1) Below is a summary of the maximum pension increases from the
Company in recent years:
|Time since last increase
The great news is that Chevron “it appears” is still committed to a final salary pension scheme and you can, for retirement planning, get a pension forecast from the Chevron UK Pensions web site. The increases however do not keep up with RPI and over the last 20 years have fallen behind considerably.
The graph below shows RPI (Top line) vs. Supplementation (Middle line) vs. CPI (Bottom line) for each £10,000 of pension. The loss in value is approximately £1,850, thus if you wish to maintain a comparable standard of living then this shortfall will have to come from your own investments.
The Government are now proposing the use of CPI , the loss vs RPI would have been, if applied, approximately £2, 850 and we don’t know what percentage of CPI the company would have awarded. A substantial loss to your standard of living.
For 2011 & beyond the government has changed all previous legislation mentioning RPI to CPI, thus the announced 2011 GMP increases use CPI. We understand that only some Texaco deferreds will continue to have increases based on RPI until they take their pension because RPI was written into their scheme.
2) For further information regarding pensions you may find these links interesting:For the State Pension you will be entitlement go to The Pensions Service at www.direct.gov.uk where you can:
– Get a State Pension Forecast,
– Calculate your State Pension Age and
– Understand the basic State Pension
If you wish to know more about pensions regulation go to The Pensions Regulator at www.thepensionsregulator.gov.uk.
If you are worried about the future of the pension scheme an informative guide entitled ‘The Future of Final Salary Schemes’ can be downloaded from Hargreaves Lansdown at www.h-l.co.uk/free-guides/final-salary-schemes<
3) Retirement can last 30 years – are you prepared?Retirement can last 30 years, are you prepared? Below is a summary of the maximum pension increases from the Company:
|1996, Sep 4.80% 19 months
1998, Sep 4.50% 24 months
2001, Apr 6.00% 31 months
2004, Apr 5.00% 36 months
2006, Jan 4.75% 21 months
2007, May 4.00% 16 months
2008, Dec 4.90% 19 months
2011, Feb 4.70% 26 months
2012, Sep 5.20% 19 months
2013, Dec 2.80% 15 months,
2018, Feb 1 50 months
|1996, Apr 4.25% 18 months
1997, Oct 4.00% 18 months
1999, Apr 4.75% 18 months
2000, May 1.20% 13 months
2001, Jul 2.50% 14 months
Despite operating in the UK for many years, the Company still has an imbedded USA culture – but without the entire employee benefits enjoyed by the USA employees. UK pensioners are dependant on the Company pension and supplementation of that pension, which is NOT the case in the USA. As a result, Chevron does not respond as a UK firm would. Also Chevron does not follow UK Custom and Practice in respect of UK pension increases.
4) Pension Supplementation
Company pension supplementation is based on only a percentage of the RPI indices issued by the government and covers a broad range of expenditure. Pensioners spending habits are different to those of people in employment and tend in the main to be affected by Council Tax, food, lighting and heating which is currently more than double RPI at 9.5% pa.
The Company has in recent times made substantial contributions to the pension fund. They have also improved the period between pension increases, but normally pay no more than 90% of RPI (the May 2007 increase was only 87% of RPI, the Dec 2008 will be 89% of RPI). For post April 1997 service the Company is obliged to increase pensions annually but increases are capped at RPI or a maximum of 5% pa and for post April 2005 service increases are capped at RPI or a maximum of 2.5% pa.
For 2011 & beyond the government has changed all previous legislation mentioning RPI to CPI, thus the announced 2011 GMP increases use CPI.
5) Pensioner RepresentationOnce you retire you will lose all the leverage you presently have. Our Association is the only real voice for Pensioners with the Company. Currently the Company is enjoying improved profits and has fully financed the Pension Fund. We continue to press the Company to improve benefits – financial and otherwise – and are pleased to report that the periods between pension supplementation are indeed decreasing.
Additional pressure from current employees may encourage the Company to improve pensioner benefits; your assistance is vital and remember any improvements will be to your ultimate benefit.
If you hope to enjoy a reasonable standard of living in retirement then if possible, we would urge you to make additional private provisions to cover your later years.
Remember – at State Pension age, the State Pension Offset is deducted from your Company Pension – and as a result, your Company pension will be reduced by roughly the amount of your state pension.
Widows / Widowers pensions are only 50% of the deceased pensioner’s pension and private provisions are essential to ensure a continued comfortable lifestyle.
6) Extra State Pension
If you put off claiming your State Pension for at least five weeks you can earn an increase to your State Pension of 1 per cent for every five weeks you put off claiming. (This is equivalent to about 10.4 per cent extra for every year you put off claiming.)