Interim Pension and Other Postretirement Benefit Plan Information

The components of our net periodic pension cost for our pension and other postretirement benefit plans for the three months ended December 31, 2013 and 2012 are presented in the following table. Most of these costs are recoverable through our gas distribution rates; however, a portion of these costs is capitalized into our gas distribution rate base. The remaining costs are recorded as a component of operation and maintenance expense. On October 2, 2013, due to the retirement of one of our executives, we recognized a settlement loss of $4.5 million associated with our Supplemental Executive Benefits Plan (SEBP). In association with the retirement, on October 2, 2013, we made a $16.8 million benefit payment from the SEBP.



	Three Months Ended December 31
	Pension Benefits						Other Benefits
	2013			2012			2013			2012
	(In thousands)
Components of net periodic pension cost:
Service cost	$	4,738		$	5,202		$	4,196		$	4,700
Interest cost	6,824			6,025			3,988			3,241
Expected return on assets	(5,901		)	(5,739		)	(1,292		)	(997		)
Amortization of transition obligation	—			—			68			270
Amortization of prior service credit	(34		)	(35		)	(363		)	(362		)
Amortization of actuarial loss	3,932			5,561			158			1,049
Settlement loss	4,539			—			—			—
Net periodic pension cost	$	14,098		$	11,014		$	6,755		$	7,901

The assumptions used to develop our net periodic pension cost for the three months ended December 31, 2013 and 2012 are as follows:



	Pension Benefits				Other Benefits
	2013		2012		2013		2012
Discount rate	4.95	%	4.04	%	4.95	%	4.04	%
Rate of compensation increase	3.50	%	3.50	%	N/A		N/A
Expected return on plan assets	7.25	%	7.75	%	4.60	%	4.70	%

The discount rate used to compute the present value of a plan’s liabilities generally is based on rates of high-grade corporate bonds with maturities similar to the average period over which the benefits will be paid. Generally, our funding policy has been to contribute annually an amount in accordance with the requirements of the Employee Retirement Income Security Act of 1974. In accordance with the Pension Protection Act of 2006 (PPA), we determined the funded status of our plans as of January 1, 2014. During the first three months of fiscal 2014, we contributed $4.7 million to our defined benefit plans and we anticipate contributing approximately $10 million to $15 million during the remainder of the fiscal year.

We contributed $5.9 million to our other post-retirement benefit plans during the three months ended December 31, 2013. We expect to contribute a total of approximately $15 million to $20 million to these plans during the remainder of the fiscal year.