You are automatically eligible to participate in the Traditional Formula Pension Plan if you:
- Were hired before January 1, 2017
- Are a full-time or part-time employee
- Complete one year of vesting service (12 consecutive months with at least 1,000 hours worked)
To receive your pension benefit, you must be:
- Age 65 (normal retirement)
- Age 55 – 65 and have at least 10 years of vesting service with the company (early retirement, reduced benefit if under age 60 at commencement)
- Totally and permanently disabled (with 10 or more years of vesting service and a Social Security disability benefits award)
You don’t make any contributions to the Pension Plan. Hess pays 100 percent of the cost for your pension benefit.
You don’t make any investment decisions for the Pension Plan. Hess manages the Pension Plan’s portfolio of investments for all participants.
Even though you become a member of the plan after one year and your pension benefits are being credited to you, they aren’t 100 percent yours until you become fully vested.
You are vested when:
- You complete five years of vesting service from date of hire, or
- You reach normal retirement (age 65) and have at least one year of vesting service
How Does It Work?
There’s not a lot you need to do when it comes to the Pension Plan. Hess funds it and manages the investment portfolio, so you don’t have to contribute or make investment decisions. But you still need to understand how it works.
First, let’s define some terms, then we’ll show you how these factors work together to determine your pension benefit under the plan.
- Credited Service — The total number of years and months you work at Hess.
- Final Average Compensation — This is your average annual compensation (base salary, overtime and annual incentive award) based on the highest-paid three calendar years (consecutive or non-consecutive) in the 10 years immediately before your retirement or earlier termination of employment.
- Primary Social Security Amount — The estimated annual benefit you’re eligible to receive at age 65 under the federal Social Security Act in effect on your retirement date or earlier termination of employment.
Here’s how these factors work together to determine your pension benefit:
How Much Will I Receive?
Financial experts estimate that you’ll need between 70 and 80 percent of your pre-retirement income to live comfortably in retirement. The Hess Pension Plan can play a role in providing retirement income that may be more predictable than income from a 401(k) plan, such as the Hess Savings Plan.
The amount of income that you may receive from the Pension Plan depends on a number of factors, including how long you work for Hess, your eligible compensation, your payment option and when you choose to have pension payments begin. For example, your full benefit is payable at age 65, but you may be able to receive a reduced benefit earlier. Read on to learn about plan features, other terms you need to know and how to use online tools and resources to factor the Pension Plan into your retirement planning along with the Savings Plan.