Index

About Pension

Participation, Vesting and Cost

Retiring From ExxonMobil

Pension Plan Basics

Receiving Your Pension Benefit

Payment Options
- Basic Annuity
- Qualified Joint and Survivor Annuity (QJSA)
- Joint Annuity
- Extended Period Certain Annuity
- Lump Sum
- Choosing a Payment Option
- Projections
- Tax Treatment of Pension Payments

Death Benefits

Administrative and ERISA Information

Key Terms

  

purple square Payment Options

Q. How can I receive my benefits?

A. The Plan calculates your basic pension benefit as a Basic Annuity, but gives you choices about how your benefit is paid. The options available to you depend on your marital status and whether you are a retiree.

Retirees may choose from any of the payment options described in this section. In addition, the Pre-Social Security Pension is paid monthly until you are eligible for a Social Security benefit or as a lump sum if you elect a lump sum payment for your pension.

If you are not a retiree, but are vested in the Pension Plan when you leave the company, you may choose only a Basic Annuity, a Qualified Joint and Survivor Annuity or a Joint Annuity.

The amount of your benefit is adjusted if you elect to receive your pension benefit as any option other than a Basic Annuity.

If you are married for at least one year at the time your benefit begins, your benefit is paid as a Qualified Joint and Survivor Annuity — see page 13 — unless you and your spouse agree to another payment option.

purple square Basic Annuity

When your basic pension benefit is calculated under the formula (see Pension Plan Basics on page 6), it is calculated as a Basic Annuity. The Basic Annuity provides the largest monthly benefit payable from the Plan. It is a monthly benefit paid to you for your lifetime with guaranteed payments for five years. If you die before the five years are completed, payments continue to your beneficiary until the period is completed. The Basic Annuity is also called a "five-year certain and life" annuity. All other payment options are derived from the Basic Annuity.


purple square Qualified Joint and Survivor Annuity (QJSA)

A Qualified Joint and Survivor Annuity is a monthly benefit paid to you for your lifetime. After your death, 50% of the monthly amount you were receiving continues to your surviving spouse (who was your spouse when benefits began) for the rest of his or her life. If you have been married at least one year at the time your benefit begins, by law you will automatically receive your pension benefit in the form of a QJSA. However you may elect a different payment option, but only if your spouse consents to your election in writing, and that consent is notarized or witnessed by a designated company representative.

Electing a QJSA After Your Pension Benefit Has Already Commenced
Ordinarily, once you have commenced your pension benefit as an annuity, you are locked in to the specific payment option you have selected, and cannot elect a new one. An exception applies, however, if you are a retiree who becomes married after commencing your pension benefit in the form of an annuity. In that case, you may elect to convert your benefit into a QJSA, with your new spouse designated to receive any survivor benefits. If you elect this conversion, the amount of your benefit will be adjusted so that your new form of benefit is the actuarial equivalent of your old annuity. You have twelve months following your marriage to elect to convert your benefit to a QJSA. This conversion option is not available to those who elected to receive their pension benefit as a lump sum.

purple square Joint Annuity

This is a monthly benefit paid to you for your lifetime. You may choose an annuity that pays 1%, 25%, 50%, 75% or 100% of your monthly amount as a survivor's benefit to your joint annuitant after your death. Monthly payments continue to your surviving joint annuitant for the remainder of his or her life. Payments under the Joint Annuity are guaranteed at the amount you were receiving for five years (or longer if an Extended Period Certain Annuity is elected in connection with the Joint Annuity) before changing to the survivor's benefit.

Qualified Joint and Survivor Annuity versus 50% Joint Annuity
A Qualified Joint and Survivor Annuity — while a little larger each month — does not offer the five years of guaranteed payments that the Joint Annuity does. Additionally, the joint annuitant for the QJSA must be your spouse.

purple square Extended Period Certain Annuity

This form of payment is identical to the Basic Annuity, see page 12, except that you can choose a 10-, 15- or 20-year guarantee period. This option is available only to retirees. The Extended Period Certain Annuity may be combined with the Joint Annuity Option.

purple square Lump Sum

This is a single payment of the actuarial value of your Basic Annuity. If you elect the lump sum payment option, you will receive your Pre-Social Security Pension as a single payment. The lump sum payment option is available only to retirees.

Calculating the Lump Sum
As a retiree, you can receive the pension benefit either as an annuity consisting of monthly payments or as a lump sum.

Since both the monthly annuity and lump sum payment are intended to have the same value, mortality and interest assumptions are used to convert the stream of annuity payments to a lump sum.

Additional information is available in the Pension/Retirement section on ExxonMobil Me, the Human Resources Intranet Site that can be accessed at work by employees.

purple square Choosing a Payment Option

All of the monthly payment options are actuarially derived from the Basic Annuity. Because these payments are guaranteed for two lives and/or for a longer period of time, the amount of your basic pension benefit is reduced when you elect a monthly payment option other than the Basic Annuity.

Example:
To understand how the benefits vary according to the payment option you select, return to Pat's example (see page 6).

As explained earlier, Pat retires at age 60 with a basic pension benefit of $2,389 each month payable as a Basic Annuity (5-year certain and life). The monthly amount Pat would receive if she elected one of the other annuity payment options is shown in the following table. This example assumes that Pat's husband is the joint annuitant for the QJSA or any joint annuity she selects, and that he is also age 60 when Pat's pension benefit commences.

Pat's Basic Annuity (5-year certain and life) = $2,389 each month

If Pat elects ... Her monthly benefit would be ...
10-year certain $2,346
15-year certain $2,286
20-year certain $2,219
Qualified Joint and Survivor Annuity $2,277
Joint Annuity — 1% $2,387
Joint Annuity — 25% $2,327
Joint Annuity — 50% $2,270
Joint Annuity — 75% $2,215
Joint Annuity — 100% $2,162

purple square Projections

There are several ways to obtain a pension estimate. Refer to Projections from the Pension Plan section on ExxonMobil Me, the Human Resources Intranet Site that can be accessed at work by employees; for additional information access the ExxonMobil Benefits Service Center (EMBSC) Web site or call 1-800-682-2847.

purple square Tax Treatment of Pension Payments

Pension benefits are generally taxable as ordinary income for federal income tax purposes. Many states also tax pension benefits. Before you begin your pension benefit, you should consult a personal tax advisor for more help.

If you are eligible for and elect to receive a lump sum payment, the taxable amount may be subject to special tax treatment and may be eligible to be rolled over to an Individual Retirement Account (IRA) or another tax-qualified employer plan. The taxable amount is the total lump sum value less amounts on which tax has been previously paid.