MANAGEMENT’S TORSTAR CORPORATION Pension Plans Post Employment Benefit Plans 2004 2003 2004 2003 Significant assumptions used To determine benefit obligation at end of year: Discount rate 5.75% 6.0% 5.75% 6.0% Rate of future compensation increase 3.0% to 3.5% 4.0% N/A N/A To determine benefit expense: Discount rate 6.0% 6.5% 6.0% 6.5% Expected long-term rate of return on plan assets 7.0% 7.0% N/A N/A Rate of future compensation increase 4.0% 4.0% N/A N/A Health care cost trend rates at end of year: Initial rate N/A N/A 9.5% 10.0% Ultimate rate N/A N/A 5.0% 5.0% Year ultimate rate reached N/A N/A 2014 2014 Average remaining service life of active employees  to 16 years 13 to 18 years 15 years 15 years Long-term liabilities includes $15.7 million related to an unfunded executive retirement plan which is supported by an outstanding letter of credit of $22.7 million at December 31, 2004. In December 2003, in order to reduce the unfunded status, the company made an incremental contribution of $23.0 million to its Canadian deferred benefit pension plans. This contribution was in addition to the required  annual employer contributions. The effect of a 1% increase or decrease in significant assumptions used for the company’s pension and post employment benefit plans would result in an increase (decrease) in the net benefit expense and accrued benefit obligation at December 31, 2004: Pension plan assets, measured as at December 31, are as follows: The company measures the accrued benefit obligations and the fair value of the Plans’ assets for accounting purposes as at December 31 of each year The most recent actuarial valuation of the Plans’ for funding purposes was  performed as at December 31, 2003 and the next required valuation will be as at December 31, 2006. 57 TORSTAR 2004 Net Benefit Expense Accrued Benefit Obligation 1% Increase 1% Decrease 1% Increase 1% Decrease Pension plans: Discount rate ($6,836) $7,934 ($67,761) $78,351 Expected long-term rate  of return on plan assets (5,014) 5,014 Rate of compensation increase 2,851 (2,639) 9,490 (8,993) Post employment benefits plans: Discount rate (228) 392 (6,703) 7,555 Per capita cost of health care 425 (396) 3,525 (3,314) 2004 2003 Equity investments 64% 61% Fixed income investments 36% 39% Total 100% 100%