Tesco 2014 Annual Report Download - page 54

Pensions
PhilipClarkeandLaurieMcIlweearemembersoftheTescoPLCPensionScheme,whichprovidesapensionofuptotwo-thirds
ofbasesalaryonretirement,normallyatage60,dependentonservice(finalsalaryscheme).
Eachyear’spensionearnedbefore1June2012willbeincreasedwithRPIuptoamaximumof5%,andpensionearnedafter
1June2012withCPIuptoamaximumof5%.
Pensionaccruedbefore1June2012anddrawnbeforeage60willbeactuariallyreducedtoreflectearlyretirement.Pensionaccrued
from1June2012willbeactuariallyreducedifitisdrawnbeforetheageatwhichafullpensionispaid(originallyage62butsubject
toadjustmentupordowntoreflectunexpectedchangesinlifeexpectancy).
SinceApril2006,followingimplementationoftheregulationscontainedwithintheFinanceAct2004,ExecutiveDirectorshavebeeneligibleto
receivethemaximumpensionthatcanbeprovidedfromtheregisteredPensionSchemewithoutincurringadditionaltaxcharges.Thebalance
ofanypensionentitlementforExecutiveDirectorsisdeliveredthroughanunfundedretirementbenefitscheme(‘SURBS’).TheSURBSissecured
byusingafixedandfloatingchargeoveracashdepositinadesignatedaccount.
ExecutiveDirectorswhoaremembersofthefinalsalaryschemearerequiredtocontribute10%ofsalary.
DetailsoftherightsundertheTescopensionschemearesetoutbelow.
Thistablehasbeenaudited.
(a)
Ageat22
February
2014
(b)
Yearsof
Company
service
(c)
Total
accrued
pensionat
22February
20141,2
£000
(d)
Increasein
accrued
pension
duringthe
year3
£000
(e)
Increasein
accrued
pension
duringthe
year(netof
inflation)4
£000
(f)
Transfer
valueof(e)
at22
February
2014(less
Director’s
contributions)
£000
(gi)
Transfer
valueoftotal
accrued
pensionat
23February
2013
(oldbasis)4
£000
(gii)
Transfer
valueoftotal
accrued
pensionat
23February
2013(new
basis)4
£000
(h)
Transfer
valueof
total
accrued
pension
at22
February
2014
£000
(i)
Increase
intransfer
value(less
Director’s
contributions)
£000
PhilipClarke 53 39 633 33 17 216 10,738 9,988 11,482 1,494
LaurieMcllwee 51 13 360 34 25 307 5,217 4,673 5,669 996
1 Theaccruedpensionisthatwhichwouldbepaidannuallyonretirementat60(pre-June2012service)andfromfullpensionage(post-June2012service),basedonservice
to22February2014.
2 SomeofPhilipClarkeandLaurieMcIlwee’sbenefitsarepayablefromanunfundedpensionarrangement.Thisissecuredbyafixedandfloatingchargeonacashdeposit.
3 Theincreaseinaccruedpensionovertheyearisadditionalpensionaccruedduringtheyear.
4 ThetransfervaluebasiswasupdatedduringtheyearfollowingareviewoftheScheme’sfactors.
InflationovertheyearhasbeenallowedforusingtheSeptember2013CPIinflationof2.7%.
Payments to former directors
Thisinformationhasbeenaudited.
TherewerenopaymentsmadetoformerDirectorswhichexceededthedeminimisthresholdof£10,000setbytheCompany.
FollowingthesaleofFresh&Easy,theawardof2,500,000sharesplusassociateddividendequivalentsgrantedin2007totheformer
CEO,SirTerryLeahy,undertheGroupNewBusinessIncentivePlanlapsedon14April2014.
Loss of office payments
Thisinformationhasbeenaudited.
Therewerenopaymentsforlossofofficeduringtheyear.
Leaving arrangements for Laurie McIlwee
LaurieMcIlweeresignedasCFOandasanExecutiveDirectorofTescoPLCon4April2014.LaurieremainsanemployeeofTescoand,
foraperiodofsixmonthsfrom4April2014,willbeemployedasCFOEmeritusperformingtransitionactivitiesandsupportinghandover
withcolleaguesaswerecruitareplacementCFO.Duringthisperiod,Lauriewillcontinuetoreceivehissalaryof£886,420andwillremain
eligibletoreceiveabonusofuptoamaximumof200%ofsalaryfor2014/15.Anybonuswillbebasedonperformanceagainsttargets
andwillbepro-ratedfortimeinemployment.
Attheendofthissixmonthperiodon3October2014(terminationdate)LauriewillceasetobeemployedbyTesco.Onterminationof
employment,inaccordancewiththetermsofhiscontract,Lauriewillreceiveaterminationpaymentof£970,800consistingof12months
basesalary(£886,420)andbenefits(£84,460consistingofstaffdiscount,privatehealthcareandhealthinsuranceandcarandcarrelated
benefits).Noadditionalamountwillbepaidinrespectofpension.
Outstandingdeferredshare(EIP)awardswillcontinueuntilthenormalvestingdateinaccordancewiththerulesoftheplan.Lauriewillhave
12monthsfromthisdatetoexerciseawards.2011awardsveston14May2014.The2012awardwillveston25May2015.Nodeferredshare
awardwasmadein2013andnoawardwillbemadein2014.Thenumberofsharessubjecttoeachawardissetoutinthetableonpage50.
Other information
Governance Financial statementsStrategic report
Tesco PLC Annual Report and Financial Statements 2014 51