Health Net 2015 Annual Report Download - page 145

143
(1) Credited service is equal to actual service for Messrs. Gellert and Woys.
(2) The amounts represented are calculated as of December 31, 2015 using a 4.00% discount rate. Mortality is
calculated according to the RP-2014 mortality table (adjusted back to 2006) with a fully generational projection
using scale MP-2015, post-retirement only. Benefit shown is one hundred percent (100%) vested for Messrs.
Gellert and Woys.
Narrative to Pension Benefits Table
We maintain the Health Net, Inc. Amended and Restated Supplemental Executive Retirement Plan (“SERP”). The
program covers Messrs. Gellert and Woys, and seventeen (17) former employees. Benefits under the SERP are not
funded; they remain subject to the claims of our creditors. The SERP is a defined benefit plan designed to provide a
Health Net-paid retirement annuity of 50% of the executive’s average pay at retirement if the executive works until age
62 and is actively employed for 15 years. The target retirement benefit is calculated at 50% of the average over the last
60 months of employment using the executive’s base pay, plus any bonus earned. This benefit is prorated for less than 15
years of service at age 62 and/or if the executive leaves employment before the age of 62. It is then multiplied by a
vesting percentage (0% if under five years of service; 10% after five years; 20% after six years; 40% after seven years;
60% after eight years; 80% after nine years and 100% for ten or more years of service).
The target benefit, after prorating and multiplying by the vesting percentage, is further reduced by other Health
Net-paid retirement benefits, whether tax-qualified or nonqualified, including the employer-paid portion of Social
Security retirement benefits, the 401(k) Plan employer matching contributions and any other prior SERP profit-sharing
plans. The net benefit is payable as an annuity for the executive’s lifetime, beginning at age 62, unless the participant
elects to receive a discounted early retirement benefit commencing between ages 55 and 62. A retired executive may
elect to begin receiving reduced payments after age 55 and before age 62 (i.e., benefits are reduced 0.5% for each full
month by which such commencement date precedes the first day of the month next following the attainment of age 62)
and/or to elect a form of payment that provides reduced payments during his or her lifetime and continues a portion of
that benefit to the surviving spouse, subject to the rules of Section 409A.
NONQUALIFIED DEFERRED COMPENSATION FOR 2015
The following table shows the benefits accrued for our named executive officers under the Health Net, Inc.
Deferred Compensation Plan (the “Deferred Compensation Plan”). All named executive officers are eligible to
participate in the Deferred Compensation Plan; however, only Mr. Sell has a current balance in the Deferred
Compensation Plan from participation in previous years.
Name
Executive
Contributions
in 2015
Registrant
Contributions
in 2015
Aggregate
Earnings
in 2015(1)
Aggregate
Withdrawals/
Distributions
Aggregate
Balance at
End of
2015(2)
Steven Sell $ 0 $ 0 $ (582) — $ 193,287
(1) Represents the net amounts credited to the Deferred Compensation Plan account of Mr. Sell as a result of the performance of the
investment vehicles in which his account was deemed invested, as more fully described in the narrative disclosure below. These amounts
do not represent above-market earnings, and thus are not reported in the “Summary Compensation Table.” For fiscal 2015, the
investment return credited to Mr. Sell’s Deferred Compensation Plan account was -0.3%, based on his investment elections.
(2) Represents the amount of the Deferred Compensation Plan account balance at the end of 2015 for Mr. Sell. The amount that was
previously reported as compensation for Mr. Sell in the Summary Compensation Table in a previous year is as follows:
Name Aggregate Amounts Previously Reported
Steven Sell $ 180,000
Description of Deferred Compensation Plan
The Deferred Compensation Plan is a non-qualified voluntary deferred compensation plan that is available to all of
our employees at the director level and above who earn a minimum annual base salary of $100,000. The Deferred
Compensation Plan provides an important supplement to our 401(k) Plan and permits personal savings beyond the IRS
contribution limits on qualified plans. The Deferred Compensation Plan allows participants to set aside tax-deferred
dollars for the future and reduce their current income tax liability. Deferred amounts can be between five percent and
ninety percent (5% and 90%) of base salary and between five percent and one hundred percent (5% and 100%) of “other