FMCC On October 25, 2013, pursuant to a directi
Post# of 5326
Posted On: 10/26/2013 12:46:12 AM
FMCC
On October 25, 2013, pursuant to a directive from our conservator, the Federal Housing Finance Agency, Fannie Mae’s Board of Directors
approved the termination of the following four defined benefit pension plans, effective as of December 31, 2013: our tax-qualified Fannie Mae
Retirement Plan for Employees Not Covered Under Civil Service Retirement Law (referred to as the "Retirement Plan"), our Executive
Pension Plan, our Supplemental Pension Plan and our Supplemental Pension Plan of 2003 (together with our Supplemental Pension Plan,
referred to as the "Supplemental Plans"). These terminations follow amendments to the Retirement Plan and the Supplemental Plans to cease
(or "freeze") benefit accruals for all employees under those plans effective June 30, 2013, and an amendment to the Executive Pension Plan to
cease benefit accruals effective December 31, 2009. Descriptions of these defined benefit pension plans are available in our Annual Report on
Form 10-K for the year ended December 31, 2012 (the "2012 Form 10-K"), filed with the SEC on April 2, 2013, under the heading "Executive
Compensation."
As a result of revisions to our retirement program in 2007 to limit new benefit accruals under our defined benefit pension plans to those who
satisfied a rule of 45 (that is, the sum of their age plus years of service was 45 or greater), David Benson, our chief financial officer, and
Michael Williams, our former chief executive officer, are our only "named executive officers" (as specified in our 2012 Form 10-K) who have
participated in any of these defined benefit pension plans. Messrs. Benson and Williams both participated in the Retirement Plan and the
Supplemental Pension Plans. Mr. Williams is our only named executive officer with a benefit under the Executive Pension Plan.
We plan to distribute all benefits remaining in the Retirement Plan following receipt of approval from the Internal Revenue Service. Except for
retirees currently receiving payments under the Retirement Plan (or "in pay status"), participants in that plan will have the choice of receiving
either a single lump sum payment or an annuity. For participants who elect to receive a lump sum payment, the payment they receive will
represent the actuarial equivalent value of the participant’s accrued benefit under the plan as of the distribution date, calculated in accordance
with the amended terms of the plan using the plan’s current benefit reduction factors for early retirement applicable for annuity payments and
based on the participant’s age on the distribution date. Retirees in pay status (which includes Mr. Williams) will continue to receive payments
under their current annuity elections.
We plan to distribute all benefits remaining in the Supplemental Plans and the Executive Pension Plan between October 2014 and October
2015, in the form of a lump sum payment representing the actuarial equivalent value of each participant’s remaining accrued benefits under the
plans as of the distribution dates, calculated in accordance with the amended terms of the plans using the plans’ current benefit reduction
factors for early retirement applicable for annuity payments and based on the participant’s age on the distribution dates.
The amount of the payments Messrs. Benson and Williams will receive under these plans will be determined as of the applicable distribution
dates in accordance with the amended terms of the plans and will be affected by several factors, including the applicable interest rates used to
determine the payments and their ages on the distribution dates.
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