Unilever 2008 Annual Report Download - page 121

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Notes to the consolidated accounts Unilever Group
118 Unilever Annual Report and Accounts 2008
Financial statements
20 Pensions and similar obligations (continued)
During 2008 some previously unfunded liabilities were funded utilising existing surpluses. As a consequence of this the liabilities of €24 million
were moved from unfunded to funded in the table above. In 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 €25 million (0.2% of total plan assets) and €32 million (0.2% of total plan assets)
at 31 December 2008 and 2007 respectively. Property includes property occupied by Unilever amounting to €57 million and €69 million at
31 December 2008 and 2007 respectively.
The pension assets above exclude the assets in a Special Benefits Trust amounting to €146 million (2007: €162 million) to fund pension and
similar obligations in the US (see also note 11 on page 101).
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 6.0%
Inflation rate Increase/decrease by 0.5% Increase/decrease by 5.0%
Income statement
The charge to the income statement comprises:
€ million € million € million
2008 2007 2006
Charged to operating profit:
Defined benefit pension and other benefit plans
Current service cost (272) (329) (369)
Employee contributions 12 12 13
Special termination benefits (54) (59) (56)
Past service cost 24 35 293
Settlements/curtailments 16 72 48
Defined contribution plans (55) (52) (61)
Total operating cost (329) (321) (132)
Charged to other finance income/(cost):
Interest on retirement benefits (988) (1 013) (977)
Expected return on assets 1 131 1 171 1 018
Total other finance income/(cost) 143 158 41
Net impact on the income statement (before tax) (186) (163) (91)