RETIREMENT PLAN AND POST-RETIREMENT BENEFITS

9 Months Ended

Sep. 30, 2013

Compensation and Retirement Disclosure [Abstract]

RETIREMENT PLAN AND POST-RETIREMENT BENEFITS

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 post-retirement 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 post-retirement 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 post-retirement costs for the three and nine months ended September 30 follows. This summary is based on a December 31, measurement date (dollars in thousands):

NVE
	Pension Benefits						Other Post-Retirement Benefits
	For the Three Months Ended September 30						For the Three Months Ended September 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 Post-Retirement Benefits
	For the Nine Months Ended September 30						For the Nine Months Ended September 30
	2013			2012			2013			2012
Service cost	$	15,396		$	13,220		$	1,980		$	1,787
Interest cost	27,911			30,684			5,030			5,715
Expected return on plan assets	(38,124		)	(37,341		)	(5,060		)	(4,690		)
Amortization of prior service cost	(2,162		)	(2,173		)	(2,857		)	(2,961		)
Amortization of net loss	14,391			10,418			2,671			2,193
Net periodic benefit cost	$	17,412		$	14,808		$	1,764		$	2,044

The average percentage of NVE net periodic costs capitalized during 2013 and 2012 was 34.5% and 35.0% respectively.

NPC
	Pension Benefits						Other Post-Retirement Benefits
	For the Three Months Ended September 30						For the Three Months Ended September 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 Post-Retirement Benefits
	For the Nine Months Ended September 30						For the Nine Months Ended September 30
	2013			2012			2013			2012
Service cost	$	8,283		$	7,072		$	1,167		$	1,050
Interest cost	13,358			14,643			1,667			1,807
Expected return on plan assets	(18,810		)	(18,711		)	(1,892		)	(1,775		)
Amortization of prior service cost	(1,358		)	(1,367		)	(69		)	687
Amortization of net loss	6,351			4,089			867			662
Net periodic benefit cost	$	7,824		$	5,726		$	1,740		$	2,431

The average percentage of NPC net periodic costs capitalized during 2013 and 2012 was 35.9% and 36.9% respectively.

SPPC
	Pension Benefits						Other Post-Retirement Benefits
	For the Three Months Ended September 30						For the Three Months Ended September 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 Post-Retirement Benefits
	For the Nine Months Ended September 30						For the Nine Months Ended September 30
	2013			2012			2013			2012
Service cost	$	5,778		$	5,086		$	752		$	682
Interest cost	13,676			15,130			3,310			3,848
Expected return on plan assets	(18,486		)	(17,813		)	(3,065		)	(2,823		)
Amortization of prior service cost	(831		)	(831		)	(2,798		)	(3,658		)
Amortization of net loss	7,502			6,078			1,777			1,511
Net periodic benefit cost	$	7,639		$	7,650		$	(24	)	$	(440	)

The average percentage of SPPC net periodic costs capitalized during 2013 and 2012 and was 35.6% and 35.1%, respectively.

As discussed in Note 10, Retirement Plan and Post-Retirement 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 nine months ended September 30, 2013, NVE paid $21.5 million in lump sum pension pay outs from the pension assets. The company does not expect any further material amounts to be paid in 2013.

During the nine months ended September 30, 2013 and 2012, the company made contributions to the pension plan in the amount of $20.0 million and $15.0 million, respectively and $5.0 million and $7.1 million, respectively in contributions to the other post-retirement benefits plan. 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.