Pizza Hut 2009 Annual Report Download - page 75

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Lump Sum Availability
Lump sum payments are available to participants who meet the requirements for Early or Normal
Retirement. Participants who leave the Company prior to meeting the requirements for Early or Normal
Retirement must take their benefits in the form of a monthly annuity and no lump sum is available. When
a lump sum is paid from the plan, it is calculated based on actuarial assumptions for lump sums required by
Internal Revenue Code Section 417(e)(3) (currently this is the annual 30-year Treasury rate for the
2nd month preceding the date of distribution and the gender blended 1994 Group Annuity Reserving Table
as set forth in Revenue Ruling 2001-62).
(2) YUM! Brands Inc. Pension Equalization Plan
The YUM! Brands Inc. Pension Equalization Plan is an unfunded, non-qualified plan that
complements the YUM! Brands Retirement Plan by providing benefits that federal tax law bars providing
under the Retirement Plan. Benefits are generally determined and payable under the same terms and
conditions as the Retirement Plan (except as noted below) without regard to federal tax limitations on
amounts of includible compensation and maximum benefits. Benefits paid are reduced by the value of
benefits payable under the Retirement Plan.
Participants who earned at least $75,000 during calendar year 1989 are eligible to receive benefits
calculated under the Retirement Plan’s pre-1989 formula, if this calculation results in a larger benefit from
the YUM! Brands Inc. Pension Equalization Plan. Messrs. Novak, Carucci, Allan and Creed qualify for
benefits under this formula. This formula is similar to the formula described above under the Retirement
Plan except that part C of the formula is calculated as follows:
C. 12⁄3% of an estimated primary Social Security amount multiplied by Projected Service up to
30 years
Retirement distributions are always paid in the form of a lump sum. In the case of a participant whose
benefits are payable based on the pre-1989 formula, the lump sum value is calculated as the actuarial
equivalent to the participant’s 50% Joint and Survivor Annuity with no reduction for survivor coverage. In
all other cases, lump sums are calculated as the actuarial equivalent of the participant’s life only annuity.
Proxy Statement
Participants who terminate employment prior to meeting eligibility for Early or Normal Retirement must
take their benefits from this plan in the form of a monthly annuity.
(3) YUM! Brands International Retirement Plan
The YUM! Brands International Retirement Plan (the ‘‘YIRP’’) is an unfunded, non-qualified
defined benefit plan that covers certain international employees who are designated by the Company as
third country nationals. Mr. Su is eligible for benefits under this Plan. The YIRP provides a retirement
benefit similar to the Retirement Plan except that part C of the formula is calculated as the sum of:
a) Company financed State benefits or Social Security benefits if paid periodically
b) The actuarial equivalent of all State paid or mandated lump sum benefits financed by the
Company
c) Any other Company financed benefits that are attributable to periods of pensionable service and
that are derived from a plan maintained or contributed to by the Company or one or more of the
group of corporations that is controlled by the Company.
Benefits are payable under the same terms and conditions as the Retirement Plan without regard to
Internal Revenue Service limitations on amounts of includible compensation and maximum benefits.
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