Dear Mr. Chevron,

Thank you for your question. Chevron employees who have been holding off on commencing their pension lump-sums will now see a substantial decrease in their value. With the short, medium, and long-term rates all seeing significant increases in May 2022, those planning to retire in August 2022 will be seeing huge drops in their lump-sum amounts. This is because when workers make a decision on when they want to start their pension, Chevron takes into account the rates from the third, fourth, and fifth months to aggregate the pension payment. For the first, second, and third segments, Chevron’s interest rates for August 2022, which are 2.89, 4.17, and 4.26. This blended rate is used to determine an individual’s lump-sum which is important because when interest rates rise or decline, an individual’s lump-sum amount will change in an inverse direction. Chevron employees have taken notice of these changes, as one user wrote on a discussion board on https://www.thelayoff.com/chevron, “Interest rates have been climbing since hitting historic lows.”

A Chevron employee’s pension is determined upon the date of when they stop working with the company and the date of when they begin to use their benefits. Their benefits are developed on the number of years they were employed with Chevron and their average wage. These factors, in addition to a Social Security Offset, are utilized to calculate their single life annuity, and then every other structure of pension payment is dependent on this figure.

A person’s modification of their retirement date could prevent them from losing out on a substantial amount of money, especially if they evade retiring in a month with high interest rates. The difference from only June 2021 to June 2022 results in a 7% to 8% decrease in lump-sums. A 2% increase can reduce a Chevron retiree’s pension by approximately 20%. As a result, if interest rates were to rise by 2%, then one can see about a 20% reduction in their lump-sum. Since rates are updated every month, an employee has many choices for when to start their pension benefit. However, collecting the pension before 60 years old will result in age penalties that hinder one’s ability to acquiring the entire pension. Lastly, it’s crucial to know that people don’t have to begin their pension the moment they retire. In other words, if one desires to postpone their benefit commencement for the future, they have the option to do so.