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The ExxonMobil Pension PlanFor your futureUK member guide
WelcomeThe ExxonMobil Pension Plan is a valuable benefit.It’s one of just a handful of final salary pensionschemes in the UK that still let members build upbenefits. So that you can get the most from it, wewant you to know how the Plan works and howyour pension will be calculated when you retire.Pensions can seem complicated, so this guideexplains the main benefits of the Plan, as well astelling you more about how it’s run and where toget more information. There’s also a jargon busterat the back that explains the pensions terms wesometimes have to use.Every year we send you a statement that showsyour own benefits in the Plan. And there’s anonline pensions administration site, ePA, whereyou get retirement quotes, change your AVCs,tell us who you would like to receive your lifeassurance lump sum and check your personaldetails whenever you want.If you joined the Plan before 6 April 2006 There’s additional information on page 24 that explains changes we made to thePlan that affect you.There’s also information for Heritage Mobil employees who were members of theMobil Plan and transferred into the Plan following the merger between Exxonand Mobil.2
Contents02 Welcome05 The main benefits06 Membership of the planWho can be a member?Can I opt out?Can I rejoin?ePA07 Contributing to the PlanHow much is the SMART adjustment orcontribution?17 Death benefitsIf you die while still working for the CompanyWho’s eligible to get my death benefits?If you die after you’ve retiredIf you die after leaving the Company butbefore you retire20 Leaving the Companyor the PlanLeaving the CompanyLeaving the Plan23 Periods of absenceWorking part-timeStatutory leaveIs shift pay included?Career breaksHow much does the Company pay?Illness or injuryBoost your benefitsWhat if I don’t return to work?Can I transfer in benefits from anotherpension plan?Annual Allowance10 Retirement benefitsWhen can I take my pension?Retiring at 6524 Additional informationFor members who joined before6 April 2006For Heritage Mobil employees25 General informationRetiring before your State Pension AgeThe TrusteeRetiring earlyHow the Plan is financedMedical retirementHow the Plan is runHow is my pension paid?Plan changesWill my pension increase?Divorce or dissolution of a civil partnershipTaking part of your benefits as cashDisputesHow much pension will I have to give up?Data protectionIf I pay AVCs, can I take these as a lump sum?15 State pensionsState Pension Age29 Useful contacts30 Pension terms explainedBasic State PensionSingle-tier pensionState Pension statementWant to know more?www.exxonmobilpensions.com3
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The main benefitsIt doesn’t costas much asyou’d thinkBenefitsat retirementBenefits whileyou’re workingManageable level ofcontributionsChoose when to takeyour benefitsYour benefits growevery yearYour SMART adjustment orcontributions start with aminimum of just 1.5% ofannual pensionable salaryup to 30,000 and 6.5%thereafter.Normal retirement date isyour 65th birthday but youcan take your benefits fromage 55 (although they wouldbe reduced).Each year you are amember of the Plan,your pension increases.The Company saves therest for youA pension for lifeLife assuranceWhen you retire you get apension that’s paid for therest of your life. And itusually increases every year.A lump sum of three timesyour pensionable salary foryour dependants if you dieas an employee.The Company pays thedifference between yourSMART adjustment orcontributions and what’sneeded to cover the cost ofyour benefits. The SMARTadjustment is paid by theCompany into the Plan.They may also geta pension.Tax relief and NI savingsTax-free lump sumIll-health pensionYour SMART adjustmentgives you tax relief and itreduces your NationalInsurance charge. If you donot use SMART pensions butinstead make a contribution,tax relief is available butthere is no reduction in yourNational Insurance charge.You can give up some ofyour pension for a tax-freelump sum.If you can’t work long-termor permanently, because ofillness or an accident, yourpension may be paidimmediately.www.exxonmobilpensions.com5
RemindMembership of the PlanWho can be a member?If you’re an eligible, regular or fixed-termemployee of: Esso Petroleum Company, Limited* ExxonMobil Chemical Limited* International Marine Transportation Limited*you are automatically put into the Plan as part ofyour contract of employment.*Referred to as the Company throughout this Guide.Employees on a formal career break can join thePlan during their periods of temporary service.Can I opt out?You can opt out within one (calendar) month ofjoining and you will receive a refund of anycontributions you’ve paid or the SMART pensionadjustment. Please consider this decision carefullyas you would be giving up valuable benefits, not onlyfor you but for your dependants too.The Company, Trustee and administrators can’tgive you advice about this decision. You mustdecide whether opting out or rejoining thePlan is right for you.6If you opt out you will be automatically enrolledevery three years and can choose to opt outagain if you wish.Can I rejoin?If you opt out, you cannot rejoin the Plan, otherthan in exceptional circumstances, until theanniversary of the Company auto-enrolment stagingdate. If you’re eligible and want to rejointhe Plan after opting out, contact HR Direct.Please note: if you opt out you can’t ‘buy back’any missed service.ePAAs a member of the Plan you have access to theinformation we hold about you, as well as the abilityto produce calculations for future benefits andupdate your nominations for death benefits online.As a new joiner, you will be sent a letter explaininghow to log on to ePA for the first time. At the firstlog in you will be asked to accept the site’s termsand conditions and set a new password that ispersonal to you.www.exxonmobilpensions.com
RegularContributing to the PlanSaving in the Plandoesn’t cost as much asyou might think, usingSMART adjustment meansyou get tax relief andNational Insurancesavings automatically.SMART is a way of contributing which allows youto reduce your before-tax salary by the amount ofyour annual pension contributions. The Companywill pay both yours and its contributions and youwill pay lower NI on your remaining salary.How much is the SMARTadjustment or contribution?All members must adjust pensionable salary,via SMART pensions (SMART adjustment),or contribute equivalently, according to the scalebelow (subject to a minimum of 1.5% of theirpensionable salary): 0% on first 3,800 of pensionable salary 1.7% on the next 26,200 6.5% on everything above 30,000www.exxonmobilpensions.com7
Contributing to the PlanHere are some examples of how SMART adjustment orcontributions are worked out for members on differentlevels of pensionable salary:GregGreg earns 40,000 a year,without overtime orallowances, so hispensionable salary is 40,000.ChloeChloe earned 32,000 inone particular year, whichincluded overtime of 2,000. As this includedovertime of 2,000, herpensionable salary isSatishSatish earnsBev earns 42,000, 55,000a yearwhich includes shiftpay of 8,000 thatis pensionable. 30,000.As members don’t SMARTadjust or pay contributionson the first 3,800 of theirpay and 1.7% for the next 26,200, Greg’s monthlySMART adjustment orcontribution would beBecause she won’t SMARTadjust or pay contributionson the first 3,800 of herpay and only 1.7% onthe rest, her monthlySMART adjustment orcontribution isjust over 91a monthjust over 37- 2.7% of hispensionable salary.And it’s taken from his paybefore tax.Bevall of which counts aspensionable salary.His monthly SMARTadjustment orcontributions isHer monthly SMARTadjustment orcontribution is 102a month 172a month- 2.9% of hispensionable salary.- 3.76% of herpensionable salary.- 1.48% of herpensionable salary.But because members mustSMART adjust or contributeat least 1.5%, her annualSMART adjustment orcontribution is 37.50a month.Saving in the Plan won’t cost asmuch as you think: You get tax relief on your SMART adjustment orcontributions at your highest rate of tax: if your highest tax rate is 20%, each 1 only costs you80 pence if your highest tax rate is 40%, each 1 only costs you60 pence If you SMART adjust your pay, your National Insurance islower than if you are paying contributions from salary.8
Contributing to the PlanWorking part-timeThe pensionable salary bands on which SMARTadjustments and contributions are calculated areconverted to part-time equivalents. You will paythe same percentage SMART adjustment orcontribution, just of a lower amount.Your benefits are based on your full-time equivalentpay before SMART adjustment but your pensionableservice is adjusted to reflect your reduced hours.Jenny works 35 hours per week and hasworked for the company for 20 years,She successfully applies for flexible working andher hours are reduced to 28 hours per week.Each year going forward her pensionableservice will increase by 0.8 of a year. If she retireswhilst still working part time after a further 10years, her pension will be calculated usingservice of 28 years (20 years full time 10 x 0.8part time)Is shift pay included?Many members work shifts for part of their careers.To make sure it is included in your pension, wecalculate an average of your shift pay and spreadit over your working life.For example, if shift pay represented 10% of yourpay averaged over your whole career, yourpensionable salary would be uplifted by 10%,whether or not you’re working on shift whenyou retire.Martin has been in the Plan for 20 years. He workedshift in the first 10 years with shift pay at 20% ofbase pay each year. During his second 10 years hedidn’t work shift. When he retires his shift pay isaveraged over all of his service.Step 1: Add together all percentages of shift payfor each year (and month) on shift. 10 years ofshift X 20% of base pay gives a total of 200%.How much does theCompany pay?The Company pays a share of the contributionsneeded to cover the cost of the benefits, and itscontributions will change from time to time, at a rateagreed with the Trustee on the advice of the Plan’sactuary. In recent years, it has contributed around30% of pay, and made special contributions on topof that.Boost your benefitsThe more you save, the bigger your benefitsare likely to be. You can pay up to 25% of yourpensionable pay into the Plan as AdditionalVoluntary Contributions (AVCs). To find out howAVCs work with the Plan benefits, see theBoost your benefits – AVC factsheet.Can I transfer in benefitsfrom another pension plan?You can’t automatically transfer in benefits butyou can ask the Trustee to consider it by asking theAdministrator for a transfer-in quotation. They willtell you how much additional service the transferwill buy in the Plan so you can decide whether torequest a transfer.The Administrator can’t advise you on transferringin benefits from other company or personal pensionplans so we recommend that you take independentfinancial advice. We tell you how to find a localIndependent Financial Advisor (IFA) on page 29.The Trustee may require you to take advice beforeconsidering a transfer in request.If you save into another pension plan whilecontributing to our Plan, these benefits cannotbe transferred into our Plan.Annual AllowanceYou can contribute to pension arrangements, aswell as to our Plan, but there are some potentiallyrelevant tax restrictions. Read our leaflet about theAnnual Allowance to find out what the limits are.Step 2: Divide this by the total number of years (andmonths) in the plan (20 years) 200% 20 10%.Therefore his final 12 month’s pensionablesalary would be uplifted by 10% when calculatinghis benefits.www.exxonmobilpensions.com9
ReceiveRetirement benefitsAs a member of the Plan, you’re building up valuable benefitsfor when you retire. These benefits are linked to your earningsand how long you’ve been a member.When can I take my pension?The Plan’s normal retirement date is your 65thbirthday. But you could take your pension beforeor after then.You may also be able to take your pension if you haveto retire early because of ill-health or an accident.10Retirement is a big changeTo help you prepare for life after work, theCompany runs regular pre-retirement coursesyou can attend when you’re approaching thePlan’s normal retirement date or your chosenretirement date. The course covers making thetransition from work to retirement, as well asfinancial planning support. Details of coursedates can be accessed on the UK HR intranet.
Retirement benefitsRetiring at 65Let’s look at how your pension is worked out if you want to retire at 65 (or later if you continue working andstay in the Plan):If you retired at 65 with 19½ years’ service and the last12 months’ pensionable salary of 35,000, your pension would be:Step 11.85% x 35,000 647.50The accrualrateStep 3Step 2Your last 12 months’pensionable payx 19.5 AYour pensionableservice*-State Pension Offset 8,094 35 231.26NewState Pensionx 19.5 12,626 B 4,510 †Your pensionableservice*A - B Your Pension 8,116* This figure could include additional service, arising from a transfer into the Plan, for example.† The State Pension deduction is called the ‘State Pension Offset’ , the maximum State Pension Offset is thevalue of the New State Pension.Some circumstances, such as an exceptionalincrease in pensionable salary may cause theamount of pension you build up in any one year tobe capped due to having reached the HMRCstandard Annual Allowance of 40,000 per tax yearafter taking into account any unused AnnualAllowance from the previous 3 years. To find outmore see the Annual Allowance factsheet. If yourpension benefit is capped when you are ready totake it, the Company will currently make up thedifference between the capped and uncappedbenefit from its own resources.Did you join before 1 January 1989?If you are a woman your position wassafeguarded when the Plan’s retirementage changed. For men this was notas comprehensive.Did you join before 6 April 2016?If so the State Pension Offset is calculated as follows:(1/49 X Basic State Pension X years of PensionableService up to 5 April 2016)(1/35 X New State Pension X years of PensionableService from 6 April 2016)www.exxonmobilpensions.com11
Retirement benefitsThe Plan gives you and your beneficiaries valuablebenefits based on the last 12 months of yourpensionable salary, but you may find when you cometo retire that you’d like more flexibility in how youreceive those benefits.Retiring earlyFrom April 2015, members of defined contributionpension plans, such as personal pension plans or theAVC scheme, aged over 55 can take all of theirdefined contribution pension savings as cash.However, unless taken as part of the tax-free cashfrom the Plan, you would receive 25% tax free andpay tax on the remaining 75% lump sum payment atyour marginal rate.Age 60 It is possible to take just one AVC cash withdrawalafter age 55 and leave the remainder in the Planuntil retirement.Age 55 – 59After the first cash withdrawal no new AVC savingscan be paid into the Plan, although you can continueto make savings outside of the Plan into a personalpension plan.You do have the option to transfer your benefits,both AVC and Plan benefits, out of the Plan to apersonal pension plan or other defined contributionpension plan. However, you must have receivedindependent financial advice from a regulatedIndependent Financial Adviser (IFA) before you applyto transfer your pension out of the Plan.Partial Transfer Out atRetirementAt the point of retirement you are able to transfer aportion of your defined benefit pension to a definedcontribution plan (Partial Transfer). This will enableyou to utilise some defined contribution freedoms inretirement whilst retaining a base regular pensionincome from the Plan.Retiring before your StatePension AgeA Temporary Early Retirement Allowance ispaid if you retire before your State Pension Age.This allowance is equal to the State Pension Offsetapplied to your pension as part of the calculation ofyour benefit.When you get to your State Pension Age, theTemporary Early Retirement Allowance stops, as youwill be eligible to receive your State Pension. Theallowance is included when calculating how much ofthe Annual Allowance and the Lifetime Allowanceyou have used.12You can retire at any time from your 55th birthday,but your pension will be reduced, depending onyour age, because it’s likely to be paid for longer:You would need to give the Company one month’swritten notice of your plans, so that there is timeto replace you or to reallocate your work.Your pension won’t be reduced. It will be based onyour last 12 months’ pensionable salary and youractual pensionable service.You would need to give the Company three months’written notice of your plans, so that there is time toreplace you or to reallocate your work.Your pension will be based on your last 12 months’pensionable salary and pensionable service up towhen you retire. It is then reduced by a ‘discount’,depending on your age in years and months.Current standard early retirement discounts formembers in employment are listed here.Retirement ageDiscount59-5%58-10%57-15%56-20%55-25%Please note: you could give less than three months’notice between 55 and 60 but your pension will bereduced by higher discounts. You can find out morefrom the Administrator, but here is an indication ofthe kind of discounts you could incur: 6% discount at age 59 30% discount at age 55If you leave the Company before 55, your benefitswill stay in the Plan as a deferred pension until youretire. However, if you joined the plan before 6 April2006 you can take your pension, with a reductionfor early payment, from age 50.
Retirement benefitsPension built up before 6 April 1997If I retire early, when will I get myState pension?You won’t get your State Pension until you reachState Pension Age. But the Plan will pay you aTemporary Early Retirement Allowance until yourState Pension can be paid. You can see how theallowance is worked out above.If I retire early, can I still have a taxfree cash lump sum?Yes, and you can read about how this is workedout below.Medical retirementIf you can’t work at any age, because of illness oran accident, the Company can ask the Trustee toconsider if you are eligible to receive an immediatepension based on total or partial disability. You musthave two years’ service to be considered. Furtherinformation is available from HR Direct and theMedical retirement factsheet.How is my pension paid?Your pension will be paid every month in advance.Income tax will be deducted before it is paid.Please make sure the Administrator has your bankaccount details, as well as your home address andemail (if you have one), in case they need to contactyou about your pension.If you want your pension paid to an overseas bankaccount, an administration charge will be deductedfrom each pension payment to cover costs.You will also be required to participate in an annual‘Proof of Life’ exercise if you are paid or live outsidethe UK, or if the bank account into which yourpension is paid is not in your own name.Will my pension increase?Pension built up after 6 April 1997This part of the pension will automatically increaseby Limited Price Indexation (LPI) each April after youretire. The increase will be in line with the annualpercentage change in the Retail Prices Index (RPI),up to a maximum of 5% for service up until 5 April2006 and 2.5% for service after that.The way this part of the pension increases isworked out differently. This is because, in general,only a portion of this gets statutory increases.See page 24 for details.In addition to statutory increases, which are laiddown by law, the Company may, at its discretion,pay further increases.Taking part of your benefitsas cashYou can exchange part of your pension at retirementfor a tax-free lump sum, subject to HMRC limits.The
The ExxonMobil Pension Plan is a valuable benefit. It’s one of just a handful of final salary pension schemes in the UK that still let members build up benefits. So that you can get the most from it, we want you to know how the Plan works and how your pension will be calculated when you retire. Pensions can seem complicated, so this guideFile Size: 1MB
