Royal Dutch Petroleum Co. and Shell Transport and Trading Co., the Hague, reported that its pension plans are "well funded," with no change resulting from the adoption of International Financial Reporting Standards, according to a news release from the company. The group made the transition to the new rules, from U.S. Generally Accepted Accounting Principals, on Jan. 1, 2004, but today reported the impact of those changes on its 2004 financial reports.
As part of adopting the new financial rules, unrecognized gains and losses related to defined benefit plans and other post-retirement benefits at the transition have been recognized in the group's 2004 opening balance sheet, with a corresponding reduction in net assets of $4.9 billion. Net liability recognized in the balance sheet under IFRS decreased to $4.7 billion as of Dec. 31, 2004, from $5.8 billion as of Jan. 1, 2004.
In addition, the group took an additional charge of $200 million last year for pension costs under IFRS, and company officials said that using fair value to measure pension plan assets rather than market value would increase volatility.
The group had combined pension plan assets of $51.9 billion as of Dec. 31, 2004.