Pension Plans for Executive Officers

The executives of Bombardier, including the Named Executive Officers, participate in two defined benefit pension plans to which executives do not contribute.

Benefits payable from the basic plan correspond to 2% of average base salary in the three continuous years of service during which the executives are paid their highest salary (up to the maximum earnings according to the Income Tax Act (Canada) which for 2012 is $132,334 Cdn) multiplied by the number of years of credited service.

The supplemental plan provides for additional benefits, depending on the management level, of:

  • 2% of average base salary up to $132,334 Cdn plus 1.75% of average base salary in excess of that amount, or
  • 2.25% of average base salary, or
  • 2.50% of average base salary,

multiplied by the number of years of credited service (up to 40) less the pension payable from the basic plan.

Bonuses and any other compensation are not considered in the computation of pension benefits.

Messrs Pierre Beaudoin, Pierre Alary, Guy C. Hachey, André Navarri and Richard Bradeen are entitled to an accrual rate of pension of 2.50%. Upon employment, Mr. Guy C. Hachey was granted the right to accrue a pension at double the annual accrual rate, or 5.0%, for each year of service completed for his first seven years of employment. The Human Resources and Compensation Committee (HRCC) has granted to Mr. André Navarri the right to accrue, starting on April 1, 2010, his pension at an additional rate of 1.25% of the annual accrual, representing 3.75% for the next six years of his employment.

Benefits are reduced by 0.33% for each month between the date of early retirement and the date of a participant’s 60th birthday or, if earlier, the date at which the participant’s age plus his years of service total 85.

No benefits are payable from the supplemental plan if a participant has not completed 5 years of service, except for Mr. Guy C. Hachey who has an immediate right to his accrued pension upon termination.

Upon the death of a participant, the 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.

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

Supplemental Pension Disclosure

The PDF links 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 February 1, 2011 and December 31, 2011 and February 1, 2010 and January 31, 2011, respectively.

Read the Supplementary Pension Disclosure table for the financial year ended December 31, 2012 

Read the Supplementary Pension Disclosure table for the financial year ended December 31, 2011 

Read the Supplementary Pension Disclosure table for the financial year ended January 31, 2011

Pension Plans, Benefits and Perquisites

The objective of Bombardier is to provide pension, benefits and perquisites at the median of the comparator group. External consultants are used to benchmark the pension, benefits and perquisites offered by Bombardier to its senior executives with those of the market.

Benefits programs for senior 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 rental, complete medical check-up and financial counselling.

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

The President and Chief Executive Officer, the President and Chief Operating Officer of Bombardier Aerospace and the President and Chief Operating Officer of Bombardier Transportation are allowed to use the Bombardier corporate aircraft for personal reasons. Bombardier does not generally assume all of the costs of corporate aircraft incurred by senior executives 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 by the Named Executive Officer 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, 2012.