The investment policy for the defined benefit plan is to invest in highly rated, lower risk securities that preserve the investment asset value of the Plan while seeking to maximize the retur on those invested assets. The Plan assets as of December 31, 2004 and 2003 ar invested principally in highly rated fixed income securities. The long term rate of return assumption is based on the fixed income securities portfolio. The actual retur on assets has historically been close to our assumptions of expected returns. During 2004, the Company contributed $13.7 million to the Plan. Based on the Company’s current expectations, the 2005 contribution should approximate $3.0 million. The Company also maintains two non-qualified excess benefit plans (“Excess Plans”) that provide more highly compensated officers and employees with defined retirement benefits in excess of qualified plan limits imposed by federal tax law. The following tables set forth the combined amounts recognized for the Supplemental Plan, which has a measurement date of October 1, and the Supplemental Employee Retirement Plan, which has a measurement date of December 31, in the Company’s consolidated financial statements as of December 31, 2004 and 2003 (in thousands): The weighted average assumptions used to calculate the net periodic benefit cost are as follows: 2004 2003 Change in projected benefit obligation: Benefit obligation at beginning of year $ 12,668 $ 10,330 Service cost 700 544 Interest cost 740 708 Actuarial loss 960 1,669 Benefits paid (667) (664) Other — 81 Benefit obligation at end of year $ 14,401 $ 12,668 Change in plan assets: Fair value of plan assets at beginning of year $ — $ — Actual contributions during the year 667 664 Benefits paid (667) (664) Fair value of plan assets at end of year $ — $ — Unfunded status $(14,401) $(12,668) Unrecognized transition obligation 142 211 Unrecognized net actuarial loss 5,015 4,262 Unrecognized prior service cost (486) (522) Accrued pension cost $ (9,730) $ (8,717) 68 2004 2003 Average discount rate 6.00% 6.50% Rate of compensation increase 6.00% 6.00% ODYSSEY RE HOLDINGS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued