At the end of this report, we summarize some important Year-End Considerations which employers should be prepared to address.

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1 Global Report December 2009 Retirement Plan Accounting Assumptions at 2009 This report supplements our June 2009 Global Report, which presented the results of Hewitt Associates global survey of 2008 year-end accounting assumptions. We forecast what the assumptions might be at 2009 year-end, assuming economic indices remain as they were as of November 28, 2009 and plan sponsors use the same methodology to set their discount rates as they used last year, for the following: Discount rate; Expected long-term rate of return; Salary increase; and Pension increase (for certain countries only). Companies with fiscal years ending in November or December 2009 may find the information in this report useful in selecting their year-end accounting assumptions. At the end of this report, we summarize some important Considerations which employers should be prepared to address. Background Hewitt conducted the survey of fiscal 2008 year-end accounting assumptions for plans outside of the United States by gathering information from our consultants, our clients, and annual reports of plan sponsors. The U.S. information is based on Hewitt s annual survey of FAS 87 pension information disclosure in the 2008 annual reports of S&P 500 companies. The majority of the reported measurement dates are December 31, 2008 or within a few months of this date. The tables on the following pages show the average for each assumption as of the end of 2008 and our forecast for 2009 year-end. Copyright 2009 Hewitt Associates LLC December 2009

2 Discount Rate The following table shows the survey results for the discount rate assumption for the 2008 fiscal year-end, as presented in our June 2009 Global Report, and our estimate of the range in which we believe the average 2009 year-end discount rate, selected by companies with a December 31, 2009 measurement date, will fall. Our estimates are based on the 2008 survey results; the movements in bond yields from December 31, 2008 to November 28, 2009; and the assumption that the current interest rate environment will prevail through the rest of Country 2008 Average Expected Range at December 31, 2009 Australia n/a 5.25% 5.50% Brazil 11.98% 10.75% 11.00% Canada 6.94% 6.00% 6.25% Euro Zone 5.88% 4.75% 5.25% Austria 5.74% 5.00% 5.25% Belgium 5.89% 5.00% 5.25% Cyprus 5.64% 5.15% 5.45% France 6.05% 4.75% 5.00% Germany 6.09% 5.20% 5.45% Greece 5.74% 5.00% 5.25% Ireland 5.86% 5.00% 5.25% Italy 5.44% 4.00% 5.20% Netherlands 5.84% 4.90% 5.20% Portugal 5.71% 5.00% 5.25% Spain 5.61% 5.00% 5.25% India 7.79% 7.50% Indonesia 12.55% 10.75% 11.00% Japan 1.96% 2.00% 2.25% Mexico 8.31% 8.00% 8.25% Norway 4.70% 4.75% 4.90% Philippines 10.18% 7.90% 8.15% Poland 5.87% 5.75% 6.00% South Korea 7.54% 6.00% 6.25% Sweden 3.18% 3.90% 4.15% Switzerland 3.17% 3.00% 3.50% Taiwan 2.26% 1.60% 1.85% United Kingdom 6.30% 5.40% 5.60% United States 6.21% 5.65% 5.90% Note that the discount rates shown above represent an average that includes plans with varying maturities and approaches to setting discount rates. The approaches range from referring to indices to using yield curves. Variations also arise in countries without a large market for corporate bonds. In these countries, some plan sponsors may refer to yields on government bonds, while other plan sponsors may refer to the yields on the corporate bonds that are issued. Within the Euro Zone, we also see differences, by country, in what we believe local auditors will find acceptable. Please see the section at the end of this report entitled Considerations to read more about setting the discount rate for 2009 year-end. Copyright 2009 Hewitt Associates LLC 2 December 2009

3 Expected Long-Term Rate of Return The following table shows the survey results for the average expected long-term rate of return on plan assets used to determine the expense for 2008 and our estimates of the average expected return for Normally, the expected return on assets does not change very much from one year to the next. Country 2008 Average 2009 Estimate Australia n/a 7.00% 7.50% Brazil 9.61% 9.37% Canada 6.94% 7.00% Euro Zone 5.47% 4.50% 5.50% Austria 5.26% 4.50% Belgium 5.12% 6.00% Cyprus 6.12% 6.00% France 4.98% 4.00% 5.00% Germany 5.65% 5.50% Greece 4.95% 4.99% Ireland 6.66% 6.00% 6.50% Netherlands 5.52% 5.50% Portugal 5.90% 5.50% Spain 4.17% 4.75% 5.00% India 8.36% 8.00% Japan 2.78% 3.00% Mexico 7.89% 7.50% 8.25% Norway 5.95% 6.00% Philippines 7.72% 9.00% South Korea 4.98% 4.75% Sweden 6.13% 6.00% Switzerland 4.52% 3.50% for fully insured plans 4.00% 5.00% for pension funds Taiwan 3.01% 2.25% United Kingdom 7.96% 7.00% United States 7.81% 7.90% Note that the expected returns shown above represent an average that includes plans with different asset allocations. Plan sponsors should look to the asset allocation of their own plans to set the expected return on assets. Copyright 2009 Hewitt Associates LLC 3 December 2009

4 Salary Increases The following table shows the survey results for the salary increase assumption for 2008 fiscal year-end and our estimate of the average salary increase assumption at 2009 year-end. Similar to the expected return on assets, the salary increase assumption does not usually change significantly from year to year. However, some plan sponsors change the inflation component of their salary increase assumption when they change their discount rate. Country 2008 Average 2009 Estimate Australia n/a 4.00% 4.50% Brazil 7.17% 7.45% Canada 3.65% 3.50% Euro Zone 3.16% 3.00% Austria 2.94% 3.00% Belgium 3.61% 3.00% Cyprus 5.75% 5.76% France 3.34% 2.50% 3.50% Germany 2.67% 2.80% Greece 4.10% 4.20% Ireland 3.41% 3.50% Italy 3.15% 3.00% Netherlands 2.57% 2.50% Portugal 2.57% 2.70% Spain 3.22% 3.00% 3.50% India 7.82% 7.00% Indonesia 9.28% 9.00% Japan 2.52% 2.60% Mexico 5.59% 5.50% Norway 3.93% 4.00% Philippines 8.12% 8.50% Poland 3.75% 3.75% South Korea 6.02% 5.00% Sweden 3.04% 3.25% Switzerland 2.24% 2.50% Taiwan 3.26% 3.00% United Kingdom 3.99% 4.50% United States 4.02% 4.30% Note that the salary scale assumptions should reflect the plan sponsor s long-term expectation for salary increases for their plans members. Copyright 2009 Hewitt Associates LLC 4 December 2009

5 Pension Increases The following table shows the survey results for the pension increase assumption for 2008 fiscal year-end and our estimate of the average pension increase assumption at 2009 year-end. Note that the results are shown for those plans where a portion of the benefits paid to pensioners is adjusted annually. Country 2008 Average 2009 Estimate Euro Zone Germany 1.88% 1.80% Ireland 2.38% 2.50% Netherlands 1.61% 1.40% Norway 2.14% 2.50% Sweden 1.91% 2.00% Switzerland 0.57% 0.50% United Kingdom 2.96% 3.40% Based on the economic conditions at November 30, 2009, we show an increase in the pension increase assumption for the United Kingdom, reversing the decline we saw at 2008 year-end. However, recent changes in inflationary expectations could result in a change in our forecast by year-end. Considerations From our meetings with the Big Four accounting firms, during which we discussed compliance with U.S. GAAP, the most important issue this year-end will again be the selection of the discount rate. They noted that the spread between the yields on bonds issued by financial institutions and the yields on bonds issued by nonfinancial institutions has decreased over the past year and returned close to the levels exhibited before the credit crisis. We expect that auditors will allow employers to return to the pre-crisis methodology they used to set their discount rates. However, there may still be enough uncertainty in the credit markets to justify continued use of a temporary deviation. Regardless of the methodology selected, each employer should have the rationale for selecting the discount rate well documented, as well as why there was or may be a deviation from it. In addition to the discount rate, the auditors discussed the following: The expected return on assets should consider any changes in capital market expectations as well as any changes in the allocation of assets that an employer is committed to making perhaps as part of a liability-driven investment policy. Contributions that were not expected at the measurement date generally should not be reflected in the expected return on assets unless there is a remeasurement. There is a need for support for demographic assumptions such as retirement and termination of employment. Copyright 2009 Hewitt Associates LLC 5 December 2009

6 Other points worth noting are: In almost all countries, last year s inverted yield curves have returned to their normal upward sloping trend. This could lead to discount rates declining by more than what one might expect by only referencing changes to published indices. In most countries, other assumptions, including inflationary expectations, have also returned to pre-crisis levels. Clients should be certain their year-end inflation assumption, which may be used to index pensioners benefits, is based on current long-term inflationary expectations and not those experienced over the last year. In addition, in certain countries, we are finding that the inflation assumption, as well as the discount rate, needs to reflect the duration of the plan s liabilities. * * * If you would like further information about accounting assumptions for defined benefit plans, contact your local Hewitt consultant. If you would like more information about this Global Report, contact Chris Christiansen in the United States ( ), Jakub Wartak in Canada ( ), or Kirsten Miller in Europe ( ). December 2009 Copyright 2009 Hewitt Associates LLC NL EN