Internal Revenue Code Section 409A (Governing Nonqualified Deferred Compensation Plans)

With both short, medium, and long-term rates rising over the last month, the higher average rate will result in lower lump-sums for those retiring in March of 2022. When employees elect the month they would like to begin their pension. Occidental Petroleum looks back to two months to calculate the rates used for the pension disbursement. When interest rates move up or down, your pension lump sum amount will move in an inverse relationship. Through the pandemic, interest rates dropped dramatically which has greatly increased many lump sum payments. However, rates have increased significantly over 2021 and 2022, causing a reduction in pension lump-sums.

Should you desire to take your pension as a lump sum, Occidental Petroleum will use interest rates and your age to calculate your lump sum payment. Your pension is calculated based on your last date of employment and benefit start date. The benefit calculation is a defined benefit based on your years of service and final average pay.

Pension Lump Sum Calculation>