Freddie Mac 2012 Annual Report Download - page 357

Table 89 — Pension Benefits — 2012
Name Plan Name
Number of Years
Credited Service(1)
Present value of
Accumulated Benefit(2)
Payments During
Last Fiscal Year
Mr. Layton ..................................... Pension Plan — $ — $—
Pension SERP Benefit — — —
Mr. Kari ....................................... Pension Plan 3.2 68,205 —
Pension SERP Benefit 3.2 276,759 —
Mr. Haldeman .................................. Pension Plan — — —
Pension SERP Benefit — — —
Mr. Mullings ................................... Pension Plan 8 238,399 —
Pension SERP Benefit 8 610,617 —
Mr. Weiss ..................................... Pension Plan 9.2 235,711 —
Pension SERP Benefit 9.2 553,724 —
Ms. Wisdom .................................... Pension Plan 5 107,963 —
Pension SERP Benefit 5 237,517 —
(1) Amounts reported represent the credited years of service for each NEO as of December 31, 2012, 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, 2012, of each NEO’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 Mr. Kari, the amount shown includes amounts in which he is 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. Mr. Haldeman was not vested in the Pension Plan
or Pension SERP Benefit when his employment with the company terminated. Mr. Layton is not eligible to participate in the Pension Plan or Pension
SERP Benefit since he was hired after December 31, 2011, when the plans closed to new hires. Because Mr. Haldeman terminated employment prior to
becoming vested in his benefits under the Pension Plan and Pension SERP, the aggregate change in the actuarial present value of Mr. Haldeman’s
accumulated benefit in these plans from December 31, 2011 to December 31, 2012 was ($66,196) and ($387,519) respectively.
Pension Plan
The Pension Plan is a tax-qualified, defined benefit pension plan that we maintain, covering substantially all employees
hired before 2012 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. As shown above, each of the current NEOs (other than Mr. Layton) 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 cash payments to each employee for non-deferred base salary,
deferred salary under the Executive Compensation Program, supplemental pay under our current pay structure for vice
presidents and below, as well as overtime pay, shift differentials, non-deferred bonuses paid under a corporate-wide annual
bonus program (if any) 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 (i.e. our
cafeteria plan under the Internal Revenue Code Section 125), 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, Deferred Base Salary amounts under the prior pay structure and amounts deferred under the EDCP (discussed
below), or amounts paid after termination of employment other than amounts included in a final paycheck.
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
that terminate after December 31, 2011, may elect a lump sum payout.
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.
352 Freddie Mac