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75
4B. Pensions and similar obligations continued
For the most important pension plans, representing approximately 80% of all defined benefit plans by liabilities, the assumptions used
at 31December 2011 and 2010 were:
United Kingdom Netherlands United States Germany
2011 2010 2011 2010 2011 2010 2011 2010
Discount rate 4.7% 5.4% 4.5% 4.7% 3.9% 5.2% 4.5% 4.7%
Inflation 3.0% 3.1% 1.8% 1.8% 2.3% 2.3% 1.8% 1.8%
Rate of increase in salaries 4.0% 4.1% 2.3% 2.3% 3.5% 4.0% 2.8% 2.8%
Rate of increase for pensions in payment
(where provided) 2.8% 3.0% 1.8% 1.8% ––1.8% 1.8%
Rate of increase for pensions in deferment
(where provided) 2.9% 3.1% 1.8% 1.8% ––––
Expected long-term rates of return:
Equities 7.3% 7.7% 7.0% 7.0% 6.9% 7.4% 7.0% 7.0%
Bonds 3.8% 4.6% 3.5% 4.3% 3.4% 4.4% 3.7% 4.2%
Property 4.8% 6.2% 4.5% 5.5% 4.4% 5.9% 4.5% 5.5%
Others 6.9% 7.1% 5.8% 5.6% 5.4% 1.7% 4.6% 5.5%
Weighted average asset return 6.2% 6.9% 5.0% 5.9% 5.0% 6.2% 4.9% 5.5%
Number of years a current pensioner is
expected to live beyond age 65:
Men 21.7 21.5 21.5 21.4 19.0 19.0 19.4 19.0
Women 23.5 23.4 23.3 23.3 20.9 20.9 23.0 23.3
Number of years a future pensioner currently
aged 45 is expected to live beyond age 65:
Men 23.5 23.3 23.0 23.0 20.6 20.5 19.4 19.0
Women 25.2 25.1 24.2 24.2 22.5 22.4 23.0 23.3
Demographic assumptions, such as mortality rates, are set having regard to the latest trends in life expectancy (including expectations
of future improvements), plan experience and other relevant data. These assumptions are reviewed and updated as necessary as part
of the periodic actuarial valuation of the pension plans. The years of life expectancy for 2011 above have been translated from the
following tables:
(i) UK: the year of use S1 series all pensioners (“S1AP”) tables have been adopted, which are based on the experience of UK pension
schemes over the period 2000-2006. Scaling factors are applied reflecting the experience of our pension funds appropriate to the
members’ gender and status. Future improvements in longevity have been allowed for in line with the 2009 CMI Core Projections
and a 1% pa long-term improvement rate.
(ii) The Netherlands: the Dutch Actuarial Society’s AG Prognosetafel 2010 – 2060 table is used with correction factors to allow for the
typically longer life expectancy of pension fund members relative to the general population. This table has an in-built allowance for
future improvements in longevity.
(iii) United States: the table RP-2000 with projected mortality improvement using Projection Scale AA from 2000 to 2018 for annuitants
and to2026 for non-annuitants. This table has an in-built allowance for future improvements in longevity.
(iv) Germany: fund specific tables are used which broadly equate to the Heubeck 2005 generational table projected to 2030.
Assumptions for the remaining defined benefit plans vary considerably, depending on the economic conditions of the countries where
they aresituated.
Unilever Annual Report and Accounts 2011
Financial statements