Freddie Mac 2011 Annual Report Download - page 355

to the Pension Plan), computed as of December 31, 2011. A summary of the material terms of each plan follows the table,
including information on early retirement.
Table 89 — Pension Benefits — 2011
Name Plan Name
Number of Years
Credited Service(#)
(1)
Present value of
Accumulated Benefit
($)
(2)
Payments During
Last Fiscal Year ($)
Mr. Haldeman . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pension Plan 2.3 $ 66,196 $—
Pension SERP Benefit 2.3 387,519 —
Mr. Kari. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pension Plan 2.2 39,779 —
Pension SERP Benefit 2.2 148,391 —
Mr. Renzi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pension Plan 2 33,661 —
Pension SERP Benefit 2 52,718 —
Mr. Weiss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pension Plan 8.2 184,141 —
Pension SERP Benefit 8.2 386,583 —
Ms. Wisdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pension Plan 4 74,916 —
Pension SERP Benefit 4 136,130 —
(1) Amounts reported represent the credited years of service for each Named Executive Officer as of December 31, 2011, 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, 2011, of each Named Executive Officer’s benefits under
the Pension Plan and the Pension SERP Benefit, respectively. Amounts reported are calculated assuming payment at the earliest unreduced
retirement date, as specified in the Plans. 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. For Messrs. Haldeman, Kari and Renzi and Ms. Wisdom, 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. Amendments were made to the Pension
Plan, effective January 1, 2012, that limit participation in the Pension Plan to those individuals who were hired (or
rehired) prior to January 1, 2012. Each of the current Named Executive Officers is eligible to participate in the Pension
Plan. 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, for 2011 lump sum payments were 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.
Throughout 2011, 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
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