Freddie Mac 2010 Annual Report Download - page 320

Table 82 — Pension Benefits — 2010
Name Plan Name
Number of Years
Credited Service (#)
(1)
Present Value of
Accumulated Benefit ($)
(2)
Payments During
Last Fiscal Year ($)
Mr. Haldeman .......................... Pension Plan 1.3 $ 31,368 $0
Pension SERP Benefit 1.3 183,092 0
Mr. Kari . . ............................ Pension Plan 1.2 16,534 0
Pension SERP Benefit 1.2 53,208 0
Mr. Bostrom ........................... Pension Plan 5 93,001 0
Pension SERP Benefit 5 442,874 0
Mr. Federico ........................... Pension Plan 22.3 258,217 0
Pension SERP Benefit 22.3 807,256 0
Mr. Bisenius ........................... Pension Plan 19 331,982 0
Pension SERP Benefit 19 651,339 0
(1) Amounts reported represent the credited years of service for each Named Executive Officer as of December 31, 2010, under the Pension Plan and the
Pension SERP Benefit, respectively.
(2) Amounts reported reflect the present value, expressed as a lump sum as of December 31, 2010, of each Named Executive Officer’s benefits under the
Pension Plan and the Pension SERP Benefit, respectively. Amounts reported are calculated using the assumptions applied in NOTE 15 to the
consolidated financial statements included in this Annual Report on Form 10-K and the normal retirement age of 65 specified in the Pension Plan. As of
December 31, 2010, the commencement age to determine the monthly accrued benefit and present value for the Pension Plan was changed from normal
retirement date to the earliest unreduced retirement date (if applicable). For benefits earned through December 31, 2010, the Pension Plan provides an
unreduced early retirement benefit at the earlier of: (a) age 62 and 15 years of service; and (b) age 65. The Pension SERP Benefit does not provide an
early retirement benefit, therefore age 65 is the assumed commencement date. Messrs. Federico and Bisenius are eligible for unreduced Pension Plan
benefits at age 62 for benefits earned prior to December 31, 2010. Mr. Federico’s change in pension value from December 31, 2009 to December 31,
2010 reflects an increase in value of $52,726 to reflect a change in methodology to include the value of unreduced benefits available at age 62 in the
Pension Plan. For Messrs. Haldeman and Kari, the amounts shown include amounts, if any, in which the Named Executive Officers are not yet vested.
Pension Plan and Pension SERP Benefits do not vest until the participant attains five years of vesting service, at which time the participant vests fully.
Pension Plan
The Pension Plan is a tax-qualified, defined benefit pension plan that we maintain, covering substantially all employees
who have attained age 21 and completed one year of service with us. Pension Plan benefits are based on an employee’s years
of service and compensation, up to limits imposed by law. Specifically, the normal retirement benefit under the Pension Plan
for service after December 31, 1988 is a monthly payment commencing at age 65 calculated as follows:
• 1% of the participant’s highest average monthly compensation for the 36-consecutive month period during which the
participant’s compensation was the highest;
• multiplied by the participant’s full and partial years of credited service under the Pension Plan.
For purposes of the Pension Plan, compensation includes the non-deferred base salary paid to each employee (which
includes Semi-Monthly Base Salary under our Executive Compensation Program), as well as overtime pay, shift differentials,
non-deferred bonuses paid under our corporate-wide annual bonus program or pursuant to a functional incentive plan
(excluding the value of any stock options or cash equivalents), commissions and salary reductions under the Thrift/401(k)
Savings Plan and the Flexible Benefits Plan, and qualified transportation benefits under Internal Revenue Code
Section 132(f)(4). Compensation does not include, among other things, supplemental compensation plans providing
temporary pay, deferrals under the Executive Compensation Program, or amounts paid after termination of employment other
than amounts included in a final paycheck.
Notwithstanding the lump sum nature of the disclosure in the preceding table, lump sum payments are not permitted
under the Pension Plan if the present value of the accrued benefit would equal or exceed $25,000. The normal form of
benefit under the Pension Plan is an annuity providing monthly payments for the life of the participant (and a survivor
annuity for the participant’s spouse if applicable). Optional forms of benefit payment are available. A benefit with an
actuarial present value equal to or less than $5,000 may only be paid as a lump sum.
Participants under the Pension Plan who terminate employment before age 55 with at least five years of service are
considered “terminated vested” participants. Such participants may commence their benefit under the Pension Plan as early
as age 55. The benefit is equal to the vested portion of the participant’s accrued benefit, reduced by 1/180th for each of the
first 60 months, and by 1/360th for each of the next 60 months, by which the commencement of such benefits precedes
age 65.
An early retirement benefit is available to a participant who terminates employment on or after age 55 with at least five
years of service. For service before January 1, 2011, this early retirement benefit is reduced by 3% for each year (prorated
monthly for partial years) by which the commencement of such benefits precedes the earlier of: (a) the participant’s
attainment of age 65; or (b) the participant’s attainment of age 62 or later with at least 15 years of service. For service after
December 31, 2010, the reduction is 5% for each year (prorated monthly for partial years) by which the commencement of
benefits precedes the participant’s attainment of age 65. For participants with service prior to January 1, 2011 and after
December 31, 2010, the reductions are separately calculated, and the early retirement benefit is the sum of the two
calculations. Death benefits are available provided the participant completed at least five years of service prior to death.
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