SURW » Topics » Pension Benefits

This excerpt taken from the SURW DEF 14A filed Mar 25, 2008.

Pension Benefits

        The following table discloses the years of credited service of, present single sum value of the accrued benefits for, and payments during the last fiscal year to each of the Named Executive Officers under our Pension Plan, which is described in more detail below:

 
Name
  Plan Name
  Number of Years
of Credited
Service (#)

  Present Value
of Accumulated
Benefit
($)(1)(2)

  Payments During
Last Fiscal Year
($)


Steven C. Oldham   Pension Plan   1.3   28,336  

Philip A. Grybas   Pension Plan   2.5   63,638  

Fred A. Arcuri(3)   Pension Plan   29.4   1,487,206  

Bill M. DeMuth(3)   Pension Plan   30.9   1,439,474  

Scott K. Barber   Pension Plan   12.7   255,891  

(1)
The actuarial present value was determined in accordance with the assumptions outlined in the notes to the Company's consolidated financial statements included in our Annual Report filed on Form 10-K, filed with the SEC, including:

Discount rate used to value pension liability equaling 6%; and

Mortality Table equals RP2000 annuitant and non-annuitant for males and females with seven and fifteen year projections from January 1, 2008 using projection scale AA. Benefit commencement at age first eligible for unreduced benefits defined by the Pension Plan to be the earlier of normal retirement age (age 65) or the age when the sum of the participant's age and years of credited service equals 85.

(2)
As described below, all benefits under the Pension Plan were frozen as of April 1, 2007, so that a participant's (including the Named Executive Officers') years of credited service and final average compensation used to determine benefits will be frozen for purposes of calculating the benefit amount.

(3)
Mr. Arcuri and Mr. DeMuth are eligible for early retirement at December 31, 2007.

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This excerpt taken from the SURW DEF 14A filed Mar 30, 2007.
PENSION BENEFITS
 
                                 
          Number of Years of
    Present Value of
    Payments During
 
          Credited Service
    Accumulated Benefit
    Last Fiscal Year
 
Name
 
Plan Name
    (#)     ($)(1)(2)     ($)  
 
Steven C. Oldham
    Pension Plan       1.0       20,393        
Philip A. Grybas
    Pension Plan       2.2       50,979        
Fred A. Arcuri
    Pension Plan       29.2       1,338,358        
Bill M. DeMuth(3)
    Pension Plan       30.6       1,390,094        
Scott K. Barber
    Pension Plan       12.5       225,917        
 
 
(1) The actuarial present value was determined in accordance with the assumptions outlined in the notes to the Company’s consolidated financial statements included in our Annual Report filed on Form 10-K, filed with the SEC, including:
 
 — Discount rate used to value pension liability equaling 6%; and
 
 — Mortality Table equals RP2000 for white collar workers. Benefit commencement at age first eligible for unreduced benefits defined by the Pension Plan to be the earlier of normal retirement age (age 65) or the age when the sum of the participant’s age and years of credited service equals 85.
 
(2) As described below, all benefits under the Pension Plan are being frozen as of March 31, 2007, so that a participant’s (including the Named Executive Officers’) years of credited service and final average compensation used to determine benefits will be frozen for purposes of calculating the benefit amount.
 
(3) Mr. DeMuth was eligible for early retirement at December 31, 2006.
 
Pension Plan and SERP
 
The Company has a qualified defined benefit pension plan in which certain employees have been eligible to participate substantially concurrently with the beginning of employment (“Pension Plan”), as well as a


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Table of Contents

supplemental non-qualified and unfunded supplemental executive retirement plan (“SERP”). The SERP provides benefits that would otherwise be denied participants by reason of certain Internal Revenue Code limitations on qualified plan benefits, based on remuneration that is covered under the plans and years of service with the Company. The only remaining participants in the SERP are now retired from the Company, and none of the Named Executive Officers participate in the SERP.
 
Benefits under the plans are a function of a participant’s years of service with the Company and the employee’s average annual compensation (salary and bonus) during the period of the highest five consecutive years in the last ten years of credited service. The monthly retirement benefit payable under the plans will be adjusted on the basis of actuarial equivalents for a joint and survivor benefit and for optional forms of benefit, such as the early retirement benefit. Benefits become fully vested at age 65 or on the completion of 5 years of service, whichever first occurs, and are not subject to any deduction for Social Security or other offset amounts. The benefits are not payable as a lump sum if the present value of the accrued benefit exceeds $50,000; they are generally paid as a monthly annuity for the life of the retiree (or his or her survivor). Benefit calculations are specifically based upon “points,” with an employee’s points equaling the sum of his or her age plus years of service. Employees who retire (i) at age 65, or (ii) with 85 or more points receive an unreduced benefit. Employees who reach age 55 and who have 5 years of service may elect early retirement with benefits reduced by 3% per point under 85 points, or 3% per year of age under age 65, whichever is less, with a maximum reduction of 30%.
 
Effective January 1, 2004, the Company modified the Pension Plan to reduce the benefits payable to participants who began employment on or after January 1, 2004. More significantly, in February 2007 the Company announced a freeze of all benefits under the Pension Plan as of April 1, 2007, so that a participant’s years of credited service and final average compensation used to determine the benefit under the Pension Plan were frozen for purposes of calculating the benefit amount. Participants will continue to receive credit for their age and years of service for vesting purposes and determining benefit payment amounts under full retirement or early retirement options. The freezing of benefits under the Pension Plan will not deprive any participant or beneficiary of any vested accrued benefits under the plans. Steven C. Oldham and Philip A. Grybas do not have five years of service with the Company, and will not be fully vested until the completion of five years of service. The other Named Executive Officers are fully vested under the Pension Plan. Bill M. DeMuth is currently eligible for full retirement benefits under the Pension Plan.
 
SureWest KSOP
 
The Company also maintains a retirement plan available to all employees known as the SureWest KSOP, which consists of both an Employee Stock Ownership Plan (ESOP) and a cash or deferred feature under section 401(k) of the Internal Revenue Code. Employees may elect to contribute a portion of their salary to the SureWest KSOP, and the Company makes matching contributions up to 6% of the participant’s base salary. Participants can choose among multiple investment alternatives, including one fund which invests primarily in Company Common Stock. The Summary Compensation Table above provides information about matching Company contributions in 2006 for the benefit of the Named Executive Officers.
 
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