Directors’ Pensions

Prudential Staff Pension Scheme
Executive directors are eligible to participate in the Prudential Staff Pension Scheme on the same basis as other members. The Scheme is non-contributory and provides members with a maximum pension of up to 38/60 of Final Pensionable Earnings at the normal retirement age of 60. Final Pensionable Earnings are the sum of the pensionable salary for the 12 months immediately preceding retirement or termination of employment and for entrants since 31 May 1989, are restricted to salary up to the Inland Revenue earnings cap.

The Scheme also provides on death, whether in service or following retirement, pensions for spouse and children. The spouse’s pension on death in service is 54 per cent of the member’s prospective pension at age 60 and, on death after retirement, is 50 per cent of the member’s pension in payment. A lump sum death in service benefit of four times Final Pensionable Earnings is also provided. Pension increases after retirement are wholly discretionary but in recent years annual increases have been awarded in line with inflation. Discretionary increases are taken into account in calculating transfer values payable in lieu of deferred pension benefits. The contract of Keith Bedell-Pearce provides that in the event of his retirement at age 55, his pension will be based on the pension he would have received at normal retirement age 60 subject to a discount rate of three per cent per annum for early retirement.

Other Pension Arrangements
For directors subject to the earnings cap, the Company has established Funded Unapproved Retirement Benefit Schemes (FURBS) and a separate life assurance scheme to provide additional retirement and life assurance benefits based on salary in excess of the earnings cap. Both Sir Peter Davis and Derek Higgs participate in these arrangements. Jonathan Bloomer does not participate in the FURBS and instead the Company pays a salary supplement to fund personal pension arrangements. He does however participate in the separate life assurance scheme and additionally the Prudential Staff Pension Scheme provides a lump sum death in service benefit.

Pension Entitlements
Details of directors’ pension entitlements under the Prudential Staff Pension Scheme and pre-tax contributions to FURBS or salary supplements are set out below.

Click icon to see this table in Excel format	Age at 31 Dec 1998	Years of pensionable service at 31 Dec 1998	Additional pension earned (excluding inflation) in year £000	Accrued entitlement based on normal retirement age		Pre-tax contribution to FURBS or salary supplement
				31 Dec 1998 £000	31 Dec 1997 £000	1998 £000	1997 £000
Keith Bedell-Pearce	52	28	13	139	122
Jonathan Bloomer	44					90	82
Sir Peter Davis	57	3	1	5	4	182	171
Derek Higgs	54	2	1	4	3	105	98
Michael Abrahams (note 1)	61	14	1	9	8
Total						377	351
Notes:
1. For the one remaining non-executive director appointed before 1988, Michael Abrahams, the normal retirement age in the Scheme is 72 but a pension not discounted for early retirement is available from age 65. The spouse’s pension on death in service is 50 per cent of the member’s prospective pension at age 72 and, on death after retirement, 50 per cent of the member’s pension in payment. No lump sum benefit is payable on death in service.
2. Total contributions to directors’ pension schemes were £462,000 (1997 £441,000).