National Grid 2014 Annual Report Download - page 63

Strategic Report Corporate Governance Financial Statements Additional Information
Pension Purpose and link to strategy: to reward sustained contribution and assist attraction
and retention.
Operation Maximum levels
Performance metrics, weighting
and time period applicable
Pension for a new Executive Director will
reflect whether they are internally promoted
orexternally appointed.
If internally promoted:
• retention of existing DB benefits without
enhancement, except forcapping of
pensionable pay increases following
promotion to Board;or
• retention of existing UK DC benefits
orequivalent cash in lieu; or
• retention of existing US DC benefits plus
401(k) plan match, provided through 401(k)
plan and non-qualified plans.
If externally appointed:
• UK DC benefits or equivalent cash in lieu; or
• US DC benefits plus 401(k) plan match.
Andrew Bonfield and John Pettigrew are
treated in line with the abovepolicy.
Steve Holliday and Nick Winser are provided
with final salary pension benefits. For service
prior to 1 April 2013, pensionable pay is
normally the base salary in the 12 months
prior to leaving the Company. For service from
1April2013 increases to pensionable pay
arecapped at the lower of 3% or the increase
in inflation. Their pension scheme rules allow
for indexed prior salaries to beused for
allmembers. They both participate in the
unfunded scheme in respect of benefits
inexcess of theLifetime Allowance.
Tom King participates in a qualified pension
plan and in an Executive Supplemental
Retirement Plan. These plans are non-
contributory, cash balance and final average
pay plans. Tom’s benefits include
compensation to buy out entitlements from
his former employer that were lost on
recruitment to National Grid. This includes
aprovision to allow an unreduced pension
tobe taken from age 55 if Tom is still in the
employment ofthe Company at that time.
In line with market practice, pensionable pay
for UK-based Executive Directors includes
salary only and for US-based Executive
Directors itincludes salary and APP award.
UK DB: a maximum pension on retirement,
atage 60, of two thirds final capped
pensionable pay or up to one thirtieth
accrual.On death in service, a lump sum of
four times pensionable pay and a two thirds
dependant’s pension isprovided.
UK DC: annual contributions of 30% of
salary.Lifeassurance provision of four times
pensionable salary and a spouse’s pension
equal to one third of the Director’s salary are
provided on death in service.
US DB: an Executive Supplemental
Retirement Plan provides for an unreduced
pension benefit at age 62 (at age 55 in Tom
King’s case). For retirements at age 62 with 35
years of service, the pension benefit would be
approximately two thirds ofpensionable pay.
Upon death in service, thespouse would
receive 50% of thepension benefit (100% if
the participant died while an active employee
after the age of55).
US DC: 9% of base salary plus APPwith
additional 401(k) plan match ofup to 4%.
Not applicable.
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