NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (thousands of dollars unless otherwise indicated) rates have a significant effect on the amounts reported for the postretirement health care benefit obligation. A one-percentage-point change in assumed health care cost trend rates would have had the following effects as of December 31, 2004: Employees of the Company hired prior to January 1, 1993 who are not members of a collective bargaining unit, and certain groups of employees added through acquisitions, are eligible for health care and life insur- ance benefits upon retirement, subject to the terms of the unfunded plans. There were 4,658, 4,727 and 4,719 retired employees entitled to receive benefits as of December 31, 2004, 2003 and 2002, respectively. The assumed health care cost trend rates to be used to determine the net periodic benefit cost for 2005 are 9.5 percent and 11.0 percent for participants under age 65 and age 65 and older, respectively. These trend rate assumptions decrease in each successive year until reach- ing 5.0 percent in 2013. Assumed health care cost trend A summary of the obligation for postretirement health care and life insurance benefits is as follows: One-Percentage-Point Increase (Decrease) Effect on total of service and interest cost components .......... $ 601 $ (582) Effect on the postretirement benefit obligation...................... $ 9,459 $ (9,080) Postretirement Benefits Other than Pensions Benefit obligation: 2004 2003 2002 Balance at beginning of year ........................................................ $ 302,449 $ 261,807  $ 267,118  Service cost .................................................................................. 4,339 4,334  3,898  Interest cost .................................................................................. 16,725 16,787  16,567  Actuarial loss (gain)...................................................................... 8,745 35,495  (3,806) Plan amendments.......................................................................... (4,787) (6,778) Benefits paid ................................................................................ (15,677) (15,974) (15,192) Balance at end of year .................................................................. 311,794 302,449  261,807  Unfunded benefit obligation recognized in  the Consolidated Balance Sheets: Unfunded benefit obligation at end of year ................................ (311,794) (302,449) (261,807) Unrecognized actuarial loss........................................................ 83,720 78,559  45,706  Unrecognized prior service credit .............................................. (9,301) (8,963) (12,848) Unfunded benefit obligation recognized in  the Consolidated Balance Sheets: .................................................. $ (237,375) $ (232,853) $ (228,949) Unfunded benefit obligation recognized in the Consolidated Balance Sheets consisted of: Benefit liability included in Other long-term liabilities .............. $ (221,975) $ (216,853) $ (213,749) Benefit liability included in Other accruals ................................ (15,400) (16,000) (15,200) Weighted-average assumptions used to determine  benefit obligation: $ (237,375) $ (232,853) $ (228,949) Discount rate.............................................................................. 5.75% 6.00% 6.55% Health care cost trend rate - pre-65 .......................................... 9.50% 10.00% 8.90% Health care cost trend rate - post-65 .......................................... 11.00% 12.00% 8.90% Weighted-average assumptions used to determine  net periodic benefit cost: Discount rate.............................................................................. 6.00% 6.55% 6.75% Health care cost trend rate - pre-65 .......................................... 10.00% 8.90% 9.50% Health care cost trend rate - post-65 .......................................... 12.00% 8.90% 9.50% Net periodic benefit cost: Service cost .................................................................................. $ 4,339 $ 4,334  $ 3,898  Interest cost .................................................................................. 16,725 16,787  16,567  Recognition of: Unrecognized prior service credit .............................................. (4,448) (3,885) (3,885) Unrecognized actuarial loss........................................................ 3,568 2,546  2,341  Net periodic benefit cost .............................................................. $ 20,184 $ 19,782  $ 18,921  58