Components of Net Periodic Benefit Cost

6 Months Ended

Jun. 30, 2020

Retirement Benefits [Abstract]

Components of Net Periodic Benefit Cost

Note 2 – Components of Net Periodic Benefit Cost

Southwest has a noncontributory qualified retirement plan with defined benefits covering substantially all employees and a separate unfunded supplemental retirement plan (“SERP”) which is limited to officers. Southwest also provides postretirement benefits other than pensions (“PBOP”) to its qualified retirees for health care, dental, and life insurance.

The service cost component of net periodic benefit costs included in the table below is a component of an overhead loading process associated with the cost of labor. The overhead process ultimately results in allocation of that portion of overall net periodic benefit costs to the same accounts to which productive labor is charged. As a result, service costs become components of various accounts, primarily operations and maintenance expense, net utility plant, and deferred charges and other assets for both the Company and Southwest. The other components of net periodic benefit cost are reflected in Other income (deductions) on the Condensed Consolidated Statements of Income of each entity.

	Qualified Retirement Plan
	June 30,
	Three Months				Six Months				Twelve Months
	2020		2019		2020		2019		2020		2019
(Thousands of dollars)
Service cost	$	8,575	$	6,466	$	17,149	$	12,932	$	30,081	$	27,209
Interest cost	11,389		12,251		22,777		24,503		47,280		46,590
Expected return on plan assets	(16,324)		(15,061)		(32,648)		(30,122)		(62,770)		(59,500)
Amortization of net actuarial loss	9,006		5,589		18,013		11,178		29,191		27,236
Net periodic benefit cost	$	12,646	$	9,245	$	25,291	$	18,491	$	43,782	$	41,535
	SERP
	June 30,
	Three Months				Six Months				Twelve Months
	2020		2019		2020		2019		2020		2019
(Thousands of dollars)
Service cost	$	97	$	67	$	195	$	133	$	328	$	256
Interest cost	402		440		803		880		1,683		1,709
Amortization of net actuarial loss	451		255		902		510		1,412		1,261
Net periodic benefit cost	$	950	$	762	$	1,900	$	1,523	$	3,423	$	3,226
	PBOP
	June 30,
	Three Months				Six Months				Twelve Months
	2020		2019		2020		2019		2020		2019
(Thousands of dollars)
Service cost	$	395	$	319	$	791	$	638	$	1,429	$	1,374
Interest cost	645		762		1,290		1,524		2,812		2,898
Expected return on plan assets	(852)		(789)		(1,704)		(1,578)		(3,282)		(3,436)
Amortization of prior service costs	289		318		578		635		1,214		1,302
Net periodic benefit cost	$	477	$	610	$	955	$	1,219	$	2,173	$	2,138