price-earnings ratios of the major stock market indices, and long- term inflation. The model currently incorporates a long-term infla- tion assumption of 2.5% and an active management premium of 1% (net of fees) validated by historical analysis. Although man- agement reviews the Company’s expected long-term rates of re- turn annually, the benefit trust investment performance for one particular year does not, by itself, significantly influence this evalu- ation. The expected rates of return are generally not revised, pro- vided these rates continue to fall within a “more likely than not” corridor of between the 25th and 75th percentile of expected long-term returns, as determined by the Company’s modeling process. The current expected rate of return of 9.3% presently equates to approximately the 50th percentile expectation. Any fu- ture variance between the expected and actual rates of return on plan assets is recognized in the calculated value of plan assets over a five-year period and once recognized, experience gains and losses are amortized using a declining-balance method over the average remaining service period of active plan participants. The Company’s year-end pension plan weighted-average asset al- locations by asset category were: The Company’s investment strategy for its major defined benefit plans is to maintain a diversified portfolio of asset classes with the primary goal of meeting long-term cash requirements as they be- come due. Assets are invested in a prudent manner to maintain the security of funds while maximizing returns within the Company’s guidelines. The current weighted-average target asset allocation reflected by this strategy is: equity securities-78.2%; debt securities-21.1%; other-.7%. Investment in Company com- mon stock represented 1.7% and 2.0% of consolidated plan as- sets at December 27, 2003 and December 28, 2002, respectively. Plan funding strategies are influenced by tax regulations. The Company currently expects to contribute approximately $83 mil- lion to its defined benefit pension plans during 2004. The Company sponsors a number of plans to provide health care and other welfare benefits to retired employees in the United States and Canada, who have met certain age and service require- ments. The majority of these plans are funded or unfunded defined benefit plans, although the Company does participate in a few multiemployer or other defined contribution plans for certain em- To determine the overall expected long-term rate of return on plan assets, the Company works with third party financial consultants to model expected returns over a 20-year investment horizon with respect to the specific investment mix of its major plans. The return assumptions used reflect a combination of rigorous historical per- formance analysis and forward-looking views of the financial mar- kets including consideration of current yields on long-term bonds, Certain of the Company’s subsidiaries sponsor 401(k) or similar savings plans for active employees. Expense related to these plans was (in millions): 2003-$26; 2002-$26; 2001-$25. Company con- tributions to these savings plans approximate annual expense. Company contributions to multiemployer and other defined contri- bution pension plans approximate the amount of annual expense presented in the table above. The components of pension expense were: Expense Assumptions Plan assets Note 10 Nonpension postretirement  and postemployment benefits Postretirement (millions) 2003 2002 2001 Service cost $6 7 . 5 $5 7 . 0 $4 7 . 4 Interest cost 151.1 140.7 124.5 Expected return on plan assets (224.3) ( 217.5) ( 192.4) Amortization of unrecognized transition obligation .1 .3 .3 Amortization of unrecognized prior service cost 7.3 6.9 6.6 Recognized net (gain) loss 28.6 11.5 4.6 Curtailment and special termination benefits -  net (gain) loss 8.1 — (1.5) Pension expense (income) - Company plans  38.4 (1.1) ( 10.5) Pension expense - defined contribution plans 3.2 2.9 3.0 Total pension expense (income) $4 1 . 6 $ 1.8 ($ 7.5) 2003 2002 Equity securities 74.6% 75.5% Debt securities 24.3% 23.7% Other 1.1% .8% Total 100.0% 100.0% 2003 2002 2001 Discount rate 5.9% 6.6% 7.0% Long-term rate of compensation increase 4.3% 4.7% 4.7% 2003 2002 2001 Discount rate 6.6% 7.0% 7.0% Long-term rate of compensation increase 4.7% 4.7% 4.6% Long-term rate of return on plan assets 9.3%  10.5% 10.4% Earning Our Stripes 44 All gains and losses, other than those related to curtailment or special termination benefits, are recognized over the average re- maining service period of active plan participants. Net losses from special termination benefits recognized in 2003 are related prima- rily to a plant workforce reduction in Great Britain. Net gains from curtailment and special termination benefits recognized in 2001 were recorded as a component of restructuring charges. Refer to Note 3 for further information. The worldwide weighted average actuarial assumptions used to determine benefit obligations were: The worldwide weighted average actuarial assumptions used to determine annual net periodic benefit cost were: