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EMPLOYEE BENEFIT PLANS
 12 Months Ended
Dec. 31, 2023
Retirement Benefits [Abstract]  
EMPLOYEE BENEFIT PLANS EMPLOYEE BENEFIT PLANS
DEFINED BENEFIT PLAN:  Substantially all of our 1,120 employees participate in the National Rural Electric Cooperative Association Retirement Security Plan (“RS Plan”) except for the 192 employees of Colowyo Coal and any non-bargaining employees hired May 1, 2021 or later and bargaining employees hired July 1, 2021 or later. The RS Plan is a defined benefit pension plan qualified under Section 401(a) and tax‑exempt under Section 501(a) of the Internal Revenue Code. It is considered a multiemployer plan under the accounting standards for compensation ‑ retirement benefits. The plan sponsor’s Employer Identification Number is 53‑116145 and the Plan Number is 333.
A unique characteristic of a multiemployer plan compared to a single employer plan is that all plan assets are available to pay benefits to any plan participant. Separate asset accounts are not maintained for participating employers. This means that assets contributed by one employer may be used to provide benefits to employees of other participating employers.
Our contributions to the RS Plan in each of the years 2023, 2022 and 2021 represented less than 5 percent of the total contributions made each year to the plan by all participating employers. We made contributions to the RS Plan of $31.6, $25.2 and $26.7 million in 2023, 2022 and 2021, respectively.
In December 2012, the National Rural Electric Cooperative Association (“NRECA”) approved an option to allow participating cooperatives in the RS Plan to make a contribution prepayment and reduce future required contributions. The prepayment amount is a cooperative’s share, as of January 1, 2013, of future contributions required to fund the RS Plan’s unfunded value of benefits earned to date using RS Plan actuarial valuation assumptions. The prepayment amount is equal to approximately 2.5 times a cooperative’s annual RS Plan required contribution as of January 1, 2013. After making the prepayment, the annual contribution was reduced by approximately 25 percent, retroactive to January 1, 2013. The reduced annual contribution is expected to continue for approximately 15 years. However, changes in interest rates, asset returns, other plan experiences different from expected, plan assumption changes and other factors may have an impact on future contributions and the 15-year period.
In May 2013, we elected to make a contribution prepayment of $71.2 million to the RS Plan. This contribution prepayment was determined to be a long‑term prepayment and therefore recorded in deferred charges and amortized beginning January 1, 2013 over the 13‑year period calculated by subtracting the average age of our workforce from our normal retirement age under the RS Plan.
Our contributions to the RS Plan include contributions for substantially all of the 215 bargaining unit employees that are made in accordance with collective bargaining agreements. We ceased to add new bargaining employees hired July 1, 2021 or later and non-bargaining employees hired May 1, 2021 or later to the RS Plan.
For the RS Plan, a “zone status” determination is not required, and therefore not determined, under the Pension Protection Act (“Act”) of 2006. In addition, the accumulated benefit obligations and plan assets are not determined or allocated separately by individual employer. In total, the RS Plan was over 80 percent funded at both January 1, 2023 and January 1, 2022, based on the Act funding target and the Act actuarial value of assets on those dates.
Because the provisions of the Act do not apply to the RS Plan, funding improvement plans and surcharges are not applicable. Future contribution requirements are determined each year as part of the actuarial valuation of the plan and may change as a result of plan experience.
We participate in the NRECA Pension Restoration Plan and the NRECA Executive Benefit Restoration Plan, both of which are intended to provide a supplemental benefit to the defined benefit plan for an eligible group of highly compensated employees. Eligible employees include the Chief Executive Officer and any other employees that become eligible. All our executive employees with a hire date prior to May 1, 2021 participate in one of the following pension restoration plans: the NRECA Pension Restoration Plan or the NRECA Executive Benefit Restoration Plan. Eligibility is determined annually and is based on January 1 base salary that exceeds the limits of the defined benefit plan. Employees hired May 1, 2021 or later are not eligible for either plan.
The NRECA Executive Benefit Restoration Plan obligations are determined annually (during the first quarter of the subsequent year) by an NRECA actuary and are included in accumulated postretirement benefit and postemployment obligations on our consolidated statements of financial position as follows (dollars in thousands):
20232022
Executive benefit restoration obligation at beginning of period$8,485 $9,852 
Service cost323 468 
Interest cost441 300 
Plan amendments - prior service cost— 308 
Curtailment— (292)
Benefit payments— (110)
Actuarial (gain) loss 909 (2,041)
Executive benefit restoration obligation at end of period$10,158 $8,485 
Fair value of plan assets at beginning of year$9,808 $8,640 
Employer contributions— 1,734 
Benefits paid— (109)
Actual return on plan assets490 (457)
Fair value of plan assets at end of year$10,298 $9,808 
Net (asset) liability recognized$(140)$(1,323)
The service cost component of our net periodic benefit cost is included in operating expenses on our consolidated statements of operations. The components of net periodic benefit cost other than the service cost component are included in other income (expense) on our consolidated statements of operations. We have an irrevocable trust with an independent third party to fund the NRECA Executive Benefit Restoration Plan. The trust is funded quarterly to the prior year obligation as determined by the NRECA actuary.
In accordance with the accounting standard related to defined benefit pension plans, actuarial gains and losses are not recognized in income but are instead recorded in accumulated other income on our consolidated statements of financial position. If the unrecognized amount is in excess of 10 percent of the projected benefit obligation, amounts are reclassified out of accumulated other comprehensive income and included in net income as the excess is amortized over the average remaining service lives of the active plan participants. Unrecognized actuarial gains and losses have been determined per actuarial studies for the executive benefit restoration obligation.
The net unrecognized actuarial gains and losses related to the executive benefit restoration obligations are included in accumulated other comprehensive income as follows (dollars in thousands):
20232022
Accumulated other comprehensive loss at beginning of period$(2,105)$(4,932)
Plan amendments - prior service cost— (308)
Amortization of prior service cost into other income1,156 1,156 
Amortization of actuarial loss219 426 
Curtailment and settlement— (187)
Unrecognized actuarial gain (loss)(909)1,740 
Accumulated other comprehensive loss at end of period$(1,639)$(2,105)
DEFINED CONTRIBUTION PLANS:  We offer one 401(k) plan to all our employees. We contribute 1 percent of employee base salary for all non-bargaining employees hired prior to May 1, 2021. All non-bargaining employees hired May 1, 2021 or later and all bargaining employees hired July 1, 2021 or later are eligible for a maximum employer contribution of 10 percent which includes an employer base contribution and an employer match up to IRS allowed annual maximum. We offer one 401(k) plan to all employees of Colowyo Coal at the Colowyo Mine. We contribute 7 percent of employee salary and match up to an additional 5 percent of employee contributions for employees hired prior to May 1, 2021 and provide a maximum employer contribution of 10 percent which includes an employer base contribution and an employer match for employees hired May 1, 2021 or later. All employees are eligible to contribute up to 75 percent of their salary on a pre-tax basis. Under all plans, total 401(k) contributions are not to exceed annual IRS limitations, which are set annually. Employees who have attained age 50 in a calendar year are eligible for the catch-up contribution with maximum contribution limits determined annually by the IRS. We made contributions to the plan of $4.9 million, $3.9 million, and $3.3 million in 2023, 2022, and 2021, respectively.
Effective January 1, 2022 we adopted a 409(a) non-qualified plan. Senior managers, vice presidents and executive officers hired prior to May 1, 2021 are eligible to participate and contribute to the plan, but are not eligible for any employer contribution. Executive officers hired on or after May 1, 2021 will be eligible to participate and contribute to the plan, and are eligible for the employer contribution. The employer contribution is effective once the eligible executive has reached the maximum allowed contribution and employer contribution and match in our base 401(k) plan and includes a maximum employer contribution of 10 percent which includes an employer base contribution and an employer match. We made minimal contributions to the plan in 2022 and 2023.
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS:  We sponsor three medical plans for all non‑bargaining unit employees under the age of 65. Two of the plans provide postretirement medical benefits to full‑time non‑bargaining unit employees and retirees who receive benefits under those plans, who have attained age 55, and who elect to participate. All three of these non‑bargaining unit medical plans offer postemployment medical benefits to employees on long‑term disability. The plans were unfunded at December 31, 2023, are contributory (with retiree premium contributions equivalent to employee premiums, adjusted annually) and contain other cost‑sharing features such as deductibles. As of June 30, 2021, the plans ceased to provide postretirement medical benefits for employees who retire after June 30, 2021.
The postretirement medical benefit and post-employment medical benefit obligations are determined annually (during the fourth quarter) by an independent actuary and are included in accumulated postretirement benefit and postemployment obligations on our consolidated statements of financial position as follows (dollars in thousands):
20232022
Postretirement medical benefit obligation at beginning of period$2,092 $2,809 
Interest cost58 47 
Benefit payments (net of contributions by participants)(469)(732)
Actuarial gain(757)(32)
Postretirement medical benefit obligation at end of period$924 $2,092 
Postemployment medical benefit obligation at end of period243 97 
Total postretirement and postemployment medical obligations at end of period$1,167 $2,189 
The service cost component of our net periodic benefit cost is included in operating expenses on our consolidated statements of operations. The components of net periodic benefit cost other than the service cost component are included in other income (expense) on our consolidated statements of operations.
In accordance with the accounting standard related to postretirement benefits other than pensions, actuarial gains and losses are not recognized in income but are instead recorded in accumulated other comprehensive income on our consolidated statements of financial position. If the unrecognized amount is in excess of 10 percent of the projected benefit obligation, amounts are reclassified out of accumulated other comprehensive income and included in net income as the excess amount is amortized over the average remaining service lives of the active plan participants. Unrecognized actuarial gains and losses have been determined per actuarial studies for the postretirement medical benefit obligation.
The net unrecognized actuarial gains and losses related to the postretirement medical benefit obligation are included in accumulated other comprehensive income as follows (dollars in thousands):
20232022
Amounts included in accumulated other comprehensive income at beginning of period$2,078 $3,580 
Amortization of prior service credit into other income(1,637)(1,636)
Amortization of actuarial loss into other income(84)102 
Actuarial gain 757 32 
Plan amendments— — 
Amounts included in accumulated other comprehensive income at end of period$1,114 $2,078 
The assumptions used in the 2023 actuarial study performed for our postretirement medical benefit obligation were as follows:
Weighted-average discount rate5.01 %
Initial health care cost trend (2018)7.25 %
Ultimate health care cost trend4.50 %
Year that the rate reached the ultimate health care cost trend rate2034
Expected return on plan assets (unfunded)N/A
Average remaining service lives of active plan participants (years)2.61
The following are the expected future benefits to be paid (net of contributions by participants) related to the postretirement medical benefit obligation during the next ten years (dollars in thousands):
2024$360,535 
2025258,005 
2026175,368 
202799,245 
202865,168 
2029 through 203349,246 
$1,007,567