Sara Lee Corporation reaches pension funding agreement

04 Apr '06

2 min read

Consumer products company Sara Lee Corporation has signed a Funding and Guarantee Agreement with the Sara Lee UK Pension Plan Trustees with respect to the Pretty Polly and Courtaulds sections of the plan.

As a part of the arrangement, Sara Lee Corporation or its subsidiaries will increase annual deficit correction payments to 32 million British pounds to the Pretty Polly and Courtaulds sections of the UK plan through 2015 to fund such sections of the plan up to the UK required Pension Protection Fund (PPF) funding levels. These payments will not significantly impact Sara Lee's future cash flow or have a material impact on earnings. If required, Sara Lee will make lump sum payments in 2016 and thereafter to ensure that the Courtaulds and Pretty Polly sections have achieved their PPF funding levels at that time.

The Pensions Regulator has cleared the arrangements between Sara Lee and the UK Plan Trustees.

As previously announced with the sale of its branded apparel business in Europe earlier this year, the company retained certain under-funded pension obligations in the UK when this business was sold and expects to contribute 49.5 million British pounds prior to the end of the current fiscal year to fully fund the retained obligations. It is anticipated that the trustees of these plans will use a substantial portion of the proceeds to purchase annuities for plan participants at a future date, and that this action will likely result in the recognition of a settlement loss. The exact timing of the settlement of these obligations has not been determined.

Sara Lee Corporation is a Chicago-based global manufacturer and marketer of high-quality, brand-name products for consumers throughout the world. In February 2005, the company began executing a bold and ambitious multi-year plan to transform Sara Lee into a company focused on its food, beverage, and household and body care businesses around the world.

Sara Lee Corporation

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