Pension.

Pension.

ELEMENT

CURRENT POLICY

Note: Details on pension for 2013 can be found in the annual report on remuneration.

PURPOSE AND LINK TO STRATEGY

The policy aims to provide competitive post-retirement benefits and therefore recognise sustained contribution.

OPERATION

Pension contributions are set at an appropriate level to attract and retain high performing people.

In line with other employees in the UK, executive directors currently participate in either a defined contribution pension plan, a defined benefit pension plan or receive a cash allowance in lieu of pension, or have some combination thereof.

The defined benefit pension plan was closed to new joiners in 2001. From 2009, increases in pensionable salary for the defined benefit pension plan for remaining active members have been limited to a maximum of 2.5% each year. For executive directors who took enhanced protection in 2006, a cash allowance was provided in lieu which may be reviewed or amended by the employer.

Non-UK national executives may be permitted to participate in home-country pension plans where relevant.

Base salary is the only element of pensionable remuneration. At the discretion of the Committee, executive directors may elect to sacrifice all or part of their cash AVP into pension.

OPPORTUNITY

New executive directors receive 15% of base salary into the defined contribution pension plan (they contribute 5%). This contribution level for executive directors is the same as that operated for senior managers in the rest of the UK organisation in the defined contribution pension plan.

As for other employees, there is a cash alternative in line with the defined contribution levels for executive directors who have opted out since 2006, or who opt out in the future, for enhanced or fixed protection above the lifetime allowance (as amended from time to time) or for executive directors who exceed the annual allowance limits (as amended from time to time). A cash allowance may also be given in lieu of pension if it is felt appropriate for an executive director from overseas to continue to participate in the local pension plan or for other valid reasons (for example but not limited to religion or other private pension arrangements). All cash allowances are subject to normal payroll deductions.

Pension arrangements for current executives:

On retirement from Legal & General at age 60 or 65 and subject to statutory limits, executive directors have pension entitlement as follows:

Mark Gregory: while in the defined benefit plan, one-sixtieth of his eligible pensionable base salary (which is lower than actual base salary as only the lower of actual base salary increases and 2.5% has been credited since January 2009) for each year of eligible service subject to him continuing his 5% of pensionable base salary contribution. Mark left these defined benefit arrangements at the end of April 2011 and joined the defined contribution scheme. He is entitled to a company contribution of 15% of his base salary if he also contributes 5%. Any balance over and above the Annual Allowance limit is paid in cash.

John Pollock: while in the defined benefit plan, one-sixtieth of eligible pensionable base salary for each year of service through to the date he opted for enhanced protection in 2006. He receives a cash allowance in lieu of pension equivalent to 22% of base salary.

Nigel Wilson: Nigel was a member of the Group’s defined contribution arrangements. During his participation, he was entitled to a company contribution of 15% of his pensionable base salary if he also contributed 5%. Any balance over and above the annual allowance limit was paid in cash. During 2012, he took fixed protection. Since this time he has received a cash contribution of 15% of base salary.

Mark Zinkula: He is entitled to a cash allowance of 15% of his base salary. Part of this allowance may be used to contribute into a US 401K pension plan. He is also a member of a cash balance plan in the US.

PERFORMANCE

There are no performance conditions

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