G4S Annual Report and Accounts 2011

Overview Strategic review Performance
Directors’ remuneration report continued
Directors’ pension entitlements
Nick Buckles and Trevor Dighton accrued pensions in the non-contributory
categories of the group’s defined benefit pension scheme until 5 July 2011
and 6 May 2011, respectively. The defined benefit pension scheme ceased
provision of future service accrual from 5 July 2011 for all members apart
from those protected under the public sector outsourcing arrangements.
During their period of participation in the defined benefit pension scheme,
Mr Dighton accrued pension at a rate of 1/30ths and Mr Buckles accrued
pension at a rate of 1/52ths of their final pensionable salaries. Their rates
of accrual have not changed in the time since they joined the Scheme.
An actuarial reduction is applied to any pension payable before the
normal retirement age of 60.
For death before retirement a capital sum equal to four times pensionable
salary is payable, together with a spouse’s pension of 50% of the member’s
accrued pension plus a return of any contributions paid prior to the
admission to the non-contributory category. For death in retirement,
a spouse’s pension of 50% of the member’s pre-commutation pension
is payable.
Post retirement pension increases are payable at the rate of 5% per annum
in respect of pension earned up to 31 December 1994 and in line with the
increase in the Retail Prices Index subject to a maximum of 5% per annum
in respect of pension earned after that date.
A salary supplement in lieu of pension of 40% of basic salary is paid on
cessation of accrual under the defined benefit scheme. The dates from
which the salary supplement has been paid is set out below.
Date
Nick Buckles 5 July 2011
Trevor Dighton 6 May 2011
Grahame Gibson 6 April 2006
Pension entitlements and corresponding transfer values during the
12 months ended 31 December 2011 (all figures are in £’000s) are
shown below:
Executive directors
Gross increase
in accrued
pension (1)
Increase in accrued
pension net of
inflation (CPI) (2)
Total accrued
pension at
31/12/11 (3) Value of net
increase in accrual
over period (4)
Total change in
transfer value
during period (5)
Transfer value
of accrued pension
at 31/12/11 (6)
Transfer value
of accrued pension
at 31/12/10 (7)
Nick Buckles 42 24 403 500 1,599 8,705 7,106
Trevor Dighton 13 8 128 203 508 3,250 2,742
Grahame Gibson (210) Note (i) 20 Note (i) (3,726) 315 4,041
Notes
(i) During the year, Mr Gibson transferred the majority of his benefits to a private pension arrangement. The transfer payment was £3.7m leaving a residual preserved benefit of £20k pa
payable from age 60.
(ii) Mr Dighton is over the normal retirement age of 60 and hence, consistent with last year’s disclosure, the transfer value is calculated on the assumption that he retired at the end
of the year.
(iii) Pension accruals shown are the amounts which would be paid annually on retirement.
(iv) Transfer values have been calculated in accordance with the current transfer value basis adopted by the trustees of the G4S Pension Scheme in May 2011.
(v) The value of net increase (4) represents the incremental value to the director of his service during part of the year up to the relevant termination dates. It is based on the increase
in accrued pension (2) with the exception of Mr Gibson whose accrual ended on 5 April 2006.
Lord Condon
Chairman of the Remuneration Committee
12 March 2012
70
G4S plc
Annual Report and Accounts 2011