NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS Asset Allocation Demographic Assumptions Contributions Changes in Comprehensive Income 82 CAPSTONE INFRASTRUCTURE CORPORATION For the year ended Dec 31, 2013 Dec 31, 2012 Current service cost 2,219 2,054 Past service cost 18 — Section expenses 520 493 Total operating expense 2,757 2,547 Interest income on Section assets 11,635 12,465 Interest expense on Section obligation (9,818) (9,531) Net pension interest income 1,817 2,934 Gain/(loss) from change in financial assumptions 3,565 (15,286) Gain/(loss) from change in demographic assumptions (2,027) (1,864) Experience gains/(losses) 2,211 (1,831) Return on plan assets, excluding amounts included in interest income (1,558) (8,602) Deferred tax (expense)/recovery 693 7,498 Actuarial gain/(loss) recognized in other comprehensive income (“OCI”) 2,884 (20,085) As at Dec 31, 2013 Dec 31, 2012 Amount Allocation Amount Allocation Equities 23,784 8% 22,788 8% Diversified growth funds 10,141 3% 8,526 3% Bonds 254,566 85% 229,192 85% Emerging markets multi-asset funds 5,410 2% 5,366 2% High yield bonds 6,076 2% 5,216 2% Other 629 —% 562 —% Market value of assets 300,606 100% 271,650 100% Present value of liabilities (254,365) (234,075) Surplus 46,241 37,575 The following table summarizes the market value of assets, present value of liabilities and resulting surplus for Bristol Water's Section of the defined benefits pension plan. The assets include a breakdown by the main asset classes. The majority of the Section assets are held within instruments with quoted market prices in an active market. The mortality assumptions have been drawn from actuarial table S1NA with a 95% adjustment to mortality rates and with future improvements in line with CMI 2012 projections from 2003, subject to a minimum increase of 1.3% and 1.0% per annum, for males and females, respectively. Per the  mortality assumptions used the average life expectancy for a male pensioner currently aged 60 is 27.4 years and for a female pensioner currently aged 60 is 29.7 years (December 31, 2012 – 26.9 male, 29.2 female). The allowance made for future improvements in longevity is such that a male member retiring at age 60 in 2038 (i.e. in 25 years' time) is assumed to have an increased average life expectancy from retirement of 29.9 years, and for a female retiring at age 60 in 2038 is assumed to have increased to  31.8 years (December 31, 2012 – 28.9 male, 30.8 female). The weighted average duration of the expected benefit payments from the Section is around 16 years. Contributions paid in the year to the Section were $3,840 (£2,383) (December 31, 2012 – $4,400 (£2,778)). For normal employer contributions after April 1, 2012 Bristol Water was required to contribute at the rates of 29% for the main sub Section and 17% for the alternative benefits sub Section of the relevant payroll costs. Prior to April 1, 2012, Bristol Water contributed 21% and 10%, respectively. The estimated amount of the total employer contribution expected to be paid to the Section for the year ending December 31, 2014 is $4,374 (£2,485). Analysis of operating expense, interest expense and amounts recognized in other comprehensive income: