KR » Topics » PENSION BENEFITS

This excerpt taken from the KR DEF 14A filed May 15, 2008.

PENSION BENEFITS

        The following table provides information on pension benefits as of 2007 year-end for the named executive officers.

2007 PENSION BENEFITS
Name
  Plan Name
  Number
of Years
Credited
Service
(#)

  Present
Value of
Accumulated
Benefit
($)

  Payments
During
Last Fiscal
Year
($)


David B. Dillon   The Kroger Consolidated Retirement Benefit Plan
The Kroger Co. Excess Benefit Plan
Dillon Companies, Inc. Excess Benefit Pension Plan
  12
12
20
  $
$
$
279,961
2,799,859
3,073,227
  $
$
$
0
0
0

J. Michael Schlotman

 

The Kroger Consolidated Retirement Benefit Plan
The Kroger Co. Excess Benefit Plan

 

22
22

 

$
$

339,526
939,593

 

$
$

0
0

W. Rodney McMullen

 

The Kroger Consolidated Retirement Benefit Plan
The Kroger Co. Excess Benefit Plan

 

22
22

 

$
$

294,959
1,727,250

 

$
$

0
0

Don W. McGeorge

 

The Kroger Consolidated Retirement Benefit Plan
The Kroger Co. Excess Benefit Plan

 

28
28

 

$
$

519,192
3,356,194

 

$
$

0
0

Donald E. Becker

 

The Kroger Consolidated Retirement Benefit Plan
The Kroger Co. Excess Benefit Plan

 

33
33

 

$
$

893,994
3,214,911

 

$
$

0
0

        The named executive officers all participate in The Kroger Consolidated Retirement Benefit Plan (the "Consolidated Plan"), which is a qualified defined benefit pension plan. The Consolidated Plan generally determines accrued benefits using a cash balance formula, but retains benefit formulas applicable under prior plans for certain "grandfathered participants" who were employed by Kroger on December 31, 2000. Each of the named executive officers is eligible for these grandfathered benefits under the Consolidated Plan. Therefore, their benefits are determined using formulas applicable under prior plans, including the Kroger formula covering service to The Kroger Co. and the Dillon Companies, Inc. Pension Plan formula covering service to Dillon Companies, Inc.

        The named executive officers also are eligible to receive benefits under The Kroger Co. Excess Benefit Plan (the "Kroger Excess Plan"), and Mr. Dillon also is eligible to receive benefits under the Dillon Companies, Inc. Excess Benefit Pension Plan (the "Dillon Excess Plan"). These plans are collectively referred to as the "Excess Plans." The Excess Plans are each considered to be nonqualified deferred compensation plans as defined in Section 409A of the Internal Revenue Code (subject to applicable transition rules). The purpose of the Excess Plans is to make up the shortfall in retirement benefits caused by the limitations on benefits to highly compensated individuals under qualified plans in accordance with the Internal Revenue Code.

        Each of the named executive officers will receive benefits under the Consolidated Plan and the Excess Plans, determined as follows:

    11/2% times years of credited service multiplied by the average of the highest five consecutive years of total earnings (base salary and annual bonus) during the last ten calendar years of employment, reduced by 11/4% times years of credited service multiplied by the primary social security benefit;

31


    normal retirement age is 65;

    unreduced benefits are payable beginning at age 62; and

    benefits payable between ages 55 and 62 will be reduced by 1/3 of one percent for each of the first 24 months and by 1/2 of one percent for each of the next 60 months by which the commencement of benefits precedes age 62.

        Although participants generally receive credited service beginning at age 21, those participants who commenced employment prior to 1986, including all of the named executive officers, began to accrue credited service after attaining age 25. In the event of a termination of employment, Mr. Becker and Mr. Dillon currently are eligible for a reduced early retirement benefit, as they each have attained age 55.

        Mr. Dillon also participates in the Dillon Employees' Profit Sharing Plan (the "Dillon Plan"). The Dillon Plan is a qualified defined contribution plan under which Dillon Companies, Inc. and its participating subsidiaries may choose to make discretionary contributions each year that are then allocated to each participant's account. Participation in the Dillon Plan was frozen effective January 1, 2001. Participants in the Dillon Plan elect from among a number of investment options and the amounts in their accounts are invested and credited with investment earnings in accordance with their elections. Prior to July 1, 2000, participants could elect to make voluntary contributions under the Dillon Plan, but that option was discontinued effective as of July 1, 2000. Participants can elect to receive their Dillon Plan benefit in the form of either a lump sum payment or installment payments.

        Due to offset formulas contained in the Consolidated Plan and the Dillon Excess Plan, Mr. Dillon's accrued benefit under the Dillon Plan offsets a portion of the benefit that would otherwise accrue for him under those plans for his service with Dillon Companies, Inc. Although benefits that accrue under defined contribution plans are not reportable under the accompanying table, we have added narrative disclosure of the Dillon Plan because of the offsetting effect that benefits under that plan has on benefits accruing under the Consolidated Plan and the Dillon Excess Plan.

        The assumptions used in calculating the present values are set forth in Note 14 to the financial statements in the Company's Form 10-K filed with the SEC on April 1, 2008. The discount rate used to determine the present values is 6.5%, which is the same rate used at the measurement date for financial reporting purposes.

32


Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki