AbbVie 2014 Annual Report Download - page 162

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the benefit is reduced 5 percent per year for each year that payments are made before age 62. Benefit C is
payable on an unreduced basis at Special Retirement and is reduced 3 percent per year for each year that
payments are made before age 62, if Early Special Retirement applies.
Supplemental Pension Plan
With the following exceptions, the provisions of the Supplemental Pension Plan are substantially the same as
those of the Pension Plan:
• Participants’ 5-year final average earnings are calculated using the average of the 5 highest years of base
earnings and the 5 highest years of payments under AbbVie’s non-equity incentive plans.
• The Pension Plan does not include amounts deferred or payments received under the AbbVie Deferred
Compensation Plan in its calculation of a participant’s final average earnings. To preserve the pension
benefits of Deferred Compensation Plan participants, the Supplemental Pension Plan includes amounts
deferred by a participant under the Deferred Compensation Plan in its calculation of final average earnings.
Beginning in the year following their election or appointment as an officer, AbbVie officers are no longer
eligible to defer compensation under the Deferred Compensation Plan.
• In addition to the benefits outlined above for the Pension Plan, the NEOs are eligible for an additional
Supplemental Pension Plan benefit equal to 0.6% of 5-year final average earnings for each year of service
for each of the first 20 years of service occurring after the participant attains age 35. The benefit is further
limited by the maximum percentage allowed under the Pension Plan under that plan’s benefit formulas (A, B
and C above). The portion of this additional benefit attributable to service before 2004 is reduced 3 percent
per year for each year that payments are made before age 60. The portion attributable to service after
2003 is reduced 5 percent per year for each year that payments are made before age 60 if the participant
is at least age 55 at early retirement. If the participant is under age 55 at retirement, the portion
attributable to service after 2003 is actuarially reduced from age 65.
• The Supplemental Pension Plan provides early retirement benefits similar to those provided under the
Pension Plan. The benefits provided to NEOs under the Supplemental Pension Plan are not, however,
reduced for the period between age 60 and age 62, unless the benefit is being actuarially reduced from
age 65. Mr. Gonzalez, Mr. Alban and Ms. Schumacher are eligible for early retirement benefits under the
plan.
• Vested benefits accrued under the Supplemental Pension Plan may be funded through a grantor trust
established by the NEO. Consistent with the distribution requirements of Internal Revenue Code
Section 409A and its regulations, those NEOs who became officers prior to 2009 may have the entire
amount of their vested plan benefits funded through a grantor trust. Any NEO who became an officer after
2008 may have only the vested benefits that accrue following the calendar year in which he or she is first
elected as an officer funded through a grantor trust. Vested benefits accrued through December 31, 2008,
to the extent not previously funded, were distributed to the participants’ individual trusts and included in
the participants’ income.
Benefits payable under the Supplemental Pension Plan are offset by the benefits payable from the Pension Plan,
calculated as if benefits under the plans commenced at the same time. The amounts paid to an NEO’s Supplemental
Pension Plan grantor trust to fund plan benefits are actuarially determined. The plan is designed to result in AbbVie
paying the NEO’s Supplemental Pension Plan benefits to the extent assets held in his or her trust are insufficient.
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