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Retirement Plan Information

Executive officers and other eligible employees of Duke Energy and its affiliated companies participate in the RCBP, which is a noncontributory, defined benefit retirement plan that is intended to satisfy the requirements for qualification under Section 401(a) of the Internal Revenue Code. In addition, selected managers are eligible to participate in the ECBP, which is a noncontributory, defined benefit retirement plan that is not intended to satisfy such requirements. In response to the enactment of Section 409A of the Internal Revenue Code, which imposes new requirements for the successful deferral of compensation, the ECBP was divided into two parts, one of which includes only benefits earned and vested before January 1, 2005, to which the new requirements do not apply, and the other of which includes benefits to which the new requirements do apply and which is intended to satisfy those requirements. Benefits earned in the ECBP are attributable to: compensation in excess of the annual compensation limit ($205,000 for 2004) under the Internal Revenue Code that applies to the determination of pay credits under the RCBP; certain deferred compensation that is not recognized by the RCBP; restoration of benefits in excess of a defined benefit plan maximum annual benefit limit ($165,000 for 2004) under the Internal Revenue Code that applies to the RCBP; and supplemental benefits granted to a particular participant.

The benefit accrual formula used to determine pay credits under the RCBP and the ECBP is based upon eligible pay, generally consisting of base pay, overtime, short-term incentives and lump-sum merit increases. The RCBP excludes eligible pay in excess of the annual compensation limit under the Internal Revenue Code, while the ECBP excludes eligible pay up to such limit. The RCBP excludes deferred compensation other than deferrals pursuant to Sections 401(k) or 125 of the Internal Revenue Code. Under the RCBP and ECBP benefit accrual formula, a participating employee's account receives a pay credit at the end of each month in which the employee remains eligible for the respective plan and receives eligible pay for services. The monthly pay credit is equal to a percentage of the employee's monthly eligible pay. The percentage depends on age and completed years of service at the beginning of the year, as shown below:

Age and Service		Monthly Pay Credit Percentage
34 or less		4%
35 to 49		5%
50 to 64		6%
65 or more		7%

In addition, there is an additional 4% pay credit for any portion of eligible pay above the Social Security taxable wage base ($87,900 for 2004). Participant accounts also receive monthly interest credits on their balances. The rate of the interest credit is adjusted quarterly and equals the yield on 30-year U.S. Treasury Bonds during the third week of the last month of the previous quarter, subject to a minimum rate of 4% per year and a maximum rate of 9% per year.

Assuming that the Named Executive Officers continue in their present positions at their present salaries and target bonus opportunities until retirement at age 65, their estimated annual pensions in a single life annuity form under the RCBP and ECBP attributable to such salaries and bonuses would be: Fred J. Fowler, $311,014; Jimmy W. Mogg, $268,642; David L. Hauser, $253,882; and Ruth G. Shaw, $254,248. These estimates are calculated assuming interest credits at an annual rate of 4% and using a 2004 Social Security taxable wage base equal to $87,900, increasing 4.5% annually. Paul M. Anderson participates in the RCBP only for purposes of determining his eligibility to qualify for early or normal retirement; he does not participate in the ECBP.