Unilever 2005 Annual Report Download - page 122
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Financial Statements
Unilever Annual Report and Accounts 2005 119
Notes to the consolidated accounts
Unilever Group
22 Pensions and similar obligations (continued)
Benefit obligations
The table below shows changes in benefit obligations during 2005 and 2004:
€ million € million € million € million
Other post- Other post-
Pension Pension employment employment
plans plans benefit plans benefit plans
Change in benefit obligations 2005 2004 2005 2004
1 January 17 512 16 718 1 175 1 049
Extension of coverage –––29
Service cost 321 293 28 24
Interest cost 915 909 68 64
Plan member contributions 19 32 ––
Amendments 13 5(56) (3)
Actuarial (gains)/losses 1 665 922 12 179
Acquisitions/(disposals) (22) –(3) –
Settlements/curtailments (40) (65) (4) 1
Special termination benefits 79 134 11
Benefits paid (1 160) (1 126) (84) (89)
Reclassification of benefits(b) 18 (166) 10 –
Currency retranslation 607 (144) 159 (80)
31 December 19 927 17 512 1 306 1 175
(b) During 2004, some plans changed from defined benefit to defined contribution. During 2005, certain obligations were reclassified as
employee benefit obligations.
Assumptions
The weighted assumptions used to value the benefit obligations in respect of the principal plans are:
%%%%
Other post- Other post-
Pension Pension employment employment
Weighted average assumptions used to determine benefit obligations plans plans benefit plans benefit plans
for the principal plans at 31 December 2005 2004 2005 2004
Discount rate 4.6 5.1 5.5 5.7
Salary increases 3.5 3.6 4.0 4.5
Pension increases 2.1 2.2 n/a n/a
Assumptions for the remaining defined benefits plans vary considerably, depending on the economic conditions of the country where they are
situated.
Post-employment healthcare benefits
Additional assumptions in respect of healthcare benefits are:
Weighted average healthcare trend rates at 31 December 2005 2004
Healthcare cost trend rate assumed for next year 10.4% 11.2%
Rate to which the cost trend rate gradually declines 4.8% 4.8%
Year that the assumed long-term rate is reached 2012 2011
Assumed healthcare cost trend rates have a significant effect on the amounts reported for the healthcare plans. A one percentage point change
in assumed healthcare cost trend rates would have the following effect:
€ million € million
1% point 1% point
increase decrease
Effect on post-employment benefit obligation 78 (69)