Page 8 - Hess Pension 2017

How the Cash Accumulation Formula Works
There’s not a lot you need to do when it comes to your cash Accumulation Account in the Pension Plan. Hess makes contributions to your account on your behalf and manages the investment portfolio. you don’t contribute or make investment decisions, but you still need to understand how it works.
FIRST, LET’S DEFINE A FEW TERMS. Then we’ll show you how they work together to determine your pension bene t under the cash Accumulation Formula. you’ll nd more Key Terms explained beginning on page 13.
■ Age — your age in completed years as of the last day of the prior month.
■ Cash Accumulation Account — your pay credits and interest credits are held in a notional account until you retire or leave.
■ Pay Credits — These are determined by multiplying your monthly compensation by a percentage based on your age as shown in the table below. Generally, compensation includes your base pay, overtime and incentive award. like interest credits, pay credits are deposited into your cash Accumulation Account on the last day worked each month.
■ Interest Credits — interest credits are determined by multiplying your opening account balance by an interest rate. The interest rate is based on the 30-year Treasury bond rate set the prior november and cannot be lower than an annual rate of 1 percent. For example, the annual rate for 2017 is 2.85 percent.
Age
Pay Credit
UNDER 30
5%
30–39
6%
40–49
7%
50 OR OLDER
8%

interest credits are deposited into your cash Accumulation Account on the last day worked each month. Because interest credits are deposited monthly but based on an annual interest rate, the interest is applied on a pro rata basis. in other words, one-twelfth of the annual interest rate is multiplied by your opening account balance, and then deposited on the last day of the month.
6 HoW THE cASH AccUmUlATion FoRmUlA WoRKS