The table below sets forth information on the pension benefits for the named executives under each of the following pension plans:
- GE Pension Plan. The GE Pension Plan is a funded and tax qualified retirement program that covers approximately 135,000 eligible employees as of December 31, 2006. As applicable to the named executives, the plan provides benefits based primarily on a formula that takes into account the executive’s earnings for each fiscal year. Since 1989, the formula provides an annual benefit accrual equal to 1.45% of the executive’s earnings for the year up to “covered compensation” and 1.9% of his earnings for the year in excess of “covered compensation.” “Covered compensation” is currently $35,000 and has varied over the years based in part on changes in the average of the Social Security taxable wage bases. The executive’s annual earnings taken into account under this formula include base salary and up to one-half of the bonus payments, but may not exceed an IRS-prescribed limit applicable to tax-qualified plans ($220,000 for 2006). Over the years, GE has made special one-time adjustments to this Plan that increased eligible participants’ pensions, but no such adjustment was made in 2006. As a result, for service in 2006 the maximum incremental annual benefit an executive could have earned toward his total pension payments under this plan was $4,022.50 ($335.21 per month), payable after retirement as described below.
The accumulated benefit an employee earns over his or her career with the company is payable starting after retirement on a monthly basis for life with a guaranteed minimum term of five years. The normal retirement age as defined in this Plan is 65. For employees who commenced service prior to 2005, including the named executives, retirement may occur at age 60 without any reduction in benefits. Employees vest in the GE Pension Plan after five years of qualifying service. In addition, the Plan provides for Social Security supplements and spousal joint and survivor annuity options, and requires employee contributions.
Benefits under the GE Pension Plan are subject to the limitations imposed under section 415 of the Internal Revenue Code. The section 415 limit for 2006 is $175,000 per year for a single life annuity payable at an IRS-prescribed retirement age. This ceiling may be actuarially adjusted in accordance with IRS rules for items such as employee contributions, other forms of distribution and different annuity starting dates.
- GE Supplementary Pension Plan. The company offers the GE Supplementary Pension Plan to the approximately 4,000 eligible employees in the executive-band and above to provide for retirement benefits above amounts available under the company’s tax-qualified and other pension programs. The Supplementary Pension Plan is unfunded and is not qualified for tax purposes. An employee’s annual Supplementary Pension, when combined with certain amounts payable under the company’s tax-qualified and other pension programs and Social Security, will equal 1.75% of the employee’s “earnings credited for retirement benefits” multiplied by the number of the employee’s years of credited service, up to a maximum of 60% of such earnings credited for retirement benefits. The “earnings credited for retirement benefits” are the employee’s average annual compensation (base salary and bonus) for the highest 36 consecutive months out of the last 120 months prior to retirement. Employees are generally not eligible for benefits under the Supplementary Pension Plan if they leave the company prior to reaching age 60. The normal retirement age as defined in this Plan is 65. For employees who commenced service prior to 2005, including the named executives, retirement may occur at age 60 without any reduction in benefits. Benefits under the Supplementary Pension Plan are generally payable at the same time and in the same manner as the GE Pension Plan.
- GE Excess Benefits Plan. The GE Excess Benefits Plan is unfunded and not qualified for tax purposes. Benefits payable under this program are equal to the excess of (1) the amount that would be payable in accordance with the terms of the GE Pension Plan disregarding the limitations imposed pursuant to section 415 of the Internal Revenue Code over (2) the pension actually payable under the GE Pension Plan taking such section 415 limitations into account. Benefits under the Excess Benefits Plan are payable at the same time and in the same manner as the GE Pension Plan. The company expects only insignificant accruals under this plan.
No pension benefits were paid to any of the named executives in the last fiscal year. The company does not have a policy for granting extra pension service but has done so under the GE Supplementary Pension Plan in individual situations on very rare occasions. Mr. Wright was credited with extra years of service under the GE Supplementary Pension Plan in 1990. For further information on these pension plans, see page 18 of the CD&A.
The amounts reported in the table below equal the present value of the accumulated benefit at December 31, 2006, for the named executives under each plan based upon the assumptions described in note 1.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Name of Executive |
Plan Name |
Number of Years Credited Service |
Present Value of Accumulated Benefit1 |
| Immelt |
|
GE Pension Plan |
|
|
24.532 |
|
|
|
|
| |
|
GE Supplementary Pension Plan |
|
|
24.532 |
|
|
23,282,637 |
|
| |
|
GE Excess Benefits Plan |
|
|
24.532 |
|
|
885 |
|
| Sherin |
|
GE Pension Plan |
|
|
25.425 |
|
|
|
|
| |
|
GE Supplementary Pension Plan |
|
|
25.425 |
|
|
8,799,867 |
|
| |
|
GE Excess Benefits Plan |
|
|
25.425 |
|
|
0 |
|
| Neal |
|
GE Pension Plan |
|
|
27.233 |
|
|
|
|
| |
|
GE Supplementary Pension Plan |
|
|
27.233 |
|
|
15,957,731 |
|
| |
|
GE Excess Benefits Plan |
|
|
27.233 |
|
|
3,302 |
|
| Rice |
|
GE Pension Plan |
|
|
28.39 |
|
|
|
|
| |
|
GE Supplementary Pension Plan |
|
|
28.39 |
|
|
11,450,622 |
|
| |
|
GE Excess Benefits Plan |
|
|
28.39 |
|
|
0 |
|
| Wright2 |
|
GE Pension Plan |
|
|
31.659 |
|
|
|
|
| |
|
GE Supplementary Pension Plan |
|
|
37.984 |
|
|
59,221,042 |
|
| |
|
GE Excess Benefits Plan |
|
|
31.659 |
|
|
247,263 |
|