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## c) Significant Assumptions 

The assumptions used to calculate annual expenses are those used to calculate the accrued retirement benefit obligation at the end of the previous year. The expected long-term rate of return on plan assets is developed based on the historical and projected returns for each asset class, as well as the target asset allocation for the pension portfolio. Projected rates of return for fixed income securities and equities are developed using a model that factors in long-term government debt rates, real bond yield trend, inflation and equity premiums, based on a combination of historical experience and future expectations. The discount rate used to determine the accrued retirement benefit obligation is determined by reference to the market interest rates of high-quality debt instruments at the measurement date. 

Weighted average assumptions used to calculate the accrued retirement benefit obligation at the end of each year are as follows: 

<img src='content_image/158543.jpg'>

## d) Employee Future Benefits Expense 

The amount of employee future benefits expense recognized in profit is as follows: 

<img src='content_image/158542.jpg'>

Of the total expense, $101 million (2011 - $103 million), $2 million (2011 - $4 million), and $(1) million (2011 - $1 million) was included in operating expenses, general and administration expenses and finance income and expenses, respectively. 

The defined contribution expense for 2012 was $33 million (2011 - $27 million), of which $27 million is included in cost of sales (2011 - $20 million) and $6 million in general and administration expenses (2011 - $7 million). 

