Segment Rate Newsletter
Segment Rate Update – March 2026 Numbers
The following table demonstrates the hypothetical* impact of recent IRS segment rate updates to the lump sum value for a 65-year-old Chevron employee with an estimated single-life annuity payment of $7,500 month:
If a Chevron employee is debating May 2026 or June 2026 as their benefit commencement date, based solely on the lump sum value of the CRP, May would be the better of the 2 months. The approximate decrease in the CRP value for a June retirement in this hypothetical scenario would be about -0.52%
While your CRP Lump Sum or your pension is not only based on interest rates, looking at recent rates over time can give you an idea of how your lump sum will be affected, and help you when you are choosing the best retirement date. Remember that interest rates have an inverse relationship with a lump sum pension, so as interest rates increase, lump sum pension value decreases.
| June 2026 | Change From Previous Month |
May 2026 | Change From Previous Month |
April 2026 |
|---|---|---|---|---|
| $1,050,538.99 | -$5,446.38/-0.52% | $1,055,985.37 | -$208.51/-0.02% | $1,056,193.88 |
*Due to the individual nature of the actual CRP lump sum calculation, you would need to run the estimator to determine the true impact to your value.
Note: Guidance for Standard Deduction, Earned Income Credit, and Reduced Refunds can be found on the IRS website.
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Understanding Segment Rates: “Am I working for free?”
With interest rates on the rise, many Chevron employees are asking themselves “Am I working for free?”.
If retirement is on the horizon for you, choosing the right month to commence benefits could be trickier than it seems.
We break down how segment rates work, how they affect your lump-sum payment and why the timing of your retirement is so important.
Our Chevron financial advisors have over 20 years of experience helping Chevron employees navigate their retirement and get the most out of their benefits package.
Segment Rate FAQs
A segment rate is an interest rate used by the IRS to determine the present value of future pension payments. These rates are divided into short-term, mid-term, and long-term segments, each applying to different time periods of expected payments.
A segmented pension refers to a pension plan that uses segment rates to calculate lump-sum distributions. The pension’s value is determined using different interest rates for different time periods, influencing how much a retiree receives in a lump-sum payout versus annuity payments.
The IRS determines minimum present value segment rates based on corporate bond yields. These rates are published monthly and help define the discount rates used to calculate pension liabilities and lump-sum payouts.
The IRS publishes segment rates on a monthly basis, typically around the middle of each month. These rates are released in IRS notices and are used to calculate pension funding obligations and lump-sum distributions.
Interest rates can be categorized into:
- Segment rates (used for pension calculations)
- Federal Reserve rates (impacting overall borrowing costs)
- Corporate bond rates (affecting investment returns)
- Fixed and variable rates (common in loans and mortgages)
Segment rates directly impact the lump-sum value of a pension. When rates increase, the present value of future pension payments decreases, leading to lower lump-sum payouts. Conversely, lower rates result in higher values.
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