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9. Interim Pension and Other Postretirement Benefit Plan Information
 6 Months Ended
Mar. 31, 2013
Disclosure Interim Pension and Other Postretirement Benefit Plans  
9. Interim Pension and Postretirement Benefit Plans

9. 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, 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.

 

    Three Months Ended March 31
    Pension Benefits Other Benefits
    2013 2012 2013 2012
    (In thousands)
               
Components of net periodic pension cost:            
 Service cost $ 5,203 $ 4,298 $ 4,700 $ 4,088
 Interest cost   6,023   6,678   3,241   3,466
 Expected return on assets   (5,738)   (5,369)   (997)   (652)
 Amortization of transition asset   -   -   270   378
 Amortization of prior service cost   (36)   (36)   (363)   (363)
 Amortization of actuarial loss   5,562   4,143   1,049   662
  Net periodic pension cost $ 11,014 $ 9,714 $ 7,900 $ 7,579
               
    Six Months Ended March 31
    Pension Benefits Other Benefits
    2013 2012 2013 2012
    (In thousands)
               
Components of net periodic pension cost:            
 Service cost $ 10,405 $ 8,596 $ 9,400 $ 8,176
 Interest cost   12,048   13,355   6,482   6,931
 Expected return on assets   (11,477)   (10,737)   (1,994)   (1,304)
 Amortization of transition asset   -   -   540   756
 Amortization of prior service cost   (71)   (71)   (725)   (725)
 Amortization of actuarial loss   11,123   8,285   2,098   1,324
  Net periodic pension cost $ 22,028 $ 19,428 $ 15,801 $ 15,158

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

 

  Pension    
  Benefits  Other Benefits 
  2013  2012  2013  2012 
Discount rate  4.04%  5.05%  4.04%  5.05%
Rate of compensation increase  3.50%  3.50% N/A  N/A 
Expected return on plan assets  7.75%  7.75%  4.70%  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, 2013. During the first six months of fiscal 2013, we contributed $13.4 million to our defined benefit plans and we anticipate contributing approximately $23 million during the remainder of the fiscal year.

 

We contributed $13.2 million to our other post-retirement benefit plans during the six months ended March 31, 2013. We expect to contribute a total of approximately $10 million to $15 million to these plans during the remainder of the fiscal year.