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EMPLOYEE BENEFIT PLANS (Notes)
 12 Months Ended
Dec. 31, 2024
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]  
Employee Benefit Plans (Notes) EMPLOYEE BENEFIT PLANS
Defined Benefit Pension and Other Postemployment Benefit Plans

Defined Benefit Pension Plans - We have a defined benefit pension plan and a supplemental executive retirement plan for certain eligible employees, both of which are closed to new participants. Certain employees of the Texas Gas Service division are entitled to benefits under a frozen cash-balance pension plan. We fund our defined benefit pension costs at a level needed to maintain or exceed the minimum funding levels required by the Employee Retirement Income Security Act of 1974, as amended, and the Pension Protection Act of 2006.

Other Postemployment Benefit Plans - We sponsor health and welfare plans that provide postemployment medical and life insurance benefits to certain eligible employees who retire with at least five years of service. The postemployment medical plan is contributory based on hire date, age and years of service, with retiree contributions adjusted periodically, and contains other cost-sharing features such as deductibles and coinsurance.

Actuarial Assumptions - The following table sets forth the weighted-average assumptions used to determine benefit obligations for pension and postemployment benefits for the periods indicated:

December 31,
 20242023
Discount rate - pension plans5.70%5.30%
Discount rate - other postemployment plans5.75%5.40%
Compensation increase rate
 3.50% - 4.30%
3.50% - 4.30%
The following table sets forth the weighted-average assumptions used by us to determine the periodic benefit costs for pension and postemployment benefits for the periods indicated:

Year Ended December 31,
 202420232022
Discount rate - pension plans5.30%5.60%
3.05%/4.55% (a)
Discount rate - other postemployment plans5.40%5.70%3.00%
Expected long-term return on plan assets - pension plans6.70%6.75%6.40%
Expected long-term return on plan assets - other postemployment plans5.20%5.55%5.85%
Compensation increase rate
3.50% - 4.30%
3.60% - 5.00%
3.10% - 5.00%
(a) Pension plans were remeasured as of April 30, 2022.

We determine our discount rates annually. We estimate our discount rate based upon a comparison of the expected cash flows associated with our future payments under our defined benefit pension and other postemployment obligations to a hypothetical bond portfolio created using high-quality bonds that closely match expected cash flows. Bond portfolios are developed by selecting a bond for each of the next 60 years based on the maturity dates of the bonds. Bonds selected to be included in the portfolios are only those rated by Moody’s as AA- or better and exclude callable bonds, bonds with less than a minimum issue size, yield outliers and other filtering criteria to remove unsuitable bonds.

We determine our overall expected long-term rate of return on plan assets based on our review of historical returns and economic growth models. We update our assumed mortality rates to incorporate new tables issued by the Society of Actuaries as needed.

Regulatory Treatment - The OCC, KCC and regulatory authorities in Texas have approved the recovery of pension and other postemployment benefits costs through rates for Oklahoma Natural Gas, Kansas Gas Service and Texas Gas Service, respectively. The costs recovered through rates are based on current funding requirements and the net periodic benefit cost for defined benefit pension and other postemployment costs. Differences, if any, between the net periodic benefit cost (credit), net of deferrals, and the amount recovered through rates are reflected in earnings.

We historically have recovered defined benefit pension and other postemployment benefit costs (credit) through rates. We believe it is probable that regulators will continue to include the net periodic pension and other postemployment benefit costs (credit) in our cost of service.

We capitalize all eligible service cost and non-service credit components pursuant to the accounting requirements of ASC Topic 980 (Regulated Operations) for rate-regulated entities, as these components are authorized by our regulators to be included in capitalized costs. Noncurrent regulatory liabilities in our consolidated balance sheets reflect the capitalized non-service credit components of $6.7 million and $2.2 million as of December 31, 2024 and 2023, respectively. See Note 3 for additional information.
Obligations and Funded Status - The following table sets forth our defined benefit pension and other postemployment benefit plans, benefit obligations and fair value of plan assets for the periods indicated:

Pension BenefitsOther Postemployment Benefits
December 31, December 31,
2024202320242023
Changes in Benefit Obligation(Thousands of dollars)
Benefit obligation, beginning of period$803,605 $784,633 $158,535 $168,342 
Service cost6,204 7,242 610 730 
Interest cost41,123 42,428 8,179 9,154 
Plan participants’ contributions— — 2,631 2,823 
Actuarial loss (gain)
(27,026)23,015 (3,267)(5,551)
Benefits paid
(54,099)(53,713)(15,704)(16,963)
Settlements(38,690)— — — 
Benefit obligation, end of period$731,117 $803,605 $150,984 $158,535 
Change in Plan Assets
Fair value of plan assets, beginning of period$795,381 $768,961 $181,608 $181,877 
Actual return on plan assets
22,322 78,827 8,404 11,325 
Employer contributions1,559 1,306 — 2,546 
Plan participants’ contributions— — 2,631 2,823 
Benefits paid
(54,099)(53,713)(13,154)(16,963)
Settlements(39,762)— — — 
Fair value of assets, end of period725,401 795,381 179,489 181,608 
Benefit asset (obligation), net
$(5,716)$(8,224)$28,505 $23,073 
Pension and other postemployment benefits$14,377 $13,409 $28,505 $23,073 
Current liabilities(1,409)(1,368)— — 
Noncurrent liabilities(18,684)(20,265)— — 
Benefit asset (obligation), net$(5,716)$(8,224)$28,505 $23,073 

The accumulated benefit obligation for our defined benefit pension plans was $703.4 million and $772.1 million at December 31, 2024 and 2023, respectively.

For the years ended December 31, 2024 and 2023, the pension benefit obligations experienced actuarial gains and losses of $27.0 million and $23.0 million, respectively, primarily due to the impact of increases in the discount rates used to calculate the benefit obligations.

In 2025, our contributions are expected to be $9.8 million to our defined benefit pension plans, and no contributions are expected to be made to our other postemployment benefit plans. In October 2024, we purchased group annuity contracts and transferred approximately $39 million of the assets and liabilities related to certain participants in our deferred benefit pension plan to a third-party insurance company.
The following tables set forth the components of net periodic benefit cost for our pension and other postemployment benefit plans for the periods indicated:

Pension Benefits
Year Ended December 31,
202420232022
(Thousands of dollars)
Components of net periodic benefit cost (credit)
 
Service cost$6,204 $7,242 $10,369 
Interest cost (a)
41,123 42,428 36,150 
Expected return on assets (a)
(59,027)(59,518)(58,528)
Amortization of unrecognized prior service cost (a)
372 372 248 
Amortization of net loss (a)
5,786 2,008 16,793 
Net periodic benefit cost (credit)
$(5,542)$(7,468)$5,032 
(a) These amounts, net of any amounts capitalized as a regulatory asset, have been recognized as other (income) expense, net in the consolidated statement of income. See Note 13 for additional detail.

Other Postemployment Benefits
Year Ended December 31,
202420232022
(Thousands of dollars)
Components of net periodic benefit cost (credit)
Service cost$610 $730 $1,274 
Interest cost (a)
8,179 9,154 6,448 
Expected return on assets (a)
(9,134)(9,728)(13,181)
Amortization of unrecognized prior service cost (credit) (a)
— 153 41 
Amortization of net loss (gain) (a)
(16)(48)217 
Net periodic benefit cost (credit)
$(361)$261 $(5,201)
(a) These amounts, net of any amounts capitalized as a regulatory asset, have been recognized as other (income) expense, net in the consolidated statement of income. See Note 13 for additional detail.
We use a December 31 measurement date for our plans. On April 30, 2022, we amended our defined benefit pension plans to change the variable cost of living adjustment for eligible participants to a fixed rate. Accordingly, we remeasured our net benefit obligations as of April 30, 2022, resulting in an adjustment of approximately $7.2 million to our pension expense, net of capitalization and regulatory deferrals, for the year ended December 31, 2022.

Other Comprehensive Income (Loss) - The following table sets forth the amounts recognized in other comprehensive income (loss), net of regulatory deferrals, related to our defined benefit pension benefits for the period indicated:

Pension Benefits
Year Ended December 31,
202420232022
(Thousands of dollars)
Net gain (loss) arising during the period
$1,242 $(619)$7,369 
Amortization of net loss (gain)(1)1 159 
Deferred income taxes(281)140 (1,705)
   Total recognized in other comprehensive income (loss)
$960 $(478)$5,823 

Due to our regulatory deferrals, there were no amounts recognized in other comprehensive income (loss) related to our other postemployment benefits for the periods presented.
The tables below set forth the amounts in accumulated other comprehensive loss that had not yet been recognized as components of net periodic benefit credit for the periods indicated:

Pension Benefits
December 31,
20242023
(Thousands of dollars)
Prior service cost$(1,720)$(2,091)
Accumulated loss(251,952)(246,988)
Accumulated other comprehensive loss before regulatory asset(253,672)(249,079)
Regulatory asset for regulated entities253,517 247,684 
Accumulated other comprehensive loss after regulatory asset(155)(1,395)
Deferred income taxes(67)213 
Accumulated other comprehensive loss, net of tax$(222)$(1,182)

Other Postemployment Benefits
December 31,
20242023
(Thousands of dollars)
Prior service cost$— $— 
Accumulated gain (loss)1,065 (1,457)
Accumulated other comprehensive loss before regulatory asset1,065 (1,457)
Regulatory asset for regulated entities(1,065)1,457 
Accumulated other comprehensive loss after regulatory asset$— $— 

Health Care Cost Trend Rates - The following table sets forth the assumed health care cost-trend rates for the periods indicated:

20242023
Health care cost-trend rate assumed for next year7.00%6.00%
Rate to which the cost-trend rate is assumed to decline (the ultimate trend rate)4.50%4.50%
Year that the rate reaches the ultimate trend rate20352030

Plan Assets - Our investment strategy is to invest plan assets in accordance with sound investment practices that emphasize long-term fundamentals. The goal of this strategy is to maximize investment returns while managing risk in order to meet the plan’s current and projected financial obligations. To achieve this strategy, we have established a liability-driven investment strategy to change the allocations as the funded status of the defined benefit pension plan increases. The plan’s investments include a diverse blend of various domestic and international equities, investment-grade debt securities which mirror the cash flows of our liability, insurance contracts and alternative investments. The current target allocation for the assets of our defined benefit pension plan is as follows:

Investment-grade bonds70.0 %
U.S. large-cap equities13.0 %
Alternative investments7.0 %
Developed foreign equities5.0 %
Mid-cap equities3.0 %
Emerging markets equities1.0 %
Small-cap equities1.0 %
  Total100.0 %

As part of our risk management for the plans, minimums and maximums have been set for each of the asset classes listed above. All investment managers for the plan are subject to certain restrictions on the securities they purchase and, with the exception of indexing purposes, are prohibited from owning our stock.
The current target allocation for the assets of our other postemployment benefits plan is 90 percent fixed income securities and 10 percent equity securities.

The following tables set forth our pension and other postemployment benefits plan assets by fair value category as of the measurement date:

Pension Benefits
December 31, 2024
Asset CategoryLevel 1Level 2Level 3Total
(Thousands of dollars)
Investments:
Equity securities (a)$81,459 $— $— $81,459 
Government obligations— 213,572 — 213,572 
Corporate obligations (b)— 328,915 — 328,915 
Cash and money market funds (c)5,871 24,737 — 30,608 
Insurance contracts and group annuity contracts— — 11,177 11,177 
Other investments (d)— — 59,670 59,670 
  Total assets$87,330 $567,224 $70,847 $725,401 
(a) - This category represents securities of the various market sectors from diverse industries.
(b) - This category represents bonds from diverse industries.
(c) - This category primarily represents money market funds.
(d) - This category represents alternative investments such as hedge funds and other financial instruments.

Pension Benefits
December 31, 2023
Asset CategoryLevel 1Level 2Level 3Total
(Thousands of dollars)
Investments:
Equity securities (a)$88,477 $— $— $88,477 
Government obligations— 204,669 — 204,669 
Corporate obligations (b)— 366,482 — 366,482 
Cash and money market funds (c)5,300 28,977 — 34,277 
Insurance contracts and group annuity contracts— — 12,350 12,350 
Other investments (d)— — 89,126 89,126 
  Total assets$93,777 $600,128 $101,476 $795,381 
(a) - This category represents securities of the various market sectors from diverse industries.
(b) - This category represents bonds from diverse industries.
(c) - This category primarily represents money market funds.
(d) - This category represents alternative investments such as hedge funds and other financial instruments.

Other Postemployment Benefits
December 31, 2024
Asset CategoryLevel 1Level 2Level 3Total
(Thousands of dollars)
Investments:
Equity securities (a)$7,226 $— $— $7,226 
Government obligations— 41,982 — 41,982 
Corporate obligations (b)— 36,411 — 36,411 
Cash and money market funds (c)806 12,167 — 12,973 
Insurance contracts and group annuity contracts (d)— 80,897 — 80,897 
  Total assets$8,032 $171,457 $— $179,489 
(a) - This category represents securities of the various market sectors from diverse industries.
(b) - This category represents bonds from diverse industries.
(c) - This category primarily represents money market funds.
(d) - This category includes equity securities and bonds held in a captive insurance product.
Other Postemployment Benefits
December 31, 2023
Asset CategoryLevel 1Level 2Level 3Total
(Thousands of dollars)
Investments:
Equity securities (a)$7,031 $— $— $7,031 
Government obligations— 41,863 — 41,863 
Corporate obligations (b)— 38,615 — 38,615 
Cash and money market funds (c)751 13,245 — 13,996 
Insurance contracts and group annuity contracts (d)— 80,102 — 80,102 
  Total assets$7,782 $173,825 $— $181,607 
(a) - This category represents securities of the various market sectors from diverse industries.
(b) - This category represents bonds from diverse industries.
(c) - This category primarily represents money market funds.
(d) - This category includes equity securities and bonds held in a captive insurance product.

Insurance contracts and group annuity contracts include investments in the Immediate Participation Guarantee Fund (“IPG Fund”) with John Hancock and are valued at fair value. John Hancock invests the IPG Fund in its general fund portfolio. The contract value of the IPG Fund at the end of the year, which approximates fair value, is estimated. The difference between this estimated balance and the actual balance, as subsequently determined by John Hancock, is charged or credited to the net assets of the plans.

Certain investments that are categorized as money market funds in Level 2 and other investments in Level 3 represent alternative investments such as hedge funds and other financial instruments measured using the net asset value per share (or its equivalent) practical expedient.

The following tables set forth additional information regarding commitments and redemption limitations of these other investments at the periods indicated:

December 31, 2024
Fair ValueUnfunded CommitmentsRedemption FrequencyRedemption Notice Period
(in thousands)(in days)
Grosvenor Registered Multi Limited Partnership$29,642 $— quarterly65
K2 Institutional Investors II Limited Partnership$30,028 $— quarterly91

December 31, 2023
Fair ValueUnfunded CommitmentsRedemption FrequencyRedemption Notice Period
(in thousands)(in days)
Grosvenor Registered Multi Limited Partnership$40,872 $— quarterly65
K2 Institutional Investors II Limited Partnership$48,254 $— quarterly91
The following table sets forth the reconciliation of Level 3 fair value measurements of our pension plans for the periods indicated:

Pension Benefits
Insurance
Contracts		Other
Investments		Total
(Thousands of dollars)
January 1, 2023$14,480 $87,031 $101,511 
Unrealized gains— 2,095 2,095 
Unrealized losses(618)— (618)
Purchases1,562 — 1,562 
Settlements(3,074)— (3,074)
December 31, 2023$12,350 $89,126 $101,476 
Unrealized gains445 — 445 
Unrealized losses— (2,984)(2,984)
Expense(167)— (167)
Purchases— 1,408 1,408 
Sales— (27,880)(27,880)
Benefits paid(1,451)— (1,451)
December 31, 2024$11,177 $59,670 $70,847 

Pension and Other Postemployment Benefit Payments - Benefit payments for our defined benefit pension and other postemployment benefit plans for the year ended December 31, 2024 were $54.1 million and $15.7 million, respectively. The following table sets forth the pension benefits and other postemployment benefits payments expected to be paid in 2025-2034:

Pension
Benefits		Other Postemployment
Benefits
Benefits to be paid in:(Thousands of dollars)
2025$52,832 $14,127 
202653,298 13,734 
202753,470 13,431 
202854,189 13,069 
202954,094 12,745 
2030 through 2034271,532 58,985 

The expected benefits to be paid are based on the same assumptions used to measure our benefit obligations at December 31, 2024, and include estimated future employee service.

Other Employee Benefit Plans

401(k) Plan - We have a 401(k) plan which covers all eligible employees. Employee contributions are discretionary and we match 100 percent of each participant’s eligible contribution up to 6 percent of eligible compensation, subject to certain limits. Our contributions to the plan were $17.7 million, $16.7 million and $15.3 million in 2024, 2023 and 2022, respectively.

We plan to make a discretionary profit-sharing contribution to the 401(k) Plan each quarter equal to 1 percent of each participant’s eligible compensation during the quarter. Additional discretionary profit-sharing contributions may be made after the end of each year. Our profit-sharing contributions made to the plan were $10.9 million, $12.6 million and $10.9 million in 2024, 2023 and 2022, respectively.

Nonqualified Deferred Compensation Plan - We have a nonqualified deferred compensation plan with obligations of $18.9 million and $16.0 million at December 31, 2024 and 2023, respectively, which are reported within other deferred credits in our consolidated balance sheets. These obligations represent the amount owed to plan participants and are treated as if invested in specified investment options. A significant portion of the obligation is indirectly funded with key-person corporate-owned life insurance policies to offset costs associated with our nonqualified deferred compensation plan and the supplemental executive retirement plan. These corporate-owned life insurance policies are measured at cash surrender value of $41.5 million and $37.9 million at December 31, 2024 and 2023, respectively, and are reported within other assets in our consolidated balance sheets.
Gains (losses) on the corporate-owned life insurance policies are recognized in other income (expense), net within our consolidated statements of income; see Note 13 for additional detail of our other income (expense), net. Deferred compensation expense (income) associated with the nonqualified deferred compensation plan is recognized in operations and maintenance expense within our consolidated statements of income and was $2.4 million, $2.3 million, and $(2.3) million for the years ended December 31, 2024, 2023 and 2022, respectively.