Sunoco 2012 Annual Report Download - page 143

For employees, including NEOs, hired before January 1, 1987 (Messrs. Hennigan and Colavita), the benefits
under SCIRP are the greater of the Final Average Pay or Career Pay formula benefits. An employee may retire at
the Normal Retirement Age of 65 regardless of years of service with Sunoco, or may retire as early as age 55
with 10 years of service. All employees hired before January 1, 1987 are 100 percent vested in their benefits. For
employees, including NEOs, hired on or after January 1, 1987 (Ms. Elsenhans, Ms. Shea-Ballay and
Mr. MacDonald), retirement benefits are calculated under the Career Pay formula only. An employee may retire
at the Normal Retirement Age of 65, or may retire as early as age 55 with 10 years of service. An employee hired
before January 1, 2008 is 40 percent vested in his or her benefit after completing two years of eligible service,
and 100 percent vested after completing three years of eligible service. Employees hired on or after January 1,
2008 are 100 percent vested after three years of eligible service.
The normal form of benefit under the SCIRP is an annuity for the life of the employee, with 50 percent of
that annuity paid for the life of the employee’s surviving spouse (50 percent Joint and Survivor Benefit). This 50
percent Joint and Survivor benefit is free for participants who benefit under the Final Average Pay formula, but is
reduced actuarially for participants who benefit under the Career Pay formula. Other forms of payment are also
offered such as a lump sum and other annuity options. Under the Career Pay formula, the lump sum is equal to
the value of the employee’s account, and under the Final Average Pay formula, the lump sum is the actuarial
equivalent of the annuity benefit, based on Internal Revenue Service prescribed interest rates and mortality
tables.
The SCIRP is subject to qualified plan Code limits on the amount of annual benefit that may be paid, and on
the amount of compensation that may be taken into account in calculating retirement benefits, under the plan. For
2010 and 2011, the limit on the compensation that may be used was $245,000. The limit on annual benefits
payable for an employee retiring in 2012 was $250,000. Benefits in excess of those permitted under the statutory
limits are paid from the Pension Restoration Plan, described below.
The amounts presented in the table above are actuarial present values based on accrued annual benefits,
using pay and service through December 31, 2012.
If the benefit is paid in a lump sum, the actual amount distributed would vary depending on the actual
interest rate and the mortality assumptions used to calculate the distribution at the time of retirement. The
mortality table and interest rates to be used in determining a lump sum are set in accordance with the Pension
Protection Act of 2006, or PPA. Under the PPA, the method for computing the lump sum interest rate was
completely phased-in for 2012. The estimated amounts above do not take into account future credited service,
potential future changes in base salary, the annual guideline incentive opportunity, or future annual incentives
that may be paid as a result of Company performance.
Sunoco, Inc. Pension Restoration Plan
The Pension Restoration Plan is a non-qualified plan that provides retirement benefits that would be
provided under the SCIRP, but are prohibited from being paid from the SCIRP by the Code limits. See the
discussion regarding the SCIRP, above, for the limits. The benefit paid by the Pension Restoration Plan is the
excess of the total benefit accrued under the SCIRP over the amount of benefit that the SCIRP is permitted to
provide under the Code. All benefits under the Pension Restoration Plan that are paid in a lump sum are
calculated using the same actuarial factors applicable under the SCIRP. Payment of benefits is made upon
termination of employment, except that payment of amounts subject to Code Section 409A is delayed until six
months after separation from service for any specified employee as defined under Code Section 409A. No
additional benefits are being accrued under the Pension Restoration Plan with regard to participant accounts in
SCIRP following June 30, 2010.
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