Annual Report and Accounts 2006 - DCC plc

94notes to the financial statements32. Retirement benefit obligationsGroupThe Group operates eight defined benefit pension schemes in the Republic of Ireland and three in the UK. The projectedunit credit method has been employed in determining the present value of the defined benefit obligation arising, the relatedcurrent service cost and, where applicable, past service cost.The Group has elected to avail of early implementation of the Amendment to IAS 19 Actuarial Gains and Losses, GroupPlans and Disclosures which enables the recognition of actuarial gains and losses and the associated movement in thedeferred tax asset in retained income via the Statement of Recognised Income and Expense.Full actuarial valuations were carried out between 31 December 2002 and 1 April 2005. In general, actuarial valuations are notavailable for public inspection, although the results of valuations are advised to the members of the various pension schemes.Actuarial valuations have been updated to 31 March 2006 for International Accounting Standard 19 by a qualified actuary.The principal actuarial assumptions used were as follows:Republic of Ireland Schemes 2006 2005Rate of increase in salaries 3.50% - 4.00% 3.50% - 4.00%Rate of increase in pensions in payment 2.25% - 3.00% 2.25% - 5.00%Discount rate 4.00% - 4.70% 4.00% - 4.80%Inflation assumption 2.25% 2.25%UK schemes 2006 2005Rate of increase in salaries 3.75% 3.75%Rate of increase in pensions in payment 2.75% - 4.00% 2.75% - 4.00%Discount rate 4.70% 5.25%Inflation assumption 2.75% 2.75%The expected long term rates of return on the assets of the schemes were as follows:Republic of Ireland schemes 2006 2005Equities 7.40% 7.20%Bonds 3.50% 3.70%Property 6.30% 5.20%Cash 3.00% 2.40%UK schemes 2006 2005Equities 7.90% 8.10%Bonds 4.00% 4.60%Property 6.80% 6.10%Cash 3.50% 3.50%Assumptions regarding future mortality experience are set based on advice from published statistics and experience in bothgeographic regions. The average life expectancy in years of a pensioner retiring at age 65 is as follows:2006 2005Male 19.5 19.5Female 22.5 22.5The Group does not operate any post-employment medical benefit schemes.