Kesko's employee pension insurances transfer from the Kesko Pension Fund to Ilmarinen

KESKO CORPORATION STOCK EXCHANGE RELEASE 01.09.2010 AT 17.00 1(2)

  
The management of the statutory pension provision and the related insurance portfolio of some 3,100 people employed by the Kesko Group have today been transferred from the Kesko Pension Fund to Ilmarinen Mutual Pension Insurance Company. The transfer is part of the plan announced on 30 December 2009 to transfer the management of Kesko's statutory pension provision and the insurance portfolio from the Kesko Pension Fund to Ilmarinen in two phases. The second phase is expected to be implemented at the beginning of 2012 at the earliest.

As a result of this first phase of transfer, Kesko will recognise an €8 million actuarial gain in the latter part of the year which will not be treated as a non-recurring item. Starting from 1 September 2010, the pension cost for the people concerned in this transfer of statutory pension provision will be determined under Ilmarinen's management in accordance with the general statutory employee pension principles.

The fair value of the Kesko Pension Fund's investment assets exceeds the amount of its pension liabilities. The difference is recognised as pension assets in Kesko's balance sheet. Pension assets are planned to be returned to those employers whose statutory pension provision has now been transferred to Ilmarinen. The returned pension assets are expected to have a positive cash flow effect for Kesko in a total amount of about €160 million during the next six months.

The return of assets and the second phase of the transfer are subject to the approval of the Financial Supervisory Authority.

In addition to the statutory pension provision, the Kesko Pension Fund has provided supplementary pension benefits to employees who joined Kesko prior to 8 May 1998 when the department A granting supplementary pension benefits was closed. The supplementary pension provision will continue to be managed by the Kesko Pension Fund.

The transfer of the management and insurance portfolio of Kesko's statutory pension provision from the Kesko Pension Fund to Ilmarinen was previously announced in a stock exchange release on 30 December 2010.

Further information:
Senior Vice President, CFO Arja Talma, Kesko Corporation, tel. +358 1053 22113
Senior Vice President Riitta Laitasalo, Human Resources, Kesko Corporation, tel. +358 1053 22060

Kesko Corporation

Paavo Moilanen
Senior Vice President, Corporate Communications and Responsibility

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