Pension Plans

The Named Executive Officers, except Mr. Laurent Troger, participate in two defined benefit pension plans. Mr. Laurent Troger participates in a defined benefit pension plan for service up to December 31, 2013 and in a defined contribution pension plan for service after that date. All these plans are non-contributory.

Messrs. Pierre Beaudoin and Pierre Alary participate in two defined benefit pension plans where i) benefits payable from the basic plan correspond to 2% of average base salary in the three continuous years of service during which the NEOs are paid their highest salary (up to the maximum earnings according to the Income Tax Act (Canada) which for 2015 is $140,945 Cdn) multiplied by the number of years of credited service and ii) the supplemental plan provides for additional benefits of 2.5% of average base salary, multiplied by the number of years of credited service (up to 40) less the pension payable from the basic plan.

Mr. Lutz Bertling participates in a defined benefit pension plan with an annual accrual rate of 2.5% of a three-year average base salary. However, upon employment, he was granted the right to accrue a pension at double the annual accrual rate, or 5.0%, for each of his first three years of service completed to compensate for forfeiture of pension entitlements at his prior employment.

Benefits are payable upon retirement from age 60. For Mr. Pierre Beaudoin, his benefits can be paid before age 60, in which case benefits are reduced by 0.33% for each month between the date of early retirement and his 60th birthday or, if earlier, the date at which the participant’s age plus years of service total 85. He is entitled to an unreduced pension from August 1, 2016. For Mr. Pierre Alary, he receives his pension since his retirement on November 1, 2015. His pension was reduced by 7.0% due to early retirement in accordance with the plan terms.

All NEOs who participate in the defined benefit pension plans have vested rights in case of termination.

Upon the death of Messrs. Pierre Beaudoin and Pierre Alary, their spouse will be entitled to a benefit equal to 60% of the benefit to which such participant was entitled. If the participant has no spouse at the time of retirement, the benefits will be paid, after death, to the designated beneficiary until such time as 120 monthly installments, in the aggregate, have been paid to the participant and/or to the designated beneficiary. For Mr. Lutz Bertling, in the event of his death, the life partner designated by Mr. Lutz Bertling before his death shall receive 50% of his monthly retirement benefit. If his life partner is more than ten years younger, the lifetime pension will be reduced by 0.3% for each year of age difference in excess of the ten years.

Messrs. Alain Bellemare, John Di Bert, Frederick Cromer and David Coleal participate in the base defined contribution pension plan (Base DC Plan) and the supplemental defined contribution pension plan (Supplemental DC Plan). Bombardier contributes a total of 25% of the base salary for Mr. Alain Bellemare and 20% of the base salary for Messrs. John Di Bert, Frederick Cromer and David Coleal (in each case, the “Contribution”). The vesting under the Base DC Plan and the Supplemental DC Plan is immediate.

Under the Base DC Plan, Bombardier contributes, on a monthly basis, an amount up to the Contribution, subject to the limit that can be contributed under the Income Tax Act (Canada) for tax-registered pension plans. The contribution limit is $25,370 for the year 2015. The NEOs have a choice of investment funds and are responsible for the investment of the contributions in their respective account. As the earnings in each investment fund are credited based on the market conditions, there is no above-market or preferential earnings credited on the contributions.

Under the Supplemental DC Plan, Bombardier contributes the amount, if any, representing the difference between the Contribution and the contribution limit in the Base DC Plan. Contributions are made in December of each year. The contributions to the Supplemental DC Plan constitute a taxable benefit in kind to the NEOs. Hence, an amount, after tax deductions, is deposited in a non-registered account for the benefit of the NEOs. As the account is non-registered, the NEOs can withdraw any amount from their respective account at their own discretion.

Mr. Laurent Troger participates in a defined contribution pension plan to which Bombardier contributes 27% of his base salary since January 1, 2014. Contributions are subject to taxation and social charges. Hence an amount, after applicable deductions, is deposited in a retirement savings account and the vesting is immediate. Mr. Laurent Troger has a choice of different investment funds and he is responsible for the investment of the contributions in his account. He can withdraw any amount from his retirement savings account at his own discretion. As the earnings in each investment fund are credited based on the market conditions, there is no above-market or preferential earnings credited on the contributions. Under his defined benefit pension plan, Mr. Laurent Troger is entitled to a benefit that corresponds to 1.5% of his average base salary over the three consecutive years in which his base salary was the highest out of the last 10 years multiplied by the number of years of service up to December 31, 2013.

Bonuses paid under the short-term incentive plans and any other form of compensation are not considered in the computation of pension benefits.

All pension benefits payable from these plans are in addition to government social security benefits.

Supplemental Pension Disclosure

The PDF link below sets forth the reconciliation of the total obligations under the basic and the supplemental plans with respect to the pension benefits payable to each of the Named Executive Officers of Bombardier between January 1, 2015 and December 31, 2015.

Read the Supplementary Pension Disclosure table for the financial year ended December 31, 2015 

Pension Plans, Benefits and Perquisites

The objective of Bombardier is to provide pension, benefits and perquisites at the median of the market. Benefit plans for executives are, as a general rule, similar to those of non-unionized employees, except however that higher limits would apply to life insurance, long-term disability, medical services and dental care coverage.

Bombardier offers a limited number of perquisites such as car lease, complete medical check-up and financial counselling.

  • The amount allocated for the leasing of a company provided car depends on the level of responsibility of executives; executives are allowed to exceed such amount but are required to pay the excess through payroll deductions. Bombardier reimburses reasonable expenses for the use and maintenance of the car.
  • All executives are entitled to have an annual complete medical check-up.
  • Bombardier assumes the annual fees incurred by selected executives for financial counselling up to a maximum amount of $3,000 Cdn.
  • As a general rule, Bombardier does not reimburse any fitness club, sport club or business club membership fees.

The Executive Chairman of the Board of Directors and the President and Chief Executive Officer are allowed to use the Bombardier corporate aircraft for personal reasons. Bombardier does not generally assume all of the costs of corporate aircraft incurred for personal use since all or part of these costs must be reimbursed to Bombardier, in an amount equal to the fair market value of a first class commercial airlines ticket for the destination of the personal trip for each person travelling aboard the corporate aircraft. The difference, if any, between the incremental operating costs to Bombardier and the costs reimbursed is included in the amounts required to be disclosed as perquisites, as applicable, under the column “All Other Compensation”,  in the “Summary Compensation Table”.

Supplemental Information

Since Bombardier has a policy of not granting loans to any of its employees, there is no outstanding loan for the financial year ended December 31, 2015.