Moog Proxy and Notice and Access Letter- FY2019 Filed 12 30 2019 - Flipbook - Page 35
The Company maintains the Moog Inc. Employees’ Retirement Plan (“ERP”), a tax-qualified defined benefit retirement plan.
The ERP is funded by employer contributions and currently all of the NEOs participate in the ERP.
Compensation used to determine the benefit accrual available to U.S. based executive officers under the qualified defined
benefit plan is limited to $275,000 in base compensation for the plan year ended September 30, 2019.
The Internal Revenue Code limits the benefits that may be paid from the ERP. The Company maintains two supplemental
retirement plans, the Moog Inc. Plan to Equalize Retirement Income and Supplemental Executive Retirement Plan (“PERI-SERP”)
and the Moog Inc. Defined Contribution Supplemental Executive Retirement Plan (“DC SERP”) for certain executive officers,
including the NEOs, to bridge the gap between legally mandated limits on qualified pension plan benefits and the retirement benefits
offered at comparable public companies, and to provide participants with supplemental benefits. Each NEO participates in the PERISERP, while Messrs. Fishback, Trabert, Burghardt and Ms. Athoe also participate in the DC SERP.
While the Company formally funds the ERP, the PERI-SERP and the DC SERP are not formally funded. Rabbi Trusts, however,
were established under which certain funds have been set aside to satisfy some of the obligations under the PERI-SERP and DC
SERP. If the funds in the Rabbi Trusts are insufficient to pay amounts payable under the PERI-SERP and DC SERP, the Company
will pay the difference.
MOOG INC. EMPLOYEES’ RETIREMENT PLAN
Under the ERP, benefits are generally payable monthly upon retirement to participating employees of the Company. These
benefits are based upon compensation and years of service and subject to limitations imposed by the Employee Retirement Income
Security Act of 1974 (“ERISA”) and the Internal Revenue Code. The ERP is administered by a Retirement Plan Committee and
covers all eligible employees with one year of service and a minimum of 1,000 hours of employment. New U.S. based employees
hired on or after January 1, 2008 are not eligible to participate in the ERP. New U.S. based employees hired after that date are
covered under a defined contribution plan.
Benefits payable under the ERP are determined on the basis of compensation and credited years of service. A participant’s
accrued benefit is equal to the sum of the participant’s prior service benefit, if any, and the participant’s future service benefit.
A participant is entitled to a prior service benefit if the participant was actively employed on or after January 1, 1998 (or retired
as of January 1, 1998) and was employed by the Company before October 1, 1990. The prior service benefit is 1.15% of the first
$20,000 of prior service compensation, plus 1.75% of prior service compensation in excess of $20,000, multiplied by the participant’s
prior service. “Prior service compensation” is the greater of (i) the participant’s basic annual rate of pay on January 1, 1988, and
(ii) the amount of the participant’s annual rate of pay plus overtime and shift differential received in the calendar year ending
December 31, 1989, not to exceed $150,000. “Prior service” is the number of years and completed months of credited service with
the Company through October 1, 1990.
A participant’s future service benefit is computed separately for each year of credited service beginning with October 1, 1990,
or the participant’s date of hire, if later, and is equal to 1.15% of the participant’s future service compensation not in excess of
$20,000, plus 1.75% of the participant’s future service compensation in excess of $20,000. In any event, after a participant is credited
with 35 years of combined prior service and future service, the participant’s benefit for each year of future service will be 1.75% of
future service compensation. “Future service compensation” with respect to a plan year is the amount of basic annual pay, plus
any overtime or shift differential, a participant receives in the calendar year ending within that plan year. The maximum dollar amount
of future service compensation that may be used for ERP purposes is set by law and adjusted periodically. The maximum dollar
amount is $275,000 for the plan year ended September 30, 2019.
Any participant who entered the ERP before the 2002 plan year and retires with five years or more of service will receive a
minimum pension benefit. If the participant joined the ERP before October 1, 2002 and retires at age 65 with 15 or more years of
vesting service, the minimum pension benefit will be at least $2,400 per year. If the participant joined the ERP before October 1,
2002 and retires at age 65 with between 5 and 15 years of service, the minimum pension benefit will be a prorated portion of the
$2,400 per year minimum benefit.
A participant generally may retire and begin receiving ERP benefits at normal retirement age (age 65). A participant also may
retire and begin receiving plan benefits on the first day of any month coincident with or next following the participant’s 55th birthday,
but only if the participant has completed 15 years of vesting service. The amount of a participant’s monthly ERP benefit, however,
will be discounted or reduced .5% for each month the early retirement benefit commences before normal retirement age.