Unilever 2007 Annual Report Download - page 107

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Unilever Annual Report and Accounts 2007 105
Financial statements continued
Notes to the consolidated accounts Unilever Group
20 Pensions and similar obligations (continued)
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 % € million € million %
31 December 2007 31 December 2006 31 December 2005
Other post- Long-term Other post- Long-term Other post- Long-term
employment rates of employment rates of employment rates of
Pension benefit return Pension benefit return Pension benefit return
plans plans expected plans plans expected plans plans expected
Assets of principal plans:
Equities 9 957 – 8.0% 10 274 – 7.8% 9 670 – 7.4%
Bonds 4 278 – 4.9% 3 946 – 4.9% 3 854 – 4.2%
Property 1 381 – 6.6% 1 421 – 6.3% 1 326 – 5.8%
Other 1 220 – 6.3% 1 221 – 6.3% 752 – 6.1%
Assets of other plans 404 13 7.5% 403 13 7.3% 387 17 6.9%
17 240 13 17 265 13 15 989 17
Present value of liabilities:
Principal plans (16 798) – (18 711) – (19 081) –
Other plans (748) (796) (722) (925) (1 059) (1 306)
(17 546) (796) (19 433) (925) (20 140) (1 306)
Aggregate net deficit of the plans (306) (783) (2 168) (912) (4 151) (1 289)
Irrecoverable surplus(a) –– – – (141) –
Pension liability net of assets (306) (783) (2 168) (912) (4 292) (1 289)
Of which in respect of
Funded plans in surplus:
Liabilities (12 396) – (5 200) – (4 728) –
Assets 14 404 – 6 897 – 5 905 –
Aggregate surplus 2 008 – 1 697 – 1 177 –
Irrecoverable surplus(a) –– – – (141) –
Pension asset net of liabilities 2 008 – 1 697 – 1 036 –
Funded plans in deficit:
Liabilities (3 627) (49) (11 716) (44) (12 444) (72)
Assets 2 836 13 10 368 13 10 084 17
Pension liability net of assets (791) (36) (1 348) (31) (2 360) (55)
Unfunded plans:
Pension liability (1 523) (747) (2 517) (881) (2 968) (1 234)
(a) A surplus is deemed recoverable to the extent that the Group is able to benefit economically from the surplus.
The constituents of the ‘Principal plans’ and ‘Other plans’ were reviewed in both 2006 and 2007, such that some ‘Other plans’ were moved
into ‘Principal plans’ in 2006 and a smaller number of plans were moved out of ‘Principal plans’ into ‘Other plans’ in 2007.
During 2007, a contractual trust arrangement was established in Germany to partially fund previously unfunded pension liabilities. The initial
funding was €300 million whilst the value of the previously unfunded liabilities at 1 January 2007 was approximately €850 million. As a
consequence of this funding, the liabilities have been transferred from unfunded to funded in the table above.
Equity securities include Unilever securities amounting to €32 million (0.2% of total plan assets) and €32 million (0.2% of total plan assets)
at 31 December 2007 and 2006 respectively. Property includes property occupied by Unilever amounting to €69 million and €75 million at
31 December 2007 and 2006 respectively.
The pension assets above exclude the assets in a Special Benefits Trust amounting to €162 million (2006: €181 million) to fund pension and
similar obligations in the US (see also note 11 on page 90).
The sensitivity of the overall pension liabilities to changes in the weighted key financial assumptions are:
Impact on
Change in overall
assumption liabilities
Discount rate Increase/decrease by 0.5% Decrease/increase by 6.6%
Inflation rate Increase/decrease by 0.5% Increase/decrease by 5.3%