NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The following table provides summaries of the estimated financial positi ons of our pension benefit plans and other future emplo yee  benefits plans: Pension benefit plans Other future employee benefits plans 20 02 2001 2000 2002 2001 2000 Accrued benefit obligation, beginning of year 2,903 $ 2,211 $ 2,098  $ 537 $ — $ — Adjustment to adopt change in accounting standard — 402 — — 490 — Benefits earned by employees 105 93 69  13 13 — Interest cost accrued on accrued benefit obligation 191 177 166  35 32 — Benefits paid to pensioners and employees (a) (167) (151) (152) (23) (18) — Voluntary employee contributions 5 6 4 — — — Actuarial (gain) loss 119 117 (7) 34 17 — Plan amendments 15 24 18  — — — Other, primarily foreign exchange (14) 24 15  (1) 3 — Accrued benefit obligation, end of year 3,157 $ 2,903 $ 2,211 $ 595 $ 537 $ — Fair value of plan assets, beginning of year 2,816 $ 3,103 $ 2,825  $ 54 $ — $ — Transition adjustment to reflect prior funding by U.S. subsidiary — — — 50 — Actual return on plan assets (188) (285) 365  (3) (3) — Bank contributions 454 122 44  27 5 — Voluntary employee contributions 5 6 4 — — — Benefits paid to pensioners and employees (167) (151) (152) (23) — — Other, primarily foreign exchange (8) 21 17 — 2 — Fair value of plan assets, end of year 2,912 $ 2,816 $ 3,103  $ 55 $ 54 $ — Plan funded status (245) $ (87) $ 892 $ (540) $ (483) $ — Unrecognized actuarial (gain) loss 1,148 633 (543) 63 25 — Unrecognized past service costs 33 20 78  — — — Unrecognized transition amount — — (1) — — — Accrued benefit asset (liability), end of year 936 $ 566 $ 426  $ (477) $ (458) $ — Annual Benefits Expense Net benefits expense includes the following components: Actual investment return on plan assets 188 $ 285 $ (365) $ 3 $ 3 $ — Excess of actual over expected return (423) (537) 135  (8) (8) — Expected return on plan assets (235) $ (252) $ (230) $ (5) $ (5) $ — Benefits earned by employees 105 93 72  13 13 — Interest cost accrued on accrued benefit obligation 191 177 166  35 32 — Amortization of actuarial loss (gain) 27 — (38) 3 1 — Amortization of past service costs 2 1 14  — — — Amortization of transition amount — (1) (1) — — — Benefits paid to pensioners and employees (a) — — — — — 16  Annual benefits expense 90 18 (17) 46 41 16 Other (includes Canada, Quebec and defined contribution pension plans expense) 45 49 40  — — — Total annual pension and other future employee benefits expenses 135 $ 67 $ 23  $ 46 $ 41 $ 16 Weighted Average Actuarial Assumptions  (%) Discount rate  6.5 6.7 8.1 6.7 6.6 — Rate of compensation increase 4.1 4.2 4.2 3.7 4.2 — Expected long-term rate of return on plan assets 7.5 8.2 8.4 8.0 8.0 — (a) Prior to November 1, 2000, we recorded the expense for other future employee benefits when it was incurred. Effective November 1, 2000, we recorded an actuarially determined liability and expense for these benefits.  As at October 31, 2002, the pension plan assets consisted of equities (53%) and fixed income invest- ments (47%). The plans paid $5 for the year ended October 31, 2002 ($4 in 2001 and 2000) to us and certain of our subsidiaries for investment management, record-keeping, custodial and administrative services rendered on the same terms that we offer to our customers. The plans did not hold any of our shares directly as at October 31, 2002, 2001 and 2000. Included in the accrued pension benefit obligation as at October 31, 2002 was $926 ($763 in 2001; $ 123 in 2000) and included in the fair value of plan assets for pension benefit plans as at October 31, 2002 was $572 ($596 in 2001; nil in 2000) in respect of plans that are not fully funded. The following table outlines the key weighted average economic assumptions used in measuring the accrued pension benefit obli- gation, the accrued other future employee benefits obligation and related expenses. The sensitivity analysis provided in the table should be used with caution as it is hypothetical and changes in each key assumption may not be linear. The sensitivities in each key variable have been calculated independently of changes in other key variables. Actual experience may result in changes in a number of key assumptions simultaneously. Changes in one factor may result in changes in another, which could amplify or reduce certain sensitivities.  82 BMO FINANCIAL GROUP ANNUAL REPORT 2002 Other future  Pension employee benefits Accrued Accrued benefit Benefits benefit Benefits obligation expense obligation expense Expected rate of return on assets (%) — 7.5 — — Impact of: 1% increase $  — $ (31) $  — $  — 1% decrease $  — $ 31 $ — $  — Di scount rate (%) 6.5 6.7 6.7 6.6 Impact of: 1% increase $ (363) $ (19) $ (76) $ (3) 1% decrease $ 445 $ 21 $ 96 $ 4 Assumed overall health care cost trend (%) — — 5.3 (1) 5.6 (2) Impact of: 1% increase $  — $  — $ 75 $ 6 1% decrease $  — $  — $ (62) $ (5) ( 1) Trending to 4.26% in 2005 and remaining at that level thereafter.  ( 2) Trending to 4.24% in 2005 and remaining at that level thereafter.