Notes To Consolidated Financial Statements Expected benefit payments for these plans total $0.4 million  for each year in the period from 2005 through 2009, and  $2.2 million for the period from 2010 through 2014. The  components of net periodic benefit cost for FCX’s and, since  October 1, 2002, FM Services Company’s health care and life  insurance benefits follow (in thousands): FCX and FM Services Company have employee savings plans  under Section 401(k) of the Internal Revenue Code that  generally allow eligible employees to contribute up to 50  percent of their pre-tax compensation, but no more than  a specified annual limit (currently $14,000). FCX and FM  Services Company match 100 percent of the first 5 percent of  the employees’ contribution. New plan participants vest 100  percent in FCX’s and FM Services Company’s matching contri- butions upon three years of service. During 2000, FCX and FM Services Company also estab- lished additional defined contribution plans for substantially  all their employees following their decision to terminate  their defined benefit pension plans. Under these plans,  FCX and FM Services Company contribute amounts to indi- vidual accounts totaling either 4 percent or 10 percent of  each employee’s pay, depending on a combination of each  employee’s age and years of service. The costs charged to  operations for FCX’s and, since October 1, 2002, FM Services  Company’s employee savings plans and defined contribution  plans totaled $3.2 million in 2004, $2.8 million in 2003 and  $1.2 million in 2002. FCX and FM Services Company have  other employee benefit plans, certain of which are related  to FCX’s performance, which costs are recognized currently  in general and administrative expense. Atlantic Copper has  a defined contribution plan and recorded charges totaling  $0.5 million in 2004, $0.4 million in 2003 and $0.3 million  in 2002 for annual service costs related to this plan. During 2004, Atlantic Copper undertook a cost reduction  and operational enhancement plan designed to reduce unit  costs, including a reduction in workforce, and enhance  operational and administrative efficiencies. In connection with  implementing this cost reduction and operational enhance- ment plan, Atlantic Copper submitted a workforce reduction  plan to the Spanish Labour Authority and, in December 2004,  received approval for this workforce reduction plan. Atlantic  Copper recorded a $12.0 million charge in 2004 related to the  workforce reduction under this plan. These charges include  $8.1 million in one-time termination benefits for those  affected employees eligible for early retirement benefits,  $0.8 million in severance payments for those affected  employees not eligible for early retirement and $3.1 million  for contract termination costs. Atlantic Copper paid $1.4  million of these benefits in December 2004 and expects to  pay the balance in the first quarter of 2005. Note 10. Commitments and Contingencies  Grasberg Open-Pit Slippage Events.  On October 9, 2003,  a slippage of material occurred in a section of the Grasberg  open pit, resulting in eight fatalities. On December 12,  2003, a debris flow involving a relatively small amount of  loose material occurred in the same section of the open  pit resulting in only minor property damage. All material  involved in the affected mining areas has been removed. The  events caused PT Freeport Indonesia to alter its short-term  mine sequencing plans and to focus its open-pit operations on  accelerating the removal of overburden from the south wall  to restore safe access to high-grade ore areas in the pit. In  April 2004, PT Freeport Indonesia established safe access and  initiated mining in higher-grade ore areas while continuing  overburden removal activities. While PT Freeport Indonesia  resumed normal milling rates in June 2004, no assurance can  be given that similar events will not occur in the future. As a result of the fourth-quarter 2003 slippage and debris  flow events, PT Freeport Indonesia notified its copper  concentrate customers that it was declaring force majeure  under the terms of its contracts as it would be unable  to satisfy its annual sales and delivery commitments. In  December 2004, PT Freeport Indonesia terminated the force  majeure that had been in effect since December 2003 under  its concentrate sales contracts. PT Freeport Indonesia maintains property damage and  business interruption insurance related to its operations.  FCX and its insurers entered into an insurance settlement  agreement in December 2004 (Settlement Agreement). Under  the Settlement Agreement, all claims that arose from the  fourth-quarter 2003 slippage and debris flow events in the  Grasberg open-pit mine were settled. The insurers agreed to  pay an aggregate of $125.0 million, inclusive of interest and  the $20.0 million previously paid to PT Freeport Indonesia  in the third quarter 2004, in connection with its claims.  Through December 31, 2004, the insurers had paid $94.5  72 |  FREEPORT-McMoRan COPPER & GOLD INC. 2004  2003  2002 Service cost  $ 137  $127  $ 57 Interest cost   335   327   152 Amortization of prior service (credit) cost   (139)   273   (62) Amortization of net actuarial loss (gain)  22  14   (33) Net periodic benefit cost  $ 355  $741  $114