RETIREMENT BENEFITS AND ASSETS HELD IN TRUST

3 Months Ended

Mar. 31, 2017

Compensation and Retirement Disclosure [Abstract]

RETIREMENT BENEFITS AND ASSETS HELD IN TRUST

RETIREMENT BENEFITS AND ASSETS HELD IN TRUST

Pension Plan Benefits

We have a qualified defined benefit pension plan (“retirement plan”) for eligible employees, comprised of a traditional final average pay plan and a cash balance plan. The traditional final average pay plan is noncontributory, covers select employees, and provides retirement benefits based on years of benefit service, average final compensation and age at retirement. The cash balance plan is also noncontributory, covers substantially all employees and provides retirement benefits based on eligible compensation and interest credits. Our funding practice for the retirement plan is to contribute amounts necessary to meet the minimum funding requirements of the Employee Retirement Income Security Act of 1974, plus additional amounts as we determine appropriate. We expect to contribute $4 million to the retirement plan in 2017.

We also have two supplemental nonqualified, noncontributory, defined benefit pension plans for selected management employees (the “supplemental benefit plans” and collectively with the retirement plan, the “pension plans”). The supplemental benefit plans provide for benefits that supplement those provided by the retirement plan. We expect to contribute $14 million to the supplemental benefit plans in 2017.

Net periodic benefit cost for the pension plans, by component, was as follows for the three months ended March 31, 2017 and 2016:

	Three months ended
	March 31,
(in millions)	2017			2016
Service cost	$	2		$	2
Interest cost	1			1
Expected return on plan assets	(1		)	(1		)
Net pension cost	$	2		$	2

Other Postretirement Benefits

We provide certain postretirement health care, dental and life insurance benefits for eligible employees. We expect to contribute $8 million to the postretirement benefit plan in 2017.

Net postretirement benefit plan cost, by component, was as follows for the three months ended March 31, 2017 and 2016:

	Three months ended
	March 31,
(in millions)	2017			2016
Service cost	$	2		$	2
Interest cost	1			1
Expected return on plan assets	(1		)	(1		)
Net postretirement cost	$	2		$	2

Defined Contribution Plan

We also sponsor a defined contribution retirement savings plan. Participation in this plan is available to substantially all employees. We match employee contributions up to certain predefined limits based upon eligible compensation and the employee’s contribution rate. The cost of this plan was $1 million and $2 million for the three months ended March 31, 2017 and 2016, respectively.