1st Mar 2007 12:15
Unilever PLC01 March 2007 NEW ARRANGEMENTS FOR UNILEVER UK PENSIONS Unilever UK today reaffirmed its commitment to its final salary pension schemefor existing employees in the UK but announced that it is proposing to close thescheme to new employees. The decision follows a thorough review of the company's UK pension arrangements. These proposals aim to ensure that the company continues to providecompetitive pensions for employees on a sustainable basis, whilst at the sametime having greater certainty about the future cost of pensions. The decision is not related to the current deficit as agreement was reachedbetween the Company and the Trustees on this matter a year ago. Under the termsof the agreement Unilever has committed to make additional payments, including£510m in the three years to April 2008, aimed at eliminating the deficit withineight years. All proposed changes to the UK scheme will need to be agreed by the FundTrustees and are subject to consultation with employees. The proposed new UK scheme for new employees, which is intended to take effectlater in 2007, will be a hybrid arrangement. There will be a defined benefitcomponent, based on career average, covering pensionable earnings up to athreshold of £35,000 pa. Above this threshold there will be a definedcontribution component. From January 1st 2008, employee members of the existing scheme will be asked toincrease their contribution to the Fund from five to seven percent of theirsalary. Alternatively, they will be able to join the new scheme. Pensioner members and deferred pensioner members will be unaffected by theseproposed changes. -o0o- 1st March, 2007 - Notes: • In many countries the Unilever Group operates defined benefit pension plans based on employee pensionable remuneration and length of service. The majority of these plans are externally funded. The Group also provides otherpost-employment benefits, mainly post-employment medical plans in the UnitedStates. These plans are predominantly unfunded. The Group also operates anumber of defined contribution plans, the assets of which are held inexternal funds. • In December 2005 Unilever announced the establishment of Univest, anew pension asset pooling vehicle which gives the opportunity to leverage thestrengths of Unilever and its national-based pension funds. • Local Unilever pension funds retain full ownership of their assets.All the sub-funds are ring-fenced from one another and enable each individualUnilever pension fund to continue to define its own geographical investmentstrategy. • Unilever UK Pension scheme members: o 40,000 pensioners o 40,000 deferred pensioners o 7,000 active employees • Market value of the Unilever UK Pension Fund at 1st January, 2007:£5.0 billion Existing scheme • The current UK scheme will be subject to the following proposed changes: o Contributions will increase from 5% to 7% effective 1 January 2008 o "Guaranteed" pension increases linked to inflation will be capped at 2.5% for pension building up from 1 January 2008. The Company will retain the discretion to grant increases above this limit Proposed new scheme • The new UK scheme will have 2 tiers of benefit: o A pension based on career average earnings, covering pensionable earningsup to a threshold at outset of £35,000. Above the £35,000 threshold, there willbe a defined contribution arrangement with a Company contribution of 12.5% ofearnings. Employees will alternatively be able to take this Companycontribution as cash o For this package of benefits, employees will pay at 5% on pensionableearnings up to the £35,000 threshold - no employee contributions are payableabove. • Existing members of the UK Pension Fund will have the option to switch to the proposed new scheme About Unilever Unilever's mission is to add vitality to life. We meet everyday needs fornutrition, hygiene and personal care with brands that help people feel good,look good and get more out of life. Unilever is one of the world's leading suppliers of fast moving consumer goodswith strong local roots in more than 100 countries across the globe. Itsportfolio includes some of the world's best known and most loved brandsincluding twelve €1 billion brands and global leadership in many categories inwhich the company operates. The portfolio features brand icons such as Knorr,Hellmann's, Wall's, Flora, Bertolli, Dove, Lux, Lynx, Persil, Domestos, andMarmite. Unilever has around 179,000 employees in approaching 100 countries and generatedannual sales of €40 billion in 2006. For more information about Unilever andits brands, please visit www.unilever.com. SAFE HARBOUR STATEMENT: This announcement may contain forward-looking statements, including'forward-looking statements' within the meaning of the United States PrivateSecurities Litigation Reform Act of 1995. Words such as 'expects','anticipates', 'intends' or the negative of these terms and other similarexpressions of future performance or results, including financial objectives to2010, and their negatives are intended to identify such forward-lookingstatements. These forward-looking statements are based upon currentexpectations and assumptions regarding anticipated developments and otherfactors affecting the Group. They are not historical facts, nor are theyguarantees of future performance. Because these forward-looking statementsinvolve risks and uncertainties, there are important factors that could causeactual results to differ materially from those expressed or implied by theseforward-looking statements, including, among others, competitive pricing andactivities, consumption levels, costs, the ability to maintain and manage keycustomer relationships and supply chain sources, currency values, interestrates, the ability to integrate acquisitions and complete planned divestitures,physical risks, environmental risks, the ability to manage regulatory, tax andlegal matters and resolve pending matters within current estimates, legislative,fiscal and regulatory developments, political, economic and social conditions inthe geographic markets where the Group operates and new or changed priorities ofthe Boards. Further details of potential risks and uncertainties affecting theGroup are described in the Group's filings with the London Stock Exchange,Euronext Amsterdam and the US Securities and Exchange Commission, including theAnnual Report & Accounts on Form 20-F. These forward-looking statements speakonly as of the date of this announcement. Except as required by any applicablelaw or regulation, the Group expressly disclaims any obligation or undertakingto release publicly any updates or revisions to any forward-looking statementscontained herein to reflect any change in the Group's expectations with regardthereto or any change in events, conditions or circumstances on which any suchstatement is based. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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