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Interim Pension and Other Postretirement Benefit Plan Information
 6 Months Ended
Mar. 31, 2014
General Discussion of Pension and Other Postretirement Benefits [Abstract]  
Interim Pension and Postretirement Benefit Plans
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 and six months ended March 31, 2014 and 2013 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 executive officers, 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 March 31
 
Pension Benefits
 
Other Benefits
 
2014
 
2013
 
2014
 
2013
 
(In thousands)
Components of net periodic pension cost:
 
 
 
 
 
 
 
Service cost
$
4,738

 
$
5,203

 
$
4,196

 
$
4,700

Interest cost
6,824

 
6,023

 
3,988

 
3,241

Expected return on assets
(5,900
)
 
(5,738
)
 
(1,292
)
 
(997
)
Amortization of transition obligation
—

 
—

 
68

 
270

Amortization of prior service credit
(34
)
 
(36
)
 
(362
)
 
(363
)
Amortization of actuarial loss
3,930

 
5,562

 
158

 
1,049

Net periodic pension cost
$
9,558

 
$
11,014

 
$
6,756

 
$
7,900

 
 
 
 
 
 
 
 
 
Six Months Ended March 31
 
Pension Benefits
 
Other Benefits
 
2014
 
2013
 
2014
 
2013
 
(In thousands)
Components of net periodic pension cost:
 
 
 
 
 
 
 
Service cost
$
9,476

 
$
10,405

 
$
8,392

 
$
9,400

Interest cost
13,648

 
12,048

 
7,976

 
6,482

Expected return on assets
(11,801
)
 
(11,477
)
 
(2,584
)
 
(1,994
)
Amortization of transition obligation
—

 
—

 
136

 
540

Amortization of prior service credit
(68
)
 
(71
)
 
(725
)
 
(725
)
Amortization of actuarial loss
7,862

 
11,123

 
316

 
2,098

Settlement loss
4,539

 
—

 
—

 
—

Net periodic pension cost
$
23,656

 
$
22,028

 
$
13,511

 
$
15,801



The assumptions used to develop our net periodic pension cost for the three and six months ended March 31, 2014 and 2013 are as follows:
 
Pension Benefits
 
Other Benefits
 
2014
 
2013
 
2014
 
2013
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 six months of fiscal 2014, we contributed $9.1 million to our defined benefit plans and we anticipate contributing approximately $10 million to $35 million during fiscal 2014.
We contributed $11.6 million to our other post-retirement benefit plans during the six months ended March 31, 2014. We expect to contribute a total of approximately $20 million to $25 million to these plans during fiscal 2014.