Changes in Financial Position Risks and Sensitivity Analysis 2013 ANNUAL REPORT  83 The sensitivities have been calculated to show the movement in the defined benefit obligation or surplus in isolation, and assuming no other changes in market conditions. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. (1) This represents a 25% increase or decrease in the return on equities, diversified growth funds, emerging markets multi asset funds and high  yield bonds. The following table summarizes the movement in the defined benefit surplus for the asset and liability components of the Section: The actual return on the Section's assets for the year ended as at December 31, 2013 was a gain of $10,077 (£6,184) (December 31, 2012 – gain of $3,371 (£2,128)). Bristol Water's defined benefit plan is exposed to a number of risks, the following table summarizes the most significant risks: Capstone has assessed the assumptions impacted by these risks provided the following indicative sensitivities:. Sensitivity - Impact on Retirement Benefit Surplus Significant Assumption Change in Assumption Increase Decrease Discount Rate 0.1% 3,701 (3,878) Inflation 0.1% (2,820) 2,820 Value of return seeking asset portfolio 25% (1) 11,281 (11,281) Life expectancy 1 year (7,756) 7,756 Risk Impact Changes in bond yields A decrease in corporate bond yields will increase plan liabilities, although this will be partially offset by  an increase in the value of the Section's bond holdings. An increase in the discount rate would lead to a reduction in the value placed on the liabilities of the Section Inflation The pension increases granted by the Section vary according to the benefit scale and period of  service to which the pension relates. The majority of pensions in payment increase in line with the  increases set out in government Pension Increase (Review) Orders, with some also being subject to a  maximum increase of 5% per annum. The government has confirmed that in future Pension Increase  Orders will be based on CPI inflation. Higher inflation would lead to higher liabilities. The majority of the Section's assets are either unaffected by or loosely correlated with inflation, meaning that an increase in inflation would also reduce the Section surplus. Asset Volatility The current investment strategy is to invest in a combination of risk-reducing assets (i.e. United  Kingdom government bonds) and return-seeking assets (i.e. equities and other diversified assets),  with the allocation to risk-reducing assets gradually increased so that by March 2027, 100% of the  Section's assets are invested in risk-reducing assets. The plan liabilities are calculated using a discount rate set with reference to yields on United Kingdom AA- rated corporate bonds. If plan assets under-perform this yield, it will create a deficit. Life expectancy Post-retirement life expectancy contains considerable uncertainty, particularly when considering the projection of future changes in mortality rates. Increases in life expectancy will result in an increase in the Section's liabilities. Inflationary increases result in higher sensitivity to changes in life expectancy. For the year ended December 31, 2013 December 31, 2012 Asset Liability Total Asset Liability Total Opening surplus in Section 271,650 (234,075) 37,575 267,114 (207,010) 60,104 Current service cost — (2,219) (2,219) — (2,054) (2,054) Past service cost — (18) (18) — — — Pension interest 11,635 (9,818) 1,817 12,465 (9,531) 2,934 Section expenses (520) — (520) (493) — (493) Re-measurements: Gain/(loss) from change in financial assumptions — 3,565 3,565 — (15,286) (15,286) Gain/(loss) from change in demographic assumptions — (2,027) (2,027) — (1,864) (1,864) Experience gains/(losses) — 2,211 2,211 — (1,831) (1,831) Return on plan assets, excluding amounts included in interest income (1,558) — (1,558) (8,602) — (8,602) Contributions by employer 3,840 — 3,840 3,726 — 3,726 Contributions by employees 649 (649) — 675 (675) — Benefits paid (9,705) 9,705 — (9,604) 9,604 — Foreign exchange 24,615 (21,040) 3,575 6,369 (5,428) 941 Ending surplus in Section 300,606 (254,365) 46,241 271,650 (234,075) 37,575