RETIREMENT PLAN AND POST-RETIREMENT BENEFITS

6 Months Ended

Jun. 30, 2013

Compensation and Retirement Disclosure [Abstract]

RETIREMENT PLAN AND POST-RETIREMENT BENEFITS

NOTE 7.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, based on a December 31, 2012 measurement date, follows (dollars in thousands):

NVE
	Pension Benefits					Other Postretirement Benefits
		For the Three Months Ended June 30,				For the Three Months Ended June 30,
		2013		2012		2013		2012
Service cost	$	5,132	$	4,406	$	660	$	595
Interest cost		9,303		10,228		1,677		1,905
Expected return on plan assets		(12,708)		(12,447)		(1,687)		(1,563)
Amortization of prior service cost		(720)		(724)		(952)		(987)
Amortization of net loss		4,797		3,473		890		731
Net periodic benefit cost	$	5,804	$	4,936	$	588	$	681
	Pension Benefits				Other Postretirement Benefits
	For the Six Months Ended June 30,				For the Six Months Ended June 30,
		2013		2012		2013		2012
Service cost	$	10,264	$	8,813	$	1,320	$	1,191
Interest cost		18,607		20,456		3,353		3,810
Expected return on plan assets		(25,416)		(24,894)		(3,373)		(3,126)
Amortization of prior service cost		(1,441)		(1,448)		(1,905)		(1,974)
Amortization of net loss		9,594		6,945		1,781		1,462
Net periodic benefit cost	$	11,608	$	9,872	$	1,176	$	1,363
The average percentage of NVE net periodic costs capitalized during 2013 and 2012 was 34.6% and 34.6%, respectively.

NPC
	Pension Benefits				Other Postretirement Benefits
		For the Three Months Ended June 30,				For the Three Months Ended June 30,
		2013		2012		2013		2012
Service cost	$	2,761	$	2,358	$	389	$	350
Interest cost		4,453		4,881		556		602
Expected return on plan assets		(6,270)		(6,237)		(631)		(592)
Amortization of prior service cost		(453)		(456)		(23)		229
Amortization of net loss		2,117		1,363		289		221
Net periodic benefit cost	$	2,608	$	1,909	$	580	$	810
	Pension Benefits				Other Postretirement Benefits
		For the Six Months Ended June 30,				For the Six Months Ended June 30,
		2013		2012		2013		2012
Service cost	$	5,522	$	4,715	$	778	$	700
Interest cost		8,905		9,762		1,111		1,205
Expected return on plan assets		(12,540)		(12,474)		(1,261)		(1,183)
Amortization of prior service cost		(905)		(912)		(46)		458
Amortization of net loss		4,234		2,726		578		441
Net periodic benefit cost	$	5,216	$	3,817	$	1,160	$	1,621
The average percentage of NPC net periodic costs capitalized during 2013 and 2012 was 35.7% and 36.6%, respectively.

SPPC
	Pension Benefits				Other Postretirement Benefits
	For the Three Months Ended June 30,				For the Three Months Ended June 30,
	2013		2012		2013		2012
Service cost	$	1,926	$	1,695	$	251	$	227
Interest cost		4,558		5,043		1,104		1,283
Expected return on plan assets		(6,162)		(5,937)		(1,022)		(941)
Amortization of prior service cost		(277)		(277)		(933)		(1,220)
Amortization of net loss		2,501		2,026		592		504
Net periodic benefit cost	$	2,546	$	2,550	$	(8)	$	(147)
	Pension Benefits				Other Postretirement Benefits
	For the Six Months Ended June 30,				For the Six Months Ended June 30,
	2013		2012		2013		2012
Service cost	$	3,852	$	3,391	$	501	$	455
Interest cost		9,117		10,086		2,207		2,566
Expected return on plan assets		(12,324)		(11,875)		(2,043)		(1,882)
Amortization of prior service cost		(554)		(554)		(1,866)		(2,439)
Amortization of net loss		5,001		4,052		1,185		1,007
Net periodic benefit cost	$	5,092	$	5,100	$	(16)	$	(293)
The average percentage of SPPC net periodic costs capitalized during 2013 and 2012 was 35.6% and 34.5%, respectively.

As discussed in Note 10, Retirement Plan and Postretirement Benefits, of the Notes to Financial Statements in the 2012 Form 10-K, NVE offered a voluntary lump sum pension pay out to former employees not currently of retirement age but eligible for future benefits and certain retiree participants already receiving benefits under NVE's pension plan in an effort to reduce NVE's future pension obligation. During the six months ended June 30, 2013, NVE paid $21.0 million in lump sum pension pay outs from the pension assets and does not expect any further material amounts due in 2013.

During the six months ended June 30, 2013, NVE made no contributions to either of the plans. At the present time, it is not anticipated that additional funding will be required for either plan in 2013 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 2013 assumptions funding levels similar to the 2012 funding. The amounts to be contributed in 2013 may change subject to market conditions.