page 75 Bombardier Inc. Annual Report 2003-04 Other Pension The Corporation sponsors several domestic- and foreign-funded and unfunded defined  benefit pension plans. The financial position and other information regarding the Corporation’s defined benefit pension plans are presented in note 23 to the Consolidated Financial Statements. Funded plans are plans for which segregated plan assets are invested in trusts. These  plans can be in an over- or under-funded position, depending on various factors, such as invest- ment returns. The funded plans are mainly located in North America, the United Kingdom and Switzerland. For these plans, employer cash contributions are determined in accor- dance with the regulatory requirements of each local jurisdiction. Unfunded plans are plans for which there are no segregated plan assets. These plans, for which the Corporation has no prefunding obligations, are located mainly in continental Europe. In these countries, the establishment of segregated plan assets is either not per- mitted or not in line with local practice. The employer cash requirement for these plans corresponds to the benefit payments to be made to the participants. The Corporation uses a measurement date of December 31 for accounting purposes.  The determination of assumptions is made after a periodic review of factors, such as long-term return expectations prepared by consultants or economists, historical invest- ment returns, long-term inflation assumptions and recommendations from actuaries. The Corporation uses a market-related valuation of assets that recognizes the effect of investment gains or losses over a three-year period from the year in which they occur for purposes  of measuring the pension cost. The Corpo- ration reflects in advance the cost of  future discretionary increases of pension benefits, for plans with a history of regular Pension cost from continuing operations for fiscal year 2004 amounted to $324 million, compared to $231 million for fiscal year 2003. The net actuarial gains and losses, based on the market-related value of plan assets, more than 10% of the greater of the pension obli- gation and the market-related value of plan assets, as well as prior service costs, are amor- tized over the estimated average remaining service life of the plan participants. The amor- tization of the net unrecognized amounts  is expected to account for $95 million of the estimated pension cost for fiscal year 2005.  As at December 31, 2003, the net unrec- ognized portion of the pension plan deficit, comprised of net actuarial losses and prior service costs, totalled $2.2 billion, compared  to $2.0 billion as at December 31, 2002. It is estimated that a decrease of 50 basis points in current discount rates would increase the pension benefit obligation by approximately $650 million. The increase in the deficit is mainly due to an increase in the pension benefit obligation resulting from a general decrease in discount rates, partially offset by favourable investment returns on plan assets (return of 10.7% on fair value of plan assets) and the effect of the sale of the recreational products segment in fiscal year 2004. The investment returns for fiscal year 2004 were negatively impacted by unfavourable returns on privately-held equity securities, including hedge funds. As at December 31, 2003, the deficit for the pension plans amounted to $2.8 billion ($2.7 bil- lion as at December 31, 2002). This amount includes the pension benefit obligation of the unfunded plans amounting to $587 million ($641 million as at December 31, 2002). Cash contributions to the pension plans for fiscal year 2005 would amount to $370 mil- lion. Actual cash contributions to the pension plans for fiscal year 2005 are estimated to be $400 million. This estimate includes a voluntary contribution of $242 million to the aerospace plans in the U.K., and excludes the $212 mil- lion of advance contributions made during fiscal year 2004.  The Corporation contributed $212 million to its plans in January 2004 as advance contri- butions for fiscal year 2005. This contribution was not reflected in determining the deficit position as at December 31, 2003 (measure- ment date), but was reflected in determining the accrued benefit asset (liability) balance as at January 31, 2004. The Corporation complies with the regulatory cash contribution requirements of each local jurisdiction, which are designed to protect par- ticipants’ rights. Since the measurement basis used to determine the pension cost is, in gen- eral, more conservative than the regulatory requirements in most jurisdictions, the deficit computed to establish cash contributions (funding deficit) is smaller than the deficit for accounting purposes for most pension plans. Pension cost for fiscal year 2005 is esti- mated to be approximately $380 million. The increase compared to fiscal year 2004 is mainly due to an increase in the pension benefit obli- gation during fiscal year 2004, and a loss on plan assets during fiscal years 2002 and 2003. Pension cost is recognized either directly  to income or capitalized to assets, such as inventories and aerospace program tooling. The increase is mainly due to a significant loss on plan assets during fiscal years 2002 and 2003, as well as a reduction of 0.6% in the expected long-term rate of return on plan assets assumption for fiscal year 2004 compared to fiscal year 2003.  discretionary increases, and the cost of future life expectancy improvements. Pension plan deficit Funding  Impact on results of operations Unrecognized amounts Assumptions