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Pension and Other Postretirement Benefit Costs
 6 Months Ended
Jun. 30, 2020
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract]  
Pension and Other Postretirement Benefit Costs PENSION AND OTHER POSTRETIREMENT BENEFIT COSTS

NW Natural maintains a qualified non-contributory defined benefit pension plan (Pension Plan), non-qualified supplemental pension plans for eligible executive officers and other key employees, and other postretirement employee benefit plans. NW Natural also has a qualified defined contribution plan (Retirement K Savings Plan) for all eligible employees. The Pension Plan and Retirement K Savings Plan have plan assets, which are held in qualified trusts to fund retirement benefits.

The service cost component of net periodic benefit cost for NW Natural pension and other postretirement benefit plans is recognized in operations and maintenance expense in the consolidated statements of comprehensive income. The other non-service cost components are recognized in other income (expense), net in the consolidated statements of comprehensive income.

The following table provides the components of net periodic benefit cost for the pension and other postretirement benefit plans:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
Pension Benefits
 
Other Postretirement
Benefits
 
Pension Benefits
 
Other
Postretirement Benefits
In thousands
 
2020
 
2019
 
2020
 
2019
 
2020
 
2019
 
2020
 
2019
Service cost
 
$
1,658

 
$
1,516

 
$
64

 
$
67

 
$
3,315

 
$
3,033

 
$
128

 
$
135

Interest cost
 
4,011

 
4,661

 
223

 
283

 
8,022

 
9,323

 
446

 
564

Expected return on plan assets
 
(5,496
)
 
(5,207
)
 
—

 
—

 
(10,992
)
 
(10,414
)
 
—

 
—

Amortization of prior service costs
 
—

 
2

 
(117
)
 
(117
)
 
—

 
4

 
(234
)
 
(234
)
Amortization of net actuarial loss
 
4,778

 
3,603

 
142

 
96

 
9,556

 
7,206

 
285

 
193

Net periodic benefit cost
 
4,951

 
4,575

 
312

 
329

 
9,901

 
9,152

 
625

 
658

Amount allocated to construction
 
(680
)
 
(596
)
 
(23
)
 
(23
)
 
(1,348
)
 
(1,182
)
 
(46
)
 
(47
)
Net periodic benefit cost charged to expense
 
4,271

 
3,979

 
289

 
306

 
8,553

 
7,970

 
579

 
611

Regulatory pension disallowance
 
—

 
—

 
—

 
—

 
—

 
10,500

 
—

 
—

Amortization of regulatory balancing account
 
1,281

 
1,281

 
—

 
—

 
4,082

 
13,792

 
—

 
—

Net amount charged to expense
 
$
5,552

 
$
5,260

 
$
289

 
$
306

 
$
12,635

 
$
32,262

 
$
579

 
$
611



Net periodic benefit costs are reduced by amounts capitalized to NGD plant. In addition, a certain amount of net periodic benefit costs were recorded to the regulatory balancing account, representing net periodic pension expense for the qualified plan above the amount set in rates, as approved by the OPUC, from 2011 through October 31, 2018.

In March 2019, the OPUC issued an order concluding the NW Natural 2018 Oregon rate case. The Order allowed for the application of certain deferred revenues and tax benefits from the Tax Cuts and Jobs Act (TCJA) to reduce NW Natural's pension regulatory balancing account. A corresponding total of $12.5 million in pension expenses were recognized in operating and maintenance expense and other income (expense), net in the consolidated statements of comprehensive income in the first quarter of 2019, with offsetting benefits recorded within operating revenues and income taxes. The Order also directed NW Natural to reduce the balancing account by an additional $10.5 million, which was also charged to operating and maintenance expense and other income (expense), net in the consolidated statements of comprehensive income. Amortization of the remaining amount of the balancing account began in the second quarter of 2019 in accordance with the Order.

The following table presents amounts recognized in accumulated other comprehensive loss (AOCL) and the changes in AOCL related to non-qualified employee benefit plans:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
In thousands
 
2020
 
2019
 
2020
 
2019
Beginning balance
 
$
(10,573
)
 
$
(8,439
)
 
$
(10,733
)
 
$
(7,188
)
Amounts reclassified from AOCL:
 
 
 
 
 
 
 
 
Amortization of actuarial losses
 
218

 
156

 
436

 
312

Reclassification of stranded tax effects(1)
 
—

 
—

 
—

 
(1,366
)
Total reclassifications before tax
 
218

 
156

 
436

 
(1,054
)
Tax (benefit) expense
 
(58
)
 
(41
)
 
(116
)
 
(82
)
Total reclassifications for the period
 
160

 
115

 
320

 
(1,136
)
Ending balance
 
$
(10,413
)
 
$
(8,324
)
 
$
(10,413
)
 
$
(8,324
)

(1)
Reclassification of $1.4 million of income tax effects resulting from the TCJA from accumulated other comprehensive loss to retained earnings was made pursuant to the adoption of ASU 2018-02. See Note 2.

Employer Contributions to Company-Sponsored Defined Benefit Pension Plans
For the six months ended June 30, 2020, NW Natural made cash contributions totaling $8.5 million to qualified defined benefit pension plans. NW Natural expects further plan contributions of $19.7 million during the remainder of 2020.

Defined Contribution Plan
The Retirement K Savings Plan is a qualified defined contribution plan under Internal Revenue Code Sections 401(a) and 401(k). Employer contributions totaled $4.4 million and $3.8 million for the six months ended June 30, 2020 and 2019, respectively.

See Note 10 in the 2019 Form 10-K for more information concerning these retirement and other postretirement benefit plans.