Pension Plan basics

Learn more about the basics of the ExxonMobil Pension Plan

Q. What is the Pension Plan, and how is the benefit calculated?

A. The Pension Plan is a defined benefit plan. This means that the Plan specifies, or defines, a formula for calculating the benefit that will be paid to you.

The Plan's formula for determining the amount of your pension benefit includes:

Once your employment ends, you can elect (within limits) when you want payments to begin and how you want your benefit to be paid to you. Typically, the amount of your benefit is adjusted to take into account your elections.

Pension formula

Your basic pension benefit is determined by this formula:

1.6% x years of pension service x final average pensionable pay 


your Social Security offset 

Your basic pension benefit is a monthly amount payable to you starting at age 65 as a Basic Annuity (see section on Payment options). If you elect to begin your benefit before age 65 or elect a different payment option, the basic pension benefit may be adjusted.

Example — Basic pension benefit:

Here is an example of how the basic pension benefit is calculated.

Pat has 30 years of pension service, final average pensionable pay of $7,000 a month and a Social Security offset of $662 a month.

These terms, used in the pension formula, will help you understand the formula. Refer to Key terms for details about these terms:

  • Pension service – Generally, all your service while participating in this Plan.
  • Final average pensionable pay – The highest average of 36 consecutive months of your pensionable pay during the last 10 years of your employment.
  • Social Security offset – The part of your estimated Social Security benefit that is used as an offset in the pension formula. The offset is equal to 1.5% of your estimated Social Security benefit multiplied by your pension service, up to 33-1/3 years, which is a maximum of 50%.

This offset reflects the fact that while you work for ExxonMobil, the company pays half of your Social Security tax and Social Security benefits make up part of your total retirement income.

Example — Social Security offset:

  • Pat's estimated Social Security benefit is $1,471.
  • Since Pat has 30 years of pension service, her offset is 1.5% x 30 years x $1,471 = $662.

For retirees, the Pre-Social Security Pension — explained in the Social Security offset section of this SPD — replaces the Social Security offset until age 62. 

Key facts about the Social Security offset

  • Only your Social Security retirement benefit is included in determining the offset. Any other Social Security payments (such as spouse's benefits or children's benefits) are not included.
  • The estimated Social Security benefit used for purposes of the Social Security offset is calculated using the following assumptions:
  • The Social Security benefit is calculated using your actual Social Security earnings history, if you provide it; otherwise, a government-prescribed formula is used to estimate the earnings history. If you elect to provide your actual Social Security earnings history, the Plan must use them even if they result in a lower basic pension benefit.
  • All calculations are based on Social Security law in effect when you leave the company. Changes in your Social Security benefit after you leave the company do not affect your payments from the Pension Plan.
  • Your estimated Social Security benefit is calculated using the actual Social Security benefit formula. Each year, Social Security grants an annual cost of living increase that is factored into the formula. In calculating your estimated Social Security benefit, the full amount of these annual increases is phased in over a nine-month period. This has the effect of reducing the initial impact of any increase in the Social Security formula, which, in turn, potentially reduces your Social Security offset that is used at the time of termination or retirement.
  • The Social Security benefit is determined when your employment ends.
  • If you are eligible to retire when you leave, the amount is determined as though you are 62 (or your actual age if you retire after age 62) on the date of retirement.
  • If you leave without meeting the requirements for retirement, the amount is determined as though you are 65 (or your actual age if you terminate employment after age 65) on the date of termination.
  • An age-62 offset is smaller than an age-65 offset.

Learn more about your Social Security benefits by calling the Social Security Administration or by accessing

Pre-Social Security pension for retirees

Although the Pension Plan may pay benefits as early as age 50 (see section on Receiving your pension benefit  for more information), the earliest you can begin your Social Security retirement benefit is age 62. The Plan provides a temporary additional benefit if you retire and start your pension benefit before becoming eligible to receive a Social Security benefit.

This additional benefit, called a pre-Social Security pension, equals the amount of the Social Security offset in your basic pension benefit calculation. The Pre-Social Security Pension starts when your pension benefit starts and continues until age 62 (or when you are first eligible for Social Security).


Pat starts her benefit (which we calculated in earlier examples) at age 60. Her Social Security offset is $662. She starts payments of her basic pension benefit of $2698 each month plus a pre-Social Security pension benefit of $662 until age 62, for a total plan benefit of $3360 until she reaches age 62.

Other offsets

Additional offsets to the basic pension benefit will likely apply if you participated in a separate pension plan, including sub-plans of this Plan or an affiliate-sponsored pension plan, and your service in that plan is also included in pension service used to calculate your ExxonMobil basic pension benefit. Other offsets may be deducted if you are eligible to receive a non-U.S. governmental pension or non-U.S. separation payment.