GERMANY - Unilever Germany has created a contractual trust arrangement (CTA) in an attempt to fund pension liabilities, according to MandateWire.
The majority of liabilities are covered by Unilever's existing €1.1bn Pensionskasse Berolina.
Michael Hahn, managing member of the board, told MandateWire: "The background of the story is that employee pensions of Unilever Deutschland Group are made up of a combined covenant; which means that in essence we have a direktzusage [direct compensation].
"The direktzusage is only for members of the Berolina pension fund, but as our covenant is based on the final salary, Berolina can't meet all liabilities and in 80% of cases it's necessary to add from the firm's resources.
"This extra cost is now also partially funded with the CTA," Hahn confirmed.
The new CTA would invest through external managers according to Hahn, however he did not disclose further details.
In other news, the German subsidiary of the Swiss pharmaceuticals giant Roche set up a defined contribution (DC) pension plan for its employees.
The German branch also has currently unfunded defined benefit obligations, which are met directly from the company's resources.
Documents on the company's website showed as part of the continuing roll out of its global DC strategy, in 2007 it launched new DC plans in eight countries, including Canada, Germany and the United States.
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