Notes to Consolidated Financial Statements We assumed the following trend rates in health- care costs: The investment strategy for the major benefit plans is to maintain a diversified portfolio of assets, invested in a prudent manner to maintain the security of funds while maximizing returns within our guidelines. The expected rate of return assumption is based on our target asset allocation policy and the expected future rates of return on these assets. The table below shows the allocation of our pension plan assets at December 31, 2004 and 2003, target allocation for 2004 and the expected long-term rate of return by asset class. Assumed trend rates in health-care costs have a significant effect on the amounts reported for the health-care plans. The table below, for example, shows the effect of a 1% change in the assumed trend rates in health-care costs. • a 4.5% annual rate of increase in the cost per person of covered health-care benefits for 2004 and the fore- seeable future • a 10.5% annual rate of increase in the cost of medica- tion for 2004 with a gradual decline to 4.5% over  six years. Equity securities included approximately $95 million of BCE Inc. common shares or 0.7% of total plan assets at December 31, 2004, and approximately $111 mil- lion of BCE Inc. common shares or 0.9% of total plan assets at December 31, 2003. We are responsible for adequately funding our DB pension plans. We make contributions to them based on various actuarial cost methods that are permitted by pension regulatory bodies. Contributions reflect actuarial assumptions about future investment returns, salary projections and future service benefits.  We contribute to the DC pension plans as employees provide service. Debt securities included approximately $8 million of BCE Inc. and affiliates’ debentures or 0.1% of total plan assets at December 31, 2004, and $108 million or 0.9% of total plan assets at December 31, 2003. The table below shows the amounts we contributed to the DB and DC pension plans and the payments made to beneficiaries under other employee benefit plans. 114 Bell Canada Enterprises  2004 Annual Report PENSION BENEFITS OTHER BENEFITS  2004 2003 2002 2004 2003 2002 Aliant 67 125 9 4 4 3 Bell Canada 20 17 4 77 83 73 Bell Globemedia 17 11 3 – – – BCE Inc. 8 7 5 – – – Total 112  160 21 81 87 76 Comprised of: Contributions to DB plans 97 155 21 81 87 76 Contributions to DC plans 15 5 – – – – Projected Cash Flows  Pension Plan Assets 1% INCREASE 1% DECREASE Effect on other benefits –  total service and interest cost 16 (13) Effect on other benefits –  accrued obligation 156 (137) WEIGHTED WEIGHTED PERCENTAGE AVERAGE  AVERAGE OF PLAN  EXPECTED  TARGET ASSETS AT  LONG-TERM  ALLOCATION DECEMBER 31 RATE OF RETURN ASSET CATEGORY 2004 2004 2003 2004 Equity securities 45%–65% 57% 56% 9.0% Debt securities 35%–55% 43% 44% 5.5% Total/Average 100% 100% 7.5%