Intel Minimum Pension Plan
What is the Minimum Pension Plan
Intel’s Minimum Pension Plan (MPP) is a non-traditional, legacy retirement benefit providing a minimum pension benefit if your Retirement Contribution Plan (RC Plan) account balance is not expected to provide a certain level of retirement income as determined by the MPP calculation.
Note: The MPP is a frozen benefit, and was closed to new Intel employees in 2011. View more details about the MPP freeze and how it affected participation.
How the MPP Works
The MPP ensures that Intel provides you with a minimum amount of monthly retirement income based on both the MPP and RC Plans. To do this, the MPP establishes your Pension Guarantee using your pay and years of service. Then the MPP determines the expected RC Benefit based your RC Plan account balance. The MPP only pays a benefit when your Pension Guarantee is greater than your RC Benefit. While your Pension Guarantee doesn’t change, your RC Plan and MPP benefits do change, as both benefits will combine to get you to your Pension Guarantee amount.
See the MPP in action, including how interest rates and your RC Plan can impact your MPP benefit
Your MPP Benefit Estimate Can Change Over Time
Your MPP tops up your RC Benefit to the level of your Pension Guarantee. Since your Pension Guarantee is now frozen, any changes in your MPP Benefit Estimate are due to your RC Benefit changing (i.e., if your RC Benefit increases, MPP doesn’t have to provide as much top-up to meet your Pension Guarantee, so your MPP Benefit Estimate decreases).
Your RC Benefit is driven by 2 primary factors:
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The current value of your RC Plan account balance: As your RC Plan account balance changes from investment performance, your MPP Benefit Estimate will change. For example, if your RC Plan balance increases due to investment gains, your MPP Benefit Estimate (if any) decreases because it doesn’t need to provide as much top-up to meet your Pension Guarantee. Conversely, RC balance decreases may cause your MPP Benefit Estimate to increase.
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Interest rate changes: The calculation to derive your MPP Benefit uses an interest rate to determine the monthly annuity value of your RC Plan account at retirement. The interest rate is set each calendar quarter, based on a method established by the Pension Benefit Guaranty Corporation (PBGC). The PBGC interest rate used in your final MPP Benefit calculation is the rate in effect on the first day you are no longer employed by Intel or an affiliate. All else equal, if the PBGC interest rate increases, the value of your RC Annuity will also increase. As a result, MPP Benefit Estimates will likely decrease or be eliminated because MPP doesn’t need to provide as much top-up to meet your Pension Guarantee. Learn more about how the PBGC rate is set each quarter.
This example shows how the MPP and RC Plan work for a participant
Model Your MPP Benefit Estimate
Active Intel employees can model MPP benefit estimates using different dates of termination, benefit commencement dates, and PBGC interest rates using the Pension Estimate tool available on NetBenefits.
Your Final MPP Benefit Calculation
There are three important dates that can influence your final MPP benefit amount.
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Intel Termination Date: Your Intel Termination Date is your last day of employment with Intel.
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MPP Termination Date: Your MPP Termination Date is the day after your Intel Termination Date. Your MPP Termination Date is the date your RC balance and applicable PBGC rate is determined and locked on your MPP Termination Date regardless of when you take your benefit.
The table below illustrates what PBGC rate will be used based on your Intel Termination Date:
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If your Intel Termination Date is between: |
MPP will use the: |
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Dec 31 - March 30 |
Q1 PBGC rate |
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March 31 - June 29 |
Q2 PBGC rate |
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June 30 - September 29 |
Q3 PBGC rate |
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September 30 - December 30 |
Q4 PBGC rate |
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Benefit Commencement Date: When you want to begin receiving benefit. When modeling or initiating your Benefit Commencement Date, you need to select a day at least 45 but no more than 180 days in the future, so choose your last day of work with this in mind.
Your MPP Payment Options:
The MPP offers several optional payment forms, including a lump sum and several annuity options. The value of these optional payment forms are determined as the actuarially equivalent of your benefit based on interest rates and other factors in place at the time the benefit is taken.
One interest rate, the 417(e) rates, changes annually and can impact the amount of your final MPP benefit payment, especially if you are considering taking a lump sum. To understand this impact, use the Pension Estimate tool in early October each year to model taking your benefit in the current year vs. the following calendar year. If you decide to take your benefit in the current year you must submit your completed benefit initiation by October 15th. The payment options are summarized below:
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Lump Sum: This option is a one-time distribution based on the present value of the minimum pension benefit.
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Single Life Annuity: This option provides a monthly payment to you for the rest of your life with no provision for continuing payments to a survivor.
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50% or 100% Joint and Survivor Annuity: This option provides a reduced monthly payment to you for the rest of your life, and after your death, monthly payments to your designated beneficiary for life of 50% or 100% of the monthly payment made during your life. This annuity is calculated based upon a single life annuity and then actuarially reduced to reflect the fact that payments are guaranteed for the lives of two people.
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10- or 15-year Period-Certain Annuity: This annuity provides a reduced monthly payment to you for the rest of your life and, if you die before receiving payments for the 10- or 15-year guarantee period, provides monthly payments to your designated beneficiary for the remainder of the guarantee period as elected.
How to Start Your Benefit
If your final MPP calculation at termination shows you have a benefit, you can receive your benefit at any time after your employment with Intel ends, up through age 65. Similar to Social Security, if you elect to receive your benefits earlier it will result in a lower benefit than the amount shown on NetBenefits — which assumes you commence your benefit at age 65. You may begin taking your benefit later than age 65 if you are still actively employed at Intel. If you terminate employment after age 65, you must take your benefit within six months of termination .
If you’re ready to collect your benefit, there are several steps to take—go to NetBenefits for detailed instructions on how to start your benefit.
Key Terms and Definitions
Pension Guarantee
The minimum amount of monthly retirement income Intel will guarantee based on pay and years of service. In 2015, pay and service accruals were stopped for eligible employees Grade 7 and above (and grade equivalents) and in 2020, for remaining eligible employees.
MPP Freeze
In 2015, pay and service accruals were frozen (stopped) for eligible employees Grade 7 and above (and grade equivalents) and in 2020, for remaining eligible employees. When the MPP was frozen it meant that each participant’s Pension Guarantee was locked in place as of the freeze date. This is because the Final Average Compensation and Years of Service used to calculate the guarantee locked as of the freeze date. Changes in your MPP benefit amount will be due to changes in your Retirement Contribution (RC) balance due to investment gains/losses and/or the PBGC interest rates. Review the Summary Plan Description for detailed information on MPP freeze dates.
Final Average Compensation
The average of your highest consecutive five years of eligible compensation in the last 10 years during which you participated in MPP through the date your benefit was frozen.. This generally includes your regular base pay plus certain bonuses, commissions, overtime, geographic salary differentials (GEOs), shift differential, compressed workweek schedule (CWW), and other premiums you receive up to a compensation limit set by the IRS. In 2015, final average compensation accruals were stopped for eligible employees Grade 7 and above (and grade equivalents) and in 2020, for remaining eligible employees.
Covered Compensation
The average of the contribution and the benefit bases — as defined by the Social Security Act — over a 35-year period ending the year in which the Participant attains the Social Security Retirement Age. The table used for participants is the table in effect for the earliest of the following events:
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You leave Intel,
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You are no longer an eligible employee, or
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Your MPP pay and service accruals were frozen.
Years of Service
Total number of years of service that have been credited to you as a U.S. employee since your date of hire at Intel through the date of the plan freeze, up to a maximum of 35 years. Note, time as an intern or as a non-U.S. employee does not count toward MPP years of service. In 2015, years of service accruals were stopped for eligible employees Grade 7 and above (and grade equivalents) and in 2020, for remaining eligible employees. Review the Summary Plan Description for a detailed explanation of how service is counted in instances of leaves or rehires.
Need help?
Call a Workplace Planning Consultant at 1-888-401-7377 for 1:1 support or go to NetBenefits to view helpful tools and resources, including the Pension Estimate tool and the Planning Summary page.