the financial genius who gave us: "Actually, mortality factors do not impact the annuity."
ROTFLMMFAOBOAY!!!
@1eiw, I advise you better start reading up on the subject. There is a smoothing (or phasing in) of the effect of the mortality changes on large pension funds. It's all in the Pension a Protection Act. Better yet, do as you wish.
I should've taken the pension.
It's not a 100% guarantee (maybe 90%+) that Chevron will continue to be a company for decades to come.
Lot of bad advice here.
Actually, mortality factors do not impact the annuity.
I've never heard of this smoothing effect, I think the new mortality tables will be effective in either Jan 2017 or 2018. Anyone know about 'smoothing' that 1hzj claims?
1hzj has no clue
The poor advice and commentary on this forum is astounding.
If we get higher interest rates, the lump sum amount will go down, and annuity amounts will go up. If the IRS adopts the latest mortality tables next year, this will tend to increase both lump sum and annuity calculations. In pension calculations, however, the IRS will permit larger companies like Chevron to use a "smoothing" effect. The benefit increase will be spread across 2 or 3 years, so technically if the new mortality tables go into effect in 2017, the full effect would not show up in benefit payouts until 2019 or 2020.
I had a buzz. I forgot to give credit to the band The Presidents Of The United States Of America. Probably unknown to under 30 somethings.
I read that the lump sum will be higher under the new IRS mortality tables, not sure if that is indeed accurate but if it is , isn't it better off to wait until 2017 before taking your lump sum ? Of course if interest rates go up that may offset any increase
I would offer another consideration for those contemplating the lump sum or the annuity option. Keep in mind the IRS will soon be adopting the latest mortality tables that show Americans are living longer. Once adopted, your annuity will drop. If you are able to select now, the monthly annuity amount will be higher. Of course, the lump sum could still be your best choice if you think you will die before your statistical mortality age. Ask many questions and good luck in your planning.
Damn @qls, were you druck or high on dope when you wrote that? LMAO!
OP posted for the 1000th time this month. Back under the bridge, troll.
It's common knowledge that many companies prefer the lump sum payouts/buyout because they have a better handle on their remaining assets moving forward. There are also cases where the annuity is a better deal for the retiree, and the company ends u paying the retiree and/or their spouse for many years, but of course that is a different discussion.
In any event, your post makes absolutely no sense from a financial standpoint, OP. I suggest that you get together and discuss this with a FA. The company has them available for you at no charge for consultation.
Lump sat alone in a boggy marsh,
totally emotionless except for her heart
Mud flowed up into lump's pajamas
she totally confused all the passing pihranas
She's lump, she's lump
She's in my head
She's lump, she's lump, she's lump
She might be dead
Lump lingered last in line for brains
and the one she got was sorta rotten and insane
Small things so sad that birds could land
Is lump fast asleep or rockin' out with the band?
She's lump, she's lump
She's in my head
She's lump, she's lump, she's lump
She might be dead
Lump was limp and lonely and needed a shove
Lump slipped on a kiss and tumbled into love
She spent her twenties between the sheets
Life limped along at sub-sonic speeds
She's lump, she's lump
She's in my head
She's lump, she's lump, she's lump
She might be dead
Is this lump outta my head?
I think so
Is this lump outta my head?
I think so
Is this lump outta my head?
I think so
Is this lump outta my head?
It's common knowledge that many companies prefer the lump sum payouts/buyout because they have a better handle on their remaining assets moving forward. There are also cases where the annuity is a better deal for the retiree, and the company ends u paying the retiree and/or their spouse for many years, but of course that is a different discussion.
In any event, your post makes absolutely no sense from a financial standpoint, OP. I suggest that you get together and discuss this with a FA. The company has them available for you at no charge for consultation.
Even in the unlikely event that the lump sum option is removed , don't they have to offer us a grace period before It is implemented so at least the retired folks can take the lump sum in that time frame ?
OP, the full 100% joint and survivor annuity pension is a much better deal in many cases for many employees than taking a lump sum. The specific values are given, and many discussed on this site. The lump sum and pension are "actuarily equal"(SP?). Chevron's annuity is a MUCH better deal than anything available on the open market. You should not post on subjects that you have no knowledge of. "they would rather hold onto your millions and make money off of it." is a completely false and stupid statement. Chevron does does not "make" or "lose" in either case. In addition, like another poster pointed out, this exact post has been repeated by you time and time again. Why lurk in the shadows and make the same stupid false post over and over? You obviously have an agenda.
Does anyone have any knowledge of the "Funding Target Attainment Percentage" that will appear in Table 1 of the Chevron 2015 Annual Funding Notice to be sent to us in April/May 2016. The Notice sent in 2015 showed 86.37%. I believe the PBGC requires a value of at least 80% for Lump Sums to be offered in full. If the value falls below 60% Lump Sums are not allowed by the PBGC. Can anyone that is involved in the preparation of the Notice comment on this restriction?
I'm taking the annuity myself so I am ok if they do. However, I doubt they will eliminate the LS since once paid they are done with you and don't have to worry you or your wife lives to a ripe old age.
The rumor is FALSE and the OP is a troll. This is the 100th time at least that he has tried to propagate this rumor.
OP-Thanks for repeating the same post over and over again, ASSWIPE; You post that every so many hours and on several threads , but finally started your own, adolescent ASSWIPE. Get a life. The topic's been discussed and closed. No truth to your rumor. STFU already.
I heard the same remarks in San Ramon ?????