There are just a couple of things almost all PBF Energy retirees need when they hit retirement: predictable income and protection against a cluster of risks, which include longevity risk, performance risk and sequence-of-returns risk.
In the past we have seen retiring PBF Energy employees utilize the “4% rule,” where retirees take annual withdrawals start at 4% of the entire portfolio and increase with inflation. They then keep the remainder of the portfolio with at least 50% invested in equities. Based on historical data, this would give a PBF Energy retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective PBF Energy retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, PBF Energy retirees need to prepare for expenses over a longer time frame. In the past we would plan for a 15 to 20 year retirement, but now we need to prepare for a 30 to 35 year retirement. What is available to assist meeting the 35-year time frame?
The annuity strategy can assist with a few of the pitfalls we see in the 4% rule. For example:
If you need $50,000 per year in retirement and need that for 30 years, you may need $1.2 million in fixed income at a 3% interest rate. BUT if you look to fund $50,000 for 30 years, you can cover that expense with $800,000 by choosing the annuity option.
The other pitfall with the 4% rule is that it may not reflect a client’s risk tolerance. When you are accumulating assets, you can afford more volatility and can take on more risk than when in the retirement and withdrawal phase after leaving PBF Energy.
Also, should we see a drop in the market, you would be able to reduce your income using the 4% rule, which you cannot do if you choose an annuity option.
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What is the primary purpose of PBF Energy’s 401(k) Savings Plan?
The primary purpose of PBF Energy’s 401(k) Savings Plan is to help employees save for retirement by allowing them to contribute a portion of their salary on a tax-deferred basis.
How can I enroll in PBF Energy's 401(k) Savings Plan?
Employees can enroll in PBF Energy's 401(k) Savings Plan by completing the enrollment process through the company’s designated benefits portal or by contacting the HR department for assistance.
Does PBF Energy offer matching contributions to the 401(k) Savings Plan?
Yes, PBF Energy offers matching contributions to the 401(k) Savings Plan, which helps employees increase their retirement savings.
What types of investment options are available in PBF Energy’s 401(k) Savings Plan?
PBF Energy’s 401(k) Savings Plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles to suit different risk tolerances.
When can I start contributing to PBF Energy’s 401(k) Savings Plan?
Employees can start contributing to PBF Energy’s 401(k) Savings Plan after they have completed their eligibility requirements, typically within the first few months of employment.
What is the maximum contribution limit for PBF Energy’s 401(k) Savings Plan?
The maximum contribution limit for PBF Energy’s 401(k) Savings Plan is determined by the IRS limits, which may change annually. Employees should refer to the plan documents for the current limits.
Can I take a loan against my 401(k) savings at PBF Energy?
Yes, PBF Energy’s 401(k) Savings Plan allows employees to take loans against their savings under certain conditions. Employees should review the plan documents for specific terms and conditions.
What happens to my 401(k) savings if I leave PBF Energy?
If you leave PBF Energy, you have several options for your 401(k) savings, including rolling it over to another retirement account, cashing it out, or leaving it in the PBF Energy plan if permitted.
Is there a vesting schedule for PBF Energy's matching contributions?
Yes, PBF Energy has a vesting schedule for matching contributions, which means that employees earn ownership of the matching funds over time based on their years of service.
How often can I change my contribution amount to PBF Energy’s 401(k) Savings Plan?
Employees can change their contribution amount to PBF Energy’s 401(k) Savings Plan at designated times throughout the year, as outlined in the plan documents.
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