Last Updated on July 27, 2023 by Ben
At Chevron, they have a unique approach when it comes to saving. It’s two most popular employer-sponsored benefits are the Chevron Retirement Plan (CRP) and Employee Savings Investment Plan(ESIP). Both are easy to understand and easy to use. And both help you to save money and make better investments.
Chevron Retirement Plan
Suppose you are an eligible employee and were hired, rehired, or first eligible for the Chevron Retirement Plan before January 1. In that case, these provisions will apply to your employment agreement.
✅ Base Benefit. (CRP) On the first day of the first month following your 62nd birthday, you will be vested one hundred percent of the assets in your vested account. Suppose you have elected to be paid under the non-participating deferred compensation plan. In that case, your total benefit will be equal to a monthly annuity starting at your 65th birthday (Actuarial Value) of $2,037.50, growing to $2,037.50 in your 70th year, $1,875 in your 75th year, and $1,708.38 in your 80th year, subject to future adjustments for mortality and interest rates.
✅ Additional Benefit. (CRP) This provision allows you a choice in the form of a guaranteed minimum increase in the value of your account. The rate of increase will be by the rate of return on the investment options in the CRP. The additional benefit will increase by less than three percent of the annual rate of return on the investment options in your CRP.
✅ Withdrawal Rules. (CRP) For purposes of the Employee Retirement Income Security Act (ERISA), the CRP is a “governmental plan” and an “individual account plan” within the meaning of the Internal Revenue Code. As a result, certain tax laws applicable to private defined contribution plans do not apply to you. Kindly ask your tax advisor for more information.
✅ IRS Reporting. (CRP) If you are an active participant in the plan during the calendar year, you must file Form 1099 within the Internal Revenue Service (IRS), and for this purpose, a participant will be active if you are a Covered Employee during the calendar year.
✅ IRS Withholding. (CRP) The CRP provides federal income tax withholding at fifty percent (50%).
✅ Deemed Distribution. (CRP) whenever of your death or disability before age 59½, your surviving spouse (if any) will, as nearly as is possible under the law, become the beneficiary of your account and will receive any distribution that might be due to you.
✅ Administration. (CRP) The Chevron Corporation administers the CRP. The CRP’s governing board of directors consists of ten representatives from the Chevron Corporation, the other ten being representatives from the Chevron Employees’ Retirement Plan. The CRP’s assets are held by one or more of the following custodians: Wells Fargo Bank, N.A., JP Morgan Chase Bank, N.A., Banc of America Securities LLC, or U.S. Bancorp. The CRP’s administrative office is located in Wilmington, Delaware.
✅ Definitions. (CRP) In this plan: A covered employee means you and your spouse (if you have one) are employees of Chevron Corporation or its subsidiaries or affiliates. Retirement means the date you first become eligible to receive a distribution from your CRP account.
Chevron Employee Savings Investment Plan (ESIP)
The Chevron Employee Savings Investment Plan is a great way to save for retirement and get the most out of your hard-earned money. If you’re eligible, these provisions will apply to other specific terms per agreement type – so make sure they’re included!
✅ Contribution. (ESIP) You may make a one-time, non-refundable contribution to your ESIP of up to five percent (5%) of your wages. This contribution will be applied against the balance of your account as of your first day of employment with Chevron Corporation. This provision will not apply if you are an Eligible Employee immediately before the rehiring of any former Employee.
✅ Withdrawal. (ESIP) You may withdraw your contributions at any moment. The plan administrator will determine the Actuarial Value of your account when you request distribution. Your withdrawals will not be taxed.
✅ IRS Reporting. (ESIP) The plan administrator will report your contributions to you on IRS Form 1099, and you will report these distributions on IRS Form 1099-DIV.
✅ IRS Withholding. (ESIP) The plan administrator will withhold twenty percent (20%) of your distributions.
✅ Deemed Distribution. (ESIP) In the event of your death or disability before age 59.5, your surviving spouse (if any) will, as nearly as is possible under the law, become the beneficiary of your account and will receive any distribution that might be due to you.
✅ Administration. (ESIP) Chevron Corporation administers the plan. The administrative office of the ESIP is located in the Chevron Corporation offices in San Ramon, California. The ESIP is a “governmental plan” and an “individual account plan” within the meaning of the Internal Revenue Code. As a result, certain tax laws applicable to private defined contribution plans do not apply to you.
✅ Definitions. (ESIP) In this plan: Actuarial value means the hypothetical value of your account as of the valuation date specified in the plan.
Chevron Incentive Plan (CIP)
The Chevron Incentive Plan is a discretionary bonus plan available to all U.S. employees eligible to participate. You may be disqualified from receiving a CIP distribution.
✅ Eligibility. (CIP) You are an “Eligible Employee” if your compensation includes a cash wage or a cash bonus (not including stock options). Note that this is different from the definition of an “Active Participant” under the Chevron Corporation defined benefit retirement plan.
✅ Maximum CIP Contribution. (CIP) The maximum contribution to your CIP account that you will make is twenty percent (20%) of your wages, subject to federal and state income tax withholdings.
✅ Distribution Dates. (CIP) The plan administrator will determine the actual distribution date. Still, it will be no later than ninety (90) days after the first day of the month after the year in which the distribution is intended to be paid.
✅ Taxes on Distributions. (CIP) Whether made weekly, monthly, at your death or otherwise, Distributions will be taxable to the full extent permitted by law.
✅ Withholding Tax. (CIP) Your CIP distribution will be subject to federal income tax withholding at fifty percent (50%).
✅ Your CIP Account. (CIP) Your CIP account is a separate account within your checking account subject to federal income tax with interest earnings.
✅ Rollover Rules. (CIP) The Internal Revenue Service (IRS) has certain rules and regulations for the tax-free transfer of money from a qualified retirement plan to a tax-deferred account. However, these rules do not apply to your CIP earnings.
✅ Additional Information. (CIP) Additional information about the CIP can be found in the “Bargaining Unit Information” section of your company’s collective bargaining agreement, which typically includes the following information: the calculation of your wages for CIP purposes, the applicable rate of contribution, and the benefit of continued use of a CIP account for tax purposes.
Chevron Retirement Restoration Plan (RRP)
The Chevron Retirement Restoration Plan is a defined benefit plan which provides a guaranteed pension benefit upon retirement but which, under certain conditions, can be used to help current employees avoid involuntary separation.
✅ Eligibility. (RRP) The Retirement Restoration Plan is open to all active and retired U.S. and Canadian employees of Chevron Corporation or its subsidiaries. Retired employees of any other companies affiliated with Chevron Corporation in the Chevron Corporation worldwide network are eligible for the plan.
✅ Age and Service Requirements. (RRP) To be eligible for the RRP, you must become fifty-nine or older at your retirement, except as provided below. If you began your employment before January 1, 1984, you might be eligible for early retirement if you become age fifty-nine during any calendar year. A “retired employee” includes an individual certified by Chevron Corporation as retired and not serving in a managerial or other supervisory position.
✅ Service. (RRP) “Participating Service” means all services you performed for Chevron Corporation before your Retirement Date, including services performed before you became an Eligible Employee and an Active Participant.
✅ Service Period. (RRP) Your “Participating Service Period” is the period from your Date of Hire to your Retirement Date.
✅ Service Contribution. (RRP) As an Active Participant of the RRP, you must make a “service contribution” in cash or credit toward your benefits, as described below.
✅ Your Contribution. (RRP) Your service contribution is a percentage of your wages, computed and paid every week. The percentage is set at the beginning of each year and may change yearly. The actual amount of your contribution is determined by your “Wage Cost Percentage.”
✅ Your Wage Cost Percentage. (RRP) The “Wage Cost Percentage” represents the portion of your wages required to be contributed to the RRP. The percentage is computed by multiplying your weekly wages by the number of weeks you are employed during the year and dividing the resulting figure by the number of weeks in the year. Your “Wage Cost Percentage” is fifty percent (50%).
✅ Your Benefit. (RRP) As an Active Participant, you will receive a monthly “RRP credit payment,” which will be debited against your service contribution.
CRP Lump Sum Payment
The Chevron Corporation provides a retiree with a Special Early Retirement Supplement (SERS) in addition to your normal monthly retirement benefit. The SERS is a cash payment you receive based on your age at retirement.
✅ Age at Retirement. (SERS) The age at which you retire is a determining factor for receiving the SERS. The age you retire is when you become an “Actively Participating” or “Actively Retired” employee under your company’s retirement plan.
✅ Retirement Benefits. (SERS) The SERS is designed to supplement your normal monthly retirement income by giving you an additional cash payment during your first five years of retirement. The SERS payment will be based on your age when you retire.
✅ SERS Calculation. (SERS) The SERS is computed as follows:
- Retirement Age minus your age at the time of your first day of employment with the company multiplied by twenty-eight and divided by fifty-five.
✅ SERS Payment. (SERS) The SERS payment will be made in a lump sum payment when you retire, and your payment will be based on the SERS calculation described above.
✅ SERS Limitations. (SERS) The SERS rules of “benefits, restrictions, and limitations” apply to your SERS payment.
✅ Single Life Annuity (SLLA) contracts are a specific type of annuity contract offered by insurance companies to provide the needs of a particular group of customers. Chevron offers an SLLA contract through its CRP.
✅ Life & Term-Certain Annuity Option (LTCAO) Chevron Corporation’s Chevron Retiree Protection Plan (CRP) offers a Life & Term-Certain Annuity Option as a rider to the basic plan. The rider gives participants the ability to take a lump-sum payment upon retirement and then purchase an annuity with that lump sum.
✅ Joint & Survivor Annuity A Joint & Survivor Annuity is a type of annuity that pays a benefit to the insured’s spouse upon the insured’s death and is a popular option for couples who plan to remain married. A joint and survivor annuity provides that any payment received by the insured (your “primary annuitant”) will be shared by you (the “secondary annuitant”), regardless of your current age or marital status. The benefit to you will be based on your needs and your spouse’s needs at the time of payment. You can even purchase a joint and survivor annuity with or without spousal consent. When purchasing a joint and survivor annuity, you can choose to make payments to the secondary annuitant beginning at retirement, at a certain age, or before retirement (“deferred”).
Uniform Income Guarantee Plan
Final Thought – Chevron Retirement
Your retirement is a complicated process, but Chevron Retirement has taken the time to explain its programs to you clearly. All of the information or details in this guide is intended to help you decide on your retirement options.