Can I Defer My Benefit Payments?

Deferring Benefit Payments

Timing when and how you access your Philipps 66 retirement benefits is an important part of maintaining your preferred lifestyle while also growing your Real Wealth. In some cases, it may be beneficial to delay receiving your benefits beyond the day you retire to maximize your total earnings and/or minimize your tax liability. 

Each of these options should be analyzed in coordination with your other retirement assets. 

Deferring Benefits After Leaving Before Normal Retirement Date

• • Cash Balance Participants (Title II and Title VI)
    • Once you are vested and leave the company, your retirement benefits can commence as early as the first day of any month after you leave. 
    • If you do not apply for your benefit, it will automatically be deferred to your Normal Retirement Date. 
    • Title VI Cash Balance Participants: If you defer commencement following termination of employment, the account will continue to receive Interest Credits during the deferral period.
      
      
  • FAE Participants (Title I, III, IV, and VI):
    • Title I Participants: Benefits can commence as early as the first of the month nearest your 55th birthday and as late as your Normal Retirement Date. If you do nothing, your benefit automatically defers until your Normal Retirement Date.
    • Title III Tosco Participants: If you have 10 years of service, the benefit can commence as early as age 55. If you do nothing, it will be paid at your Normal Retirement Date.
    • Title IV Conoco Participants: Benefits can commence as early as the first of the month after your 50th birthday and as late as your Normal Retirement Date. If you do nothing, your benefit will be paid at your Normal Retirement Date.
    • Title VI FAE Participants: If you leave before Early Retirement Eligibility, you may defer receipt of your vested benefits no later than your Normal Retirement Date. 
      • If you qualify for Early Retirement and defer your monthly pension benefit until you reach age 65, your benefits are not reduced for early retirement.

Deferring Benefits By Continuing Employment

If you continue working past your Normal Retirement Date:

• • Your benefits will not begin until you leave employment, which is your Deferred Retirement Date.
  • Working past your Normal Retirement Date may result in an increased benefit, often due to continuing credited service and higher earnings (in FAE plans) or continued Interest Credits (in Cash Balance plans).

Mandatory Commencement Date

For all defined benefit pension plans, your benefit must begin no later than the earliest of:

1. 1. Your Normal Retirement Date, provided you terminated employment before that date; or
   2. The first of the month after your employment ends, if you work beyond your Normal Retirement Date.

Phillips 66 Savings Plan 401(k)

If the value of your account is greater than $1,000 after you leave the company, you have the option to leave the money in the plan.

Required Minimum Distributions (RMDs)

• • If you are still an active employee when you reach age 73, you are generally not required to take a distribution until April 1 following the calendar year in which your employment ends.
  • If you are not an active employee when you reach age 73, RMDs must begin no later than April 1 in the year after you turn 73.
  • If you roll over a lump-sum distribution from a pension plan into another tax-qualified plan (like an IRA or the Phillips 66 Savings Plan), you can postpone paying taxes and avoid early withdrawal penalties.

Real Wealth Questions

Should you defer your pension or 401(k) distributions to delay taxes or increase future income?
What are the implications of deferral on RMDs and tax brackets?
Will deferral affect the survivor benefits you chose?
Do you have any health concerns (including family history) that could affect your retirement timeline and the optimal timing of your benefits?

Questions? Visit the Philips 66 Benefits Glossary.