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102 Unilever Annual Report & Accounts and Form 20-F 2003
Notes to the consolidated accounts
Unilever Group
17 Pensions and similar obligations continued
Profit and loss account
The charge to the profit and loss account comprises:
€ million € million € million
2003 2002 2001
Restated Restated
Charged to operating profit:
Defined benefit pension and other benefit plans:
Current service cost (336) (364) (384)
Special termination benefits (73) (96) (79)
Past service cost (5) 9 (16)
Gains on settlements/curtailments 14 119 9
Recognition of previously irrecoverable surplus – 7 –
Defined contribution plans (30) (26) (24)
Total operating cost (430) (351) (494)
Charged to other finance income/(cost):
Interest on retirement benefits (966) (1 072) (1 121)
Exceptional financing loss on recoverable surplus – – (128)
Refund of previously irrecoverable surplus 7––
Expected return on assets 793 1 180 1 291
Total other finance income/(cost) (166) 108 42
Net impact on the profit and loss account (before tax) (596) (243) (452)
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 2003, the benefits paid in respect of unfunded plans amounted to €295 million (2002: €260 million;
2001: €352 million). Company contributions to funded plans have been 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 are ending
for many Unilever plans and the aggregate level of contributions is now rising. In 2003, contributions to funded defined benefit plans, including
one-off contributions of €32 million, amounted to €170 million (2002: €140 million; 2001: €214 million net refund). The contributions in 2001
were net of a €221 million refund in the Netherlands and a €76 million refund in Finland. In 2003 a refund of €7 million was received in
Finland out of previously irrecoverable surplus. Contributions are subject to periodic review and current expectations are that in 2004
contributions will restart or increase in a number of countries. Total contributions to funded plans and benefit payments by the Group in
respect of unfunded plans are expected to be about €850 million in 2004. This includes one-off contributions to funded plans in the US,
Germany, Switzerland and Austria of approximately €145 million.
Statement of total recognised gains and losses
The following amounts have been recognised in the statement of total recognised gains and losses:
€ million € million € million
2003 2002 2001
Restated Restated
Actual return less expected return on pension and other benefit plan assets 967 (3 276) (2 343)
Experience gains/(losses) arising on pension plan and other benefit plan liabilities (135) (95) 197
Changes in assumptions underlying the present value of the pension and other benefit plan liabilities (644) (952) (198)
Actuarial gain/(loss) 188 (4 323) (2 344)
Change in unrecognised surplus (40) 171 149
Net actuarial gain/(loss) recognised in statement of total recognised gains and losses (before tax) 148 (4 152) (2 195)
Reconciliation of change in surplus/deficit
Movements in surplus/deficit during the year:
€ million € million € million
2003 2002 2001
Surplus/(deficit) at beginning of the year (5 295) (1 520) 1 126
Movements in year
Acquisitions (1) ––
Reclassification of employee benefits as pension liabilities (23) ––
Current service cost (336) (364) (384)
Special termination benefits (73) (96) (79)
Past service costs (5) 9 (16)
Settlements/curtailments 14 119 9
Other finance income (173) 108 42
Actuarial gain/(loss) 188 (4 323) (2 344)
Contributions 465 400 138
Currency retranslation 403 372 (12)
Surplus/(deficit) at end of the year (4 836) (5 295) (1 520)