Executive compensation

2015 Pension benefits narrative

The 2015 Pension Benefits Table shows the number of years of credited service, present value of accumulated benefit and payments during the last fiscal year for each named executive officer under the IBM Personal Pension Plan. Effective January 1, 2005, the IBM Personal Pension Plan was closed to new participants.

The IBM Personal Pension Plan consists of a tax-qualified plan and a non-tax qualified plan. Effective January 1, 2008, the non-tax qualified plan was renamed the IBM Excess Personal Pension Plan and is referred to herein as the Nonqualified Plan, and the tax-qualified plan is referred to as the Qualified Plan. The combined plan is referred to herein as the IBM Personal Pension Plan.

Qualified Plan and Nonqualified Plan Descriptions—General

Plan Description

IBM Personal Pension Plan (Qualified Plan)

Purpose of the Qualified Plan

Material Terms and Conditions: Pension Credit Formula under the Qualified Plan

Material Terms and Conditions: Personal Pension Account Formula under the Qualified Plan

Compensation Elements Included in Calculations

Qualified Plan Funding

Policy Regarding Extra Years of Credited Service

IBM Excess Personal Pension Plan (Nonqualified Plan)

Purpose of the Nonqualified Plan

Material Terms and Conditions of the Nonqualified Plan

Nonqualified Plan Funding

Policy Regarding Extra Years of Credited Service

Available Forms of Payment

Pension Credit Formula

Personal Pension Account

  Maximum Lump Sum
Name Qualified Plan Nonqualified Plan Total Available Lump Sum
V.M. Rometty $395,937 N/A $395,937
M.J. Schroeter 61,392 $20,919 82,311
M.D. Rhodin 294,409 132,701 427,110
B.A. van Kralingen 41,537 82,680 124,217
J.E. Kelly III 442,050 961,247 1,403,297

Annual Pension Benefits

The annual pension benefit that was earned as of December 31, 2007, and that is payable as a single life annuity beginning at normal retirement age for each of the named executive officers is below. Because Mr. Schroeter, Mr. Rhodin, Mrs. van Kralingen and Dr. Kelly will receive a lump sum payment for their Nonqualified Plan benefits, no amount is represented in the Nonqualified Plan column below:

  Annual Pension Benefit at
Normal Retirement Age
Name Qualified Plan Nonqualified Plan Total Benefit
V.M. Rometty $82,083 $342,761 $424,844
M.J. Schroeter 5,709 N/A 5,709
M.D. Rhodin 25,677 N/A 25,677
B.A. van Kralingen 3,694 N/A 3,694
J.E. Kelly III 35,553 N/A 35,553

Present Value of Accumulated Benefit

2015 Pension Benefits Table

As noted in the Introduction and Purpose to the 2015 Retention Plan Narrative, the 2015 Pension Benefits Table does not include amounts reflected in the 2015 Retention Plan Table.

Name
(a)
Plan Name
(b)
Number of Years Credited Service(1)
(#)
(c)
Present Value of Accumulated Benefit(2)
($)
(d)
Payments During Last Fiscal Year
($)
(e)
V.M. Rometty Qualified Plan 26 $942,294 $0
  Nonqualified Plan   3,934,797 0
  Total Benefit   $4,877,091 $0
M.J. Schroeter Qualified Plan 4 $44,079 $0
  Nonqualified Plan   14,571 0
  Total Benefit   $58,650 $0
M.D. Rhodin Qualified Plan 24 $228,687 $0
  Nonqualified Plan   101,786 0
  Total Benefit   $330,473 $0
B.A. van Kralingen Qualified Plan 4 $29,898 $0
  Nonqualified Plan   59,512 0
  Total Benefit   $89,410 $0
J.E. Kelly III Qualified Plan 27 $415,545 $0
  Nonqualified Plan   884,423 0
  Total Benefit   $1,299,968 $0

(1) Reflects years of credited service as of December 31, 2007, which was the date accruals under the Qualified Plan and the Nonqualified Plan stopped. Each of the named executive officers has eight additional years of service with IBM after that date.

(2) While the accruals under the Qualified Plan and the Nonqualified Plan stopped on December 31, 2007, the value of the Qualified Plan and Nonqualified Plan benefits for the named executive officers will continue to change based on their ages and the assumptions used to calculate the present value of the accumulated benefit.

 

Assumptions to determine present value as of December 31, 2015 for each named executive officer:

Assumptions to determine present value as of December 31, 2014: