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PBI » Topics » PENSION BENEFITS AS OF DECEMBER 31, 2007

This excerpt taken from the PBI DEF 14A filed Mar 27, 2008.
PENSION BENEFITS AS OF DECEMBER 31, 2007
             
        Number of Years   Present Value of
            Credited Service             Accumulated
Name   Plan Name  
(#)
  Benefit ($)(1)
Murray D. Martin(2)   Pitney Bowes Pension Plan  
20.4
  439,531    
Murray D. Martin   Pitney Bowes Pension Restoration Plan  
20.4
  2,284,131  
Michael J. Critelli(2)   Pitney Bowes Pension Plan  
28.7
  655,875  
Michael J. Critelli   Pitney Bowes Pension Restoration Plan  
28.7
  8,224,026  
Bruce P. Nolop   Pitney Bowes Pension Plan  
  8.0
  72,672  
Bruce P. Nolop   Pitney Bowes Pension Restoration Plan  
  8.0
  344,684  
Patrick J. Keddy(3)   Pitney Bowes Pension Fund  
18.7
  2,202,747  
Michael Monahan   Pitney Bowes Pension Plan  
19.6
  120,613  
Michael Monahan   Pitney Bowes Pension Restoration Plan  
19.6
  238,568  
Leslie Abi-Karam   Pitney Bowes Pension Plan  
23.9
  177,674  
Leslie Abi-Karam   Pitney Bowes Pension Restoration Plan  
23.9
  371,527  
Kevin S. Weiss   Pitney Bowes Pension Plan  
30.9
  454,729  
Kevin S. Weiss   Pitney Bowes Pension Restoration Plan  
30.9
  844,770  

(1)     

Material assumptions used to calculate the present value of accumulated benefits under the Pitney Bowes Pension Plan for each named officer are detailed in note 13 to the financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2007. In addition, the mortality table used was UP94G.
 
(2)     

Messrs. Martin and Critelli were eligible for early retirement on December 31, 2007. If they were to have retired on December 31, 2007, the present value of the pension benefit payable would have been $2,859,987 for Mr. Martin and $11,231,311 for Mr. Critelli. As of December 31, 2007, Mr. Weiss was not yet retirement eligible.
 
(3)     

Amount shown for Mr. Keddy’s pension has been converted to dollars using the conversion rate of $1.9947 to £1.00 (which is the average of the monthly average conversion rates for 2007).

The material terms of the U.S. Pension and Pension Restoration plans are summarized below:

  • Employees hired prior to January 1, 2005 are eligible to participate.

  • Normal retirement age is 65 with at least five years of service, while early retirement is allowed at age 55 with at least ten years of service.

  • The vesting period is five years.

  • For purposes of determining pension benefits, “earnings” are defined as the average of the five highest consecutive calendar year pay amounts. Earnings include base salary, vacation, severance, before-tax plan contributions, annual incentives (paid and deferred), and certain bonuses. Earnings do not include long-term cash incentive unit payments, stock options, restricted stock, hiring bonuses, company contributions to benefits, and expense reimbursements.

  • The formula to determine benefits is based on age, years of service, and final average five-year earnings. Employees receive annual percentages of earnings based on their age plus service. The annual percentages range from 2% to 10% of final average earnings, plus 2% to 6% of such earnings in excess of the Social Security Wage Base. In addition, Pension Plan participants whose age plus service totaled more than 50 as of September 1, 1997 receive “transition credits” to make up for some of the

39

differences between old and new retirement plan formulas. Messrs. Martin, Critelli and Weiss and Ms. Abi-Karam are among those Pension Plan participants who are eligible to receive “transition credits.”

  • The maximum annual benefit accrual under the Pension Restoration Plan is an amount equal to 16.5% multiplied by the participant’s final average earnings and further multiplied by the participant’s credited service.

  • Upon retirement, benefits are payable in a lump-sum or various annuity forms, including life annuity and 50% joint and survivor annuity.

  • The distribution options under the Pension Restoration Plan are designed to comply with the requirements of Internal Revenue Code Section 409A.

The material terms of the U.K. Pension Fund are summarized below:

  • Normal retirement age is 65, while early retirement is allowed from age 55. The plan was revised in July 1998 to change the retirement age to 65 from 60. The benefit for service from July 1998 is reduced by 4% per year before age 65 and the benefit for service before July 1998 is reduced 4% per year before age 60.

  • For purposes of determining pension benefits, earnings are defined as the average of the three highest consecutive calendar year earnings amounts during the last ten years. Earnings include base salary and annual incentives less the U.K. social security threshold.

  • The formula to determine benefits is based on years of service and earnings. Employees must contribute 2% of their earnings into the defined benefit portion of the plan. Employees accrue 1/80th of their earnings for each year of service.

    For service prior to July 1998, employees accrued 1/60th of earnings for each year of service. Mr. Keddy has nine years of service accrued under the old formula.

  • The U.K. Pension Fund also includes a Qualified Defined Contribution benefit under which the employee contributes 2% of his earnings and the company makes a 2% matching contribution. The employee also has the option to contribute additional savings that are not matched.

  • Upon retirement, benefits are payable as an annuity with a spousal survivor benefit, plus the option to take up to 25% of the value as a lump-sum.

"PENSION BENEFITS AS OF DECEMBER 31, 2007" elsewhere:

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