AGU » Topics » Defined contribution plans

This excerpt taken from the AGU 6-K filed Apr 3, 2009.
Defined contribution plans
With the exception of Mr. Gearheard, the NEOs are members of the DC Plan. The DC Plan is registered under the Income Tax Act (Canada) and the Employment Pension Plans Act (Alberta) and is subject to the maximum pension and contribution limits imposed under the Income Tax Act (Canada). Under the DC Plan, the Corporation contributes 6% of eligible base salary, and if the participant makes voluntary contributions up to 6% of eligible base salary, the Corporation makes 50% matching contributions up to 3% of eligible base salary. For designated executives, eligible base salary is limited each year to the earnings level that generates the maximum annual contribution that can be made to the DC Plan in accordance with the Income Tax Act (Canada), which was $131,300 in 2008 (the “DC Plan Earnings Limit”).
Mr. Gearheard is a member of the 401(k) Plan. Prior to 2008, the 401(k) Plan permitted voluntary contributions up to 30% of total compensation, with such contributions subject to the U.S. legal maximum. The amount of the Corporation’s contribution was 50% of the first 6% of employee contributions. Effective January 1, 2008, the earnings used to determine the Corporation’s contribution to the 401(k) Plan for Mr. Gearheard are limited to the DC Plan Earnings Limit, expressed in U.S. dollars at par.
Until January 1, 2008, Mr. Gearheard was a member of the Agrium U.S. Inc. Retirement Plan (the “U.S. Basic Plan”), a non-contributory defined benefit retirement plan. The U.S. Basic Plan is qualified under the U.S. Internal Revenue Code. The formula for benefits on retirement under the U.S. Basic Plan is 1.1% of three year average best earnings prior to January 2008 (the “Final Average Earnings”) up to Social Security Average Wages plus 1.4% of Final Average Earnings in excess of Social Security Average Wages multiplied by the first 35 years of Benefit Service, plus 0.8% of the Final Average Earnings multiplied by the years of Benefit Service in excess of 35 years but less than 40 years. Under the U.S. Basic Plan earnings are limited to those permitted under the Internal Revenue Code. As of January 1, 2008, Mr. Gearheard retains his qualified U.S. Basic Plan benefit for his period of employment prior to January 1, 2008, but is no longer earning a benefit for future service.


Table of Contents

The table below presents the benefits accumulated under Agrium’s defined contribution plans. The actual benefits payable upon retirement will be determined by the size of each participant’s account values (based on the amount of actual contribution and by the realized investment returns), interest rates at the time benefits commence and the type of retirement vehicle selected (life income fund, life annuity, joint annuity, etc.):
    value at start
    of year
  value at year
Name   (U.S.$)   (U.S.$)   (U.S.$)   end (U.S.$)
M.M. Wilson
  $ 44,498     $ 57,821     $ 255,431     $ 357,750  
B.G. Waterman
  $ 189,124     $ 11,820     $ (81,280 )   $ 119,664  
R.L. Gearheard
  $ 3,379,404     $ 12,273     $ (1,610,142 )   $ 1,781,535  
R.A. Wilkinson
  $ 460,886     $ 11,820     $ (189.281 )   $ 283,425  
L. O’Donoghue
  $ 177,640     $ 11,820     $ (55,616 )   $ 133,844  
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