A summary of the plans’ benefit obligations, funded status, and net balance sheet position is as follows: The company has engaged a non-affiliated third party  professional investment advisor to assist the company develop investment policy and establish asset allocations. The company’s overall investment objective is to provide a return, that along  with company contributions, is expected to meet future benefit payments. Investment policy is established in consideration of anticipated future timing of benefit payments under the plans. The anticipated duration of the investment and the potential for investment losses during that period are carefully weighed against the potential for appreciation when making investment decisions. The company routinely monitors the performance of investments made under the plans and reviews investment policy in considera- tion of changes made to the plans or expected changes in the timing of future benefit payments. 34 MIDDLEBY CORPORATION AND SUBSIDIARIES 2004 2004 2003 2003 Union Director Union Director (dollars in thousands) Plan Plans Plan Plans Change in Benefit Obligation: Benefit obligation - beginning of year $ 4,034 $ 5,809 $ 3,502 $ 4,129 Service cost — 341 — 397 Interest on benefit obligations 243 375 249 312 Return on assets (215) — (264) — Net amortization and deferral 132 648 106 406 Pension settlement — 1,947 — — Net pension expense 160 3,311 91 1,115 Net benefit payments (190) (7) (203) (7) Actuarial (gain) loss 157 (832) 644 572 Benefit obligation - end of year $ 4,161 $ 8,281 $ 4,034 $ 5,809 Change in Plan Assets: Plan assets at fair value - beginning of year $ 3,346 $ 2,420 $ 3,078 $ 1,214 Company contributions 216 1,580 280 1,007 Investment gain 111 71 191 310 Benefit payments and plan expenses (190) (106) (203) (111) Plan assets at fair value - end of year $ 3,483 $ 3,965 $ 3,346 $ 2,420 Funded Status: Unfunded benefit obligation $ (678) $ (4,316) $ (688) $ (3,389) Unrecognized net loss 1,674 — 1,628 832 Net amount recognized in the balance sheet at year-end 996 (4,316) $ 940 $ (2,557) Amount recognized in balance sheet: Current liabilities $ — $ (3,637) $ — $ — Non-current liabilities (678) (679) (688) (3,389) Accumulated other comprehensive income 1,674 — 1,628 832 Net amount recognized $ 996 $ (4,316) $ 940 $ (2,557) Salary growth rate n/a 3.50% n/a 3.50% Assumed discount rate 6.00% 6.25% 6.25% 6.25% Expected return on assets 6.50% n/a 8.50% n/a