For ExxonMobil employees and retirees
Planning for ExxonMobil employees, starting with the pension formula.
The ExxonMobil Pension Plan pays 1.6% of final average pay for every year of service, less a Social Security offset, and lets a retiree take it as an annuity, a 100% lump sum, or half of each. The lump sum is priced by interest rates, the annuity is priced by your age at 55, 60, or 65, and the same 55-and-15 line opens retiree medical. We build the retirement date around those numbers, then fit the Savings Plan, the restricted stock schedule, and the nonqualified plans around it.
The situation
A pension that still exists, and a date that prices it
ExxonMobil is one of the few large employers that still enrolls new hires in a defined benefit pension. Regular full-time employees participate automatically, and the formula is 1.6% times years of pension service times final average pensionable pay, the highest 36 consecutive months of the last ten years, minus a Social Security offset of 1.5% of your estimated Social Security benefit per year of service, capped at 50%. The proxy adds that the qualified plan counts pay only up to the IRS limit, $350,000 for 2025, with the Supplemental Pension Plan and the Additional Payments Plan picking up salary and bonus above it as a lump sum six months after retirement.
The date you leave prices the benefit twice. A retiree, someone at least 55 with 15 or more years of benefit service, receives 100% of the basic benefit from age 60 and 5% less for each year earlier, 75% at 55, with the Social Security offset waived on annuity payments before 62. A terminee, anyone who leaves without meeting that test, is actuarially reduced before 65 (79% at 62, 32% at 50) and can take a lump sum only at separation or at 65. The lump sum itself converts the annuity using mortality and the three interest-rate segments under IRC §417(e); the proxy reports the rates used for year-end 2025 valuations as 4.13%, 5.21%, and 6.01%, and higher rates mean a smaller lump sum. Which month’s rates the plan applies to your start date, and how often they reset, is a plan-document question for the Benefits Service Center.
The company reported about 58,000 regular employees at the end of 2025 and runs from its Spring campus north of Houston. Harris County counts 16,740 ExxonMobil employees countywide, 7,695 of them at headquarters and 7,000 at the Baytown refinery. In North Texas, the former Pioneer Natural Resources office in Irving has been winding down since the May 2024 acquisition; a notice filed with the Texas Workforce Commission covered 376 positions in phases through 2026. In September 2025 the company announced 2,000 job reductions worldwide and said none were planned in the United States. Beside the pension sit the Savings Plan’s 7% match, retiree medical at 55 with 15 years, and restricted stock that releases half at three years and half at seven, on a schedule that does not move when you retire.
Hypothetical illustration
Retiring at 55, 60, or 65: the same formula, three annuities
Suppose an employee hired at 30 has final average pensionable pay of $200,000 and an estimated Social Security benefit of $40,000 a year, and retires as a retiree at 55, 60, or 65. Pay is held flat and the numbers are round and invented; they show how the formula, the offset, and the early-commencement factors interact, not any real benefit.
| Retire at | Years of service | 1.6% formula, before offset | Social Security offset (from 62) | Retiree factor | Annual annuity before 62 | Annual annuity from 62 |
|---|---|---|---|---|---|---|
| 55 | 25 | $80,000 | $15,000 | 75% | $60,000 | $48,750 |
| 60 | 30 | $96,000 | $18,000 | 100% | n/a | $78,000 |
| 65 | 35 | $112,000 | $20,000 | 100% | n/a | $92,000 |
Five more years of service and five fewer years of early-commencement reduction move the lifetime annuity from $48,750 to $78,000, and the retiree who leaves at 55 receives $60,000 a year until 62, when the offset begins. The lump sum is the actuarial value of the basic annuity, so it rises and falls with the same factors and then with the §417(e) segment rates in the month the plan uses; a retiree on or after December 1, 2015 may also take 50% as a lump sum and 50% as an annuity. Retiree medical eligibility and the nonqualified lump sums turn on the same 55-and-15 test, so the date is a package, not a single election.
Now suppose the employee leaves at 54 with 24 years of service, one year short of retiree status. The benefit is actuarially reduced for any start before 65, the lump sum is offered only at separation or at 65, retiree medical does not open, and the Supplemental Pension and Additional Payments Plans pay nothing unless approved. The difference between 54 and 55 is the largest single number in most ExxonMobil retirement plans, which is why we model the date before anything else.
Why it’s complex
Six ExxonMobil decisions that turn on a date
The pension lump sum is priced by interest rates
Lump sums convert the basic annuity using mortality and three interest-rate segments under IRC §417(e). The proxy shows the rates used for year-end 2025 were 4.13%, 5.21%, and 6.01%, against 4.34%, 4.86%, and 5.33% a year earlier; the IRS published 4.42%, 5.47%, and 6.31% for May 2026. Higher rates mean a smaller lump sum, and the month the plan uses for your start date is set in the plan document, so confirm the lookback and how often it resets with the Benefits Service Center before choosing a commencement date.
Turning savings into incomeRetiree or terminee: the 55-and-15 line
A retiree receives 100% of the basic benefit from 60, 75% at 55, with the Social Security offset waived before 62, and may elect a 100% lump sum, a 50% lump sum plus annuity, or an annuity with a 1%, 50%, 75%, or 100% survivor benefit. A vested terminee is actuarially reduced before 65 and is offered a lump sum only at separation and again at 65. Five years of vesting service are needed for any benefit at all.
Which account to draw from firstRetiree medical opens at 55 with 15 years
Retiring as a regular employee at 55 or later with 15 years of benefit service brings eligibility for the ExxonMobil Retiree Medical Plan, with the Medicare Primary Option once Medicare begins. Declining coverage at retirement leaves limited chances to enroll later.
Medicare’s enrollment windowThe Savings Plan pays 7% for 6%
Contribute at least 6% of pay and the company adds 7%, on contributions up to 20% of pay in before-tax, after-tax, or Roth form. The match vests after three years of vesting service, at 65, or at death. In-plan Roth conversions are allowed once a year and cannot be undone.
Catch-up contributions in 2026Restricted stock runs on three- and seven-year clocks
Most ExxonMobil restricted stock units release half three years after grant and half after seven, on schedule whether or not you are still an employee, and the 2026 proxy states there is no acceleration at retirement. Leave before the first of the month after you turn 65 and unvested units are forfeited unless the plan’s administrative authority determines you may keep them.
The full restricted stock guideThe nonqualified plans pay after you leave
The Supplemental Savings Plan credits the match the IRS limits blocked, grows it at 120% of the long-term federal rate, and pays a lump sum after termination. The Supplemental Pension and Additional Payments Plans pay an equivalent lump sum six months after retirement. All are unfunded promises, and leaving before retirement eligibility can forfeit them.
How we approach tax planningSources: ExxonMobil Pension Plan SPD (formula, retiree definition, early-commencement factors); ExxonMobil 2026 Proxy Statement (early-retirement terms and lump-sum rates); ExxonMobil Savings Plan; ExxonMobil 2025 Form 10-K and its 2025 restricted stock unit agreement (vesting and forfeiture). As of September 2026; terms vary by plan, award, and pay grade, and your plan documents govern.
Our approach
A plan that follows the ExxonMobil career arc
We read the public plan terms before the first meeting so it can start with your specifics: your pension estimate and benefit-service date, your Savings Plan mix, your grant history, and your health coverage. Then we build the structure in the order the decisions arrive.
Capture the 7%
Contribute the 6% that earns the full match, decide the before-tax, Roth, and after-tax split, and note the benefit-service date that will one day define retiree status.
Track the two formulas
Watch final average pay against the $350,000 qualified-plan limit, the offset building toward its 50% cap, and the nonqualified balances above the IRS limits, while annual restricted stock grants begin to overlap.
Choose the date on purpose
Model retirement at 55, 60, 62, and 65 against the early-commencement factors, the lump-sum rates in effect, retiree medical, Social Security timing, and the 65 line on unvested units.
Sequence the payouts
Coordinate the pension election and survivor form, the six-month nonqualified lump sums, units still releasing on schedule, Roth conversions in the low-income years, and required distributions at 73 or 75.
The work
What you’ll work through with us
- Pension lump-sum versus annuity analysis, including the 50% lump-sum option, survivor forms, and the rates in effect
- Retirement-date modeling at 55, 60, 62, and 65, side by side, with the retiree-versus-terminee line marked
- Health coverage from retirement to Medicare, and the Medicare Primary Option after
- Savings Plan design: pre-tax, Roth, after-tax, and in-plan conversions
- Cash-flow planning for the nonqualified lump sums that arrive after separation
- An award map: every restricted stock grant, its release dates, and what would be forfeited at each candidate date
- A written plan for each settlement, sized against total XOM exposure and the company’s anti-hedging policy
- Coordination with your CPA and estate attorney
Planning at the firm is led by Theo Halbardier, CFP®, CIMA®, CAIA®, the firm’s founder. We are fee-only: no commissions, no product sales. About Theo
Questions
Common questions from ExxonMobil employees
Are you affiliated with or endorsed by ExxonMobil?
No. The Financial Sciences Company is an independent, fee-only registered investment adviser. We are not affiliated with, endorsed by, or sponsored by Exxon Mobil Corporation or its benefit plans. We work from ExxonMobil’s public SEC filings, the plan summaries it publishes, and, with your permission, your own statements.
Will my ExxonMobil pension lump sum shrink if interest rates rise?
Generally, yes. The plan converts your basic annuity to a lump sum using mortality assumptions and the three-segment interest rates prescribed under IRC §417(e); higher rates produce a smaller present value. The proxy reported rates of 4.13%, 5.21%, and 6.01% for year-end 2025 valuations, and the IRS published 4.42%, 5.47%, and 6.31% for May 2026. The plan document sets which month’s rates apply to your commencement date, so confirm the lookback and how often it resets with the Benefits Service Center before choosing a date.
Should I take the ExxonMobil pension as a lump sum or an annuity?
There is no single answer. The annuity carries longevity and survivor protection and is undiscounted from 60; the lump sum, or the 50% lump sum plus annuity available to retirees since December 1, 2015, gives control and the ability to leave a balance, at the cost of investment and longevity risk. The comparison depends on the rates in effect, your health and your spouse’s, other lifetime income, and how the nonqualified lump sums and restricted stock releases fill the early retirement years.
How is the Social Security offset calculated?
The offset is 1.5% of your estimated Social Security retirement benefit for each year of pension service, up to 33-1/3 years, so it tops out at 50% of that estimate. It is waived on annuity payments scheduled before age 62, which is why a retiree who starts at 55 sees the monthly amount step down at 62.
Can I take a lump sum if I leave before 55 with 15 years?
Yes, but the windows are narrow. A vested terminee is offered a lump sum at separation and, if the benefit has not started, once more at 65; those are the only two opportunities. The benefit is also actuarially reduced for any start before 65, while a retiree who starts at 60 receives 100% and one who starts at 55 receives 75%.
What happens to my restricted stock units if I retire at 58?
Under the 2025 award agreement, a termination other than death before standard retirement time forfeits every unit whose restricted period has not expired, unless the program’s administrative authority determines you may keep them. The 2003 Incentive Program defines standard retirement time for U.S. payroll as the first of the month after you turn 65. Ask for the retention decision in writing before you set a date, and check each award’s own terms.
Do you have an office in Houston or Irving?
No. We work with ExxonMobil households across Texas by video and phone, which suits a first conversation squeezed between shifts at Baytown or a commute to Spring.
Reviewed by Theo Halbardier, CFP® · Updated September 2026 · Figures current for 2026
Bring your pension estimate.
The first conversation is 30 minutes. A recent pension estimate and incentive award statement help, but no preparation is needed.
We work with ExxonMobil households across Texas by video and phone.
Meet with usExxonMobil and its logo are trademarks of Exxon Mobil Corporation. The Financial Sciences Company is an independent, fee-only registered investment adviser and is not affiliated with, endorsed by, or sponsored by ExxonMobil. Plan details summarized here come from public sources and may change; your plan documents govern.