Unilever 2004 Annual Report Download - page 128

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Unilever Annual Report and Accounts 2004 125
18 Pensions and similar obligations (continued)
Profit and loss account
The charge to the profit and loss account comprises:
€ million € million € million
2004 2003 2002
Charged to operating profit:
Defined benefit pension and other benefit plans:
Current service cost (317) (336) (364)
Special termination benefits (135) (73) (96)
Past service cost (13) (5) 9
Gains on settlements/curtailments 61 14 119
Recognition of previously irrecoverable surplus 1–7
Defined contribution plans (42) (30) (26)
Total operating cost (445) (430) (351)
Charged to other finance income/(cost):
Interest on retirement benefits (977) (966) (1 072)
Refund of previously irrecoverable surplus –7–
Expected return on assets 916 793 1 180
Total other finance income/(cost) (61) (166) 108
Net impact on the profit and loss account (before tax) (506) (596) (243)
Cash flow
Group cash flow in respect of pensions and similar benefits comprises company contributions paid to funded plans and benefits paid by the
company in respect of unfunded plans. In 2004, the benefits paid in respect of unfunded plans amounted to €311 million (2003: €295 million;
2002: €260 million). Company contributions to funded plans were at a reduced level for a number of years resulting from the generally strong
stock market performance of the 1990s. Following the falls in stock markets in 2000, 2001 and 2002, contribution holidays have ended for
many Unilever plans and the aggregate level of contributions is now rising. Contributions are subject to periodic review. In 2004, contributions
to funded defined benefit plans, including one-off contributions of €186 million, amounted to €462 million (2003: €170 million; 2002: €140
million). In 2003 a refund of €7 million was received in Finland out of previously irrecoverable surplus. Total contributions to funded plans and
benefit payments by the Group in respect of unfunded plans are expected to be about €675 million in 2005 (2004: €815 million).
Statement of total recognised gains and losses
The following amounts have been recognised in the statement of total recognised gains and losses, net of minority interests:
€ million € million € million
2004 2003 2002
Actual return less expected return on pension and other benefit plan assets 392 967 (3 276)
Experience gains/(losses) arising on pension plan and other benefit plan liabilities (45) (135) (95)
Changes in assumptions underlying the present value of the pension and other benefit plan liabilities (1 053) (644) (952)
Actuarial gains/(losses) (706) 188 (4 323)
Change in unrecognised surplus 15 (40) 171
Net actuarial gain/(loss) recognised in statement of total recognised gains and losses (before tax) (691) 148 (4 152)
Reconciliation of change in surplus/deficit
Movements in surplus/deficit during the year:
€ million € million € million
2004 2003 2002
Surplus/(deficit) at beginning of the year (4 836) (5 295) (1 520)
Movements in year:
Acquisitions 3(1) –
Reclassification of employee benefits as pension liabilities (1) (23) –
Current service cost (317) (336) (364)
Special termination benefits (135) (73) (96)
Past service costs (13) (5) 9
Settlements/curtailments 61 14 119
Other finance income/(cost) (61) (173) 108
Actuarial gain/(loss) (697) 188 (4 323)
Contributions 773 465 400
Currency retranslation 94 403 372
Surplus/(deficit) at end of the year (5 129) (4 836) (5 295)
Notes to the consolidated accounts
Unilever Group