Pension and Other Postretirement Plans

9 Months Ended

Sep. 30, 2024

Retirement Benefits [Abstract]

Pension and Other Postretirement Plans

Pension and Other Postretirement Plans - MGE Energy and MGE.

MGE maintains qualified and nonqualified pension plans, health care, and life insurance benefits and defined contribution 401(k) benefit plans for its employees and retirees.

The components of net periodic benefit cost, other than the service cost component, are recorded in "Other income, net" on the consolidated statements of income. The service cost component is recorded in "Other operations and maintenance" on the consolidated statements of income. MGE has regulatory treatment and recognizes regulatory assets or liabilities for timing differences between when net periodic benefit costs are recovered and when costs are recognized.

The following table presents the components of net periodic benefit costs recognized.

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(In thousands)	2024			2023			2024			2023
Pension Benefits
Components of net periodic benefit cost:
Service cost	$	769		$	723		$	2,308		$	2,169
Interest cost		4,280			4,330			12,839			12,989
Expected return on assets		(7,149	)		(6,312	)		(21,448	)		(18,936	)
Amortization of:
Actuarial loss		215			440			644			1,320
Net periodic benefit (credit) cost	$	(1,885	)	$	(819	)	$	(5,657	)	$	(2,458	)
Postretirement Benefits(a)
Components of net periodic benefit cost:
Service cost	$	214		$	195		$	642		$	585
Interest cost		778			827			2,354			2,481
Expected return on assets		(675	)		(649	)		(2,059	)		(1,946	)
Settlement cost		288			—			288			—
Amortization of:
Transition obligation		1			1			2			2
Prior service credit		(234	)		—			(242	)		—
Actuarial loss (gain)		774			(48	)		568			(143	)
Net periodic benefit cost	$	1,146		$	326		$	1,553		$	979

(a)In August 2024, MGE entered into an agreement to transfer the mortality and investment risk, as well as the administration of, its employer-paid life insurance plan to a third party. MGE accounted for the settlement under the scope of ASC 715.

As approved by the PSCW, MGE is allowed to defer differences between actual employee benefit plan costs and costs reflected in current rates. The deferred costs may be recovered or refunded in MGE's next rate filing. During the three and nine months ended September 30, 2024, MGE recovered $0.5 million and $3.1 million, respectively, of pension and other postretirement costs previously deferred. During the three and nine months ended September 30, 2023, MGE deferred $1.6 million and $2.4 million, respectively, of pension and other postretirement costs. These costs have not been reflected in the table above.