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ExxonMobil & ConocoPhillips Employees Face the Biggest Pension Drop in a Generation

By: Get News

Many ExxonMobil & ConocoPhillips employees will lose over 10% on their lump-sums in just a 3-month time period. In 2022 pension lump-sum payments have already taken a major hit, which is negatively impacting employees of ExxonMobil & ConocoPhillips. The IRS just released the segment rates for June and the new rates indicate another big pension drop will be coming in the fourth quarter of 2022. Simply by retiring in the fourth quarter of 2022 instead of the third quarter many employees will lose over 10%.  

Luckily for employees who are considering retirement there is still time to evaluate these changes and possibly move up their retirement date to avoid pension losses. 

These losses are due to rising interest rates. When interest rates rise an employee’s lump-sum will move in an inverse relationship. For every 1% increase in interest rates a ConocoPhillips or ExxonMobil employee’s lump-sum will drop by 8-12%. For ExxonMobil employees who are non-grandfathered (employees who were under 64 years old or had less than 24 years of ExxonMobil service by December 31st, 2021), the interest rate in the second segment, which is the most impactful, increased by 1.17% between Q3 and Q4. This means that if an employee has a $1,000,000 lump-sum they would lose about $117,000 simply by retiring in October of 2022, instead of September.


Video Link: https://www.youtube.com/embed/p4w2-mqojAs

Grandfathered employees at ExxonMobil will also see a significant decrease in their lump-sum amount; however, there are some additional factors which may factor in for Grandfathered employees. ExxonMobil employees can schedule a call with an advisor from The Retirement Group who can break down how these changes will impact them specifically.

ConocoPhillips employees who have a plan which utilizes the corporate bond segment rates to calculate their pension will see a similar decrease from Q3 to Q4. Interest rates rose in the second segment for ConocoPhillips employees by 1.09%. Based on this increase, ConocoPhillips employees who have a $1,000,000 lump-sum can expect to see about a $109,000 reduction in their lump-sum if they decide to retire in Q4 instead of Q3. 


Video Link: https://www.youtube.com/embed/LDtvjq7CIjM

ConocoPhillips has 8 different pension plans, each with their own complex pension calculation method. Some plans will utilize the PBGC rate or 30 Year Treasury Rate. To speak with a ConocoPhillips-focused advisor from The Retirement Group, employees can schedule a call by clicking here. 

These changes come after several quarters of interest rates reducing the lump-sum values of ConocoPhillips & ExxonMobil employees. Over the course of 2022 ConocoPhillips rates have increased by 2.25% in the second segment, which has led to lump-sum losses of about 22.5%. 

ExxonMobil interest rates have increased by 2.17%, leading to pension losses of about 21.7%. These huge decreases have made this the largest pension drop at both companies in a generation. 

Disclosure: The Retirement Group is an independent financial advisory group that focuses on transition planning and lump sum distribution. Neither The Retirement Group or FSC Securities provide tax or legal advice. Please call the office at 800-900-5867 for additional questions or for help in the retirement planning process. The Retirement Group is not affiliated with, nor endorsed by ExxonMobil or ConocoPhillips. 

Securities offered through FSC Securities Corporation (FSC) member FINRA/SIPC. Investment advisory services offered through The Retirement Group, LLC. FSC is separately owned and other entities and/or marketing names, products or services referenced here are independent of FSC. Office of Supervisory Jurisdiction: 5414 Oberlin Dr #220, San Diego CA 92121. ExxonMobil and ConocoPhillips are not affiliated nor endorsed by The Retirement Group or FSC Securities.

Media Contact
Company Name: The Retirement Group
Contact Person: Tiffany Hill
Email: Send Email
City: San Diego
State: California
Country: United States
Website: https://www.theretirementgroup.com/

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