Retirement Plan

We previously sponsored a non-contributory defined benefit retirement plan that covered certain employees and was fully frozen prior to 2013. In 2012, our Compensation Committee, pursuant to authority delegated to it by the Board of Directors, approved the termination of the HollyFrontier Corporation Pension Plan (the “Plan”). In June 2013, we made contributions of $22.7 million to the Plan.

Our contribution to the Plan in the second quarter of 2013 was sufficient for the Plan to settle its obligations to all participants including the premium paid to the non-participating annuity provider; however, the contract with this annuity provider was not executed as of September 30, 2013. In the second quarter of 2013, we recognized a pre-tax pension settlement charge of $30.9 million, of which $29.0 million was reclassified out of accumulated other comprehensive income, representing the irrevocable portion of our obligation. The Plan finalized the contract terms with the annuity provider in October 2013, and we will record an additional pre-tax charge of $8.6 million, which includes the remaining pension loss recorded in accumulated other comprehensive income in the fourth quarter of 2013.

The net periodic pension expense consisted of the following components:



	Three Months Ended September 30,					Nine Months Ended September 30,
	2013		2012			2013			2012
	(In thousands)
Service cost – benefit earned during the period	$	—	$	—		$	—		$	679
Interest cost on projected benefit obligations	—		955			1,797			3,007
Expected return on plan assets	—		(950		)	(92		)	(2,849		)
Amortization of prior service cost	—		—			—			67
Amortization of net loss	—		415			1,386			1,518
Curtailment	—		—			—			899
Settlement	—		—			30,893			—
Net periodic pension expense	$	—	$	420		$	33,984		$	3,321

In 2012, we established a program for plan participants whose benefits pursuant to the defined benefit plan were frozen. The program provides for payments after year-end for three years (beginning with 2012) provided the employee is employed by us on the last day of each year. The payments are based on each employee's years of service and eligible salary. Transition benefit costs associated with transition to the new defined contribution plan were $2.7 million and $3.2 million for the three months ended September 30, 2013 and 2012, respectively, and $8.5 million and $10.1 million, for the nine months ended September 30, 2013 and 2012, respectively.

We have a post-retirement healthcare and other benefits plan that is available to certain of our employees who satisfy certain age and service requirements. The net periodic benefit expense of this plan consisted of the following components:



	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(In thousands)
Service cost – benefit earned during the period	$	278		$	475		$	834		$	1,425
Interest cost on projected benefit obligations	159			875			477			2,625
Amortization of prior service credit	(1,474		)	(550		)	(4,422		)	(1,650		)
Amortization of net loss	31			75			93			225
Actuarial loss on post-retirement healthcare plan reclassified to net income upon partial plan settlement	—			—			1,726			—
Net periodic pension expense (credit)	$	(1,006	)	$	875		$	(1,292	)	$	2,625

In the first quarter of 2013, we settled a portion of our post-retirement medical obligation, at which time we reclassified a $1.7 million pretax loss out of accumulated other comprehensive income that was recognized as a charge to net income.