AbbVie 2014 Annual Report Download - page 156
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13NOV201221352027
prevailing market rate of interest. In 2014, interest rates declined and the discount rate used for the Pension Plan
and the Supplemental Pension Plan was reduced to reflect that decline. A reduction in the discount rate increases
the present value of participants’ pensions while actual payments to be made to participants are not changed. The
discount rate used for 2014 was 4.45%, and the discount rate used for 2013 was 5.36%. The mortality assumptions
that apply for actuarial purposes also affect pension values. During 2014, the Society of Actuaries released new
mortality tables reflecting longer life expectancies, which are now in use for Pension Plan and Supplemental
Pension Plan accounting. This increase in assumed life expectancy results in an increase in the present value of
participants’ pensions.
In addition to the effect of the changes in actuarial assumptions, other factors built into the plans contributed to
the pension calculations. The change in pension value numbers reflect the application of the benefit formulas under
the Pension Plan and the Supplemental Pension Plan, which are described in the section of this proxy statement
captioned ‘‘Pension Benefits.’’ As participants’ pay increases and service credit accumulates year over year, the
formulas yield greater pension values. Furthermore, as a participant ages (before he or she is eligible for unreduced
pension benefits), the present value of his or her pension benefits increases, even without changes to actuarial
assumptions.
The effects of the actuarial changes and other factors are summarized in the following table.
R. Gonzalez $1,193,401 $3,743,606
M. Severino 43,227 145,390
C. Alban 1,056,243 1,125,544
L. Schumacher 1,381,330 857,166
W. Chase 786,806 862,299
(8) As part of Dr. Severino’s hiring package, this amount was paid to replace a prior employer incentive award.
(9) Bonus paid in recognition of performance related to the separation from Abbott.
36 2015 Proxy Statement
2014 Change in Pension Value
Attributable to Attributable
Changes in Actuarial to Other
Name Assumptions ($) Factors ($)
EXECUTIVE COMPENSATION