The Chevron Retirement Plan (CRP) can be taken as a lump sum or an annuity stream of income, at the separation of service from Chevron. The pros and cons for the two options should be considered carefully before electing which option is appropriate for your financial situation. Over the years, the majority of Chevron employees have opted for lump-sum.
It is important to understand the variables that are used in the calculation for the lump-sum payout. One important factor is the Segment Rates.
Segment Rates are published by the Secretary of Treasury 7 to 15 days after the end of the month. The calculation for the three segment rates are based on yield averages over the previous month as follows:
- 1st segment rate: Yields on the top three tiers of investment grade corporate bonds maturing within 5 years.
- 2nd segment rate: Same as above but maturing in years 6 through 20.
- 3rd segment rate: Same as above but maturing after year 20.
The way Chevron determines the segment rates in your lump-sum calculation is as follow:
i. The 2 most previous months of segment rates are thrown out of the calculation
ii. Segment rates equation will be calculated based on the average of 3 months before those
2 months that were thrown out
In short, this method is advantageous for you in a rising interest rate environment.
When you decide to retire from Chevron, you will need to notify HR and order your When You Leave package. Please note that this package can only be ordered up to 90 days before your set retirement date. Once the HR receives your paperwork in good order, the current Chevron segment rates are applied. In order to get the lump-sum payout at the beginning of following month, paperwork should be turned in at least two weeks prior.
Read more about how we can help you understand your Chevron Employee Benefits.
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Company retirement plans are subject to change. For specific plan information consult your human resource department.