Unilever 1999 Annual Report Download - page 34

Unilever Group Directors’ remuneration and interests
Report to the shareholders (continued)
Directors’ pensions (continued)
(1) The NV early retirement scheme operates on the basis of a justifiable expectation and does not provide a vested deferred
entitlement. Directors leaving before age 55 are not entitled to any benefit, while those terminating service at age 55 or older
can expect to receive an immediate pension under the expectations of the scheme.
(2) Normal Retirement Age is that established for the purposes of the respective early retirement scheme for the director, and
generally does not coincide with the termination date of his employment under the terms of his service contracts (see ‘Service
contracts’ on page 40).
(3) The increase in accrued pension during the year excludes any increase for inflation over the year, and is shown on a consistent
basis with the accrued pension at the end of the year. For directors retiring during the year, the accrued pension and its increase
are based on the position when the director retired. For directors appointed during the year, the increase is based on the
difference between the accrued pension at the end of the year and the accrued pension immediately prior to the appointment.
(4) For directors in the NV early retirement scheme aged 55 and over, the accrued pension is the immediate annual pension payable
under all Unilever schemes. For the NV director under age 55, no pension is included in respect of the NV early retirement scheme
and the accrued pension is that payable in total, under the normal Unilever schemes, ignoring any future inflationary increases.
The accrued pension under the normal PLC scheme is payable from age 65, while the accrued pension under the normal NV
scheme is shown payable from age 62, which is the age at which the most valuable retirement terms are provided, and includes
temporary pensions converted to lifetime equivalent pensions. The additional lump sum of one year’s final pensionable pay,
payable on normal retirement is excluded from these pensionable amounts. Amounts paid are disclosed separately in the year of
retirement.
(5) Retired during the year. In addition to the pension benefit shown, a lump sum amount of Fl. 2 640 000 was paid on retirement.
(6) 88% of the total accrued pension at 31 December 1999 and 82% of the increase in accrued pension correspond to the normal NV
scheme.
(7) Retired during the year. In addition to the pension benefit shown, a lump sum amount of Fl. 2 058 000 was paid on retirement.
(8) For the PLC scheme, the accrued pension shown is that which would be paid annually from Normal Retirement Age, based
on service to 31 December 1999, and includes benefits from all Unilever schemes. It does not include allowance for any future
inflationary increases.
(9) Elected on 4 May 1999. The accrued pension includes benefits (actuarially converted for consistency) under all Unilever Schemes
and those earned, prior to appointment, under social security schemes.
(10) The pension will be converted to US dollars upon retirement and will be increased in future to maintain US purchasing power.
Directors’ pensions: further information
It is expected that the directors’ pensions will be regularly increased in payment and in deferment in line with the increase in the
consumer price index in the country, the Netherlands or United Kingdom, to which the scheme in which they participate relates. These
pension increases are awarded at the discretion of NV or PLC, as appropriate, although the schemes in the United Kingdom guarantee
increases in line with retail price inflation, up to a maximum of 5% per annum.
For directors in the NV early retirement scheme who are aged 55 or more, the immediate early retirement pension is shown. For the NV
director who has not attained age 55 by the year end, the pension payable under the normal NV scheme is shown payable from the age
at which it is most valuable, while that payable under the normal PLC scheme is payable unreduced (partly discretionary and partly by
right) from age 60, and subject to a 5% per annum reduction for each year that retirement precedes age 60.
For directors in the PLC early retirement scheme, early retirement is possible from age 50 (or age 55 for PLC directors appointed after
1 January 1999), in which case the total accrued pension is reduced by 5% per annum for each year of early retirement prior to age 60.
Dependants’ and children’s pensions are payable under the normal and early retirement schemes in each country. Under the NV normal
and early retirement schemes, the spouse’s pension is 70% of the member’s pension, while under the PLC early retirement scheme, the
spouse’s pension is 66.7% of the member’s retirement pension. Under the normal PLC scheme, the spouse’s pension is 50% of the
member’s pension.
Where, for directors in the NV early retirement scheme, the early retirement pension is shown, this amount will be reduced at age 65 by
an allowance, currently Fl. 25 801, corresponding to the State benefits payable. The pension may also be subject to minor adjustments to
equalise social security benefits.
Members may pay additional voluntary contributions. Neither the contributions nor the resulting benefits are included in the table
of pension entitlements.
34 Unilever Annual Accounts 1999