The Future of 401(k) Contributions for ExxonMobil: A Balanced Outlook and Considerations

ExxonMobil is in the process of cutting costs to help cope with an economy left behind by the pandemic. Coronavirus took a toll on the entire economy, but it came down on the oil & gas industry especially hard. According to S&P Global, ExxonMobil announced plans to cut an additional $1.6 billion in operating expenditures, making the total reduction $2.3 billion.

But what will be on the chopping block? Could ExxonMobil be the next corporation to suspend or reduce their company match program?

One of ExxonMobil’ major competitors, ExxonMobil, announced that it would stop matching corporate employee’s contributions to their retirement savings plans. To get a better idea of what an end to 401(k) Matching would look like, let’s use them as an example. Earlier this year, ExxonMobil sent a mass email to its employees alerting them that the company match would be suspended indefinitely. The suspension of these benefits officially began on October 1st, 2020. According to Reuters, ExxonMobil has now experienced “its first back-to-back quarterly loss in 36 years because of the drop in demand during the novel coronavirus pandemic.”

ExxonMobil has two savings plans available to corporate employees. The first is the U.S. ExxonMobil Savings Plan (EMSP) and the second is the U.S. Supplement Savings Plan (SSP). The company was matching a 6% minimum employee contribution with 7% of the participant’s pay. These match programs will be reinstated beginning on October 1st, according to Reuters.

There has been a consistent economic trend showing that corporations will decrease or suspend benefits when a recession strikes. We witnessed this in the 2001 recession when General Motors, Charles Schwab, Goodyear Tire & Rubber, and Ford, all decreased or suspended their company match programs. The same happened in 2008, with Forbes reporting that nearly 20% of companies with over 1,000 employees reduced or suspended 401(k) contributions. Unfortunately, that trend seems to be continuing in the wake of the current recession brought on by the Coronavirus pandemic. According to Market Watch, 16 major companies have suspended their 401(k) matching programs last year including Amtrak, Marriott Vacations Worldwide, and Tenet Health. General Electric & Lockheed Martin also made big news with their announcements to cut benefits in 2019. There have even been rumors of AT&T cutting benefits to hit their target goal of $10 billion in cost cuts.

When benefits are frozen, employees in the mid to late portion of their career are usually hurt the most. If ExxonMobil' match program does end, it’s a good idea to calculate exactly how much this will affect your retirement savings plan. Forbes recommends maintaining your retirement contributions and even increasing them if you have the funds. This can help compensate for the loss of benefits.

For more information regarding ExxonMobil' 401(k) matching program, contact your HR department.

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https://www.reuters.com/business/energy/exxon-plans-reinstate-employer-401k-match-oct-1-2021-07-02/

How does the ExxonMobil Savings Plan compare against typical retirement savings plans, and what unique features does it offer that can benefit employees approaching retirement? Additionally, can you elaborate on the necessary steps ExxonMobil employees should take within the savings plan to ensure maximum contributions and employer match during their service years?

ExxonMobil Savings Plan: ExxonMobil's Savings Plan offers flexibility with pre-tax, after-tax, and Roth contributions, and features a 7% company match for the first 6% of employee contributions, a unique benefit compared to typical plans. Employees should contribute the maximum percentage to receive the full match and regularly review their investment allocations through the Voya platform(ExxonMobil_2024_ExxonMo…).

What are the eligibility criteria for employees to participate in the ExxonMobil Pension Plan, and how is the retirement benefit calculated? As employees consider their long-term savings strategy, how does the option of a lump-sum distribution versus an annuity influence their financial planning at ExxonMobil?

ExxonMobil Pension Plan: Employees are automatically enrolled and eligible for benefits after five years of service, with full retirement benefits offered at 55 with 15 years of service. The pension is calculated based on 1.6% of final average pay multiplied by years of service, minus a social security offset. Lump-sum and annuity options affect long-term financial planning, with lump sums offering immediate flexibility while annuities provide a steady income(ExxonMobil_2024_ExxonMo…).

In what ways does the ExxonMobil Employee Assistance Program (EAP) support employees during personal or family crises, and what confidentiality measures are in place to protect their privacy? Additionally, how can ExxonMobil employees access these services, and what are the key resources available through this program?

Employee Assistance Program (EAP): ExxonMobil's EAP provides confidential counseling services for personal and family issues like anxiety, addiction, and family conflict. Services are accessible by phone, video chat, or text, with privacy strictly protected. Employees can contact ComPsych for guidance and support through the GuidanceNow app or website(ExxonMobil_2024_ExxonMo…).

With the introduction of Flexible Spending Accounts (FSAs) at ExxonMobil, how do these accounts help employees manage their health care and dependent care expenses more effectively? What guidelines should employees follow to ensure they maximize their tax advantages while complying with IRS regulations during the enrollment process?

Flexible Spending Accounts (FSAs): FSAs at ExxonMobil allow employees to reduce taxable income by contributing pre-tax dollars to healthcare or dependent care expenses. Employees should estimate their expenses carefully during the enrollment period and comply with IRS rules, ensuring they submit claims by April 15th of the following year(ExxonMobil_2024_ExxonMo…).

How does ExxonMobil define "work-life balance," and what specific benefits and programs are in place to support this philosophy for employees? Can you discuss how employees can utilize these options, such as flexible schedules and leave of absence policies, without negatively impacting their career progression within the company?

Work-Life Balance: ExxonMobil promotes work-life balance with programs like “Flex Your Day,” allowing flexibility in work hours, and up to 20 days of back-up dependent care. Employees are encouraged to use these options strategically to maintain career progression while balancing personal obligations(ExxonMobil_2024_ExxonMo…).

In light of the various medical plan options offered at ExxonMobil, how should employees approach selecting the right plan to best meet their healthcare needs? What factors should they consider, including family health history and financial implications, when making their decisions?

Medical Plan Selection: ExxonMobil offers Aetna POS II and network-only options, allowing employees to choose between plans based on cost, coverage, and provider access. Employees should assess their family's healthcare needs, financial situation, and preferred providers when selecting the most appropriate plan(ExxonMobil_2024_ExxonMo…).

For ExxonMobil employees nearing retirement, what resources are available to help them understand the nuances of health benefits coordination through Medicare and their ExxonMobil coverage? How can they best navigate this transition, and what checkpoints should they be aware of to ensure they remain compliant with company policies during retirement?

Retirement Health Benefits and Medicare: ExxonMobil offers resources to help employees coordinate health benefits with Medicare upon retirement. Employees nearing retirement should explore their options through the Your Total Rewards portal and ensure compliance with company policies during the transition(ExxonMobil_2024_ExxonMo…).

What financial education resources does ExxonMobil provide to employees to promote informed decision-making about their retirement savings and benefits? Can you detail how programs like the Financial Fitness Program enable employees to strategically manage their finances and plan for retirement?

Financial Education Resources: ExxonMobil's Financial Fitness Program, provided in collaboration with Ernst & Young, helps employees manage their finances with resources such as EY Navigate and personalized financial planning. This program supports informed decision-making about retirement and savings strategies(ExxonMobil_2024_ExxonMo…).

As part of the benefits provided by ExxonMobil, how does the company facilitate employee participation in volunteer programs and charitable activities through the ExxonMobil Foundation? How can employees engage with these initiatives while also balancing their work commitments?

Volunteer Programs: Through the ExxonMobil Foundation, employees can engage in charitable activities via the Volunteer Involvement Program (VIP), which offers grants to nonprofits based on time spent volunteering. Participation in these programs is flexible, enabling employees to balance work commitments with volunteer efforts(ExxonMobil_2024_ExxonMo…).

How can ExxonMobil employees get in touch with benefits representatives to address specific questions about their retirement and savings plans? What are the recommended channels and best times to reach out for assistance to ensure they receive timely and relevant information about their options?

Contacting Benefits Representatives: Employees can reach out to the ExxonMobil Benefits Service Center at 833-776-9966 during business hours (8 a.m. to 4 p.m. CST) for assistance with retirement and savings plan questions. The Your Total Rewards portal also offers 24/7 access for reviewing and managing benefits(ExxonMobil_2024_ExxonMo…).

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

ExxonMobil offers a traditional defined benefit pension plan that provides a monthly retirement benefit. Employees can choose between a lump-sum payment or a monthly annuity. The plan calculates benefits based on final average pay and years of service.

Layoffs and Restructuring: ExxonMobil announced plans to lay off approximately 1,900 employees in 2024 as part of its ongoing restructuring efforts. These layoffs are aimed at improving cost efficiency and adapting to market changes amidst fluctuating oil prices (Sources: MarketScreener, Nasdaq). Facility Closures: The company is closing its Clinton, New Jersey facility, leading to the loss of hundreds of jobs. Most affected employees are being offered roles at the Houston headquarters (Source: ROI-NJ). Operational Strategy: The restructuring is part of ExxonMobil's broader strategy to consolidate its North American research and technology operations in Houston, which is expected to enhance research capabilities and drive long-term growth (Source: ROI-NJ).

ExxonMobil provides RSUs that vest over time, offering employees shares upon vesting. They also grant stock options, allowing employees to buy shares at a set price.

ExxonMobil offers a comprehensive benefits package that addresses a wide range of employee needs. For 2023, the company continued to provide robust health insurance options, including various medical, dental, and vision plans. These plans offer extensive coverage for preventive care, major dental services, and comprehensive vision care, including allowances for lenses and frames or contact lenses. Notably, the medical plans also cover telemedicine services, second opinion services, and enhanced fertility benefits. This reflects ExxonMobil's commitment to ensuring its employees have access to high-quality healthcare options that cater to their specific needs. In 2024, ExxonMobil has introduced several enhancements to its benefits offerings. The Employee Health Advisory Program provides professional counseling services for mental health issues, including anxiety, depression, and family conflicts, in a confidential environment. Additionally, the company continues to support employees through a pre-tax spending plan, allowing them to make tax-free contributions to cover eligible health care and dependent care expenses. These benefits are particularly relevant in today's economic and political climate, where managing healthcare costs and ensuring mental well-being are critical. ExxonMobil's focus on comprehensive and flexible healthcare benefits underscores its commitment to supporting the overall well-being of its employees.

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For more information you can reach the plan administrator for ExxonMobil at p.o .box 64111 Spring, TX 77387-4111; or by calling them at 832-624-6731.

https://corporate.exxonmobil.com/documents/pension-plan-2022.pdf - Page 5, https://corporate.exxonmobil.com/documents/pension-plan-2023.pdf - Page 12, https://corporate.exxonmobil.com/documents/pension-plan-2024.pdf - Page 15, https://corporate.exxonmobil.com/documents/401k-plan-2022.pdf - Page 8, https://corporate.exxonmobil.com/documents/401k-plan-2023.pdf - Page 22, https://corporate.exxonmobil.com/documents/401k-plan-2024.pdf - Page 28, https://corporate.exxonmobil.com/documents/rsu-plan-2022.pdf - Page 20, https://corporate.exxonmobil.com/documents/rsu-plan-2023.pdf - Page 14, https://corporate.exxonmobil.com/documents/rsu-plan-2024.pdf - Page 17, https://corporate.exxonmobil.com/documents/healthcare-plan-2022.pdf - Page 23