Q. What do I need to know about the heritage plans' grandfathered features?
A. Other sections of this publication describe the plan benefits and features applicable to your entire account balance. However, some features that you had as a participant in the heritage plans will continue to apply, but only to a portion of your Savings Plan Account. These grandfathered features relate specifically to withdrawal and distribution from this portion of the Savings Plan.
Some of the features you had as a participant in the Paxon Polymer Company, L.P. II Savings Plan or the Paxon Polymer Company, L.P. II Hourly Savings Plan (collectively "Paxon Plan") and/or the Advanced Elastomer Systems, L.P. Retirement Savings Plan ("AES Plan") are grandfathered. Some of these features to access your account balance are further enhanced. For purposes of this publication, the features you had in the heritage plans and the enhanced features are all referred to as grandfathered features.
The grandfathered features only apply to any protected balance you have in the Savings Plan, upon completion of the transfer of assets to the Savings Plan. Here is how the protected and non-protected balances are determined:
- "Protected" Balance is the market value of your Paxon Plan and/or AES Plan account balance transferred to the Savings Plan on December 1, 2006. This balance may be reduced by withdrawals or distributions. If the total market value of your Savings Plan Account falls below your protected balance, your protected balance will be limited to the market value. Please note that your protected balance in the Savings Plan may be embedded in the Before-Tax, After-Tax and/or General Accounts.
- "Non-Protected" Balance is the amount of your Savings Plan Account balance in excess of your protected balance. Generally, it includes the ExxonMobil portion of your Savings Plan Account, if any, plus post-transfer contributions, or any post-transfer earnings across your entire account (including post-transfer earnings on the heritage plans' protected balance).
Please remember that all of the Savings Plan provisions discussed in this publication and the grandfathered features described below apply to these protected balances.
Former Paxon Plan and AES Plan participants may withdraw their protected rollover balance, after-tax balance and, if at least age 59-1/2, before-tax balance. Former AES Plan participants may also withdraw their protected employer match balance, if fully vested with respect to employer match contributions. There is no restriction on the number of withdrawal per year and there is no minimum withdrawal amount limitation. If you separate from service, you will continue to be eligible for these withdrawals.
Upon termination of employment without retiree status, former Paxon Plan and AES Plan participants may defer distribution on the protected balances past age 65. If you reach age 70-1/2 and your account is still deferred, minimum required distributions will be made as required by law. Your non-protected balance, however, will be distributed to you at age 65.
If you receive a post-separation withdrawal or distribution in any year before the year in which you receive your entire Savings Plan balance, this withdrawal or distribution will not be a lump-sum distribution eligible for favorable lump-sum tax treatment. Favorable lump-sum treatment also may not be available to you when you subsequently elect a total distribution in another tax year.
The following chart highlights the grandfathered features of your protected balance in terms of distribution or withdrawal types available. Use of these features generally will reduce your protected balance.
Grandfathered features for former Paxon and AES plan participants