Allstate 2014 Annual Report Download - page 64

9MAR201204034531
15MAR201510311246
Executive Compensation — Tables
(2) The following table shows the lump sum present value of the non-qualified pension benefits for each named
executive earned through December 31, 2014, if the named executives’ employment terminated on that date.
Lump Sum
Amount
Name Plan Name ($)
Mr. Wilson SRIP 13,365,728
Mr. Shebik SRIP 3,438,715
Mr. Civgin SRIP 257,423
Ms. Greffin SRIP 4,987,970
Mr. Winter SRIP 306,768
The amount shown is based on the lump sum methodology used by the Allstate pension plans in 2014.
Specifically, the interest rate for 2014 is based on 100% of the average corporate bond segmented yield
curve from August of the prior year. As required under the Internal Revenue Code, the mortality table used
for 2014 is the 2014 combined static Pension Protection Act funding mortality table with a blend of 50%
males and 50% females.
Allstate Retirement Plan (ARP) their Base Benefit by 4.8% for each year of early
payment before age 65 and their Additional Benefit by
Contributions to the ARP are made entirely by Allstate 8% for each year of early payment from age 62 to age
and are paid into a trust fund from which benefits are 65 and 4% for each year of early payment from age
paid. Before January 1, 2014, ARP participants earned 55 to age 62, prorated on a monthly basis based on
benefits under one of two formulas (final average pay age at the date payments begin.
or cash balance) based on their date of hire or their
choice at the time Allstate introduced the cash
balance formula. In order to better align our pension
benefits with market practices, provide future pension
benefits more equitably to Allstate employees, and All named executives earned benefits under the cash
reduce costs, final average pay benefits were frozen as balance formula in 2014. Under this formula,
of December 31, 2013. Beginning on January 1, 2014, participants receive pay credits while employed at
all eligible participants earn benefits under a new cash Allstate, based on a percentage of eligible annual
balance formula only. compensation and years of service, plus interest
credits. Pay credits are allocated to a hypothetical
Final Average Pay Formula — Frozen as of 12/31/13 account in an amount equal to 3% to 5% of eligible
Benefits under the final average pay formula were annual compensation, depending on years of vesting
earned and are stated in the form of a straight life service. Interest credits are allocated to the
annuity payable at the normal retirement age of 65. hypothetical account based on the interest crediting
Ms. Greffin and Messrs. Shebik and Wilson have rate in effect for that plan year as published by the
earned final average pay benefits equal to the sum of Internal Revenue Service. The interest crediting rate is
a Base Benefit and an Additional Benefit. The Base set annually and is currently based on the average
Benefit equals 1.55% of the participant’s average yield for 30-year U.S. Treasury securities for August of
annual compensation, multiplied by credited service the prior year. Prior to 2014, Messrs. Civgin and
after 1988 through 2013. The Additional Benefit equals Winter earned cash balance credits equal to 2.5% of
0.65% of the amount of the participant’s average eligible annual compensation after they completed one
annual compensation that exceeds the participant’s year of vesting service based on the prior cash
covered compensation, multiplied by credited service balance formula.
after 1988 through 2013. Covered compensation is the
average of the maximum annual salary taxable for Supplemental Retirement Income Plan (SRIP)
Social Security over the 35-year period ending the year SRIP benefits are generally determined using a
the participant would reach Social Security retirement two-step process: (1) determine the amount that
age. Messrs. Shebik and Wilson are eligible for a would be payable under the ARP formula(s) specified
reduced early retirement benefit which would reduce above if Internal Revenue Code limits did not apply,
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PROXY STATEMENT
Cash Balance Formula — For all Participants
Beginning 1/1/14
The Allstate Corporation