The funding policies for the defined benefit pension plans are determined in accordance with statutory funding requirements. The U.S. funding policy requires at least those amounts required by the Employee Retirement Income Security Act of 1974 and no more than those amounts permitted by the Internal Revenue Code. Assets of the plans consist primarily of fixed income and equity investments.

postretirement healthcare benefit plans Certain U.S. based subsidiaries of Bunge have benefit plans to provide certain postretirement healthcare benefits to eligible retired employees of those subsidiaries. The plans require minimum retiree contributions and define the maximum amount the subsidiaries will be obligated to pay under the plans.

plan amendments In 2004, certain non-qualified key executive plans were created and the related past service costs reflected in the benefit obligations as of December 31, 2004. In addition, effective January 1, 2004, the qualified defined benefit pension plans for all non-union U.S. employees were merged into one plan and that plan was amended to include certain hourly employees, to introduce unreduced early retirement benefits at age 62 and to redefine salary to include a portion of variable compensation. In addition, certain postretirement healthcare benefit plans were amended, which reduced Bunge's liability related to future retirees. These pension and postretirement healthcare benefit plan amendments were reflected in the benefit obligations as of December 31, 2003.

In 2003, Bunge recognized $26 million in pretax curtailment gains for the defined benefit pension and postretirement healthcare plans, of which $2 million was recognized in discontinued operations resulting from the sale of the U.S. bakery business. These gains largely resulted from a reduction in pension and postretirement healthcare benefit liabilities relating to the transfer of employees to Solae, Bunge's joint venture and a reduction of postretirement healthcare benefits of certain U.S. employees.

The following table sets forth in aggregate a reconciliation of the changes in the defined benefit pension and the postretirement healthcare benefit plans benefit obligations, assets and funded status at December 31, 2004 and 2003 for plans with assets in excess of benefit obligations and plans with benefit obligations in excess of plan assets. The projected benefit obligation related principally to U.S. plans and therefore Bunge has aggregated U.S. and foreign plans for the following disclosures. A measurement date of September 30, 2004 was used for all plans.

	Pension Benefits							Postretirement Healthcare Benefits
	December 31,							December 31,
(US$ in millions)	2004			2003				2004			2003
Change in benefit obligations:
Benefit obligation as of beginning of year	$	318		$	269			$	27		$	42
Service cost		10			8				–			1
Interest cost		19			16				1			2
Actuarial losses, net		9			40				–			3
Acquisition and purchase accounting adjustments		–			(9	)			–			(3	)
Plan amendments		3			9				–			–
Curtailment/settlement (gains)		(1	)		(10	)			–			(16	)
Benefits paid		(20	)		(12	)			(2	)		(2	)
Impact of foreign exchange rates		4			7				–			–
Benefit obligation as of end of year	$	342		$	318			$	26		$	27
Change in plan assets:
Fair value of plan assets as of beginning of year	$	205		$	183			$	–		$	–
Actual return on plan assets		21			27				–			–
Employer contributions		19			6				2			2
Benefits paid		(20	)		(12	)			(2	)		(2	)
Impact of foreign exchange rates		2			1				–			–
Fair value of plan assets as of end of year	$	227		$	205			$	–		$	–
Funded status and net amounts recognized:
Plan assets less than benefit obligation	$	(115	)	$	(113	)		$	(26	)	$	(26	)
Contribution adjustment		4			2				–			–
Unrecognized prior service cost		14			12				–			–
Unrecognized net actuarial losses		65			63				1			1
Unrecognized net transition asset		(1	)		(2	)			–			–
Net liability recognized in the balance sheet	$	(33	)	$	(38	)		$	(25	)	$	(25	)
Amounts recognized in the balance sheet consist of:
Prepaid benefit costs	$	8		$	10			$	–		$	–
Accrued benefit cost		(89	)		(92	)			(25	)		(25	)
Intangible asset		12			11				–			–
Accumulated other comprehensive income		36			33				–			–
Net liability recognized	$	(33	)	$	(38	)		$	(25	)	$	(25	)

Bunge has aggregated certain pension plans with projected benefit obligations in excess of fair value of plan assets with pension plans that have fair value of plan assets in excess of projected benefit obligations. At December 31, 2004, the $342 million projected benefit obligation includes plans with projected benefit obligations of $328 million, which was in excess of the fair value of related plan assets of $209 million. At December 31, 2003, the $318 million projected benefit obligation includes plans with projected benefit obligations of $304 million, which were in excess of the fair value of related plan assets of $188 million.

The accumulated benefit obligation for the defined benefit pension plans was $309 million and $291 million at December 31, 2004 and 2003, respectively.

The following table summarizes information relating to aggregated pension plans with an accumulated benefit obligation in excess of plan assets.

December 31,
(US$ in millions)	2004		2003
Projected benefit obligation	$	328	$	304
Accumulated benefit obligation		294		277
Fair value of plan assets		209		188

The components of net periodic costs are as follows:

	Pension Benefits										Postretirement Healthcare Benefits
	Year Ended December 31,										Year Ended December 31,
(US$ in millions)	2004			2003			2002				2004		2003		2002
Service cost	$	10		$	8		$	5			$	–	$	1	$	1
Interest cost		19			16			11				2		2		2
Expected return on plan assets		(17	)		(16	)		(11	)			–		–		–
Amortization of unrecognized prior service cost		1			1			1				–		–		–
Recognized net loss		3			1			–				–		–		–
Amortization of transition obligation		(1	)		(1	)		(1	)			–		–		–
Net periodic benefit costs	$	15		$	9		$	5			$	2	$	3	$	3

Bunge has recorded a minimum pension liability for the actuarial present value of accumulated benefits that exceeded plan assets and the accrued pension liabilities that were exceeded by the unfunded accumulated benefit obligation. The accrued additional minimum pension liability at December 31, 2004 and 2003 was $48 million and $44 million, respectively. At December 31, 2004 and 2003, Bunge also recognized an intangible asset of $12 million and $11 million, respectively, related to unamortized prior service costs for which a minimum pension liability was recorded. At December 31, 2004 and 2003, Bunge recorded $36 million and $33 million, respectively, of the excess of the additional minimum pension liability over the amount recognized as an intangible asset in other accumulated comprehensive income (loss). Bunge recorded an increase in additional minimum pension liability of $3 million and $17 million for the years ended December 31, 2004 and 2003, respectively, which is included in other comprehensive income (loss).

The weighted average assumptions used in determining the actuarial present value of the projected benefit obligations under the defined benefit plans are as follows:

December 31,
	2004		2003
Discount rate	5.7	%	6.0	%
Increase in future compensation levels	3.3	%	3.4	%

The weighted average assumptions used in determining the net periodic benefit cost under the defined benefit plans are as follows:

Year Ended December 31,
		2004		2003		2002
Discount rate		6.0	%	6.8	%	7.5	%
Increase in future
	compensation levels	3.4	%	4.5	%	5.0	%
Expected long-term rate
	of return on assets	8.0	%	8.4	%	9.0	%

The sponsoring subsidiaries select the expected long-term rate of return on assets in consultation with their investment advisors and actuaries. These rates are intended to reflect the average rates of earnings expected to be earned on the funds invested or to be invested to provide required plan benefits. The plans are assumed to continue in effect as long as assets are expected to be invested.

In estimating the expected long-term rate of return on assets, appropriate consideration is given to historical performance for the major asset classes held or anticipated to be held by the applicable plan trusts and to current forecasts of future rates of return for those asset classes. Cash flow and expenses are taken into consideration to the extent that the expected returns would be affected by them. Because assets are generally held in qualified trusts, anticipated returns are not reduced for taxes.

At December 31, 2004, for measurement purposes, a 6% annual rate of increase in the per capita cost of covered healthcare benefits was assumed for 2005 and forward. At December 31, 2003, for measurement purposes, an 8% annual rate of increase in the per capita cost of covered healthcare benefits was assumed for 2004, decreasing to 6% for 2005, remaining at that level thereafter.

A one-percentage point change in assumed healthcare cost trend rates would have the following effects at December 31, 2004:

(US$ in millions)		One-percentage point increase		One-percentage point decrease
Effect on total service and
	interest cost components	$	–	$	–
Effect on postretirement
	benefit obligation	$	2	$	2

The pension plans' weighted-average asset allocations as of the measurement date for 2004 and 2003, by category, are as follows:

Plan Assets
	2004		2003
Asset Category
Equities	61	%	58	%
Fixed income securities	34	%	41	%
Cash	5	%	1	%
Total	100	%	100	%

The objectives of the Plans' trust funds are to sufficiently diversify plan assets to maintain a reasonable level of risk without imprudently sacrificing return, with a target asset allocation of approximately 40% fixed income securities and approximately 60% equities. Bunge retains investment managers who select investment fund managers to implement the investment strategy, such that the investments approximate the target asset allocation. Bunge's policy is not to invest plan assets in Bunge Limited shares.

Bunge expects to contribute $17 million to its defined benefit pension plans and $2 million to its postretirement healthcare benefit plans in 2005.

The following benefit payments, which reflect future service as appropriate, are expected to be paid:

(US$ in millions)	Pension Benefits		Postretirement Healthcare Benefits
2005	$	15	$	2
2006		15		2
2007		15		2
2008		16		2
2009		18		2
2010-2014		108		11

employee defined contribution Bunge also makes contributions to qualified defined contribution plans for eligible employees. Contributions to these plans amounted to $9 million, $7 million and $4 million in 2004, 2003 and 2002, respectively.

multi-employer plan In addition, certain salaried employees of Bunge's Brazilian fertilizer operations participate in a multi-employer defined benefit pension plan, Fundação Petrobras de Securidade Social (Petros), to which Bunge makes contributions. Contributions to this plan were $1 million, $1 million and $1 million in 2004, 2003 and 2002, respectively.