XML 40 R18.htm IDEA: XBRL DOCUMENT v3.25.3
Retirement Plan and Other Post-Retirement Benefits
 12 Months Ended
Sep. 30, 2025
Retirement Benefits [Abstract]  
Retirement Plan and Other Post-Retirement Benefits 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 $7.1 million, $6.5 million and $5.7 million for the years ended September 30, 2025, 2024 and 2023, 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 $9.8 million, $9.0 million and $8.2 million for the years ended September 30, 2025, 2024 and 2023, 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 components of net periodic benefit cost other than service cost are presented in Other Income (Deductions) on the Consolidated Statements of Income. The date used to measure the Benefit Obligations, Plan Assets and Funded Status is September 30 for fiscal years 2025, 2024 and 2023.
 Retirement PlanOther Post-Retirement Benefits
 Year Ended September 30Year Ended September 30
 202520242023202520242023
 (Thousands)
Change in Benefit Obligation
Benefit Obligation at Beginning of Period
$822,306$768,750$813,828$321,025$274,278$299,283
Service Cost4,0924,1975,187519434587
Interest Cost36,89243,55842,51614,50115,56115,648
Plan Participants’ Contributions———3,5973,4013,297
Retiree Drug Subsidy Receipts———1,5141,2082,969
Actuarial (Gain) Loss(17,232)72,016(27,313)17,07254,443(20,789)
Benefits Paid(66,395)(66,215)(65,468)(27,644)(28,300)(26,717)
Benefit Obligation at End of Period
$779,663$822,306$768,750$330,584$321,025$274,278
Change in Plan Assets
Fair Value of Assets at Beginning of Period
$823,985$784,712$845,205$496,065$455,702$461,438
Actual Return on Plan Assets20,527105,4884,97523,49464,78317,449
Employer Contributions———594479235
Plan Participants’ Contributions———3,5973,4013,297
Benefits Paid(66,395)(66,215)(65,468)(27,644)(28,300)(26,717)
Fair Value of Assets at End of Period
$778,117$823,985$784,712$496,106$496,065$455,702
Net Amount Recognized at End of Period (Funded Status)
$(1,546)$1,679$15,962$165,522$175,040$181,424
Amounts Recognized in the Balance Sheets Consist of:
Non-Current Liabilities$(1,546)$—$—$(3,706)$(3,511)$(2,915)
Non-Current Assets—1,67915,962169,228178,551184,339
Net Amount Recognized at End of Period
$(1,546)$1,679$15,962$165,522$175,040$181,424
Accumulated Benefit Obligation$765,747$804,916$751,912N/AN/AN/A
Weighted Average Assumptions Used to Determine Benefit Obligation at September 30
Discount Rate5.28 %4.97 %5.99 %5.30 %4.98 %5.99 %
Rate of Compensation Increase4.60 %4.60 %4.60 %4.60 %4.60 %4.60 %
 Retirement PlanOther Post-Retirement Benefits
 Year Ended September 30Year Ended September 30
 202520242023202520242023
 (Thousands)
Components of Net Periodic Benefit Cost
Service Cost$4,092$4,197$5,187$519$434$587
Interest Cost36,89243,55842,51614,50115,56115,648
Expected Return on Plan Assets(58,587)(68,343)(66,593)(26,144)(26,642)(25,612)
Amortization of Prior Service Cost (Credit)
302362436(429)(429)(429)
Recognition of Actuarial (Gain) Loss(1)6,481(1,339)(7,680)37(2,266)(8,755)
Net Amortization and Deferral for Regulatory Purposes
(1,375)16,23121,512(3,857)8,75915,157
Net Periodic Benefit Income$(12,195)$(5,334)$(4,622)$(15,373)$(4,583)$(3,404)
Weighted Average Assumptions Used to Determine Net Periodic Benefit Cost at September 30
Effective Discount Rate for Benefit Obligations
4.97 %5.99 %5.57 %4.98 %5.99 %5.56 %
Effective Rate for Interest on Benefit Obligations
4.68 %5.93 %5.45 %4.69 %5.93 %5.45 %
Effective Discount Rate for Service Cost
5.14 %6.01 %5.49 %5.21 %5.99 %5.35 %
Effective Rate for Interest on Service Cost
4.96 %5.98 %5.53 %5.14 %6.01 %5.47 %
Expected Return on Plan Assets6.60 %7.40 %6.90 %5.40 %6.00 %5.70 %
Rate of Compensation Increase4.60 %4.60 %4.60 %4.60 %4.60 %4.60 %
(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 (Income) 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 whose income level has exceeded certain IRS thresholds or who have been designated as participants 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 costs associated with these plans were $4.6 million, $9.5 million and $8.3
million in 2025, 2024 and 2023, respectively. The components of net periodic benefit cost other than service costs associated with these plans are presented in Other Income (Deductions) on the Consolidated Statements of Income. The accumulated benefit obligations for the plans were $50.9 million, $57.5 million and $58.5 million at September 30, 2025, 2024 and 2023, respectively. The projected benefit obligations for the plans were $58.4 million, $66.0 million and $69.5 million at September 30, 2025, 2024 and 2023, respectively. At September 30, 2025, $11.6 million of the projected benefit obligation is recorded in Other Accruals and Current Liabilities and the remaining $46.8 million is recorded in Other Liabilities on the Consolidated Balance Sheets. At September 30, 2024, $14.1 million of the projected benefit obligation was recorded in Other Accruals and Current Liabilities and the remaining $51.9 million was recorded in Other Liabilities on the Consolidated Balance Sheets. At September 30, 2023, $13.1 million of the projected benefit obligation was recorded in Other Accruals and Current Liabilities and the remaining $56.4 million was recorded in Other Liabilities on the Consolidated Balance Sheets. The weighted average discount rates for these plans were 4.86%, 4.71% and 5.91% as of September 30, 2025, 2024 and 2023, respectively and the weighted average rate of compensation increase for these plans was 8.00% as of September 30, 2025, 2024 and 2023.
The cumulative amounts recognized in accumulated other comprehensive income (loss), regulatory assets, and regulatory liabilities through fiscal 2025, as well as the changes in such amounts during 2025, are presented in the table below:
Retirement
Plan		Other
Post-Retirement
Benefits		Non-Qualified
Benefit Plans
 (Thousands)
Amounts Recognized in Accumulated Other Comprehensive Income (Loss), Regulatory Assets and Regulatory Liabilities(1)
Net Actuarial Loss$(178,675)$(19,813)$(13,353)
Prior Service (Cost) Credit(1,372)257 — 
Net Amount Recognized$(180,047)$(19,556)$(13,353)
Changes to Accumulated Other Comprehensive Income (Loss), Regulatory Assets and Regulatory Liabilities Recognized During Fiscal 2025(1)
Increase in Actuarial Loss, excluding amortization(2)$(20,828)$(19,722)$(1,061)
Change due to Amortization of Actuarial Loss6,481 37 1,101 
Prior Service (Cost) Credit302 (429)— 
Net Change$(14,045)$(20,114)$40 
(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 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, 2025, the Company recorded a $23.8 million increase to Other Regulatory Assets in the Company’s Utility and Pipeline and Storage segments and a $10.3 million (pre-tax) decrease to Accumulated Other Comprehensive Income.
The effect of the discount rate change for the Retirement Plan in 2025 was to decrease the projected benefit obligation of the Retirement Plan by $21.4 million. Other actuarial experience increased the projected benefit obligation for the Retirement Plan in 2025 by $4.2 million. The effect of the discount rate change for the Retirement Plan in 2024 was to increase the projected benefit obligation of the Retirement Plan by $69.6
million. The effect of the discount rate change for the Retirement Plan in 2023 was to decrease the projected benefit obligation of the Retirement Plan by $28.4 million.
The Company did not make any cash contributions to the Retirement Plan during the year ended September 30, 2025. The Company does not expect to make any contributions to the Retirement Plan in 2026.
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: $67.6 million in 2026; $66.9 million in 2027; $66.1 million in 2028; $65.1 million in 2029; $64.0 million in 2030; and $297.8 million in the five years thereafter.
The effect of the discount rate change in 2025 was to decrease the other post-retirement benefit obligation by $9.9 million. The health care cost trend rates were updated, which increased the other post-retirement benefit obligation in 2025 by $18.2 million. Other actuarial experience increased the other post-retirement benefit obligation in 2025 by $8.8 million, the majority of which was attributable to a revision in assumed per-capita claims cost, premiums, retiree contributions and retiree drug subsidy assumptions based on actual experience.
The effect of the discount rate change in 2024 was to increase the other post-retirement benefit obligation by $28.1 million. The healthcare cost trend rates were updated, which increased the other post-retirement benefit obligation in 2024 by $25.2 million. Other actuarial experience increased the other post-retirement benefit obligation in 2024 by $1.2 million, the majority of which was attributable to a revision in assumed per-capita claims cost, premiums, retiree contributions and retiree drug subsidy assumptions based on actual experience.
The effect of the discount rate change in 2023 was to decrease the other post-retirement benefit obligation by $10.7 million. The mortality improvement projection scale was updated, which decreased the other post-retirement benefit obligation in 2023 by $0.4 million. The health care cost trend rates were updated, which increased the other post-retirement benefit obligation in 2023 by $3.2 million. Other actuarial experience decreased the other post-retirement benefit obligation in 2023 by $12.9 million, the majority of which was attributable to a revision in assumed per-capita claims cost, premiums, retiree contributions and retiree drug subsidy assumptions based on actual experience.
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 PaymentsSubsidy Receipts
2026$26,899 $(1,560)
2027$27,556 $(1,574)
2028$28,060 $(1,577)
2029$28,344 $(1,577)
2030$28,406 $(1,568)
2031 through 2035
$135,297 $(7,536)
 
Assumed health care cost trend rates as of September 30 were:
202520242023
Rate of Medical Cost Increase for Pre Age 65 Participants7.25 %(1)6.25 %(2)6.25 %(3)
Rate of Medical Cost Increase for Post Age 65 Participants5.75 %(1)5.75 %(2)5.00 %(3)
Annual Rate of Increase in the Per Capita Cost of Covered Prescription Drug Benefits
11.75 %(1)10.25 %(2)6.85 %(3)
Annual Rate of Increase in the Per Capita Medicare Part B Reimbursement
5.75 %(1)5.75 %(2)5.00 %(3)
Annual Rate of Increase in the Per Capita Medicare Part D Subsidy
4.00 %(1)4.00 %(2)6.60 %(3)
(1)It was assumed that this rate would gradually decline to 4% by 2050.
(2)It was assumed that this rate would gradually decline to 4% by 2049.
(3)It was assumed that this rate would gradually decline to 4% by 2048.
The Company made direct payments of $0.6 million to retirees not covered by the VEBA trusts and 401(h) accounts during the year ended September 30, 2025. The Company did not make any cash contributions to its VEBA trusts during the year ended September 30, 2025, and does not expect to make any contributions to its VEBA trusts in 2026.
Investment Valuation
The Retirement Plan assets and other post-retirement benefit assets are valued under the current fair value framework. See Note I — 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, 2025 and 2024, 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):
At September 30, 2025
Total
Fair Value		Level 1Level 2Level 3Measured
at NAV(6)
Retirement Plan Investments
Domestic Equities(1)$116 $116 $— $— $— 
Global Equities(2)79,470 — — — 79,470 
Domestic Fixed Income(3)(7)645,955 — 596,905 — 49,050 
International Fixed Income(4)9,609 — 9,609 — — 
Real Estate (5)102,373 — — — 102,373 
Cash Held in Collective Trust Funds34,077 — — — 34,077 
Total Retirement Plan Investments871,600 116 606,514 — 264,970 
401(h) Investments(86,093)(12)(60,379)— (25,702)
Total Retirement Plan Investments (excluding 401(h) Investments)
$785,507 $104 $546,135 $— $239,268 
Miscellaneous Accruals, Interest Receivables, and Non-Interest Cash
(7,390)
Total Retirement Plan Assets$778,117 
At September 30, 2024
Total
Fair Value		Level 1Level 2Level 3Measured
at NAV(6)
Retirement Plan Investments
Domestic Equities(1)$37,984 $37,984 $— $— $— 
Global Equities(2)38,234 — — — 38,234 
Domestic Fixed Income(3)(7)681,755 — 633,600 — 48,155 
International Fixed Income(4)8,587 — 8,587 — — 
Real Estate (5)109,383 — — — 109,383 
Cash Held in Collective Trust Funds41,709 — — — 41,709 
Total Retirement Plan Investments917,652 37,984 642,187 — 237,481 
401(h) Investments(83,682)(3,500)(59,166)— (21,016)
Total Retirement Plan Investments (excluding 401(h) Investments)
$833,970 $34,484 $583,021 $— $216,465 
Miscellaneous Accruals, Interest Receivables, and Non-Interest Cash
(9,985)
Total Retirement Plan Assets$823,985 
(1)Domestic Equities include mostly collective trust funds, common stock, and exchange traded funds.
(2)Global Equities are comprised of collective trust funds.
(3)Domestic Fixed Income securities include mostly collective trust funds, corporate/government bonds and mortgages, and exchange traded funds.
(4)International Fixed Income securities are comprised mostly of corporate/government bonds.
(5)Real Estate consists of investments held in a collective trust fund and a partnership.
(6)Reflects the authoritative guidance related to investments measured at net asset value (NAV).
(7)Domestic Fixed Income securities include $6.2 million and $8.5 million of derivative instruments used as part of the Company’s overall liability-driven investment strategy as a way to assist in matching the duration of the assets of the Retirement Plan investments with its liability to plan participants as of September 30, 2025 and September 30, 2024, respectively.
At September 30, 2025
Total
Fair Value		Level 1Level 2Level 3Measured
at NAV(1)
Other Post-Retirement Benefit Assets held in VEBA Trusts
Collective Trust Funds — Global Equities
$232,395 $— $— $— $232,395 
Exchange Traded Funds — Fixed Income165,601 165,601 — — — 
Cash Held in Collective Trust Funds12,302 — — — 12,302 
Total VEBA Trust Investments410,298 165,601 — — 244,697 
401(h) Investments86,093 12 60,379 — 25,702 
Total Investments (including 401(h) Investments)
$496,391 $165,613 $60,379 $— $270,399 
Miscellaneous Accruals (including Current and Deferred Taxes, Claims Incurred But Not Reported, Administrative)(285)
Total Other Post-Retirement Benefit Assets
$496,106 
At September 30, 2024
Total
Fair Value		Level 1Level 2Level 3Measured
at NAV(1)
Other Post-Retirement Benefit Assets held in VEBA Trusts
Collective Trust Funds — Global Equities$82,814 $— $— $— $82,814 
Exchange Traded Funds — Fixed Income314,052 314,052 — — — 
Cash Held in Collective Trust Funds14,274 — — — 14,274 
Total VEBA Trust Investments411,140 314,052 — — 97,088 
401(h) Investments83,682 3,500 59,166 — 21,016 
Total Investments (including 401(h) Investments)
$494,822 $317,552 $59,166 $— $118,104 
Miscellaneous Accruals (Including Current and Deferred Taxes, Claims Incurred But Not Reported, Administrative)
1,243 
Total Other Post-Retirement Benefit Assets
$496,065 
(1)Reflects the authoritative guidance related to investments measured at net asset value (NAV).
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.
For the years ended September 30, 2025 and September 30, 2024, there were no transfers from Level 1 to Level 2. For the years ended September 30, 2025 and September 30, 2024, there were no assets or liabilities measured at fair value and classified as Level 3.
The Company’s assumption regarding the expected long-term rate of return on plan assets is 7.10% (Retirement Plan) and 6.10% (other post-retirement benefits), effective for fiscal 2026. 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). Risk tolerance is established through consideration of plan liabilities, plan funded status and corporate financial condition. The assets of the Retirement Plan trust, 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. The actual asset allocations as of September 30, 2025 are noted in the table above, and such allocations are subject to change, but the majority of the assets will remain hedging fixed income assets in conjunction with the Company’s liability driven investment strategy. Given the level of the VEBA trust and 401(h) assets in relation to the Other Post-Retirement Benefits, the majority of those assets are and will remain in fixed income securities.
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 Company determines the service and interest cost components of net periodic benefit cost using the spot rate approach, which uses individual spot rates along the yield curve that correspond to the timing of each
benefit payment in order to determine the discount rate. The individual spot rates along the yield curve are determined by an above mean methodology in that the coupon interest rates that are in the lower 50th percentile are excluded based on the assumption that the Company would not utilize more expensive (i.e. lower yield) instruments to settle its liabilities.