directors report and accounts 2006 - Table 4. Executive Directors' pension entitlements - audited
Annual Report
and Accounts 2006
The following Directors were members of defined benefit schemes provided by the Group during the year. Pension entitlements and corresponding transfer values increased as follows during the year:
| UK Pension Fund normal retirement age | Total accrued pension at 31 Dec 20061 £ | Gross increase in accrued pension £ | Increase in accrued pension net of inflation2 £ | Transfer value of net increase in accrual over period3 £ | Transfer value of accrued pension at 31 Dec 20053 £ | Transfer value of accrued pension at 31 Dec 20063 £ | Total change in transfer value during period £ | |
|---|---|---|---|---|---|---|---|---|
| P N Adams | 60 | 378,878 | 50,693 | 36,252 | 702,820 | 4,820,971 | 7,345,334 | 2,524,363 |
| P A Rayner | 60 | 75,729 | 18,768 | 16,262 | 305,892 | 802,161 | 1,424,481 | 622,320 |
| A Monteiro de Castro5 | 60 | 294,225 | 33,541 | 27,806 | 611,728 | 5,638,863 | 6,472,957 | 834,094 |
1 The amount of total accrued pension is the pension that would be paid annually on retirement based on service to the end of the year, excluding any increases granted under statute before retirement.
2 The value of net increase in accrued pension represents the incremental value to the Executive Director of his service during the year, calculated on the assumption service terminated at the year end.
3 Changes in the transfer values reflect both individual Executive Director’s circumstances such as the date of joining the Pension Fund and changes in salary during the year, together with the application of market value adjustments in accordance with actuarial and legislative requirements. During 2006, the Trustee of the Pension Fund revised the method and assumptions used to calculate transfer values. Previously, transfer values were calculated in accordance with section 1.5 of version 9.2 of Actuarial Guidance Note GN11 issued by the actuarial profession. Following a review of the transfer value basis, the Trustee agreed to increase the transfer value offered to members, and these are now provided on the same basis used for the ongoing funding of the Pension Fund. The transfer values of the accrued entitlement represent the value of assets that the Pension Fund would need to transfer to another pension provider on transferring the Pension Fund’s liability in respect of Executive Director’s pension benefits. They do not represent sums payable to individual Executive Directors and, therefore, cannot be added meaningfully to annual remuneration. Further, although Antonio Monteiro de Castro is not a member of the Pension Fund, the transfer values calculated above have been calculated in accordance with the method used for the Pension Fund.
Although Paul Adams and Paul Rayner receive a significant element of their overall entitlement from an unfunded unapproved retirement benefit scheme, the transfer values calculated above have been calculated in accordance with the method used for the Pension Fund.
4 The Pension Fund is non-contributory; voluntary contributions paid by the Executive Directors and resulting benefits are not shown. No excess retirement benefits have been paid to or are receivable by any Executive Director or past Executive Director of the Company.
5 Antonio Monteiro de Castro attained his normal retirement age of 60 on 24 May 2005 and became entitled to a pension in accordance with the rules of the Souza Cruz Plan. He commenced immediate receipt of a pension of £81,396 per annum in respect of his service up to age 60. In addition, he is entitled to a top-up benefit to increase his overall accrual rate over this period to 2.5 per cent per annum. This benefit will be provided through an unfunded unapproved retirement benefit scheme when he retires. He has remained a Director and continues to accrue pension at 2.5 per cent. The accrued pension figures in the table above reflect Antonio Monteiro de Castro’s full entitlement to an accrual rate of 2.5 per cent per annum and assume immediate retirement at the year ended 31 December 2006.