The Group’s pension plan weighted – average asset allocations at December 31, 2003 and 2002, by asset category are as follows:
| Target Allocation | Percentage of Plan Assets | ||
| Dec 31, 2004 | Dec 31, 2003 | Dec 31, 2002 | |
| Asset Category | |||
| Equity securities | 20% | 27% | 25% |
| Debt securities | 75% | 65% | 61% |
| Real estate and other | 5% | 8% | 14% |
| Total | 100% | 100% | 100% |
The Group¢s pension plan investment strategy is to match the maturity profiles of the assets and liabilities in order to reduce the future volatility of pension expense and funding status of the plans. This involves the rebalancing of the investment portfolios to reduce the exposure to equity securities as well as increase the amount and duration of the fixed income portfolio . In the last quarter of 2003, the average equity share of the portfolios was reduced from 35% to below 30% and a further reduction to 20% is targeted by April, 2004. The lengthening of the average duration of the fixed income portfolio is expected to be achieved by December 2004. Implementation of the investment strategy may be limited by the regulatory and legal framework applicable to the particular pension plans. The asset allocation of each of the Group’s pension plans is reviewed regularly.
The Group expects to contribute approximately € 250 million to its pension plans in 2004, representing expected service costs in 2004.