NETHERLANDS – TPG, one of the 10 European corporates placed on credit watch by S&P as a result of pensions concerns has laid bare its 2002 pensions costs in its annual report.

Gross pensions costs for the Dutch logistics firm in the 2003 income statement will be 43 million euros, says the firm – an increase of 37 million euros over 2002. Additional net pension cost in the 2003 income statement will be 24 million euros.

The total underfunded status of the pension fund is 473 million euros, from 206 million euros at the end of 2001, driven by pre-retirement liabilities. The funded status of its defined benefits plans at 2002 year-end is 100.5% from 112% in 2001. Although the coverage ratio is above 100%, PVK, the Dutch pension scheme watchdog, has asked Dutch funds to build up a coverage ratio of 105%.

In order to counterbalance deficits, total cash contributions in 2003 will be 259 million euros of which 110 million euros is an agreed additional contribution.

With regards to the move by S&P, TPG once more remarked on its surprise at the decision, saying: "On 26 November 2002, S&P announced that TPG’s financial ratios are acceptable for he current rating category, and the rations continue to improve."

TPG will be working with S&P to reach a resolution, hopefully by the end of the first quarter 2003.