U. S. Benefits Overview - ConocoPhillipshrcpdocctr.conocophillips.com/Documents... · U. S. Benefits Overview. January 2011. ... build current and future wealth Benefit programs shall
There are many ways that employees feel rewarded and recognized at work. These include challenging assignments, a flexible work environment, personal development, responsibility, and many others. These are all important to employees as well as their monetary compensation and benefits. I will focus on the compensation and benefits aspects in my presentation today. (There will be a future presentation on Talent Management issues above).
January 2011 3
Benefits: Health & Welfare
Compensation: Base Salary, Variable Cash Incentive Program (VCIP),
Long-term Incentive (LTI),Special Recognition Award (SRA)
Total Compensation & Benefits
Benefits: Retirement Plan (CPRP)
Benefits: Savings Plan (CPSP)
Benefits: Time-off and Others
Presenter
Presentation Notes
The presentation today will focus on 1) the three key areas of our compensation (base salary, VCIP-our variable bonus plan, and the smaller special recognition award for immediate recognition, 2) the wealth-building side of our benefits, including our retirement plan, our stock savings plan, and our thrift plan, and 3) the health and welfare side of our benefits
January 2011 4
U.S. Benefits PhilosophyAttract, retain, motivate and engage the best talent
Provide a broad array of benefits that offer choice
Support business unit and corporate strategies
Provide benefit programs that are highly competitive with other
frame of reference peer companies
Provide benefit programs that provide employees with opportunities to build current and future wealth
Benefit programs shall be broad in scope, providing attractive and comprehensive coverage for a variety of life events
Deliver overall U.S. Benefit programs for relatively low employee contributions
Presenter
Presentation Notes
ConocoPhillips senior management established the U.S. Benefits philosophy in 2002 and the focus of Sr. Management for US Benefits has not really changed COP will structure its benefit programs to provide more discretionary income and more take home pay allowing employees more choice to personalize their benefit package. COP will do this by: Weighting Company contributions toward the wealth accumulation plans (Retirement and Savings) Weighting Company contributions toward the core health and welfare plans that almost all employees desire (Medical, Dental and Life Insurance) Designing its employee contributions to be relatively low to receive maximum match in savings plans and competitive contributions on health and welfare plans Providing a full range of non-core, voluntary, health and welfare plans which employees may choose and change as their personal situation warrants (Supplemental Life, AD&D, LTD, LTC, etc.)
January 2011 5
U.S. Benefits Provide ........
…..Competitive Value with Peers
Continued monitoring to assure competitiveness
Complete benefits disclosure each year to outside consultant
Participation by 16 companies with benefits disclosure to the same consultant, including our “peer group”: BP, Chevron, ExxonMobil and Shell
Consultant assigns values to plan features and company contributions; then computes a value for all plans
Consultant’s “benefits value”
comparison includes the broader energy industry and Fortune 500 averages
Presenter
Presentation Notes
The competitive “peer group” used for U.S. benefits is the same group of companies used for stock performance and Variable Cash Incentive Program comparisons
January 2011 6
Benefits: Health & Welfare
Compensation: Base Salary, Variable Cash Incentive Program (VCIP),
Long-term Incentive (LTI),Special Recognition Award (SRA)
Total Compensation & Benefits
Benefits: Retirement Plan (CPRP)
Benefits: Savings Plan (CPSP)
Benefits: Time-off and Others
Presenter
Presentation Notes
The presentation today will focus on 1) the three key areas of our compensation (base salary, VCIP-our variable bonus plan, and the smaller special recognition award for immediate recognition, 2) the wealth-building side of our benefits, including our retirement plan, our stock savings plan, and our thrift plan, and 3) the health and welfare side of our benefits
January 2011 7
Wealth: Retirement (CPRP)ConocoPhillips Retirement Plan (Pension)
ConocoPhillips Cash Balance Account•
Pay credits recognize both age and service (one “point” per year of service plus age equals total points)
–
Under 44 points: 6%–
44 through 65 points: 7%–
66 or more points: 9% •
Bonus (VCIP) is part of eligible compensation used to calculate cash balance pay credit
•
Interest credits based on 30 year Treasury rate•
Cash Balance Account vests in 3 years •
Company paid
Heritage Company Final Average Earnings (FAE) plans, while closed to new participants, continue for current participants
Presenter
Presentation Notes
In the Cash Balance Account; Pay credits will be applied to accounts on the last day of each month. Pay credits are determined by multiplying the employee’s Eligible Monthly Pay by the applicable Pay Credit Percentage. The interest credits are applied to accounts as of the last day of each month and are calculated by multiplying the interest credit rate by the employee’s account value as of the last day of the prior month.
January 2011 8
Wealth: Retirement (CPRP)
Example: Cash Balance Account
First month after hire, Company calculates the pay credit percentage based on total pointsNext month, balance times interest rate plus another pay credit percentage is calculatedEach month thereafter, balance times interest rate plus pay credit percentage equals new balanceIncreases in age and years of service (after 1st
year, receive year’s age and service points on January 1st
of each year) cause pay credit percentage to increase to next levelSalary increases also result in Cash Balance Account growth
January 2011 9
Wealth: Retirement (CPRP)
Example: Cash Balance AccountAssuming:
–
Age 25 start date–
Age 60 retirement date
–
$50,000 starting salary–
4% annual salary increase
–
7.5% annual target bonus (VCIP)–
5% interest crediting rate
Estimated value of cash balance account at age 60 retirement -
$631,000
Presenter
Presentation Notes
This example does not take into consideration any salary increases for grade increases or promotions.
January 2011 10
Benefits: Health & Welfare
Compensation: Base Salary, Variable Cash Incentive Program (VCIP),
Long-term Incentive (LTI),Special Recognition Award (SRA)
Total Compensation & Benefits
Benefits: Retirement Plan (CPRP)
Benefits: Savings Plan (CPSP)
Benefits: Time-off and Others
Presenter
Presentation Notes
The presentation today will focus on 1) the three key areas of our compensation (base salary, VCIP-our variable bonus plan, and the smaller special recognition award for immediate recognition, 2) the wealth-building side of our benefits, including our retirement plan, our stock savings plan, and our thrift plan, and 3) the health and welfare side of our benefits
January 2011 11
Wealth: ConocoPhillips Savings Plan (CPSP)
ConocoPhillips Savings Plan (CPSP)
Two features in CPSP:•
Stock Savings Feature (SSF)
•
Thrift Feature
•
Must enroll in each feature separately
Total targeted match of 9.25% with only a 2.25% employee contribution
Eligible to participate immediately upon employment
100% vested immediately, including Company contributions
Loans and withdrawals available
Vanguard is the record keeper
Presenter
Presentation Notes
Savings Plan The ConocoPhillips Savings Plan consists of two features – the Stock Savings Feature and the Thrift Feature. Employees may enroll in one or both of the features. Employee contributions are made through automatic payroll deduction. The combination provides a very competitive total targeted match of 9.25% with only a very low 2.25% employee contribution required. Withdrawals, exchanges and loans are available through the Savings Plan. Vanguard will mail new hires a Welcome Kit containing plan information along with instructions on how to enroll (generally mailed within 3 days from date of hire). An electronic Welcome Kit (e-kit) is available on-line at www.vanguard.com. Employees can elect their contribution deferral percentage and investment fund elections on-line at www.vanguard.com as soon as their date of hire is transmitted to Vanguard (generally within 3 days of date of hire) instead of waiting to receive the Welcome Kit in the mail. Employees will need the CPSP Plan number (092538), their Social Security number, birth date and zip code to enroll on-line. For employees who do not have a Social Security number, they should use their 6-digit employee identification number preceded by 999 (i.e.: 999111111)
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Wealth: Savings Plan (CPSP)
Stock Savings Feature (SSF)
Employee contributes 1% of eligible pay
•
Before-tax, after-tax or Roth 401(k) contribution
•
Eligible pay includes base salary and overtime
Matching semi-annual allocation of ConocoPhillips stock (target $8 for every $1 contributed)
Shares of ConocoPhillips Stock
•
Employee contribution
•
Company matching semi-annual allocation
•
Employee may diversify ConocoPhillips stock immediately
Presenter
Presentation Notes
The employee elects to contribute 1% of eligible pay each pay period. The SSF allocation occurs twice a year, at the end of June and December, and is posted to participant accounts in mid-July and mid-January. The employee’s 1% contribution and the SSF semi-annual allocation are invested in shares of ConocoPhillips stock. The employee may exchange out of ConocoPhillips Stock at any time. The employee must make a separate SSF Before-Tax Election to participate in the Stock Savings Feature of the CPSP. The target return for the semi-annual company allocation is $8 for each $1 contributed by the employee There is no guarantee that the target will be met due to fluctuations in the stock price and employee participation. The next slide shows a history of the actual return for each allocation since June 2003. In a few slides we’ll show an example of the numbers for an individual who earns $40,000/year.
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Allocation History Jun '04 - Dec '10Market Value per $1 of Employee Deposits
$8 .9 3
$9 .9 4
$12 .8 9 $12 .6 6 $12 .50
$13 .77$14 .3 3
$15.9 7$16 .57
$9 .0 3
$7.2 0
$8 .6 0$8 .12
$10 .9 3
$0 .0 0
$2 .0 0
$4 .0 0
$6 .0 0
$8 .0 0
$10 .0 0
$12 .0 0
$14 .0 0
$16 .0 0
$18 .0 0
Jun 04 Dec 04 Jun 05 Dec 05 Jun 06 Dec 06 Jun 07 Dec 07 Jun 08 Dec 08 Jun 09 Dec 09 Jun 10 Dec 10
Assume $40,000 annual earnings Jan 2010 to Dec 2010
Second half 2010 contribution of 1% which is $200
$20,000 second half earnings x 1% = $200 employee contributions
Company Stock allocation as of December 31, 2010 was worth $2,186 (at $10.93 per $1 of employee contributions)
$200 employee contributions x $10.93 = $2,186 semi-annual Company allocation
Presenter
Presentation Notes
This example uses data from the last half 2008 allocation. The employee received $9.03 of ConocoPhillips stock for every $1 the employee contributed to the SSF during the six-month allocation period ending December 31. $1,806/$200=$9.03 The allocation value depends on the ConocoPhillips stock price on the six-month allocation period end date. The SSF allocation is in shares of ConocoPhillips stock that will be invested in the ConocoPhillips Stock Fund and the Leveraged Stock Fund. Employees may exchange out of ConocoPhillips stock and into any of the other investment options available in the plan at any time. The number of shares allocated semi-annually depends on the number of employees participating in the SSF. Each individual employee’s portion of the allocation is based on the ratio of employee’s SSF contributions over the total of all participant’s SSF contributions multiplied by the number of shares to be allocated for that six-month allocation period.
January 2011 15
Wealth: Savings Plan (CPSP)
Thrift Feature
Employee may contribute up to 75% of eligible pay
•
Eligible pay includes base salary and overtime
•
Before-tax, after-tax, Roth 401(k) or a combination
•
“Catch-Up”
before-tax contributions allowed if age 50 or older
•
Withdrawals, exchanges and loans allowed
Company matches $1 for $1 up to 1.25% of eligible pay
38 diverse investment fund options
•
Company matching contributions follow the employee’s contribution investment election
Presenter
Presentation Notes
Employees may elect to contribute up to 75% of eligible pay on a before-tax, after-tax, Roth 401(k) or a combination for each pay period. Employees must make a separate pre-tax, after-tax and catch-up (if age 50 or older) election to participate in the Thrift feature of the CPSP. The employee has 30 diverse investment fund options from which to choose how to invest their contributions. Company matching contributions are made as soon as administratively practicable following each eligible pay period and are invested in the same investment options that the employee has elected for their contributions under the Thrift feature. � Employees should still consider contributing more than 1.25% (match level) to the Thrift feature to achieve their retirement goals and receive the maximum benefit of deferring pre-tax dollars up to 30% of their eligible pay. Limits imposed by the code: 2009 projected $16,500 limit for pre-tax deferrals, the projected $5,500 limit for catch-up contributions, and the projected $49,000 limit for all annual additions, from whatever source other than catch-up contributions. The following slide shows an example of the numbers based on an individual who earns $40,000/year.
January 2011 16
Wealth: ConocoPhillips Savings Plan (CPSP)
Example: Total CPSP Contributions
$40,000 earnings from Jan. 2010 to Dec. 2010
Employee Contributions:
1.25% Thrift contribution
1% SSF contribution
Company Contributions:
1.25% Thrift Match
Jun. 2010 SSF semi-allocation: $8.12 per $1 employee contribution
Dec. 2010 SSF semi-allocation: $10.93 per $1 employee contribution
Employee Company Total
Thrift Jan - Dec Contributions $500 $500 $1,000
SSF Jan - June Contributions $200 $1,624 $1,824
SSF July - Dec Contributions $200 $2,186 $2,386
Total $900 $4,310 $5,210
Presenter
Presentation Notes
This slide shows total CPSP contributions for one full year. This slide shows that for a relatively small investment of $900 (2.25%) made by the employee to the CPSP, the Company would contribute $7,008 to the Plan.
January 2011 17
Wealth: ConocoPhillips Savings Plan (CPSP)
Contact Vanguard to enroll or make changes:
www.vanguard.com (Plan # 092538)
Call Vanguard at 800-523-1188
Access Vanguard through HR Express
January 2011 18
Benefits: Health & Welfare
Compensation: Base Salary, Variable Cash Incentive Program (VCIP),
Long-term Incentive (LTI),Special Recognition Award (SRA)
Total Compensation & Benefits
Benefits: Retirement Plan (CPRP)
Benefits: Savings Plan (CPSP)
Benefits: Time-off and Others
Presenter
Presentation Notes
The presentation today will focus on 1) the three key areas of our compensation (base salary, VCIP-our variable bonus plan, and the smaller special recognition award for immediate recognition, 2) the wealth-building side of our benefits, including our retirement plan, our stock savings plan, and our thrift plan, and 3) the health and welfare side of our benefits
January 2011 19
Health – Medical and Dental PlansMedical Plan
Coverage assists with health care needs from prevention to catastrophic events, while also providing a range of options within that coverageOptions include:
•
HDHP with or without a Health Savings Account (HSA)•
PPO•
EPO –
in certain locations•
Traditional•
HMO –
in certain locations
If enrolled in the HDHP with HSA, ConocoPhillips will contribute
$500 (you only) or $750 (all other coverage levels) to your Chase HSAIncludes a retail and home delivery prescription drug benefit through Medco (for HDHP, PPO, EPO and Traditional options)Projected 80 / 20 cost sharing between ConocoPhillips & employees (ConocoPhillips contribution to HMOs capped at PPO contribution) Benefits are coordinated with our health improvement programsModeling tools available to help employees decide which options are right for their personal situation
Dental PlanCP Dental –through MetLife with projected 80 / 20 cost sharing between ConocoPhillips & employees Preventive Dental –
through MetLife at a zero ($0) monthly cost to employees
Presenter
Presentation Notes
Additional HDHP talking points: There are no monthly premiums/contributions for the employee and their family if they enroll in the HDHP option……..IT’S FREE To make sure you take good care of your health– preventive care is covered at 100% up to $1,500 per person per year; you do not have to meet your deductible and there are no co-pays for preventive care. In 2009 added preventive prescription drug coverage at 100% up to $1,500 per person per year. If you have individual coverage, you are responsible for paying for the first $1,200 in covered medical expenses before the plan begins paying. If you have individual plus one or more coverage, you are responsible for the first $2,400. That’s the deductible but less than you would pay in monthly premium contributions if you were enrolled in another medical option, which by the way also have deductibles. Remember there is NO monthly payroll deduction from your earnings when you enroll in the HDHP option. Once the deductible is met, the plan starts paying 80% of your covered expenses and you pay the remaining 20% if you use an in-network provider (Same as the PPO option). There’s a limit on how much you’ll ever have to pay in any year – that’s the out of pocket maximum. It includes your deductible as well as the 20% you pay after the deductible. Your out of pocket maximum is $4,000 for individuals and $8,000 for those with family coverage. So – if you get hit with unexpected catastrophic medical expenses, you still have very comprehensive coverage – no matter how much your medical care ends up costing, you won’t pay more than four or eight thousand dollars. A “companion” to high-deductible plans is the Health Savings Account, or H.S.A. You can put money into the HSA that can be used to pay for your out of pocket medical expenses – like the deductible. ConocoPhillips is contributing $500 for you only coverage and $750 for you plus one or more dependents coverage to the health savings accounts established through Aetna . With preventive care for medical and prescriptions drugs covered at 100% up to $1500 each per person per year and $500 or $750 from ConocoPhillips in your HSA this may very well cover all the out of pocket medical expenses you have in a year and remember, there is no monthly cost for this option either. If in future years you do not elect the HDHP option you may still use your HSA funds for qualified medical expenses. You just can not contribute additional funds to the HSA unless you are in a HDHP. You will also designate beneficiaries for your HSA who can use your account balance for qualified medical expenses if you die. HSAs are one of the biggest developments in medical plans in recent years. The HSA is a special type of savings account that can only be used in combination with a high deductible health plan. The HSA is a portable savings account, similar to a IRA, but for health care expenses. Just like a IRA the HSA is funded with tax deductible contributions and both you and ConocoPhillips can contribute. Your contributions are tax-deductible and can be used to offset income above the line on your tax return. You may also make contributions to your HSA on a before tax basis through payroll deduction. As mentioned, ConocoPhillips will be contributing $500 or $750 to the your HSA through Aetna. The most that can be contributed to an HSA, including your contributions and the Company’s contributions, is $3,000 for individuals and $5,950 for families in 2009. The HSA has what we call the “triple crown” of tax savings: your contributions are tax-deductible or before tax, the account can grow with interest – also tax free – and, if you use the money in your account to pay for qualified medical expenses – you don’t even pay taxes on it when you withdraw it! Examples of eligible medical expenses include the deductible, 20% coinsurance paid by you, etc. Long term care insurance premiums can also be paid for with your HSA funds. If you don’t use the money in your HSA account, it can be carried over from year to year. And, if you leave or retire from ConocoPhillips, the money goes with you. There is no vesting or qualifying limitations. You can use the money in your retirement or in future years to pay for any qualified medical expenses. You can model the tax impact of saving in an HSA with our Educate and Evaluate online modeling tools now available throughout the year, not just at annual enrollment. There is no requirement to use the Health Savings Account (HSA) for any un-reimbursed medical expense. If not used the HSA can grow tax deferred from year to year and if still not used at retirement can be used to pay medical costs for retiree insurance. Because there are no monthly premiums for the HDHP an employees can use the premiums they would have paid for another medical option to fund additional contributions to the HSA or to pay deductibles.
January 2011 20
What is the HDHP and HSA?HDHP with or without a HSA -
A medical option that has:Zero ($0) monthly cost to employee for medical coverage for themselves and their eligible dependentsThe same coverage and network for medical services as the PPO option100% coverage, before deductible, for network preventive medical care, and $1,500 for preventive
prescription drugs per person per year Pay a deductible, for non-preventive services and prescription drug costs, before reaching
the coinsurance benefitCoinsurance the same as the PPO option (80% / 20% network)A network and non-network benefit similar to the PPOIncludes an out-of-pocket cost maximum, similar to PPO, but includes prescription drug costs to reach maximumThe opportunity to make before-tax contributions to a Health Savings Account (HSA)
Health Savings Account (HSA) –
A tax-free interest/earnings-bearing account where you:Own the account/money; its in your name Can make before-tax payroll deduction or tax-deductible contributions Can accumulate tax-free money and earnings to use now or in the future for qualified health care expensesCan roll unused money over year after year; you never lose itContributions and earnings are not taxable as long as monies are
used for qualified healthcare expenses (broader list of covered expenses than with a Flexible Spending Account (FSA))
Did you know that the annual premium cost (which buys no medical services, just access) for family coverage in the PPO, EPO and Traditional medical options is more than the HDHP deductible? And, after premiums, these other medical options still have a deductible and coinsurance / copays. With the HDHP, since there is no monthly premium, you only pay when you use medical services that are beyond the 100% preventive care coverage.
Presenter
Presentation Notes
Additional HDHP talking points: There are no monthly premiums/contributions for the employee and their family if they enroll in the HDHP option……..IT’S FREE To make sure you take good care of your health– preventive care is covered at 100% up to $1,500 per person per year; you do not have to meet your deductible and there are no co-pays for preventive care. If you have individual coverage, you are responsible for paying for the first $1,200 in covered medical expenses before the plan begins paying. If you have individual plus one or more coverage, you are responsible for the first $2,400. That’s the deductible but less than you would pay in monthly premium contributions if you were enrolled in another medical option, which by the way also have deductibles. Remember there is NO monthly payroll deduction from your earnings when you enroll in the HDHP option. Once the deductible is met, the plan starts paying 80% of your covered expenses and you pay the remaining 20% if you use an in-network provider (Same as the PPO option). There’s a limit on how much you’ll ever have to pay in any year – that’s the out of pocket maximum. It includes your deductible as well as the 20% you pay after the deductible. Your out of pocket maximum is $4,000 for individuals and $8,000 for those with family coverage. So – if you get hit with unexpected catastrophic medical expenses, you still have very comprehensive coverage – no matter how much your medical care ends up costing, you won’t pay more than four or eight thousand dollars. A “companion” to high-deductible plans is the Health Savings Account, or H.S.A. You can put money into the HSA that can be used to pay for your out of pocket medical expenses – like the deductible. ConocoPhillips is contributing $500 for you only coverage and $750 for you plus one or more dependents coverage to the health savings accounts established through Aetna . With preventive care for medical and prescription drugs covered at 100% up to $1500 each and $500 or $750 from ConocoPhillips in your HSA this may very well cover all the medical expenses you have in a year and remember, there is no monthly cost for this option either. If in future years you do not elect the HDHP option you may still use your HSA funds for qualified medical expenses. You just can not contribute additional funds to the HSA unless you are in a HDHP. You will also designate beneficiaries for your HSA who can use your account balance for qualified medical expenses if you die. HSAs are one of the biggest developments in medical plans in recent years. The HSA is a special type of savings account that can only be used in combination with a high deductible health plan. The HSA is a portable savings account, similar to a IRA, but for health care expenses. Just like a IRA the HSA is funded with tax deductible contributions or you can make contributions on a before tax basis through payroll deduction and both you and ConocoPhillips can contribute. Your contributions are tax-deductible and can be used to offset income above the line on your tax return. As mentioned, ConocoPhillips will be contributing $500 or $750 to the your HSA through Aetna. The most that can be contributed to an HSA, including your contributions and the Company’s contributions, is $3,000 for individuals and $5,950 for families in 2009. The HSA has what we call the “triple crown” of tax savings: your contributions are tax-deductible or before tax, the account can grow with interest – also tax free – and, if you use the money in your account to pay for qualified medical expenses – you don’t even pay taxes on it when you withdraw it! Examples of eligible medical expenses include the deductible, 20% coinsurance paid by you, etc. Long term care insurance premiums can also be paid for with your HSA funds. If you don’t use the money in your HSA account, it can be carried over from year to year. And, if you leave or retire from ConocoPhillips, the money goes with you. There is no vesting or qualifying limitations. You can use the money in your retirement or in future years to pay for any qualified medical expenses. You can model the tax impact of saving in an HSA with our Educate and Evaluate online modeling tools now available throughout the year, not just at annual enrollment. There is no requirement to use the Health Savings Account (HSA) for any un-reimbursed medical expense. If not used the HSA can grow tax deferred from year to year and if still not used at retirement can be used to pay medical costs for retiree insurance. Because there are no monthly premiums for the HDHP an employees can use the premiums they would have paid for another medical option to fund additional contributions to the HSA or to pay deductibles.
January 2011 21
Medical Option Highlights (Network)HDHP PPO EPO Traditional
Occupational Accidental Death (OAD)Benefit of $500,000; Company paid
Accidental Death and Dismemberment (AD & D)Coverage of $20,000 to $1 million; employee paid
Family coverage available; employee paid
Presenter
Presentation Notes
Life Insurance Basic term life insurance is provided by ConocoPhillips to all employees at no cost; coverage is equal to one times your annual base salary. Supplemental term life insurance is available for purchase in coverage amounts of up to eight times your annual base salary. The cost for coverage is based on your age. Evidence of insurability may be required to increase your coverage level. Optional dependent term life insurance is available for spouse and/or eligible dependent child(ren). The options include: • High – $75,000 spouse/$25,000 child(ren) • Low – $40,000 spouse/$15,000 child(ren). Occupational Accidental Death (OAD) and Accidental Death and Dismemberment (AD&D) – OAD insurance is Company-paid and provides coverage of $500,000 in the event of your on-the-job accidental death. AD&D coverage pays in the event of your accidental death or for accidents with certain physical injuries. AD&D is optional coverage that is available for purchase in coverage amounts ranging from $20,000 to $1,000,000 for employees, $20,000 to $500,000 for a spouse and $10,000 to $50,000 for eligible child(ren).
January 2011 27
Welfare: Disability
Short-Term Disability (STD) 52 weeks; Maximum benefit available with 10 years of service:
•
First 26 weeks at 100 percent pay
•
Next 26 weeks at 60 percent pay
Company paid
Long-Term Disability (LTD)Basic benefit –
50 percent of pay; nontaxable
Enhanced benefit –60 percent of pay; nontaxableEmployee paid
Presenter
Presentation Notes
Short-term disability coverage is Company-paid and provides income for 52 weeks each calendar year for disability that meet disability criteria and that is due to non-occupational illness or injury. The maximum benefit equals 26 weeks of 100 percent pay and 26 weeks of 60 percent pay. The duration of 100 percent pay depends on years of service. Long-term disability coverage is employee paid and provides replacement income if you meet the disability criteria. The basic benefit equals 50 percent of tax free monthly pay. Benefits continue for the earlier of duration of your disability or to age 65. Enhanced long-term disability coverage can be elected and provides inflation protection of 4 percent or the increase in the Consumer Price Index (CPI), whichever is less, after the initial 24 months of payments.
January 2011 28
Benefits: Health & Welfare
Compensation: Base Salary, Variable Cash Incentive Program (VCIP),
Long-term Incentive (LTI),Special Recognition Award (SRA)
Total Compensation & Benefits
Benefits: Retirement Plan (CPRP)
Benefits: Savings Plan (CPSP)
Benefits: Time-off and Others
Presenter
Presentation Notes
The presentation today will focus on 1) the three key areas of our compensation (base salary, VCIP-our variable bonus plan, and the smaller special recognition award for immediate recognition, 2) the wealth-building side of our benefits, including our retirement plan, our stock savings plan, and our thrift plan, and 3) the health and welfare side of our benefits
January 2011 29
Time Off Policies – Vacation
Years of Service Eligible Days of Vacation Maximum Vacation Limit
1 - 4 10 20
5 - 9 15 25
10 - 19 20 30
20 - 29 25 35
30 + 30 40
Presenter
Presentation Notes
An Employee will be awarded Eligible Days of Vacation on January 1 of each year as set out in the above table. That combined with the 10 day maximum carryover limit equals the Maximum Vacation Limit also set out in the above table. Employees hired in to regular full-time or regular part-time, exempt, non-exempt and hourly jobs after completing 90 days’ of continuous service will be awarded vacation based on the following schedule:�Month of Hire% of full Jan-Feb-Mar100% Apr-May-June 75% Jul-Aug-Sept 50% Oct-Nov-Dec 0%
January 2011 30
Additional Time Off PoliciesHolidaysSerious Illness in Family Death in FamilyPersonal Leave/Sabbaticals Flexible core working hours 19/30 work schedulePart-time regular work schedulesFamily and Medical Leave (FMLA)Disability LeaveMilitary LeaveCommunity Service LeaveExcused Leave with Pay and Hardship AssistanceNOTE: Some policies may not be applicable to sites under a collective bargaining unit Agreement (CBA). Such sites should consult their HRBP or CBA.
Presenter
Presentation Notes
Information on these policies can be accessed by the employee or supervisors on HR Express. Questions regarding the policies should be directed to HR Connections.
January 2011 31
Other Benefits and ProgramsFlexible Spending Accounts (FSA)
Health Care Account (maximum of $4,800)Dependent Care Account (maximum of $5,000)
Long-Term Care (LTC) – UNUM Insurance CarrierBenefits for convalescent facility or home health careEmployee paid
Employee Assistance Plan (EAP) – ValueOptions 5 face-to-face visits per family member / problem / yearCompany paid
Matching Gift Program for contributions to charitable organizations or schools Employees are matched $1 for $1 up to $15,000 annuallyEligible recipients include 501(c(3) charitable organizations
Educational Assistance / Tuition RefundAssists in furthering higher education in fields of mutual interest to the employee and CompanyPays 90% of tuition and mandatory enrollment fees up to annual maximums of $8,500 for advanced degrees and $4,000 for all other formal education (subject to applicable approvals)
ConocoPhillips Severance Pay PlanUp to 60 weeks of pay based on years of service, if eligibleEducation reimbursement up to $2,000
Presenter
Presentation Notes
Flexible Spending Accounts (FSAs) – Both a Health Care Spending Account and Dependent Care Reimbursement Account are available. These accounts allow employees to set aside money on a before-tax basis to cover eligible health care and/or dependent day care expenses. Long Term Care Insurance (LTC) – coverage is employee paid and provides a monthly benefit to assist with costs associated with convalescent or home health care for you, your family including parents and grandparents. Your coverage choices range from a monthly benefit of $1,000 up to $8,000, as well as coverage for non-forfeiture and inflation protection. Employee Assistance Plan (EAP) – ValueOptions – ConocoPhillips provides an EAP administered by ValueOptions, to all employees. You do not need to enroll for this benefit. You and your family members have access to EAP services, at no cost to you. The EAP is a confidential resource. There is no limit on the number of calls and if you need to speak to an EAP counselor face-to-face, you and your dependents each have up to five visits per problem, per year.
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U.S. Base Salary & Benefit Components
Total Compensation and Benefits Elements: Base Salary, Bonuses, Benefits and Taxes
Total Compensation and Benefits Elements: Base Salary, Bonuses, Benefits and Taxes
* Targets* Targets
VCIP*7.5%
VCIP*7.5%
Base Salary100%
Health and
Welfare 12.5%
Health and
Welfare12.5% Payroll Tax
8.1%Payroll Tax
8.1%
Retirement*22.2%
Retirement*22.2%
Savings*9.25%
Savings*9.25%
2010 Non-base compensation
exceeds 59% of base salary
2010 Non-base compensation
exceeds 59% of base salary
* Value for collective retirement plans (FAE & Cash Balance)
* Value for collective retirement plans (FAE & Cash Balance)
Presenter
Presentation Notes
Note: When using this chart be sure to point out the following: ConocoPhillips Benefits package provides a significant portion of total compensation with a significant financial value to employees This chart is based on 2008 ConocoPhillips domestic payrolls and benefit costs for benefits “not in pay” The numbers shown are a composite average for all Business Units and Staffs for U.S. employees All base pay, including regularly scheduled overtime, has been set as “100%” The VCIP target of 7.50% for most employees has been used to represent variable pay The company-contribution Savings target of 9.25% has been used as the value of savings The retirement value is a collective value considering both the heritage FAE plans and the Cash Balance Plan “Benefits Not In Pay” include: Retirement, Thrift feature matching, Stock Savings feature allocations, Payroll taxes, Tuition Refund, Employee Activities, etc. “Benefits Included in Pay”, which are not shown here, include: Vacation, Holiday Pay, Short-Term Disability, Severance Pay, etc.
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Additional Support
For questions about plans, policies and programs:
Call ConocoPhillips Benefits Center800-622-5501 or 718-354-1344 8 a.m. -
6 p.m. Central time
Monday through Friday
Visit Your Benefits Resources (YBR) Web site through HR Express or at: http://resources.hewitt.com/conocophillips
Visit ConocoPhillips public HR Web site at: http://hr.conocophillips.com
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Disclaimer
This is a high-level overview of ConocoPhillips compensation and benefit plans, policies and programs, intended to serve as a general orientation for employees.
If there are any discrepancies between this presentation and the
official plan, policy or program documents, the terms of the official plan, policy or program documents will govern actual compensation and benefits. ConocoPhillips reserves the right to amend, modify
or terminate any of the plans, policies or programs at any time with or without notice.
Participation in the savings plan is offered only through the Summary Plan Description /prospectuses for the plan. Past performance of
the savings plan is no guarantee of future results.
