RBS 2007 Annual Report Download - page 116

RBS Group • Annual Report and Accounts 2007
114
Directors’ remuneration report continued
Governance
Directors’ pension arrangements
During the year, Johnny Cameron, Sir Fred Goodwin and
Gordon Pell accrued pensionable service 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.
Sir Fred Goodwin and Gordon Pell are provided with additional
pension benefits on a defined benefit basis outwith the RBS
Fund. The figures shown below include the accrual in respect
of these arrangements. A funded, non-registered, arrangement
has been set up to provide Sir Fred Goodwin’s benefits to the
extent they are not provided by the RBS Fund.
Johnny Cameron’s benefits are based on salary limited to the
pensions earning cap and he receives a cash allowance in
place of pension on salary above this cap.
Mark Fisher opted to cease future accrual of pension benefit
within the RBS Fund with effect from 6 April 2006. The increase
in pension shown in the table arises from his increase in
pensionable salary over the year. He is provided with a cash
allowance in place of further pension benefits.
Guy Whittaker is provided with a cash allowance in place of
pension benefits.
The cash allowances for Johnny Cameron, Mark Fisher and
Guy Whittaker are shown on page 110.
Larry 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. He will continue to
accrue benefits under these plans until 30 April 2008.
Of the total transfer value shown as at 31 December 2007,
54% relates to benefits in funded pension schemes.
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 2007 2007 2007* 2007 2006 2007 2007*
Defined benefit arrangements 2007 £000 p.a. £000 p.a. £000 p.a. £000 £000 £000 £000
Sir Fred Goodwin 49 579 69 50 8,370 7,043 1,327 722
Mr Cameron 53 57 6 3 931 824 107 56
Mr Fish 63 $2,080 $251 $251 $24,101 $17,800 $6,301 $2,915
Mr Fisher 47 337 35 24 4,562 3,904 658 323
Mr Pell 57 423 62 49 8,403 6,744 1,659 971
* 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 Gordon Pell and Larry Fish is 53% and 2% respectively. All benefits for Johnny Cameron, Mark Fisher and
Sir Fred Goodwin are in funded pension schemes.
(5) In accordance with US market practice, Larry Fish’s pensionable remuneration is limited to US$4 million per annum.
(6) Larry Fish’s executive director service contract effective from February 2004 provides that he may retire at any age between 60 and 65. As noted on page 107, he will cease
pension accrual with effect from 1 May 2008 and draw his pension from that date. The valuation of his benefits in the table above as at the end of 2007 allow for this payment
date; previous figures assumed retirement at age 65.
Contributions and allowances paid in the year ended 31 December 2007 under defined contribution arrangements were:
2007 2006
000 000
Mr Cameron — £46
Mr Fish $60 $56
Bob Scott
Chairman of the Remuneration Committee
27 February 2008