Retirement Plan and Other Post-Retirement Benefits

The Company has a tax-qualified, noncontributory, defined-benefit retirement plan (Retirement Plan). The Retirement Plan covers certain non-collectively bargained employees hired before July 1, 2003 and certain collectively bargained employees hired before November 1, 2003. Certain non-collectively bargained employees hired after June 30, 2003 and certain collectively bargained employees hired after October 31, 2003 are eligible for a Retirement Savings Account benefit provided under the Company’s defined contribution Tax-Deferred Savings Plans. Costs associated with the Retirement Savings Account were $1.9 million, $1.2 million and $0.9 million for the years ended September 30, 2014, 2013 and 2012, respectively. Costs associated with the Company’s contributions to the Tax-Deferred Savings Plans, exclusive of the costs associated with the Retirement Savings Account, were $5.2 million, $4.4 million, and $4.3 million for the years ended September 30, 2014, 2013 and 2012, respectively.

The Company provides health care and life insurance benefits (other post-retirement benefits) for a majority of its retired employees. The other post-retirement benefits cover certain non-collectively bargained employees hired before January 1, 2003 and certain collectively bargained employees hired before October 31, 2003.

The Company’s policy is to fund the Retirement Plan with at least an amount necessary to satisfy the minimum funding requirements of applicable laws and regulations and not more than the maximum amount deductible for federal income tax purposes. The Company has established VEBA trusts for its other post-retirement benefits. Contributions to the VEBA trusts are tax deductible, subject to limitations contained in the Internal Revenue Code and regulations and are made to fund employees’ other post-retirement benefits, as well as benefits as they are paid to current retirees. In addition, the Company has established 401(h) accounts for its other post-retirement benefits. They are separate accounts within the Retirement Plan trust used to pay retiree medical benefits for the associated participants in the Retirement Plan. Although these accounts are in the Retirement Plan trust, for funding status purposes as shown below, the 401(h) accounts are included in Fair Value of Assets under Other Post-Retirement Benefits. Contributions are tax-deductible when made, subject to limitations contained in the Internal Revenue Code and regulations.

The expected return on Retirement Plan assets, a component of net periodic benefit cost shown in the tables below, is applied to the market-related value of plan assets. The market-related value of plan assets is the market value as of the measurement date adjusted for variances between actual returns and expected returns (from previous years) that have not been reflected in net periodic benefit costs. The expected return on other post-retirement benefit assets (i.e. the VEBA trusts and 401(h) accounts), which is a component of net periodic benefit cost shown in the tables below, is applied to the fair value of assets as of the measurement date.

Reconciliations of the Benefit Obligations, Plan Assets and Funded Status, as well as the components of Net Periodic Benefit Cost and the Weighted Average Assumptions of the Retirement Plan and other post-retirement benefits are shown in the tables below. The date used to measure the Benefit Obligations, Plan Assets and Funded Status is September 30 for fiscal years 2014, 2013 and 2012.



	Retirement Plan									Other Post-Retirement Benefits
	Year Ended September 30									Year Ended September 30
	2014			2013			2012			2014			2013			2012
	(Thousands)
Change in Benefit Obligation
Benefit Obligation at Beginning of Period	$	946,305		$	1,070,744		$	949,777		$	460,634		$	561,263		$	485,452
Service Cost	11,987			15,846			14,202			2,939			4,705			4,016
Interest Cost	43,574			36,498			41,526			21,308			19,212			21,315
Plan Participants’ Contributions	—			—			—			2,265			2,141			1,956
Retiree Drug Subsidy Receipts	—			—			—			1,419			1,526			1,528
Actuarial (Gain) Loss	53,887			(121,631		)	120,338			1,087			(104,455		)	71,708
Benefits Paid	(56,254		)	(55,152		)	(55,099		)	(24,069		)	(23,758		)	(24,712		)
Benefit Obligation at End of Period	$	999,499		$	946,305		$	1,070,744		$	465,583		$	460,634		$	561,263
Change in Plan Assets
Fair Value of Assets at Beginning of Period	$	799,307		$	701,676		$	601,719		$	472,392		$	414,134		$	351,990
Actual Return on Plan Assets	93,238			98,783			111,034			44,898			61,715			63,552
Employer Contributions	33,500			54,000			44,022			2,115			18,160			21,348
Plan Participants’ Contributions	—			—			—			2,265			2,141			1,956
Benefits Paid	(56,254		)	(55,152		)	(55,099		)	(24,069		)	(23,758		)	(24,712		)
Fair Value of Assets at End of Period	$	869,791		$	799,307		$	701,676		$	497,601		$	472,392		$	414,134
Net Amount Recognized at End of Period (Funded Status)	$	(129,708	)	$	(146,998	)	$	(369,068	)	$	32,018		$	11,758		$	(147,129	)
Amounts Recognized in the Balance Sheets Consist of:
Non-Current Liabilities	$	(129,708	)	$	(146,998	)	$	(369,068	)	$	(4,494	)	$	(11,016	)	$	(147,129	)
Non-Current Assets	—			—			—			36,512			22,774			—
Net Amount Recognized at End of Period	$	(129,708	)	$	(146,998	)	$	(369,068	)	$	32,018		$	11,758		$	(147,129	)
Accumulated Benefit Obligation	$	940,068		$	886,942		$	986,223		N/A			N/A			N/A
Weighted Average Assumptions Used to Determine Benefit Obligation at September 30
Discount Rate	4.25		%	4.75		%	3.50		%	4.25		%	4.75		%	3.50		%
Rate of Compensation Increase	4.75		%	4.75		%	4.75		%	4.75		%	4.75		%	4.75		%



	Retirement Plan									Other Post-Retirement Benefits
	Year Ended September 30									Year Ended September 30
	2014			2013			2012			2014			2013			2012
	(Thousands)
Components of Net Periodic Benefit Cost
Service Cost	$	11,987		$	15,846		$	14,202		$	2,939		$	4,705		$	4,016
Interest Cost	43,574			36,498			41,526			21,308			19,212			21,315
Expected Return on Plan Assets	(59,974		)	(57,346		)	(59,701		)	(37,424		)	(32,872		)	(28,971		)
Amortization of Prior Service Cost (Credit)	210			238			269			(2,138		)	(2,138		)	(2,138		)
Amortization of Transition Amount	—			—			—			—			8			10
Recognition of Actuarial Loss(1)	36,007			52,776			39,615			2,645			20,892			24,057
Net Amortization and Deferral for Regulatory Purposes	8,151			(10,406		)	(6,900		)	23,263			11,844			6,162
Net Periodic Benefit Cost	$	39,955		$	37,606		$	29,011		$	10,593		$	21,651		$	24,451
Weighted Average Assumptions Used to Determine Net Periodic Benefit Cost at September 30
Discount Rate	4.75		%	3.50		%	4.50		%	4.75		%	3.50		%	4.50		%
Expected Return on Plan Assets	8.00		%	8.00		%	8.25		%	8.00		%	8.00		%	8.25		%
Rate of Compensation Increase	4.75		%	4.75		%	4.75		%	4.75		%	4.75		%	4.75		%


(1)	Distribution Corporation’s New York jurisdiction calculates the amortization of the actuarial loss on a vintage year basis over 10 years, as mandated by the NYPSC. All the other subsidiaries of the Company utilize the corridor approach.

The Net Periodic Benefit Cost in the table above includes the effects of regulation. The Company recovers pension and other post-retirement benefit costs in its Utility and Pipeline and Storage segments in accordance with the applicable regulatory commission authorizations. Certain of those commission authorizations established tracking mechanisms which allow the Company to record the difference between the amount of pension and other post-retirement benefit costs recoverable in rates and the amounts of such costs as determined under the existing authoritative guidance as either a regulatory asset or liability, as appropriate. Any activity under the tracking mechanisms (including the amortization of pension and other post-retirement regulatory assets and liabilities) is reflected in the Net Amortization and Deferral for Regulatory Purposes line item above.

In addition to the Retirement Plan discussed above, the Company also has Non-Qualified benefit plans that cover a group of management employees designated by the Chief Executive Officer of the Company. These plans provide for defined benefit payments upon retirement of the management employee, or to the spouse upon death of the management employee. The net periodic benefit cost associated with these plans were $7.5 million, $9.6 million and $9.1 million in 2014, 2013 and 2012, respectively. The accumulated benefit obligations for the plans were $65.7 million, $57.2 million and $54.5 million at September 30, 2014, 2013 and 2012, respectively. The projected benefit obligations for the plans were $85.5 million, $77.1 million and $88.5 million at September 30, 2014, 2013 and 2012, respectively. At September 30, 2014, $6.6 million of the projected benefit obligation is recorded in Other Accruals and Current Liabilities and the remaining $78.9 million is recorded in Other Deferred Credits on the Consolidated Balance Sheets. At September 30, 2013 and 2012, the projected benefit obligations are recorded in Other Deferred Credits on the Consolidated Balance Sheets. The weighted average discount rates for these plans were 3.50%, 3.75% and 2.50% as of September 30, 2014, 2013 and 2012, respectively and a weighted average rate of compensation increase of 7.50%, 7.75% and 7.75% as of September 30, 2014, 2013 and 2012, respectively.

The cumulative amounts recognized in accumulated other comprehensive income (loss), regulatory assets, and regulatory liabilities through fiscal 2014, the changes in such amounts during 2014, as well as the amounts expected to be recognized in net periodic benefit cost in fiscal 2015 are presented in the table below:



	Retirement Plan			Other Post-Retirement Benefits			Non-Qualified Benefit Plans
	(Thousands)
Amounts Recognized in Accumulated Other Comprehensive Income (Loss), Regulatory Assets and Regulatory Liabilities(1)
Net Actuarial Loss	$	(226,897	)	$	(32,082	)	$	(23,532	)
Prior Service (Cost) Credit	(856		)	6,940			—
Net Amount Recognized	$	(227,753	)	$	(25,142	)	$	(23,532	)
Changes to Accumulated Other Comprehensive Income (Loss), Regulatory Assets and Regulatory Liabilities Recognized During Fiscal 2014(1)
Decrease (Increase) in Actuarial Loss, excluding amortization(2)	$	(20,622	)	$	6,387		$	(5,424	)
Change due to Amortization of Actuarial Loss	36,007			2,645			3,008
Prior Service (Cost) Credit	210			(2,138		)	—
Net Change	$	15,595		$	6,894		$	(2,416	)
Amounts Expected to be Recognized in Net Periodic Benefit Cost in the Next Fiscal Year(1)
Net Actuarial Loss	$	(36,129	)	$	(4,148	)	$	(2,925	)
Prior Service (Cost) Credit	(183		)	1,913			—
Net Amount Expected to be Recognized	$	(36,312	)	$	(2,235	)	$	(2,925	)


(1)	Amounts presented are shown before recognizing deferred taxes.


(2)	Amounts presented include the impact of actuarial gains/losses related to return on assets, as well as the Actuarial (Gain) Loss amounts presented in the Change in Benefit Obligation.

In order to adjust the funded status of its pension (tax-qualified and non-qualified) and other post-retirement benefit plans at September 30, 2014, the Company recorded a $19.2 million decrease to Other Regulatory Assets in the Company’s Utility and Pipeline and Storage segments and a $0.9 million (pre-tax) decrease to Accumulated Other Comprehensive Loss.

The effect of the discount rate change for the Retirement Plan in 2014 was to increase the projected benefit obligation of the Retirement Plan by $53.7 million. In 2014, other actuarial experience increased the projected benefit obligation for the Retirement Plan by $0.2 million. The effect of the discount rate change for the Retirement Plan in 2013 was to decrease the projected benefit obligation of the Retirement Plan by $147.9 million. The effect of the discount rate change for the Retirement Plan in 2012 was to increase the projected benefit obligation of the Retirement Plan by $118.8 million.

The Company made cash contributions totaling $33.5 million to the Retirement Plan during the year ended September 30, 2014. The Company expects that the annual contribution to the Retirement Plan in 2015 will be in the range of $15.0 million to $25.0 million. Changes in the discount rate, other actuarial assumptions, and asset performance could ultimately cause the Company to fund larger amounts to the Retirement Plan in 2015 in order to be in compliance with the Pension Protection Act of 2006 (as impacted by the Moving Ahead for Progress in the 21^st Century Act). In July 2012, the Surface Transportation Extension Act, which is also referred to as the Moving Ahead for Progress in the 21st Century Act (the Act), was passed by Congress and signed by the President. The Act included pension funding stabilization provisions. The Highway and Transportation Funding Act of 2014 (HAFTA) was passed by Congress on July 2014 and signed by the President in August 2014. HAFTA extended certain funding stabilization provisions of the Act signed into law in 2012. The Company is continually evaluating its future contributions in light of the provisions of these laws.

The following Retirement Plan benefit payments, which reflect expected future service, are expected to be paid by the Retirement Plan during the next five years and the five years thereafter: $59.4 million in 2015; $60.4 million in 2016; $61.3 million in 2017; $62.2 million in 2018; $62.9 million in 2019; and $326.2 million in the five years thereafter.

The effect of the discount rate change in 2014 was to increase the other post-retirement benefit obligation by $26.4 million. Other actuarial experience decreased the other post-retirement benefit obligation in 2014 by $25.3 million primarily attributable to a revision in assumed per-capita claims cost, premiums and participant contributions based on actual experience.

The effect of the discount rate change in 2013 was to decrease the other post-retirement benefit obligation by $75.9 million. Other actuarial experience decreased the other post-retirement benefit obligation in 2013 by $28.6 million as the increase in obligation attributable to the change in mortality assumption was more than offset by the decrease in obligation attributable to a revision in assumed per-capita claims cost, premiums and participant contributions based on actual experience.

The effect of the discount rate change in 2012 was to increase the other post-retirement benefit obligation by $65.6 million. Other actuarial experience increased the other post-retirement benefit obligation in 2012 by $6.1 million.

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 provides for a prescription drug benefit under Medicare (Medicare Part D), as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D.

The estimated gross other post-retirement benefit payments and gross amount of Medicare Part D prescription drug subsidy receipts are as follows (dollars in thousands):



	Benefit Payments		Subsidy Receipts
2015	$	25,594	$	(1,955	)
2016	$	26,909	$	(2,143	)
2017	$	28,113	$	(2,323	)
2018	$	29,226	$	(2,511	)
2019	$	30,173	$	(2,708	)
2020 through 2024	$	163,470	$	(16,104	)



	2014			2013			2012
Rate of Increase for Pre Age 65 Participants	7.10	%	(1)	7.28	%	(1)	7.46	%	(1)
Rate of Increase for Post Age 65 Participants	6.73	%	(1)	6.78	%	(1)	6.84	%	(1)
Annual Rate of Increase in the Per Capita Cost of Covered Prescription Drug Benefits	7.47	%	(1)	7.78	%	(1)	8.08	%	(1)
Annual Rate of Increase in the Per Capita Medicare Part B Reimbursement	6.73	%	(1)	6.78	%	(1)	6.84	%	(1)
Annual Rate of Increase in the Per Capita Medicare Part D Subsidy	6.79	%	(1)	7.03	%	(1)	7.13	%	(1)


(1)	It was assumed that this rate would gradually decline to 4.5% by 2028.

The health care cost trend rate assumptions used to calculate the per capita cost of covered medical care benefits have a significant effect on the amounts reported. If the health care cost trend rates were increased by 1% in each year, the other post-retirement benefit obligation as of October 1, 2014 would increase by $53.0 million. This 1% change would also have increased the aggregate of the service and interest cost components of net periodic post-retirement benefit cost for 2014 by $3.3 million. If the health care cost trend rates were decreased by 1% in each year, the other post-retirement benefit obligation as of October 1, 2014 would decrease by $44.6 million. This 1% change would also have decreased the aggregate of the service and interest cost components of net periodic post-retirement benefit cost for 2014 by $2.8 million.

The Company made cash contributions totaling $2.0 million to its VEBA trusts and 401(h) accounts during the year ended September 30, 2014. In addition, the Company made direct payments of $0.1 million to retirees not covered by the VEBA trusts and 401(h) accounts during the year ended September 30, 2014. The Company expects that the annual contribution to its VEBA trusts and 401(h) accounts in 2015 will be in the range of $2.0 million to $5.0 million.

Investment Valuation

The Retirement Plan assets and other post-retirement benefit assets are valued under the current fair value framework. See Note F — Fair Value Measurements for further discussion regarding the definition and levels of fair value hierarchy established by the authoritative guidance.

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Below is a listing of the major categories of plan assets held as of September 30, 2014 and 2013, as well as the associated level within the fair value hierarchy in which the fair value measurements in their entirety fall, based on the lowest level input that is significant to the fair value measurement in its entirety (dollars in thousands):



	Total Fair Value Amounts at September 30, 2014			Level 1			Level 2			Level 3
Retirement Plan Investments
Domestic Equities(1)	$	268,649		$	171,979		$	96,670		$	—
International Equities(2)	80,957			1,969			78,988			—
Global Equities(3)	104,238			—			104,238			—
Domestic Fixed Income(4)	299,494			63,187			236,307			—
International Fixed Income(5)	1,240			508			732			—
Global Fixed Income(6)	93,704			—			93,704			—
Hedge Fund Investments	45,213			—			—			45,213
Real Estate	3,792			—			—			3,792
Cash and Cash Equivalents	33,544			—			33,544			—
Total Retirement Plan Investments	930,831			237,643			644,183			49,005
401(h) Investments	(54,921		)	(14,105		)	(37,907		)	(2,909		)
Total Retirement Plan Investments (excluding 401(h) Investments)	$	875,910		$	223,538		$	606,276		$	46,096
Miscellaneous Accruals, Interest Receivables, and Non-Interest Cash	(6,119		)
Total Retirement Plan Assets	$	869,791



	Total Fair Value Amounts at September 30, 2013			Level 1			Level 2			Level 3
Retirement Plan Investments
Domestic Equities(1)	$	402,107		$	271,071		$	131,036		$	—
International Equities(2)	103,028			2,355			100,673			—
Global Equities(3)	25,325			—			25,325			—
Domestic Fixed Income(4)	163,750			71,185			92,565			—
International Fixed Income(5)	2,762			1,318			1,444			—
Global Fixed Income(6)	88,084			—			88,084			—
Hedge Fund Investments	42,027			—			—			42,027
Real Estate	2,723			—			—			2,723
Cash and Cash Equivalents	22,694			—			22,694			—
Total Retirement Plan Investments	852,500			345,929			461,821			44,750
401(h) Investments	(49,453		)	(20,141		)	(26,706		)	(2,606		)
Total Retirement Plan Investments (excluding 401(h) Investments)	$	803,047		$	325,788		$	435,115		$	42,144
Miscellaneous Accruals, Interest Receivables, and Non-Interest Cash	(3,740		)
Total Retirement Plan Assets	$	799,307


(1)	Domestic Equities include mostly collective trust funds, common stock, and exchange traded funds.


(2)	International Equities include mostly collective trust funds and common stock.


(3)	Global Equities are comprised of a collective trust fund.


(4)	Domestic Fixed Income securities include mostly collective trust funds, corporate/government bonds and mortgages, and exchange traded funds.


(5)	International Fixed Income securities include mostly collective trust funds and exchange traded funds.


(6)	Global Fixed Income securities are comprised of a collective trust fund.



	Total Fair Value Amounts at September 30, 2014			Level 1		Level 2		Level 3
Other Post-Retirement Benefit Assets held in VEBA Trusts
Collective Trust Funds — Domestic Equities	$	148,219		$	—	$	148,219	$	—
Collective Trust Funds — International Equities	54,881			—		54,881		—
Exchange Traded Funds — Fixed Income	236,513			236,513		—		—
Cash Held in Collective Trust Funds	6,412			—		6,412		—
Total VEBA Trust Investments	446,025			236,513		209,512		—
401(h) Investments	54,921			14,105		37,907		2,909
Total Investments (including 401(h) Investments)	$	500,946		$	250,618	$	247,419	$	2,909
Miscellaneous Accruals (Including Current and Deferred Taxes, Claims Incurred But Not Reported, Administrative)	(3,345		)
Total Other Post-Retirement Benefit Assets	$	497,601



	Total Fair Value Amounts at September 30, 2013			Level 1		Level 2		Level 3
Other Post-Retirement Benefit Assets held in VEBA Trusts
Collective Trust Funds — Domestic Equities	$	205,623		$	—	$	205,623	$	—
Collective Trust Funds — International Equities	87,613			—		87,613		—
Exchange Traded Funds — Fixed Income	122,558			122,558		—		—
Real Estate	55			—		—		55
Cash Held in Collective Trust Funds	11,678			—		11,678		—
Total VEBA Trust Investments	427,527			122,558		304,914		55
401(h) Investments	49,453			20,141		26,706		2,606
Total Investments (including 401(h) Investments)	$	476,980		$	142,699	$	331,620	$	2,661
Miscellaneous Accruals (Including Current and Deferred Taxes, Claims Incurred But Not Reported, Administrative)	(4,588		)
Total Other Post-Retirement Benefit Assets	$	472,392

The fair values disclosed in the above tables may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

The following tables provide a reconciliation of the beginning and ending balances of the Retirement Plan and other post-retirement benefit assets measured at fair value on a recurring basis where the determination of fair value includes significant unobservable inputs (Level 3). Note: For the years ended September 30, 2014 and September 30, 2013, there were no transfers from Level 1 to Level 2. In addition, as shown in the following tables, there were no transfers in or out of Level 3.



	Retirement Plan Level 3 Assets (Thousands)
	Hedge Funds		Real Estate			Excluding 401(h) Investments			Total


Balance at September 30, 2012	$	39,956	$	6,170		$	(2,680	)	$	43,446
Realized Gains/(Losses)	—		(73		)	4			(69		)
Unrealized Gains/(Losses)	2,071		515			(156		)	2,430
Purchases	—		188			(11		)	177
Sales	—		(4,077		)	237			(3,840		)
Balance at September 30, 2013	42,027		2,723			(2,606		)	42,144
Realized Gains/(Losses)	—		62			(4		)	58
Unrealized Gains/(Losses)	3,186		(10		)	(239		)	2,937
Purchases	—		1,111			(65		)	1,046
Sales	—		(94		)	5			(89		)
Balance at September 30, 2014	$	45,213	$	3,792		$	(2,909	)	$	46,096



	Other Post-Retirement Benefit Level 3 Assets (Thousands)
	VEBA Trust Investments			Including 401(h) Investments			Other Post-Retirement Benefit Investments
	Real Estate			Including 401(h) Investments			Other Post-Retirement Benefit Investments
Balance at September 30, 2012	$	1,305		$	2,680		$	3,985
Realized Gains/(Losses)	940			(4		)	936
Unrealized Gains/(Losses)	385			156			541
Purchases	—			11			11
Sales	(2,575		)	(237		)	(2,812		)
Balance at September 30, 2013	55			2,606			2,661
Realized Gains/(Losses)	(40		)	4			(36		)
Unrealized Gains/(Losses)	—			239			239
Purchases	—			65			65
Sales	(15		)	(5		)	(20		)
Balance at September 30, 2014	$	—		$	2,909		$	2,909

The Company’s assumption regarding the expected long-term rate of return on plan assets is 7.5% (Retirement Plan) and 7.0% (other post-retirement benefits), effective for fiscal 2015. The return assumption reflects the anticipated long-term rate of return on the plan’s current and future assets. The Company utilizes projected capital market conditions and the plan’s target asset class and investment manager allocations to set the assumption regarding the expected return on plan assets.

The long-term investment objective of the Retirement Plan trust, the VEBA trusts and the 401(h) accounts is to achieve the target total return in accordance with the Company’s risk tolerance. Assets are diversified utilizing a mix of equities, fixed income and other securities (including real estate). The target allocation for the Retirement Plan is 40-60% equity securities, 35-55% fixed income securities and 5-20% other. The target allocation for the VEBA trusts (including 401(h) accounts) is 40-60% equity securities, 40-60% fixed income securities and 0-15% other. Risk tolerance is established through consideration of plan liabilities, plan funded status and corporate financial condition. The assets of the Retirement Plan trusts, VEBA trusts and the 401(h) accounts have no significant concentrations of risk in any one country (other than the United States), industry or entity.

Investment managers are retained to manage separate pools of assets. Comparative market and peer group performance of individual managers and the total fund are monitored on a regular basis, and reviewed by the Company’s Retirement Committee on at least a quarterly basis.

The discount rate which is used to present value the future benefit payment obligations of the Retirement Plan and the Company’s other post-retirement benefits is 4.25% as of September 30, 2014. The discount rate which is used to present value the future benefit payment obligations of the Non-Qualified benefit plans is 3.50% as of September 30, 2014. The Company utilizes the Mercer Yield Curve Above Mean Model to determine the discount rate. The yield curve is a spot rate yield curve that provides a zero-coupon interest rate for each year into the future. Each year’s anticipated benefit payments are discounted at the associated spot interest rate back to the measurement date. The discount rate is then determined based on the spot interest rate that results in the same present value when applied to the same anticipated benefit payments. In determining the spot rates, the model will exclude coupon interest rates that are in the lower 50^th percentile based on the assumption that the Company would not utilize more expensive (i.e. lower yield) instruments to settle its liabilities.