Unilever 2009 Annual Report Download - page 119

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19 Pensions and similar obligations (continued)
Liabilities of €150 million were transferred from the UK unfunded plan to the funded plan in 2009. This followed the payment to the UK funded
plan in 2008 in expectation of a transfer in 2009 and 2010. 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 for 2008.
Equity securities include Unilever securities amounting to €37 million (0.3% of total plan assets) and €25 million (0.2% of total plan assets)
at 31 December 2009 and 2008 respectively. Property includes property occupied by Unilever amounting to €12 million and €57 million at
31 December 2009 and 2008 respectively.
The pension assets above exclude the assets in a Special Benefits Trust amounting to €127 million (2008: €146 million) to fund pension and
similar obligations in the US (see also note 11 on page 97).
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 6.0%
Income statement
The charge to the income statement comprises:
€ million € million € million
2009 2008 2007
Charged to operating profit:
Defined benefit pension and other benefit plans
Current service cost (228) (272) (329)
Employee contributions 12 12 12
Special termination benefits (50) (54) (59)
Past service cost 50 24 35
Settlements/curtailments 20 16 72
Defined contribution plans (60) (55) (52)
Total operating cost 4(256) (329) (321)
Charged to other finance income/(cost):
Interest on retirement benefits (940) (988) (1,013)
Expected return on assets 776 1,131 1,171
Total other finance income/(cost) 5(164) 143 158
Net impact on the income statement (before tax) (420) (186) (163)
Cash flow
Group cash flow in respect of pensions and similar post-employment benefits comprises company contributions paid to funded plans and
benefits paid by the company in respect of unfunded plans. In 2009, the benefits paid in respect of unfunded plans amounted to €234 million
(2008: €223 million; 2007: €280 million). Company contributions to funded defined benefit plans are subject to periodic review, taking account
of local legislation. In 2009, contributions to funded defined benefit plans amounted to €968 million (2008: €531 million; 2007: €878 million).
2009 contributions paid to funded plans included around €370 million of future years’ contributions accelerated into 2009. 2008 contributions
to funded plans included €254 million to the UK pension plan to cover the transfer of unfunded liabilities into the plan in 2009 and 2010. In
2009 and 2007, refunds of €25 million €50 million respectively were received out of recognised surplus from Finland. In 2008 a €42 million
refund was received from the Danish pension plan following action to externally insure the liabilities. Contributions to defined contribution plans
including 401k plans amounted to €60 million (2008: €55 million; 2007 €52 million). Total contributions by the Group to funded plans, net of
refunds, are currently expected to be about €425 million in 2010 (2009 actual: €968 million). Benefit payments by the Group in respect of
unfunded plans are currently expected to be about €215 million in 2010 (2009 actual: €234 million). Total cash costs of pensions are expected
to be around €700 million in 2010 (2009 actual: €1.3 billion).
Notes to the consolidated financial statements Unilever Group
116 Unilever Annual Report and Accounts 2009
Financial statements