FTI » Topics » Pension Plans

This excerpt taken from the FTI DEF 14A filed Mar 28, 2008.

Pension Plans

A longer term element of compensation for our U.S. based executive officers is an IRS qualified defined benefit pension plan (the “U.S. Pension Plan”) that provides income replacement retirement benefits. We believe our pension plan design is a powerful retention vehicle and that it has been a significant factor in the long tenure of our executive management team and, consequently, the depth of our management team’s experience with our businesses. The same benefit calculation formula is used for our executive officers as is used for our non-bargaining unit production personnel and administrative and technical staff. The U.S. Pension Plan is designed to provide income replacement in retirement to all of our current employees who meet the minimum service requirement of five years. The pension payment is based on “final average pay,” which is calculated for the period that includes the employee’s highest 60 consecutive months of pay in the final 120 months of service, and includes base pay and annual non-equity incentive bonus in the calculation. Eligible earnings under the provisions of the U.S. Pension Plan do not include the value of the equity grants (stock options or restricted stock awards), matching contributions to our U.S. Qualified Savings Plan, our U.S. Non-Qualified Savings Plan or perquisites.

The U.S. Pension Plan is qualified under the United States Employment Retirement Income Security Act (“ERISA”). The Internal Revenue Service limits the amount of compensation on which retirement benefits can be earned and the amounts payable by a tax qualified defined benefit pension plan.

We also have a non-qualified defined benefit pension plan (the “U.S. Non-Qualified Pension Plan)” to provide the same level of benefits for earnings above the IRS limits. The U.S. Non-Qualified Pension Plan uses the same pension calculation formula as the tax qualified U.S. Pension Plan. The benefits under this plan are our general obligations and are not protected by ERISA.

Mr. Halvorsen is our only named executive officer who is not U.S. based and his longer term element of compensation is the Norwegian Pension Program (the “Norwegian Program”). The Norwegian Program is designed to provide employees based in Norway with targeted total pension payment of 65% of their salary. This benefit is offset by any state or government provided social security benefits. The salary included in the benefit calculation is limited to 12 times the National Insurance Base Amount, which was ($11,427) NOK 66,812 effective May 1, 2007 through the end of 2007. The amount in U.S. dollars is based on an average currency exchange rate at month end over the full year. We established a supplementary pension scheme in Norway, effective January 1, 2007, to provide benefits for salary in excess of 12 times the National Insurance Base Amount. This supplemental plan provides 49% of salary exceeding 12 times the National Insurance Base Amount for service beginning on or after January 1, 2007.

 

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All of the members of our executive management team have significant accrued pension benefits under the pension plans as a result of their long tenure. We believe that these pension benefits are a significant reason for the long-term retention of our management team. Our executive officers as well as all other employees have been credited under our Pension Plan for their years of service with FMC Corporation, our former parent company, prior to our spin off as a separate company in 2001.

This excerpt taken from the FTI DEF 14A filed Mar 30, 2007.

Pension Plans

A longer term element of compensation for our executive officers is an IRS qualified defined benefit pension plan (the “Pension Plan”) that provides income replacement retirement benefits. We believe our pension plan design is a powerful retention vehicle and that it has been a significant factor in the long tenure of our executive management team and, consequently, the depth of our management team’s experience with our businesses. The same benefit calculation formula is used for our executive officers as is used for our non-bargaining unit production personnel and administrative and technical staff. The Pension Plan is designed to provide income replacement in retirement to all of our current employees who meet the minimum service requirement of five years. The pension payment is based on “final average pay,” which is calculated for the period that includes the employee’s highest 60 consecutive months of pay in the final 120 months of service, and includes base pay and annual non-equity incentive bonus in the calculation. Eligible earnings under the provisions of the Pension Plan do not include the value of the equity grants (stock options or restricted stock awards), matching contributions to our Qualified Savings Plan, our Non-Qualified Savings Plan or perquisites.

The Pension Plan is qualified under the United States Employment Retirement Income Security Act (“ERISA”). The Internal Revenue Service limits the amount of compensation on which retirement benefits can be earned and the amounts payable by a tax qualified defined benefit pension plan.

We also have a non-qualified defined benefit pension plan (the “Non-Qualified Pension Plan)” to provide the same level of benefits for earnings above the IRS limits. The Non-Qualified Pension Plan uses the same pension calculation formula as the tax qualified Pension Plan. The benefits under this plan are our general obligations and are not protected by ERISA.

All of the members of our executive management team have significant accrued pension benefits under the pension plans as a result of their long tenure. We believe that these pension benefits are a significant reason for the long-term retention of our management team. Our executive officers as well as all other employees have been credited under our Pension Plan for their years of service with FMC Corporation, our former parent company, prior to our spin-off as a separate company in 2001.

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