RBS 2010 Annual Report Download - page 264

Directors' pension arrangements
During 2010, Gordon Pell accrued pensionable service in The Royal
Bank of Scotland Group Pension Fund (the RBS Fund) until his
retirement date of 31 March 2010. The RBS Fund is a defined benefit
fund registered with HM Revenue & Customs under the Finance Act 2004.
Gordon Pell was 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.
Disclosure of these benefits has been made in accordance with the
United Kingdom Listing Authority's Listing Rules and with the Large and
Medium-sized Companies and Groups (Accounts and Reports)
Regulations 2008.
Defined benefit arrangements
Age at
31 December
2010
Accrued
entitlement at
31 December
2010
£000 p.a.
Additional
pension
earned
during the
year ended
31 December
2010
£000 p.a.
Additional
pension
earned
during the
year ended
31 December
2010*
£000 p.a.
Transfer
value as at
31 December
2010
£000
Transfer
value as at
31 December
2009
£000
Increase
in transfer
value during
the year ended
31 December
2010
£000
Transfer value
for the additional
pension
earned
during the
year ended
31 December
2010 (2)
£000
Gordon Pell 60 563 (19) (19) 12,732 13,581 (849) (441)
*Net of statutory revaluation applying to deferred pensions.
Notes:
(1) Gordon Pell retired on 31 March 2010. The figures in the table above show his cash equivalent transfer value (CETV) as at the end of the year, using the appropriate factors that would apply at that
date. Prior to his retirement and subsequent exchange of part of his pension for a lump sum his accrued pension was £590,940 p.a. at 31 March 2010. The equivalent CETV of this pre-commutation
amount was £13,394,000 as at 31 March 2010.
(2) The decrease in pension during the year is a result of the lump sum of £488,579 (plus an additional £91,075 in respect of the excess above his personal lifetime allowance) taken by Gordon Pell on
retirement which offset the accrual from 31 December 2009 to 31 March 2010.
Gordon Pell retired from the Group on 31 March 2010, shortly after his
normal pension age of 60. His pension at retirement was based on his 39
years of service with Lloyds TSB and with the Group, part of which has
been funded by a transfer payment from a Lloyds TSB pension plan. As
required by the Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008, the value shown above is the
value at the end of the year of the residual pension.
There is a significant difference in the form of disclosure required by the
Listing Rules and the Large and Medium-sized Companies and Groups
(Accounts and Reports) Regulations 2008. The former requires
disclosure of the additional pension earned during the period and the
transfer value equivalent to this pension based on financial conditions at
the end of the period. The latter requires the disclosure of the difference
between the transfer value at the start and end of the period and is
therefore dependent on the change in financial conditions over that time.
The proportion of benefits represented by funded pension schemes for
Gordon Pell is 39%.
Stephen Hester and Bruce Van Saun are provided with a cash allowance
in place of pension benefits or have contributions made to a defined
contribution pension arrangement, as detailed below:
2010 2009
£000 £000
Cash allowances in place of pension
Stephen Hester 420 420
Bruce Van Saun
—
80
Pension contributions to a defined contribution pension arrangement
Bruce Van Saun 321 —
RBS Group 2010262
Directors’ remuneration report continued