Visa 2008 Annual Report Download - page 225

Table of Contents
Visa Retirement Plan
Under the Visa Retirement Plan, our U.S.-based employees generally earn the right to receive certain benefits (i) upon retirement at the normal
retirement age of 65, (ii) upon early retirement at or after age 55 (or at or after age 50 if hired prior to October 1, 2002) and having completed at least 10 years
of service with us or (iii) upon an earlier termination of employment, but solely if the employee is vested at that time. Retirement benefits are calculated as the
product of 1.25% times the employee's years of service multiplied by the employee's monthly final average earnings for the last 60 consecutive months before
retirement (or, for employees hired prior to October 1, 2002, the product of 46.25% times the employee's years of service divided by 25 years, multiplied by
the employee's monthly final average earnings for the 36 highest consecutive months in the last 60 months before retirement). Eligible earnings include salary,
overtime, shift differentials, special and merit awards and short-term cash incentive awards. The formula below provides an illustration of how the retirement
benefits are calculated.
For employees hired prior to October 1, 2002
46.25% of monthly final average
earnings
X
Completed years of service, including partial year
based on completed months
25 years
For employees hired after September 30, 2002
1.25% X
Completed years of service, including partial year based on completed months
(up to 35 full years) X Monthly final average earnings
If the employee retires early, that is, between the ages of 55 and 64 (or between the ages of 50 and 61 if hired prior to October 1, 2002), and has
completed at least 10 years of service with the Company, the amount of such employee's benefits is reduced for each complete year that such employee begins
receiving early retirement benefits before the age of 65 (or before the age of 62 if hired prior to October 1, 2002). If such employee retires prior to becoming
eligible for early or normal retirement, the amount of his or her benefits is actuarially reduced and is generally not as large as if the employee had continued
employment until his or her early or normal retirement date.
The Visa Retirement Plan began transitioning to cash balance benefits effective January 1, 2008. Under the cash balance benefit accrual formula, 6% of
an employee's eligible monthly pay will be credited each month to the employee's notional cash balance account, along with interest each month on the
account balance at an annualized rate equal to the 30 year U.S. Treasury Bond average annual interest rate for November of the previous calendar year.
The change to a cash balance benefit formula took effect immediately for employees hired or rehired after December 31, 2007. However, for employees
hired before January 1, 2008 (and not rehired thereafter), the current Visa Retirement Plan benefit formula was grandfathered for a three-year period and
grandfathered employees will continue to accrue benefits under their current Visa Retirement Plan benefit formula described above. Their accrued benefits at
December 31, 2010 (the last day of the grandfathered period) or the date they terminate employment, if earlier, will be preserved. After that date, employees
will not accrue any additional benefits under the current Visa Retirement Plan benefit formulas and all future benefit accruals will be under the cash balance
benefit formula.
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