BROADENING OUR HORIZONS - Arrium

Notes to the Financial StatementsDefined benefitpension plansAUSTRALIA2010 $mChanges in the present value of the defined benefit obligationOpening defined benefit obligation 376.4Interest cost 16.1Current service cost 16.4Contributions by plan participants 6.0Benefits paid (54.3)Settlements (24.7)Actuarial gains on obligation (13.5)Closing defined benefit obligation 322.497Changes in the fair value of plan assetsOpening fair value of plan assets 303.8Expected return 20.1Contributions by employer 28.0Contributions by plan participants 2.1Benefits paid (54.3)Settlements (24.7)Actuarial gains 23.6Fair value of plan assets 298.6The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:Defined benefit pension plansAUSTRALIACANADA2011 % %Equity instruments 58.0 65.1Property 6.0 –Debt instruments 28.0 34.1Alternatives 8.0 0.8Defined benefitpension plansAUSTRALIA2010 %Equity instruments 52.5Property 7.5Debt instruments 28.0Alternatives 12.0The expected rate of return on plan assets has been based on historical and future expectations of returns for each of the majorcategories of asset classes as well as the expected and actual allocation of plan assets to these major categories.The principal actuarial assumptions used in determining defined benefit obligations for the Group’s defined benefit plans areshown below:Post-retirementDefined benefit pension plans medical benefits2011 AUSTRALIA CANADA CANADAPrincipal actuarial assumption % % %Discount rate 5.1 5.4 5.7Expected rate of return on assets 7.4 6.6 N/AFuture salary increases 4.2 3.3 3.1CPI inflation 2.5 N/A N/AImmediate health care trend rate N/A N/A 7.4Ultimate health care trend rate N/A N/A 4.5