Interim Pension and Other Postretirement Benefit Plan Information

3 Months Ended

Dec. 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 months ended December 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 his 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
	2014			2013			2014			2013
	(In thousands)
Components of net periodic pension cost:
Service cost	$	5,051		$	4,738		$	3,896		$	4,196
Interest cost	6,699			6,824			3,596			3,988
Expected return on assets	(6,436		)	(5,901		)	(1,608		)	(1,292		)
Amortization of transition obligation	—			—			68			68
Amortization of prior service credit	(49		)	(34		)	(411		)	(363		)
Amortization of actuarial loss	3,917			3,932			—			158
Settlement loss	—			4,539			—			—
Net periodic pension cost	$	9,182		$	14,098		$	5,541		$	6,755

The assumptions used to develop our net periodic pension cost for the three months ended December 31, 2014 and 2013 are as follows:

	Pension Benefits				Other Benefits
	2014		2013		2014		2013
Discount rate	4.43	%	4.95	%	4.43	%	4.95	%
Rate of compensation increase	3.50	%	3.50	%	N/A		N/A
Expected return on plan assets	7.25	%	7.25	%	4.60	%	4.60	%

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, 2015. Due to current market conditions, the current funded position of the plans and the funding requirements under the PPA, we were not required to make a contribution to our defined benefit plans during the first quarter of fiscal 2015, nor do we anticipate making a contribution during the remainder of the fiscal year.

We contributed $5.6 million to our other post-retirement benefit plans during the three months ended December 31, 2014. We expect to contribute a total of approximately $20 million to $25 million to these plans during all of fiscal 2015.

In October 2014, the Society of Actuaries released its final report on mortality tables and the mortality improvement scale to reflect increasing life expectancies in the United States. We anticipate utilizing the new mortality data in our next actuarial calculation date on September 30, 2015. We are currently evaluating the impact the updated data will have on the valuation of our defined benefit and other post-retirement benefits plans. It is expected the use of this new data will increase the total amount of liabilities reported on our balance sheet in future periods by less than five percent.