Notes To Consolidated Financial Statements the first 20 years of commercial operations. No amounts  were paid under this assignment. PT Smelting had project- specific debt, nonrecourse to PT Freeport Indonesia, totaling  $259.5 million at December 31, 2004, and $283.1 million at  December 31, 2003. Pension Plans.  During 2000, FCX and FM Services  Company elected to terminate their defined benefit pension  plans covering substantially all U.S. and certain overseas  expatriate employees and replace these plans, which have  substantially the same provisions, with defined contribution  plans, as further discussed below. All participants’ account  balances in the defined benefit plans were fully vested on  June 30, 2000, and interest credits continue to accrue under  the plans until the assets are finally liquidated. The final  distribution will occur once approved by the Internal Revenue  Service and the Pension Benefit Guaranty Corporation. The  plans’ investment portfolios were liquidated and invested in  primarily short duration fixed-income securities in the fourth  quarter of 2000 to reduce exposure to equity market volatility.  All of the FCX plan assets shown in the table below relate to  these plans and the unfunded liability totaled $2.2 million at  December 31, 2004. In February 2004, FCX established an unfunded Supplemental  Executive Retirement Plan (SERP) for its two most senior  executive officers. The SERP provides for retirement benefits  payable in the form of a joint and survivor annuity or an equiva- lent lump sum. The annuity will equal a percentage of the  executive’s highest average compensation for any consecutive  three-year period during the five years immediately preceding  the earlier of the executive’s retirement or completion of 25  years of credited service. The SERP benefit will be reduced  by the value of all benefits due under FCX’s cash-balance  pension plan and all other benefit plans sponsored by FCX or  any other predecessor employer. Unrecognized prior service  cost at inception of the SERP totaled $18.9 million and is being  amortized over the five-year term of the executive officers’  current employment agreements. FCX also has an unfunded  pension plan for its directors. PT Freeport Indonesia has a defined benefit pension plan  denominated in Indonesian rupiahs covering substantially all  of its Indonesian national employees. PT Freeport Indonesia  funds the plan and invests the assets in accordance with  Indonesian pension guidelines. The pension obligation was  valued at an exchange rate of 9,270 rupiah to one U.S.  dollar on December 31, 2004, and 8,437 rupiah to one U.S.  dollar on December 31, 2003. Labor laws enacted in 2003,  which replace labor laws enacted in 2001, in Indonesia  require that companies provide a minimum level of benefits  to employees upon employment termination based on  the reason for termination and the employee’s years of  service. PT Freeport Indonesia’s pension benefit disclo- sures for 2003, as shown below, include the impact of this  law as a $5.0 million increase in the benefit obligation  and a component of unrecognized prior service cost being  amortized over an approximate 11-year period. Information as of December 31, 2004 and 2003, on the FCX  (including FM Services Company’s plan and FCX’s SERP and  director plans), PT Freeport Indonesia and Atlantic Copper  plans follows (dollars in thousands): Atlantic Copper has a contractual obligation denominated  in euros to supplement amounts paid to certain retired  Spanish national employees. Amended Spanish legislation  required that Atlantic Copper begin funding its contractual  obligation to the retired employees through a third party in  November 2002. In August 2002, Atlantic Copper complied  with the amended Spanish legislation by agreeing to fund 7.2  million euros annually for 15 years to an approved insurance  company for its estimated 72 million euro contractual obliga- tion to the retired employees. The insurance company invests  the plan assets in accordance with Spanish regulations and  Atlantic Copper has no control over these investments.  Atlantic Copper is amortizing the unrecognized net actuarial  loss over the remaining 12-year funding period.  2004 ANNUAL REPORT  | 69