Mandarin Oriental International Limited - Mandarin Oriental Hotel ...

11 Loan receivable
Balance represents an interest-bearing mezzanine loan of US$12.0 million (2004: nil) provided in respect of the
Boston hotel project.
12 Pension plans
The Group has a number of defined benefit pension plans, covering all the main territories in which it operates
with the major plans relating to employees in Hong Kong and South East Asia. Most of the pension plans are final
salary defined benefit plans and are funded.The assets of the funded plans are held independently of the Group’s
assets in separate trustee administered funds.The Group’s major plans are valued by independent actuaries annually
using the projected unit credit method.
The principal actuarial assumptions used for accounting purposes at 31st December are as follows:
2005 2004
Weighted Weighted
average average
% %
Discount rate applied to pension obligations 5.5 5.5
Expected return on plan assets 6.0 6.0
Future salary increases 6.0 5.0
The expected return on plan assets is determined based on the expected long-term average returns on global
equities of 6% to 9% per annum and global bonds of 3.5% to 5.5% per annum, and the long-term benchmark
allocation of assets between equities and bonds in each plan.
ANNUAL REPORT 2005 51