RETIREMENT PLAN AND POST-RETIREMENT BENEFITS

9 Months Ended

Sep. 30, 2012

Compensation and Retirement Disclosure [Abstract]

RETIREMENT PLAN AND POST-RETIREMENT BENEFITS

NOTE 6.RETIREMENT PLAN AND POST-RETIREMENT BENEFITS

NVE has a single employer defined benefit pension plan covering substantially all employees of NVE and the Utilities. NVE allocates the unfunded liability and the net periodic benefit costs for its pension benefit and other postretirement benefit plans to NPC and SPPC based upon the current, or in the case of the retirees, previous, employment location. Certain grandfathered and union employees are covered under a benefit formula based on years of service and the employee's highest compensation for a period prior to retirement, while most employees are covered under a cash balance formula with vesting after three years of service. NVE also has other postretirement plans, including a defined contribution plan which provides medical and life insurance benefits for certain retired employees. A summary of the components of net periodic pension and other postretirement costs for the nine months ended September 30 follows. This summary is based on a December 31, measurement date (dollars in thousands):

NVE
	Pension Benefits					Other Postretirement Benefits
		For the Three Months Ended September 30,				For the Three Months Ended September 30,
		2012		2011		2012		2011
Service cost	$	4,406	$	4,607	$	595	$	653
Interest cost		10,228		10,169		1,905		2,090
Expected return on plan assets		(12,447)		(12,192)		(1,563)		(1,596)
Amortization of prior service cost		(724)		(738)		(987)		(987)
Amortization of net loss		3,473		4,155		731		1,083
Net periodic benefit cost	$	4,936	$	6,001	$	681	$	1,243
	Pension Benefits				Other Postretirement Benefits
	For the Nine Months Ended September 30,				For the Nine Months Ended September 30,
		2012		2011		2012		2011
Service cost	$	13,220	$	13,820	$	1,787	$	1,958
Interest cost		30,684		30,507		5,715		6,270
Expected return on plan assets		(37,341)		(36,575)		(4,690)		(4,789)
Amortization of prior service cost		(2,173)		(2,214)		(2,961)		(2,961)
Amortization of net loss		10,418		12,465		2,193		3,250
Net periodic benefit cost	$	14,808	$	18,003	$	2,044	$	3,728
The average percentage of NVE net periodic costs capitalized during 2012 and 2011 was 34.97% and 33.26%, respectively.

NPC
	Pension Benefits				Other Postretirement Benefits
		For the Three Months Ended September 30,				For the Three Months Ended September 30,
		2012		2011		2012		2011
Service cost	$	2,358	$	2,445	$	350	$	363
Interest cost		4,881		4,880		602		615
Expected return on plan assets		(6,237)		(6,169)		(592)		(590)
Amortization of prior service cost		(456)		(470)		229		229
Amortization of net loss		1,363		1,690		221		302
Net periodic benefit cost	$	1,909	$	2,376	$	810	$	919
	Pension Benefits				Other Postretirement Benefits
		For the Nine Months Ended September 30,				For the Nine Months Ended September 30,
		2012		2011		2012		2011
Service cost	$	7,072	$	7,336	$	1,050	$	1,090
Interest cost		14,643		14,640		1,807		1,844
Expected return on plan assets		(18,711)		(18,508)		(1,775)		(1,769)
Amortization of prior service cost		(1,367)		(1,409)		687		687
Amortization of net loss		4,089		5,069		662		906
Net periodic benefit cost	$	5,726	$	7,128	$	2,431	$	2,758
The average percentage of NPC net periodic costs capitalized during 2012 and 2011 was 36.92% and 37.18%, respectively.

SPPC
	Pension Benefits				Other Postretirement Benefits
	For the Three Months Ended September 30,				For the Three Months Ended September 30,
	2012		2011		2012		2011
Service cost	$	1,695	$	1,840	$	227	$	271
Interest cost		5,043		5,013		1,283		1,457
Expected return on plan assets		(5,937)		(5,741)		(941)		(976)
Amortization of prior service cost		(277)		(277)		(1,220)		(1,219)
Amortization of net loss		2,026		2,412		504		773
Net periodic benefit cost	$	2,550	$	3,247	$	(147)	$	306
	Pension Benefits				Other Postretirement Benefits
	For the Nine Months Ended September 30,				For the Nine Months Ended September 30,
	2012		2011		2012		2011
Service cost	$	5,086	$	5,520	$	682	$	815
Interest cost		15,130		15,038		3,848		4,372
Expected return on plan assets		(17,813)		(17,223)		(2,823)		(2,929)
Amortization of prior service cost		(831)		(831)		(3,658)		(3,658)
Amortization of net loss		6,078		7,235		1,511		2,319
Net periodic benefit cost	$	7,650	$	9,739	$	(440)	$	919
The average percentage of SPPC net periodic costs capitalized during 2012 and 2011 was 35.09% and 31.22%, respectively.

In 2012, NVE offered a voluntary lump sum pension payout to former employees not currently of retirement age but eligible for future benefits under NVE's pension plan in an effort to reduce NVE's future pension benefit obligation. As a result, NVE paid approximately $7.3 million as of September 30, 2012 from pension assets. NVE expects to payout an additional lump sum of approximately $11.9 million from the pension assets during the fourth quarter of 2012.

During the nine months ended September 30, 2012 and 2011, the company made contributions to the pension plan totaling $15.0 million and $10.0 million, respectively, and $7.1 million and $0 million, respectively, in contributions to the other postretirement benefits plan. At the present time, it is not anticipated that additional funding will be required for either plan in 2012 in order to meet the minimum funding level requirements defined by the Pension Protection Act of 2006. However, NVE and the Utilities have included in their 2012 assumptions funding levels similar to the 2011 funding. The amounts to be contributed in 2012 may change subject to market conditions.