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Pension Plan and Employee Benefits
 12 Months Ended
Dec. 31, 2025
Retirement Benefits [Abstract]  
Pension Plan and Employee Benefits
Note 11 — Pension Plan and Employee Benefits
Pension Plan
Employees hired before August 1, 2007, are covered by a non-contributory, defined benefit pension plan. Benefits under the plan reflect an employee’s years of service, age at retirement, and highest total average compensation for any consecutive five calendar years during the last ten years of employment with Cleco. Cleco’s policy is to base its contributions to the employee pension plan upon actuarial computations utilizing the projected unit credit method, subject to the IRS’s full funding limitation. Required contributions are driven by liability funding target percentages set by law and could cause the required contributions to be uneven among the years. Based on the funding assumptions at December 31, 2025, management estimates that $59.8 million in pension contributions will be required through 2030, of which $16.8 million is required in 2026. During the years ended December 31, 2025, and 2024, Cleco made required pension contributions of $16.5 million and $25.8 million, respectively. No pension contributions were required in 2023.
Future discretionary contributions may be made depending on changes in assumptions, the ability to utilize the contribution as a tax deduction, and requirements concerning recognizing a minimum pension liability. Adverse changes in assumptions or adverse actual events could cause additional minimum contributions. The ultimate amount and timing of the contributions may be affected by changes in the discount rate, changes in the funding regulations, and actual returns on fund
assets. Cleco Power is the plan sponsor, and Support Group is the plan administrator.
In June 2024, an amendment to the pension plan was executed allowing the transfer of the cash balance and
pension liabilities to the Cleco Cajun Purchaser’s pension plan. This transfer was for the former Cleco Cajun employees that became employees of the Cleco Cajun Purchasers following the closing of the Cleco Cajun Divestiture. The transfer was completed in June 2024.
The benefit obligation, plan assets, and funded status for the pension plan at December 31, 2025, and 2024 are presented in the following table:
FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)20252024
Change in benefit obligation
Benefit obligation at beginning of period
$494,864 $525,482 
Service cost
3,866 4,619 
Interest cost
27,105 26,140 
Actuarial loss (gain)
5,913 (25,647)
Expenses paid
— (3,396)
Transfer to Cleco Cajun Purchasers
— (1,674)
Benefits paid(31,247)(30,660)
Benefit obligation at end of period
500,501 494,864 
Change in plan assets
Fair value of plan assets at beginning of period
409,270 408,159 
Actual gain on plan assets
48,686 11,091 
Employer contributions
16,500 25,750 
Expenses paid
(2,967)(3,396)
Transfer to Cleco Cajun Purchasers
— (1,674)
Benefits paid(31,247)(30,660)
Fair value of plan assets at end of period
440,242 409,270 
Unfunded status$(60,259)$(85,594)
The current and non-current portions of the Pension Benefits liability for Cleco and Cleco Power at December 31, 2025, and 2024 are as follows:
AT DEC. 31,
(THOUSANDS)20252024
Current$16,772 $16,344 
Non-current$43,487 $69,250 

The employee pension plan accumulated benefit obligation at December 31, 2025, and 2024 is presented in the following table:

AT DEC. 31,
(THOUSANDS)20252024
Accumulated benefit obligation$485,708 $479,948 

The following table presents the net actuarial gains/losses included in net periodic benefit cost and recorded in the associated Postretirement costs regulatory asset for the Pension Plan for the years ended December 31, 2025, and 2024:

FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)20252024
Net actuarial gain occurring during period
$(6,639)$(6,310)

The pension net actuarial gain was $6.6 million for the year ended December 31, 2025, primarily due to actual plan asset returns exceeding expected returns, partially offset by losses resulting from a decrease in the discount rate and unfavorable demographic experience. The pension net actuarial gain was $6.3 million for the year ended December 31, 2024, primarily due to the increase in the discount rate, partially offset by the actual plan asset returns compared to the expected plan asset returns.
The following table presents net actuarial gains/losses in accumulated other comprehensive income that have not been recognized as components of net periodic benefit costs for the employee pension plan:

FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)20252024
Accumulated net actuarial loss
$51,451 $58,089 

The non-service components of net periodic pension cost are included in Other income (expense), net within Cleco’s and Cleco Power’s Consolidated Statements of Income. The components of net periodic pension costs for 2025, 2024, and 2023 are as follows:

FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)202520242023
Components of periodic benefit costs
Service cost$3,866 $4,619 $4,977 
Interest cost27,105 26,140 26,423 
Expected return on plan assets(33,167)(30,428)(29,544)
Net periodic benefit (credit) cost
$(2,196)$331 $1,856 

Because Cleco Power is the pension plan sponsor and the related trust holds the assets, the net unfunded status of the pension plan is reflected at Cleco Power. The liability of Cleco’s other subsidiaries is transferred with a like amount of assets to Cleco Power monthly. The expense of the pension plan related to Cleco’s other subsidiaries for the years ended December 31, 2025, 2024, and 2023 was $1.0 million, $1.8 million, and $1.9 million, respectively.
The measurement date used to determine the pension benefits is December 31. In order to calculate the discount rate to measure the liabilities, management uses a theoretical bond portfolio that matches expected benefit payments. The assumptions used to determine the benefit obligation and the periodic costs are as follows:

AT DEC. 31,
 20252024
Weighted-average assumptions used to determine the benefit obligation  
Discount rate5.60 %5.66 %
Rate of compensation increase
3.00 %3.00 %
FOR THE YEAR ENDED DEC. 31,
 202520242023
Weighted-average assumptions used to determine the net benefit cost
Discount rate5.66 %5.13 %5.44 %
Expected return on plan assets
7.07 %6.68 %6.60 %
Rate of compensation increase
3.00 %3.50 %2.76 %

Pension Plan Asset Investments
The expected return on plan assets was determined by examining the risk profile of each target category as compared to the expected return on that risk, within the parameters determined by Cleco’s Retirement Committee. In assessing the risk as compared to return profile, historical returns as compared to risk were considered. The historical risk compared to returns was adjusted for the expected future long-term relationship between risk and return. For the calculation of the 2026 periodic expense, Cleco decreased the discount rate to 5.60% and decreased the expected long-term return on plan assets to 6.95%. As a result, Cleco expects pension income to decrease in 2026 by approximately $1.0 million primarily due to an increase in the expected return on plan assets.
Employee pension plan assets are invested in accordance with the Pension Plan’s Investment Policy Statement. At December 31, 2025, allowable investments included U.S. Equity Portfolios, International Equity - Developed Markets Portfolios, Emerging Markets Equity Portfolios, Multi-Asset Credits, Treasury Separate Trading of Registered Interest and Principal of Securities (STRIPS), Fixed Income Portfolios - Long Credit and Intermediate Government Credit, and Real Estate Portfolios.
Real estate funds and the pooled separate accounts are stated at estimated market value based on appraisal reports prepared annually by independent real estate appraisers (members of the American Institute of Real Estate Appraisers). The estimated market value of recently acquired properties is assumed to approximate cost.

Fair Value Disclosures
Cleco classifies assets and liabilities measured at their fair value according to three different levels, depending on the inputs used in determining fair value. For more information on the fair value hierarchy, see Note 8 — “Fair Value Accounting Instruments.”
There have been no changes in the methodologies for determining fair value at December 31, 2025, and 2024. The following tables disclose the pension plan’s fair value of financial assets measured on a recurring basis:
(THOUSANDS)AT DEC. 31, 2025QUOTED PRICES
IN ACTIVE
MARKETS FOR
IDENTICAL ASSETS
(LEVEL 1)		SIGNIFICANT
OTHER
OBSERVABLE
INPUTS
(LEVEL 2)		SIGNIFICANT
UNOBSERVABLE
INPUTS
(LEVEL 3)
Asset Description    
Cash equivalents$9,264 $— $9,264 $— 
Mutual funds
Domestic
138,407 138,407 — — 
Total$147,671 $138,407 $9,264 $— 
Investments measured at net asset value(1)
292,247 
Interest accrual324 
Total net assets$440,242 
(1) Investments measured at net asset value consist of Common/collective trust and real estate fund investments.

(THOUSANDS)AT DEC. 31, 2024QUOTED PRICES
IN ACTIVE
MARKETS FOR
IDENTICAL ASSETS
(LEVEL 1)		SIGNIFICANT
OTHER
OBSERVABLE
INPUTS
(LEVEL 2)
SIGNIFICANT
UNOBSERVABLE
INPUTS
(LEVEL 3)(1)
Asset Description    
Cash equivalents$5,818 $— $5,818 $— 
Mutual funds
Domestic
121,954 121,954 — — 
Corporate debt76,712 — 76,712 — 
Total$204,484 $121,954 $82,530 $— 
Investments measured at net asset value(1)
204,476 
Interest accrual310 
Total net assets$409,270 
(1) Investments measured at net asset value consist of Common/collective trust and real estate fund investments.
Cleco utilizes a practical expedient, referred to as net asset value (NAV), to estimate fair value of certain pension investments, Common/collective trust funds and real estate investment funds. Common/collective trust fund investments consist of domestic and international index equities, valued based upon the aggregate market values of the underlying investment index equities. The value of the NAV of each fund or trust is determined as of the close of the national securities exchange on which such fund or trust is listed for trading at the last business day of the year. There are no imposed redemption restrictions and the pension plan does not have any contractual obligations to further invest in the trust. Real estate fund investments are open-end real estate funds that invest in a portfolio of real properties that are broadly diversified by geography and property type. The real estate asset class is expected to produce returns from income and capital appreciation. Real estate also provides a hedge against inflation. The purpose of each fund is to invest in real estate and real estate related assets that generate a total return from current income and capital appreciation which exceeds the applicable fund’s index. Each fund’s NAV is made available to fund participants quarterly.
The market-related value of plan assets differs from the fair value of plan assets by the amount of deferred asset gains or losses. Actual asset returns that differ from the expected return on plan assets are deferred and recognized in the market-related value of assets on a straight-line basis over a five-year period. For 2025, the return on plan assets was 11.16% compared to an expected long-term return of 7.07%. The 2024 return on pension plan assets was 1.90% compared
to an expected long-term return of 6.68%. As of December 31, 2025, none of the pension plan participants’ future annual benefits are covered by insurance contracts.

Pension Plan Strategic Asset Allocation
Cleco’s pension investment strategy is designed to balance risk and return through a diversified portfolio of equity and fixed income investments. As the funded status of the plan improves, Cleco’s target asset allocation is structured to reduce funded status volatility by increasing exposure to fixed income investments and reducing exposure to return‑seeking assets.
The general funded status to target portfolio allocations are as follows:

FUNDED STATUS
RETURN-SEEKING ASSETS
LIABILITY-HEDGING
ASSETS - CREDIT
LIABILITY-HEDGING
ASSETS - GOVERNMENT
≤ 80%
60%
20%
20%
80% to 100%
60% to 47%
20% to 37%
20% to 16%
100% to 115%
47% to 10%
37% to 83%
16% to 7%
≥ 115%
10%
83%
7%

Other Pension Plan Disclosures
The projected benefit payments for the employee pension plan for each year through 2030 and the next five years thereafter are listed in the following table:

(THOUSANDS)20262027202820292030FIVE
YEARS
THEREAFTER
Pension
$33,095 $33,882 $34,510 $35,058 $35,522 $180,012 

Other Benefits Plan
Cleco’s retirees, including retirees not covered by the pension plan, may be eligible to receive Other Benefits. Dependents of these retirees may also be eligible to receive Other Benefits with the exception of life insurance benefits. Cleco recognizes the expected cost of Other Benefits during the periods in which the benefits are earned.
The benefit obligation, plan assets, and funded status for the Other Benefits plan at December 31, 2025, and 2024 are presented in the following table:

FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)20252024
Change in benefit obligation
Benefit obligation at beginning of period
$44,003 $47,056 
Service cost
1,578 1,907 
Interest cost
2,343 2,322 
Actuarial gain
1,346 (2,011)
Plan amendments
4,532 — 
Derecognition of Cleco Cajun liability— (380)
Benefits paid(4,969)(4,891)
Benefit obligation at end of period
48,833 44,003 
Unfunded status$(48,833)$(44,003)

The following table presents the net actuarial gains/losses included in other comprehensive income for Other Benefits related to current year gains and losses as a result of being included in net periodic benefit costs for the Other Benefits plan for the years ended December 31, 2025, and 2024:

FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)20252024
Net actuarial loss (gain) occurring during period
$1,346 $(1,964)
Net actuarial (gain) loss amortized during period
$(295)$653 

The Other Benefits net actuarial loss was $1.3 million for the year ended December 31, 2025, primarily due to a decrease in the discount rate. The Other Benefits net actuarial gain was $2.0 million for the year ended December 31, 2024, primarily due to updated demographic assumptions, the removal of Cleco Cajun participants, and the increase in the discount rate.
During 2025, Cleco amended the Other Benefits plan to increase its share of medical costs, which increased the accumulated postretirement benefit obligation and resulted in the recognition of prior service cost.
The following table presents net actuarial gains/losses in accumulated other comprehensive income that have not been
recognized as components of net periodic benefit costs for the Other Benefits plan:

FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)20252024
Accumulated net actuarial loss
$9,984 $9,685 

The non-service components of net periodic Other Benefits cost are included in Other income (expense), net within Cleco’s and Cleco Power’s Consolidated Statements of Income. The components of net periodic Other Benefits costs for 2025, 2024, and 2023 are as follows:

FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)202520242023
Components of periodic benefit costs
Service cost$1,578 $1,907 $1,472 
Interest cost2,343 2,322 2,285 
Amortizations
Net (gain) loss
295 646 (45)
Gain on derecognition of Cleco Cajun
— (169)— 
Net periodic benefit cost$4,216 $4,706 $3,712 

Cleco Holdings is the plan sponsor for the other benefit plans. There are no assets set aside in a trust and the liabilities are reported on the individual subsidiaries’ financial statements. The expense related to Other Benefits reflected in Cleco Power’s Consolidated Statements of Income for the years ended December 31, 2025, 2024, and 2023 was $4.1 million, $4.3 million, and $3.5 million, respectively. The current and non-current portions of the Other Benefits liability for Cleco and Cleco Power at December 31, 2025, and 2024 are as follows:

Cleco
AT DEC. 31,
(THOUSANDS)20252024
Current$5,753 $5,279 
Non-current$43,080 $38,724 

Cleco Power
AT DEC. 31,
(THOUSANDS)20252024
Current$4,896 $4,524 
Non-current$33,457 $30,054 

The measurement date used to determine the other postretirement benefits is December 31. The assumptions used to determine the benefit obligation and the periodic costs are as follows:

AT DEC. 31,
 20252024
Weighted-average assumptions used to determine the benefit obligation  
Discount rate5.25 %5.61 %

FOR THE YEAR ENDED DEC. 31,
 202520242023
Weighted-average assumptions used to determine the net benefit cost
Discount rate5.61 %5.25 %5.61 %

Other Benefits Plan Disclosures
The assumed health care cost trend rates used to measure the expected cost of Other Benefits is 5.0% for 2026 and remains at 5.0% thereafter. The rate used for 2025 was also 5.0%. Assumed health care cost trend rates have a limited effect on the amount reported for Cleco’s health care plans.
The projected benefit payments for the Other Benefits plan for each year through 2030 and the next five years thereafter are listed in the following table:

(THOUSANDS)20262027202820292030FIVE
YEARS
THEREAFTER
Other benefits
$5,753 $5,792 $5,667 $5,555 $5,397 $24,195 

SERP
SERP is a non-qualified, non-contributory, defined benefit pension plan for the benefit of certain executive officers who are designated as participants by the Leadership Development and Compensation Committee. In 2014, SERP was closed to new participants; however, with regard to current SERP participants, including former employees or their beneficiaries, all terms of SERP will continue.
Cleco does not fund the SERP liability, but instead pays for current benefits out of the cash available of the respective company of the employed officer. Because SERP is a non-qualified plan, Cleco has purchased life insurance policies on certain SERP participants as a mechanism to provide a source of funding. These polices are held in a rabbi trust formed by Cleco Power. The rabbi trust is the named beneficiary of the life insurance policies and, therefore, receives the proceeds upon death of the insured participants. The life insurance policies may be used to reimburse Cleco for benefits paid from general funds, pay the SERP participants’ death benefits, or pay future SERP payments. Market conditions could have a significant impact on the cash surrender value of the life insurance policies. Because SERP is a non-qualified plan, the assets of the trust could be used to satisfy general creditors of Cleco Power in the event of insolvency. Cleco Power is the plan sponsor and Support Group is the plan administrator.
The SERP funded status at December 31, 2025, and 2024 is presented in the following table:

 SERP BENEFITS
FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)20252024
Change in benefit obligation
Benefit obligation at beginning of period
$63,543 $67,462 
Service cost58 134 
Interest cost3,454 3,343 
Actuarial gain1,177 (2,814)
Benefits paid(4,603)(4,582)
Benefit obligation at end of period
$63,629 $63,543 

The SERP accumulated benefit obligation at December 31, 2025, and 2024 is presented in the following table:

AT DEC. 31,
(THOUSANDS)20252024
Accumulated benefit obligation$63,629 $63,543 

The following table presents net actuarial gains/losses and prior service credits included in other comprehensive income or regulatory assets related to current year gains and losses as a result of being amortized as a component of net periodic benefit costs for SERP for December 31, 2025, and 2024:

FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)20252024
Net actuarial loss (gain) occurring during year
$1,176 $(2,814)
Net actuarial gain amortized during year
$— $(58)
Prior service credit amortized during year
$(215)$(215)

The SERP net actuarial loss was $1.2 million for the year ended December 31, 2025, primarily due to the decrease in the discount rate and updates to the 2025 census data. The following table presents net actuarial losses and prior service credit in accumulated other comprehensive income and regulatory assets that have not been recognized as components of net periodic benefit costs for SERP at December 31, 2025, and 2024:

AT DEC. 31
(THOUSANDS)20252024
Accumulated net actuarial loss
$6,125 $4,948 
Prior service credit$(655)$(870)

The non-service components of net periodic benefit cost related to SERP are included in Other income (expense), net within Cleco’s and Cleco Power’s Consolidated Statements of Income. The components of the net SERP costs for 2025, 2024, and 2023 are as follows:

FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)202520242023
Components of periodic benefit costs
Service cost$58 $134 $142 
Interest cost3,454 3,343 3,604 
Amortizations
Prior service credit(215)(215)(215)
Net (gain) loss
(139)(81)(63)
Net periodic benefit cost$3,158 $3,181 $3,468 

The measurement date used to determine the SERP benefits is December 31. The assumptions used to determine the benefit obligation and the periodic costs are as follows:

AT DEC. 31,
 20252024
Weighted-average assumptions used to determine the benefit obligation
  
Discount rate5.54 %5.65 %

FOR THE YEAR ENDED DEC. 31,
 202520242023
Weighted-average assumptions used to determine the net benefit cost
Discount rate5.65 %5.13 %5.46 %

The expense related to SERP reflected on Cleco Power’s Consolidated Statements of Income for the years ended December 31, 2025, 2024, and 2023 was $0.6 million, $0.5 million, and $0.5 million, respectively.
Liabilities relating to SERP are reported on the individual subsidiaries’ financial statements. The current and non-current portions of the SERP liability for Cleco and Cleco Power at December 31, 2025, and 2024 are as follows:

Cleco
AT DEC. 31,
(THOUSANDS)20252024
Current$4,981 $4,815 
Non-current$58,648 $58,728 

Cleco Power
AT DEC. 31,
(THOUSANDS)20252024
Current$862 $833 
Non-current$10,146 $10,160 

The projected benefit payments for SERP for each year through 2030 and the next five years thereafter are shown in the following table:

(THOUSANDS)20262027202820292030FIVE
YEARS
THEREAFTER
SERP$4,981 $4,936 $4,925 $4,898 $4,829 $23,079 

401(k)
Cleco’s 401(k) Plan is intended to provide active, eligible employees with voluntary, long-term savings and investment opportunities. The 401(k) Plan is a defined contribution plan and is subject to the applicable provisions of the Employee Retirement Income Security Act of 1974. In accordance with the 401(k) Plan, employer contributions are made in the form of cash. Cash contributions are invested in proportion to the participant’s voluntary contribution investment choices. Participation in the Plan is voluntary and active Cleco employees are eligible to participate. Cleco’s 401(k) Plan expense for the years ended December 31, 2025, 2024, and 2023 was as follows:

 FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)202520242023
401(k) Plan expense
$8,829 $9,069 $7,770 

Cleco Power is the plan sponsor for the 401(k) Plan. The expense of the 401(k) Plan related to Cleco’s other subsidiaries for the years ended December 31, 2025, 2024, and 2023 was as follows:

 FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)202520242023
401(k) Plan expense
$1,835 $3,071 $2,859