Unilever 2005 Annual Report Download - page 119

116 Unilever Annual Report and Accounts 2005
Notes to the consolidated accounts
Unilever Group
22 Pensions and similar obligations (continued)
United States Germany
2005 2004 2003 2005 2004 2003
Discount rate 5.5% 5.7% 6.1% 4.0% 4.5% 5.2%
Inflation 2.4% 2.5% 2.5% 1.8% 1.8% 1.8%
Rate of increase in salaries 4.0% 4.5% 4.5% 2.5% 2.5% 2.5%
Rate of increase for pensions in payment 0.0% 0.0% 0.0% 1.8% 1.8% 1.8%
Rate of increase for pensions in deferment (where provided) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Expected long-term rates of return:
Equities 8.0% 8.4% 8.6% 7.0% 7.6% 8.3%
Bonds 4.8% 4.7% 4.7% 3.7% 4.1% 4.7%
Property 6.5% 6.9% n/a 5.5% 6.1% 6.8%
Others 4.2% 2.1% n/a 3.7% 3.7% 3.7%
Weighted average asset return 7.0% 7.3% 7.4% 5.3% 5.7% 6.1%
Mortality assumptions for these countries are based on the following post-retirement mortality tables: (i) United Kingdom: PMA 92 and PFA 92
with short cohort adjustment and scaling factor of 125% applied, projected to 2015 for current pensioners and to 2025 for future pensioners;
(ii) the Netherlands: GBMV (1995-2000); (iii) United States: RP2000 with a projection period of 10-15 years; and (iv) Germany: Heubeck 1998
(Periodentafel) with a scaling factor of 85%.
Assumptions for the remaining defined benefit plans vary considerably, depending on the economic conditions of the country where they
are situated.
Balance Sheet
The assets, liabilities and surplus/(deficit) position of the pension and other post-employment benefit plans and the expected rates of return on
the plan assets at the balance sheet date were:
€ million € million % € million € million %
31 December 2005 31 December 2004
Other post- Long-term Other post- Long-term
employment rates of employment rates of
Pension benefit return Pension benefit return
plans plans expected plans plans expected
Assets of principal plans:
Equities 9 670 – 7.4% 8 050 – 7.9%
Bonds 3 854 – 4.2% 3 154 – 4.5%
Property 1 326 – 5.8% 1 229 – 6.3%
Other 752 – 6.1% 684 – 6.1%
Assets of other plans 387 17 6.9% 288 14 7.2%
15 989 17 13 405 14
Present value of liabilities
Principal plans (19 081) – (16 528) –
Other plans (1 059) (1 306) (1 070) (1 175)
(20 140) (1 306) (17 598) (1 175)
Aggregate net deficit of the plans (4 151) (1 289) (4 193) (1 161)
Irrecoverable surplus(a) (141) – (100) –
Pension liability net of assets (4 292) (1 289) (4 293) (1 161)
Of which in respect of
Funded plans in surplus:
Liabilities (4 728) – (4 176) –
Assets 5 905 – 4 901 –
Aggregate surplus 1 177 – 725 –
Irrecoverable surplus(a) (141) – (100) –
Pension asset net of liabilities 1 036 – 625 –
Funded plans in deficit:
Liabilities (12 444) (72) (10 795) (62)
Assets 10 084 17 8 504 14
Pension liability net of assets (2 360) (55) (2 291) (48)
Unfunded plans:
Pension liability (2 968) (1 234) (2 627) (1 113)
(a) The surplus in the plans is only recoverable to the extent that the Group can benefit from either refunds formally agreed or future
contribution reductions.