CURRENT SITUATION As far as our general situation is concerned, Unilever continues to stand by its commitment to existing pensioners that they will receive cost of living increases even if inflation rises above 5%. However, this is a discretionary benefit as under the rules of the fund, any increases are limited to the retail price index or 5%, whichever is the lower. Company and employee contributions resumed some years ago. From this year employees will have to contribute more (7% instead of 5%) but increases to current employees’ pensions for service after 2007 are being capped at 3% unless they make extra contributions for a 5% limit. New employees will enjoy a less generous Career Average Revalued Earnings (CARE) scheme with pension increases limited to 2.5%. Unilever is also making additional payments to reduce the gap that existed after the 2005 valuation between the fund’s assets and its liabilities. We are waiting the outcome of the routine actuarial valuation of the Unilever UK Pension Fund, which normally takes place every three years. Two years ago an interim valuation revealed that the assets were only sufficient to meet about three-quarters (79%) of what was needed to pay existing pensions’ liabilities. The period since the last valuation has seen a continuing improvement in stock markets which has increased the value of the Fund’s assets. This, together with the extra company contributions, should have reduced the Fund’s deficit. We will only know the extent when the 2007 valuation report is published.