Note 9 — Defined Benefit Pension and Other Postretirement Plans

We sponsor a defined benefit pension plan for employees hired prior to January 1, 2009, of UGI, UGI Utilities, PNG, CPG and certain of UGI’s other domestic wholly owned subsidiaries (“Pension Plan”). Pension Plan benefits are based on years of service, age and employee compensation. We also provide postretirement health care benefits to certain retirees and postretirement life insurance benefits to nearly all active and retired employees (“Other Postretirement Plans”).

Net periodic pension expense and other postretirement benefit costs include the following components:



	Pension Benefits						Other Postretirement Benefits
Three Months Ended March 31,	2018			2017			2018			2017
Service cost	$	1,881		$	2,022		$	67		$	61
Interest cost	5,767			5,539			112			107
Expected return on assets	(7,777		)	(7,496		)	(177		)	(164		)
Amortization of:
Prior service cost (benefit)	63			82			(110		)	(160		)
Actuarial loss	2,984			3,706			24			29
Net benefit cost (benefit)	2,918			3,853			(84		)	(127		)
Change in associated regulatory liabilities	—			—			(123		)	(123		)
Net benefit cost (benefit) after change in regulatory liabilities	$	2,918		$	3,853		$	(207	)	$	(250	)

	Pension Benefits						Other Postretirement Benefits
Six Months Ended March 31,	2018			2017			2018			2017
Service cost	$	3,762		$	4,045		$	134		$	122
Interest cost	11,534			11,078			224			215
Expected return on assets	(15,554		)	(14,993		)	(354		)	(328		)
Amortization of:
Prior service cost (benefit)	126			163			(220		)	(320		)
Actuarial loss	5,968			7,413			48			57
Net benefit cost (benefit)	5,836			7,706			(168		)	(254		)
Change in associated regulatory liabilities	—			—			(246		)	(245		)
Net benefit cost (benefit) after change in regulatory liabilities	$	5,836		$	7,706		$	(414	)	$	(499	)

Pension Plan assets are held in trust and consist principally of publicly traded, diversified equity and fixed income mutual funds and, to a much lesser extent, UGI Corporation Common Stock. It is our general policy to fund amounts for Pension Plan benefits equal to at least the minimum contribution required by ERISA. From time to time we may, at our discretion, contribute additional amounts. During the six months ended March 31, 2018 and 2017, the Company made contributions to the Pension Plan of $6,720 and $5,698, respectively. The Company expects to make additional discretionary cash contributions of approximately $6,720 to the Pension Plan during the remainder of Fiscal 2018.

UGI Utilities has established a Voluntary Employees’ Beneficiary Association (“VEBA”) trust to pay retiree health care and life insurance benefits by depositing into the VEBA the annual amount of postretirement benefits costs, if any. The difference between such cash deposits or expense recorded and the amounts included in UGI Gas’ and Electric Utility’s rates, if any, is deferred for future recovery from, or refund to, ratepayers. There were no required contributions to the VEBA during the six months ended March 31, 2018 and 2017.

We also participate in an unfunded and non-qualified defined benefit supplemental executive retirement plan. Net benefit costs associated with this plan for all periods presented were not material.