This excerpt taken from the XEL DEF 14A filed Apr 1, 2008.
The Company maintains several defined benefit plans in which the NEOs are eligible to participate. One is the Xcel Energy Pension Plan, which provides funded, tax-qualified benefits. The benefits under the Xcel Energy Pension Plan are subject to compensation and benefit limits under the Internal Revenue Code. The second is the Xcel Energy Inc. Nonqualified Pension Plan (referred to as the "Nonqualified Pension Plan"), which provides unfunded, non-qualified benefits for compensation that is in excess of the limits applicable to the Xcel Energy Pension Plan. The third is the Xcel Energy SERP, which provides unfunded, non-qualified benefits that are offset by benefits under the Xcel Energy Pension Plan and the Nonqualified Pension Plan and of which participation is at the discretion of the Committee.
The following table shows the pension benefits available to each NEO. From left to right, the following elements are disclosed in the columns of the Pension Benefits Table:
Named Executive Officer's Number of Years of Credited Service The Number of Years of Credited Service is expressed in whole years as defined by each listed pension benefit plan. The additional years of credited service that were provided to Mr. Bonavia in the SERP are discussed in the Retirement and Deferred Compensation Benefits section above.
Present Value of Accumulated Benefits The Present Value of Accumulated Benefits is the present value as of December 31, 2007 of the annual pension benefit that was earned as of December 31, 2007 that would be payable under each plan for the executive officer's life beginning at the executive officer's normal retirement age. Certain assumptions regarding interest rates and mortality were used to determine the present value of the benefit that is payable beginning at normal retirement age. Those assumptions are consistent with those used in the Company's financial statements. Normal retirement age for this purpose is defined by the various plans in which the executives participate. The Present Value of Accumulated Benefits is determined for each plan assuming benefits commence at the age described below:
Xcel Energy Pension Plan the basic benefit payable under the Xcel Energy Pension Plan to each executive is determined under one of three formulas: the final average pay formula (the "Traditional Benefit formula"), the Pension Equity Benefit formula or the Account Balance Benefit formula. The Present Value of Accumulated Benefits is determined assuming that the benefit commences at the normal retirement age defined by the Plan, which is age 65. Mr. Johnson is the only named executive officer who participated in the Traditional Benefit formula. As discussed previously, Mr. Johnson retired on March 31, 2007. For a discussion of Mr. Johnson's retirement benefits, see "Potential Payments Upon Termination or Change in Control Gary R. Johnson Retirement Agreement," below. Mr. Fowke and Mr. Gogel are participants in the Pension Equity Benefit formula. Mr. Kelly, Mr. Bonavia and Mr. Wilks are participants in the Account Balance Benefit formula.
Nonqualified Pension Plan The Present Value of Accumulated Benefits is determined in the same manner as described above.
SERP the Present Value of Accumulated Benefits is determined assuming that the benefit payable under this plan commences at the normal retirement age defined by the Plan, which is age 62 (or for Mr. Bonavia, age 60).
Payments Made During the Last Fiscal Year Represents amounts actually paid from the listed plans to the Named Executive Officer due to an event calling for payment. Mr. Johnson was the only Named Executive Officer to receive payment under any of the plans due to his retirement, as mentioned previously.