WIN » Topics » PENSION BENEFITS

This excerpt taken from the WIN DEF 14A filed Mar 23, 2009.

PENSION BENEFITS

 

Name   Plan Name  

Number of Years  

Credited Service  

(#) (1)

 

Present Value of
Accumulated Benefit  

($) (2)

  

Payments During  
Last Fiscal Year  

($)

Jeffery R. Gardner

  Pension Plan   10   147,495    -0-
    Benefit Restoration Plan     -     961,285    -0-

Brent Whittington

  Pension Plan   3.5   22,477    -0-
    Benefit Restoration Plan     -     -      -0-

John P. Fletcher

  -     -     -      -  

Richard J. Crane

  Pension Plan   8.42   172,217    -0-
    Benefit Restoration Plan     -     60,989    -0-

Robert G. Clancy

  Pension Plan   10   106,909    -0-
    Benefit Restoration Plan     -     26,597    -0-

 

 

(1)    The plans recognize all prior years of service under the Alltel Corporation Pension Plan and the Alltel Corporation Benefit Restoration Plan.

(2)    The present value of accumulated benefits includes the present value of the benefits transferred from the Alltel Corporation Pension Plan and the Alltel Corporation Benefit Restoration Plan as part of the spin-off. The present value of accumulated benefits was calculated based on retirement at age 60 with 20 years of credited service, current compensation as of December 31, 2008, no pre-retirement decrements, the RP-2000 combined healthy mortality table (projected to 2009), and a 6.18% discount rate, which is the same rate used for preparing Windstream’s consolidated financial statements.

This excerpt taken from the WIN DEF 14A filed Mar 31, 2008.

PENSION BENEFITS

 

Name

 

 

  

Plan Name

 

 

  

Number of Years  

Credited Service  

(#) (1)

 

  

Present Value of

Accumulated Benefit  

($) (2)

 

  

Payments During  

Last Fiscal Year  

($)

 

 

Jeffery R. Gardner

 

   Pension Plan

Benefit Restoration Plan  

 

   9

-0-

   118,316

762,056

   -0-

-0-

 

Brent Whittington

   Pension Plan

Benefit Restoration Plan  

 

   3.5

-0-

   20,006

-0-

   -0-

-0-

 

John P. Fletcher

 

   -  

 

   -0-

 

   -0-

 

   -0-

 

 

Robert G. Clancy

 

   Pension Plan

Benefit Restoration Plan  

 

   9

-0-

 

   84,789

17,134

 

   -0-

-0-

 

 

Susan Bradley

   Pension Plan

Benefit Restoration Plan

 

   9.67

-0-

   180,627

9,307

   -0-

-0-

Keith D. Paglusch

 

 

   -      -0-    -0-    -0-

 

 

(1)    The plans recognize all prior years of service under the Alltel Corporation Pension Plan and the Alltel Corporation Benefit Restoration Plan.

(2)    The present value of accumulated benefits includes the present value of the benefits transferred from the Alltel Corporation Pension Plan and the Alltel Corporation Benefit Restoration Plan as part of the spin-off. The present value of accumulated benefits was calculated based on retirement at age 60 with 20 years of credited service, current compensation as of December 31, 2007, no pre-retirement decrements, the RP-2000 combined healthy mortality table (projected to 2008), and a 6.36% discount rate, which is the same rate used for preparing Windstream’s consolidated financial statements.

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

Pension Benefits

The following is a brief summary of the material terms of the retirement plans maintained by Windstream.

Windstream Pension Plan.    Windstream created the Windstream Pension Plan (“Pension Plan”), which is a tax-qualified defined benefit plan, as a mirror plan to the Alltel Corporation Pension Plan as part of the spin-off. Windstream was required to create the Pension Plan pursuant to the Employee Benefits Agreement with Alltel, and Windstream received $850 million in assets from Alltel to support the obligations assumed by Windstream under the Pension Plan. The Pension Plan generally covers salaried and non-salaried employees of Windstream and those subsidiary companies that have adopted the Pension Plan. For non-bargaining employees, the Pension Plan was closed to new participants as of December 31, 2005 and frozen to additional accruals as of December 31, 2005 (December 31, 2010 for employees who had attained age 40 with two years of service as of December 31, 2005). Of our named executive officers, only Messrs. Gardner and Frantz were eligible for continuing accruals under the Pension Plan as of the end of 2006.

The Pension Plan’s accrued benefit is payable in the form of a monthly life annuity following normal retirement at age 65 (or, if later, five years of service or fifth anniversary of participation). The accrued benefit is also payable in a monthly life annuity following early retirement at or after age 55 with at least 20 years of service (with reduction in the life annuity of 0.25% for each month that commencement precedes age 60) or at or

 

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after age 60 with 15 years of service (with reduction in the life annuity of 0.25% for each month that commencement precedes age 65 for a participant whose benefit commences before age 62). As of the end of 2006, none of the named executive officers satisfied the foregoing age and service requirements to commence receipt of an early retirement benefit under the Pension Plan.

For deferred vested participants (i.e. those who terminate employment before early retirement), the accrued benefit is payable in a monthly life annuity beginning at normal retirement age. If a deferred vested participant has 15 years of service, the accrued benefit is also payable in a monthly life annuity beginning as early as age 60 (with reduction in the life annuity of 0.50% for each month commencement precedes age 65), and, if the deferred vested participant has at least 20 years of service, the accrued benefit is also payable in a monthly life annuity beginning as early as age 55 (with reduction in the life annuity of 0.50% for each month commencement precedes age 65).

For a participant eligible for normal retirement or early retirement, payment is also available in actuarial equivalent joint and surviving spouse annuities, which provide a reduced monthly amount for the participant’s life with the surviving spouse receiving 50% or 100%, as elected, of the reduced monthly amount, or in an actuarial equivalent 10-year certain annuity, which provides a reduced monthly amount for the participant’s life and, if the participant dies within 10 years of benefit commencement, with payments to a designated beneficiary for the remainder of the 10-year certain period. For a married deferred vested participant, payment is also available in the form of an actuarial equivalent joint and 50% surviving spouse annuity. If a vested participant dies before benefit commencement, an annuity generally is payable to the participant’s surviving spouse in an amount based on the joint and 50% surviving spouse annuity that would have been payable to the participant beginning on the later of when the participant died or would have been eligible to commence a benefit.

Under the Pension Plan, post-January 1, 1988 through December 31, 2005 service (December 31, 2010 service for employees who had attained age 40 with two years of service as of December 31, 2005) is credited at 1% of compensation, including salary, bonus and other non-equity incentive compensation, plus 0.4% of that part of the participant’s compensation in excess of the Social Security taxable wage base for such year. Service prior to 1988, if any, is credited on the basis of a percentage of the participant’s highest consecutive five-year average annual salary, equal to 1% for each year of service prior to 1982 and thereafter increasing by 0.05% each year until 1988, but only prospectively, i.e., with respect to service earned in such succeeding year. In addition, participants receive an additional credit of 0.25% for each pre-1988 year of service after age 55, subject to a maximum of 10 years of credit, plus an amount equal to .4% of the amount by which the participant’s pre-1988 career average annual base salary (three highest years) exceeds his or her Social Security covered compensation, multiplied by his years of pre-1988 credited service.

Windstream Benefit Restoration Plan.  The Windstream Benefit Restoration Plan (“BRP”) contains an unfunded, unsecured pension benefit for a group of highly compensated employees. Of Windstream’s named executive officers, only Messrs. Gardner and Frantz participated in the pension benefit of the BRP as of the end of 2006. The pension benefit under the BRP is calculated as the excess, if any, of (x) the participant’s Pension Plan benefit (on a single life-annuity basis payable commencing on the later of the participant’s retirement date or age 65) without regard to the IRS compensation limit ($220,000 for 2006) and without regard to the benefit limitation ($175,000 for 2006) over (y) the participant’s actual Pension Plan benefit (on a single life-annuity basis payable commencing on the later of the participant’s retirement date or age 65). If the participant has not attained age 65 on the date his benefit is scheduled to commence, the BRP benefit is reduced to the same extent, if any, as the Pension Plan benefit. For purposes of the preceding calculations, compensation has the same meaning provided in the foregoing description of the Pension Plan. Benefits are paid over the life of the participant if the participant is alive when benefits commence or over the life of the spouse if the benefit is paid as a pre-retirement death benefit. Windstream may direct that the benefit be paid in an alternative form provided that it is the actuarial equivalent of the normal form of benefit so that the BRP benefit is paid in the same form as the Pension Plan benefit. None of the named executive officers were eligible for an early retirement benefit under the BRP as of the end of 2006.

 

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Impact of Section 409A.  Section 409A was added to the Internal Revenue Code as part of the American Jobs Creation Act of 2004. Section 409A imposes new restrictions on the BRP described above with respect to amounts deferred after December 31, 2004 and earnings thereon (and with respect to plans that are “materially modified” after October 3, 2004). These new restrictions generally define the earliest date that payments may commence under the plans and limit the ability of participants to receive accelerated payments or to change their deferral and payment elections. As permitted under existing guidance, Windstream will amend the plans described above on or before December 31, 2007 to conform to Section 409A. In the interim, the BRP will be administered in good faith compliance with the new rules, as permitted by current IRS guidance.

The following table shows certain information regarding benefits under the Windstream Pension Plan as of December 31, 2006 for the individuals named below.

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