pension and other retirement benefits. The valuation uses management’s assumptions for the discount  rate, expected long-term rate of return on plan assets, rate of compensation increase, health-care cost trend and expected average remaining years of service  of employees. While we believe that these assumptions are rea- sonable, differences in actual results or changes in assumptions could materially affect employee benefit obligations and future net benefit plans costs. We account for differences between actual and assumed results by recognizing differences in benefit obligations and plan performance over the working lives of the employees who benefit from the plans. The two most significant assumptions used to cal- culate the net employee benefit plans cost are the dis- count rate and the expected long-term rate of return on plan assets. Each of our operating segments is affected by these assumptions. We determine the appropriate discount rate at the end  of every year. Our discount rate was 6.2% at Decem- ber 31, 2004, a decrease from 6.5% at December 31, 2003. The table below shows the impact on the net benefit plans cost for 2005 and the accrued benefit asset at December 31, 2005 of a 0.5% increase and a 0.5% decrease in the discount rate. Although there is no immediate impact on our bal- ance sheet, a lower discount rate results in a higher accrued benefit obligation and a lower pension sur- plus. This means that we may have to increase any cash contributions to the plan. Expected Long-Term Rate of Return Discount Rate The expected long-term rate of return is a weighted average rate of our forward-looking view of long-term returns on each of the major plan asset categories in our funds. We determine the appropriate expected long-term rate of return at the end of every year. We assumed an expected long-term rate of return on plan assets of 7.5% in 2004, which is the same as it was in 2003. The table below shows the impact on the net benefit plans cost for 2005 and the accrued benefit asset at Decem- ber 31, 2005 of a 0.5% increase and a 0.5% decrease in the expected rate of return on plan assets. Discount Rate The discount rate is the interest rate used to deter- mine the present value of the future cash flows that we expect will be needed to set- tle employee benefit obliga- tions. It is based on the yield on long-term high-quality corporate fixed income investments, with maturities matching the estimated cash flows from the plan. Although there is no immediate impact on our bal- ance sheet, poor fund performance results in a lower fair value of plan assets and a lower pension surplus. This means that we may have to increase any cash  contributions to the plan. IMPACT ON ACCRUED  IMPACT ON BENEFIT  NET BENEFIT ASSET AT  PLANS COST  DECEMBER 31, FOR 2005 2005 Discount rate increased to 6.7% Consumer (27) 27 Business (24) 24 Aliant (12) 12 Other Bell Canada (12) 12 Other BCE (5) 5 Total (80) 80 Discount rate decreased to 5.7% Consumer 28 (28) Business 25 (25) Aliant 10 (10) Other Bell Canada 12 (12) Other BCE 5 (5) Total 80 (80) IMPACT ON ACCRUED  IMPACT ON BENEFIT  NET BENEFIT ASSET AT  PLANS COST  DECEMBER 31, FOR 2005 2005 Expected rate of return  increased to 8.0% Consumer (24) 24 Business (21) 21 Aliant (5) 5 Other Bell Canada (10) 10 Other BCE (5) 5 Total (65) 65 Expected rate of return  decreased to 7.0% Consumer 24 (24) Business 21 (21) Aliant 5 (5) Other Bell Canada 10 (10) Other BCE 5 (5) Total 65 (65) Bell Canada Enterprises  2004 Annual Report 79