Aviva 2007 Annual Report Download - page 112
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Please find page 112 of the 2007 Aviva annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Executive directors’ pension arrangements
During 2007 executive directors, with the exception of Mr Harvey and Mr Moss, accumulated pension benefits under the
defined benefits section of the Pension Scheme as detailed below.
Richard Harvey
1
Andrew Moss
2
Philip Scott
3
Patrick Snowball
4
Tidjane Thiam
5
£’000 £’000 £’000 £’000 £’000
Accrued annual pension at 1 January 2007 75 20 361 289 49
Increase in accrued annual pension during the year
as a result of inflation – – 14 6 2
Augmentation of benefits –––––
Adjustment to accrued annual pension as a result
of salary increase relative to inflation – – 1 1 15
Increase in accrued annual pension as a result
of additional service – – – 9 9
Reduction due to lump sum settlement and early retirement (25) ––––
Accrued annual pension at 31 December 2007650 20 376 305 75
Employee contributions during the year7– – 28 14 12
Transfer value of accrued pension at
31 December 2006 1,252 231 5,236 4,833 452
Transfer value of accrued pension at
31 December 2007 1,153 248 5,609 5,283 720
Change in transfer value during the period
less employee contributions (99) 17 345 436 256
Age at 31 December 2007 (years) 57 49 53 57 45
Notes
1. Mr. Harvey ceased to accrue pension benefits in the Pension Scheme with effect from April 2006. Instead, contributions have been paid into his ACAP.
Mr. Harvey’s Pension Scheme Benefit at March 2006 was £75,000 pa. This increased in line with deferred pension increases (the lower of the increase in
the RPI or 5%). Mr. Harvey subsequently took early retirement with effect from 31 July 2007. As part of Mr. Harvey’s agreed early retirement terms, the
Company agreed to base the calculation of his pension on it being paid two years earlier than a retirement of age 60 rather than three. Consequently,
his early retirement pension payable from 1 August 2007 amounted to £69,153 pa rather than £65,237 pa. To provide this additional £3,916 pa pension,
a cost was incurred to the Company of £101,857. Mr. Harvey then surrendered £19,014 pa of his pension for a cash sum, reducing his pension payable
from 1 August 2007 to £50,139 pa. This will increase annually in payment in line with RPI, subject to a maximum of 10%.
2. Mr. Moss ceased accrual in the Pension Scheme with effect from 31 March 2006, and as a result, his post-March 2006 pension benefit was £19,556 pa.
This will increase in line with deferred pensions (the lower of the increase in RPI or 5%) subject to the LTA. At 31 December 2007 it increased to
£20,260 pa. The amounts shown above are rounded to the nearest thousand, thus showing no increase in pension for Mr. Moss.
3. Mr Scott has been accruing benefits in the Pension Scheme since before June 1989, so was not therefore subject to the HMRC Earnings Cap. Following
pensions’ simplification Mr Scott registered with HMRC for enhanced protection. He remains a member of the scheme and continues to accrue benefits as
a result of salary increases and inflation. However, he is not accruing benefits as a result of additional service. Mr. Scott’s pension will be based upon his
final pensionable salary and years of service at retirement, subject to an overriding limit of two-thirds of final pensionable salary.
4. Mr. Snowball had been accruing benefits in the pension scheme since before June 1989, so was not therefore subject to HMRC’s Earnings Cap.
He continued to accrue benefits in the Pension Scheme until he left the Company on 30 June 2007. His deferred pension at that date is that
shown above at 31 December 2007, which will increase until his retirement in line with RPI subject to a maximum of 5%.
5. Mr. Thiam was appointed as Group Executive Director with effect from 1 May 2007. The above shows his benefits, including pensionable service prior to
him being appointed an executive director. He ceased to be Group Executive Director with effect from 21 September 2007. The above only allows for
benefits up to that date.
6. The “accrued pension” is the amount of annual pension to which the directors would have been entitled at age 60, had they left service at 31 December
2007. The amount shown in respect of Mr. Harvey is his annual pension in payment at 31 December 2007. See note 1 above.
7. Members of the Defined Benefit section of the Pension Scheme made a contribution of 5% of their pensionable salary.
8. The change in transfer values over the year includes the effect of changes made by the Trustee of the Pension Scheme to the assumptions used in respect
of changes to market values and expected future investment returns. Transfer values represent the estimated liability on the Scheme to pay the stated level
of benefits. They are not sums paid or due to a director, and do not represent the true cost of providing the pension benefit.
9. No former directors received any increase in retirement benefits in excess of the amount to which they were entitled, on the later of the date when the
benefits first became payable or 31 March 1997.
Aviva plc
Annual Report and
Accounts 2007
108
Governance
Directors’ remuneration report continued