BDX » Topics » Pension benefits

This excerpt taken from the BDX DEF 14A filed Dec 23, 2008.

Pension benefits

We maintain a qualified retirement plan for all of our associates. Benefits under the plan are based on age, years of service and compensation levels. Because the Internal Revenue Code limits the maximum annual benefit that may be paid to an individual under our retirement plan, we provide a restoration benefit under our Deferred Compensation and Retirement Benefit Restoration Plan to offset this limitation. A more complete description of our pension benefits begins on page 41. The named executive officers participate in these plans on the same basis as all eligible associates. These benefits are intended to be part of a competitive compensation program necessary to attract and retain executive talent and reduce associate turnover. As shown in the Summary Compensation Table on page 34, the present value of accumulated pension benefits of four of the named executive officers decreased during fiscal year 2008. This was primarily due to a change in the interest rate used to calculate these benefits.

This excerpt taken from the BDX DEF 14A filed Dec 21, 2007.

PENSION BENEFITS

 

 

 

 

 

 

 

Name

 

Plan name

 

Number of years
credited service

 

Present value of
accumulated benefit

Edward J. Ludwig

 

Retirement Plan

     

28

     

$

 

496,709

 

 

 

Restoration Plan

     

28

       

4,828,066

 

John R. Considine

 

Retirement Plan

 

 

 

7

   

 

 

138,745

 

 

 

Restoration Plan

 

 

 

7

   

 

 

605,322

 

 

 

Supplemental Agreement

 

 

 

N/A

   

 

 

634,994

 

Vincent A. Forlenza

 

Retirement Plan

     

27

       

424,685

 

 

 

Restoration Plan

     

27

       

1,265,281

 

William A. Kozy

 

Retirement Plan

 

 

 

33

   

 

 

559,937

 

 

 

Restoration Plan

 

 

 

33

   

 

 

1,655,525

 

Gary M. Cohen

 

Retirement Plan

     

24

       

257,565

 

 

 

Restoration Plan

     

24

       

841,097

 

Amounts shown are not subject to any further deduction for Social Security benefits or other offsets. Associates may elect to receive a lifetime pension or the actuarial value of their retirement benefits in a lump sum, as described below.

Calculation of Benefits. The monthly pension benefit payable in cases of retirement at normal retirement age is calculated using the following formula:

(1% of average final covered compensation, plus 1.5% of average final excess compensation)
multiplied by
years and months of credited service

For purposes of the formula, “average final covered compensation” is generally the portion of an associate’s covered compensation subject to Social Security tax, and “average final excess compensation” is that portion that is not subject to such tax.

Early Retirement. Our plans allow for early retirement when an associate has reached age 55 and has at least 10 years of vesting service. Messrs. Ludwig and Kozy are currently eligible for early retirement under the plans. As a result of his supplemental agreement, Mr. Considine is eligible for early retirement under the Restoration Plan. Under the early retirement provisions, an associate’s pension benefit is reduced by 4/10 of 1% (0.004) for each month that the associate receives benefits before the earlier of (i) age 65 or (ii) the date the associate’s age plus years of vesting service would have equaled 85 had his or her employment continued. For example, if an associate were to retire at age 63 with 22 years of service, the associate’s benefit would not be reduced, because the sum of the associate’s age and service equals 85.

Form of Benefit. Participants may elect to receive their benefits in various forms. Participants may select a single life annuity, in which pension payments will be payable only during the associate’s lifetime. Associates may also elect to receive their benefits in a single lump sum payment that is actuarially equivalent to the benefit payable under the single life annuity option.

Married participants may select a joint and survivor annuity option. Under this option, the associate receives a reduced benefit during his or her lifetime and upon death, the associate’s spouse will receive

41


monthly payments for the remainder of the spouse’s lifetime. The associate can choose a continuation benefit of 50%, 75% or 100% of the amount that was paid to the associate. The degree to which the pension benefit is reduced depends upon on the age difference of the associate and the spouse, and on the percentage of the continuation benefit that is selected.

Associates may also select a guaranteed payment option. This option allows an associate to receive monthly income for life. The associate chooses a designated number of guaranteed monthly payments (either a 60- month minimum guarantee or a 120-month minimum guarantee). If the associate dies before receiving all of the minimum payments, the associate’s beneficiary will receive the balance of the payments. If this option is selected, the single life annuity otherwise payable is reduced to cover the cost of the guarantee. The amount of the reduction is 3% if the 60-month option is chosen, and 7% if the 120-month option is chosen.

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