Note 6 - Employee Benefit Plans

9 Months Ended

Sep. 30, 2012

Pension and Other Postretirement Benefits Disclosure [Text Block]

Note 6 - Employee Benefit Plans

Pension Benefits

We sponsor three tax-qualified defined benefit pension plans for our eligible employees: the Nicor Gas Retirement Plan, the AGL Retirement Plan and the NUI Retirement Plan. A defined benefit plan specifies the amount of benefits an eligible participant eventually will receive using information about the participant. Following are the combined cost components of our three defined benefit pension plans for the periods indicated:

	Three months ended September 30,						Nine months ended September 30,
In millions	2012			2011			2012			2011
Service cost	$	7		$	3		$	21		$	10
Interest cost		10			7			32			21
Expected return on plan assets		(16	)		(7	)		(48	)		(23	)
Net amortization of prior service cost		0			(1	)		(1	)		(2	)
Recognized actuarial loss		9			3			26			10
Net pension benefit cost	$	10		$	5		$	30		$	16

Other Defined Retirement Benefits

We sponsor two defined benefit retirement health care plans for our eligible employees: the Health and Welfare Plan for Retirees and Inactive Employees of AGL Resources Inc. (AGL Welfare Plan) and the Nicor Gas Welfare Benefit Plan (Nicor Gas Welfare Plan). Eligibility for these benefits is based on age and years of service.

Following are the cost components of our other retirement benefit costs for the periods indicated:

	Three months ended September 30,						Nine months ended September 30,
In millions	2012			2011			2012			2011
Service cost	$	1		$	1		$	3		$	1
Interest cost		4			1			12			4
Expected return on plan assets		(1	)		(1	)		(4	)		(4	)
Net amortization of prior service cost		(1	)		(1	)		(2	)		(3	)
Recognized actuarial loss		2			0			7			1
Net benefit cost	$	5		$	0		$	16		$	(1	)

In the second quarter of 2012, the estimated benefit obligation for the Nicor Gas Welfare Plan decreased to $263 million as a result of final updated census data and claims costs. As of December 31, 2011, the Nicor Gas Welfare Plan benefit obligation was $283 million.

Contributions

Our employees generally do not contribute to these pension and other plans. We fund the qualified pension plans by contributing at least the minimum amounts required by applicable regulations and as recommended by our actuary. However, we may contribute in excess of the minimum required amounts. In July 2012, the Pension Protection Act of 2006 (the Act) was changed to provide near-term funding relief to certain pension plans and to increase Pension Benefit Guaranty Corporation premiums over the next five years. As a result, we expect to have additional flexibility with respect to the amount of contributions to our pension plans through 2014.

The Act contains funding requirements for single employer defined benefit pension plans and establishes a 100% funding target (over a 7-year amortization period) for plan years beginning after December 31, 2007. If certain conditions are met, the Worker, Retiree and Employer Recovery Act of 2008 allows us to measure our required minimum contributions based on a funding target of 100% in 2011 and 2012. During the first nine months of 2012, we contributed $32 million to the AGL Retirement Plan and the NUI Retirement Plan and $50 million during the same period last year. For more information on our pension plans, see Note 11 to our Consolidated Financial Statements and related notes included in Item 8 of our 2011 Form 10-K.