RBS 2006 Annual Report Download - page 125
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Please find page 125 of the 2006 RBS annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.RBS Group • Annual Report and Accounts 2006
124
Directors’ remuneration report continued
Governance
Directors’ pension arrangements
During the year, Johnny Cameron, Mark Fisher, Sir Fred Goodwin,
Gordon Pell and Fred Watt participated in The Royal Bank of
Scotland Group Pension Fund (“the RBS Fund”). The RBS
Fund is a defined benefit fund registered with HM Revenue &
Customs under the Finance Act 2004.
The legislation governing the taxation of pensions in the UK
changed with effect from April 2006. No changes have been
made to the level of pension benefits of any of the directors as
a result of this legislation, however the arrangements for
providing some benefits have changed as follows.
Arrangements had previously been made to provide Sir Fred
Goodwin and Gordon Pell with additional pension benefits on a
defined benefit basis outwith the RBS Fund. No changes have
been made to the overall level of benefits to be provided, but
the amount which can be provided from within the RBS Fund
may be different than previously envisaged. The figures shown
below include the accrual in respect of these arrangements.
Johnny Cameron and Fred Watt were provided with additional
pension benefits on a defined contribution basis and the
contributions made in the year are shown below. These
contributions ceased with effect from April 2006 and were
replaced by a salary supplement which is shown in the table
on page 119.
Mark Fisher opted to cease future accrual of pension benefit
within the RBS Fund with effect from 6 April 2006 and to
receive instead a salary supplement. Guy Whittaker has been
provided with a salary supplement in place of pension benefits
since his employment started. These cash allowances are
shown in the table on page 119.
Of the total transfer value shown as at 31 December 2006,
34% relates to benefits in funded pension schemes.
Sir George Mathewson received life assurance cover under an
individual arrangement until his retirement from the Board.
Details of his current benefits are set out on page 119.
The non-executive directors do not accrue pension benefits or
receive life assurance cover.
Lawrence Fish accrues pension benefits under a number of
arrangements in the US. Defined benefits are built up under
the Citizens’ Qualified Plan, Excess Plan and Supplemental
Executive Retirement Arrangement. In addition, he is a
member of two defined contribution arrangements: a Qualified
401(k) Plan and an Excess 401(k) Plan.
Disclosure of these benefits has been made in accordance
with the United Kingdom Listing Authority Listing Rules and
with the Directors’ Remuneration Report Regulations 2002.
Transfer value
Additional Additional for the additional
pension pension Increase pension
earned earned in transfer earned
Accrued during the during the Transfer Transfer value during during the
entitlement at year ended year ended value as at value as at year ended year ended
Age at 31 December 31 December 31 December 31 December 31 December 31 December 31 December
31 December 2006 2006 2006* 2006 2005 2006 2006*
Defined benefit arrangements 2006 £000 p.a. £000 p.a. £000 p.a. £000 £000 £000 £000
Sir Fred Goodwin 48 510 66 54 7,043 5,119 1,924 745
Mr Cameron 52 51 4 3 824 655 169 48
Mr Fish 62 $1,829 $445 $445 $17,800 $13,347 $4,453 $4,330
Mr Fisher 46 302 26 18 3,904 2,978 926 239
Mr Pell 56 361 59 51 6,744 5,092 1,652 956
Mr Watt 45 10 1 — 108 96 12 3
* net of statutory revaluation applying to deferred pensions
Notes:
(1) There is a significant difference in the form of disclosure required by the Combined Code and the Directors’ Remuneration Report Regulations 2002. The former requires the
disclosure of the additional pension earned during the year and the transfer value equivalent to this pension based on stock market conditions at the end of the year. The latter
requires the disclosure of the difference between the transfer value at the start and end of the year and is therefore dependent on the change in stock market conditions over
the course of the year. The above disclosure has been made in accordance with the Combined Code and the Directors’ Remuneration Report Regulations 2002.
(2) The transfer values disclosed above do not represent a sum paid or payable to the individual director. Instead they represent a potential liability of the Group pension scheme.
(3) No allowance is made in these transfer values for any enhanced benefits that may become payable on early retirement.
(4) The proportion of benefits represented by funded pension schemes for Sir Fred Goodwin, Gordon Pell and Lawrence Fish is 3%, 60% and 2% respectively. All benefits for
Johnny Cameron, Mark Fisher and Fred Watt are in funded pension schemes.
(5) In accordance with US market practice, Mr Fish’s pensionable remuneration is limited to US$4 million per annum.
(6) The above figures include pension accrued for Mr Watt for the period until cessation of employment on 28 February 2006.
Contributions and allowances paid in the year ended 31 December 2006 under defined contribution arrangements were:
2006 2005
000 000
Mr Cameron £46 —
Mr Watt £25 £144
Mr Fish $56 $139
Bob Scott
Chairman of the Remuneration Committee
28 February 2007