Pension and Postretirement Benefits

3 Months Ended

Mar. 31, 2013

Pension and Postretirement Benefits

7.  Pension and Postretirement Benefits 

DP&L sponsors a defined benefit pension plan for the vast majority of its employees.   

We generally fund pension plan benefits as accrued in accordance with the minimum funding requirements of the Employee Retirement Income Security Act of 1974 (ERISA) and, in addition, make voluntary contributions from time to time.  There were no contributions made during the three months ended March 31, 2013 or 2012. 

The amounts presented in the following tables for pension include both the collective bargaining plan formula, the traditional management plan formula, the cash balance plan formula and the SERP, in the aggregate.  The amounts presented for postretirement include both health and life insurance. 

The net periodic benefit cost/(income) of the pension and postretirement benefit plans for the three months ended March 31, 2013 and 2012 was: 

Net Periodic Benefit Cost / (Income)	Pension				Postretirement
	Three months ended March 31,		Three months ended March 31,		Three months ended March 31,		Three months ended March 31,
$ in millions	2013		2012		2013		2012
Service cost	$	1.8	$	1.5	$	0.1	$	0.1
Interest cost		3.9		4.3		0.2		0.3
Expected return on assets (a)		(5.9)		(5.7)		(0.1)		(0.1)
Amortization of unrecognized:
Actuarial loss / (gain)		1.2		1.2		(0.1)		(0.2)
Prior service cost		0.4		0.4		-		-
Net periodic benefit cost / (income)	$	1.4	$	1.7	$	0.1	$	0.1

(a)   For purposes of calculating the expected return on pension plan assets, under GAAP, the market-related value of assets (MRVA) is used. GAAP requires that the difference between actual plan asset returns and estimated plan asset returns be included in the MRVA equally over a period not to exceed five years.  We use a methodology under which we include the difference between actual and estimated asset returns in the MRVA equally over a three year period.  The MRVA used in the calculation of expected return on pension plan assets for the 2013 and 2012 net periodic benefit cost was approximately $346.0 million and $336.0 million, respectively. 

Benefit payments, which reflect future service, are expected to be paid as follows:
Estimated Future Benefit Payments and Medicare Part D Reimbursements
$ in millions	Pension		Postretirement
2013	$	16.6	$	1.7
2014		22.5		2.2
2015		23.0		2.0
2016		23.3		1.9
2017		23.7		1.7
2018 - 2022		124.4		6.8

DP&L [Member]

Pension and Postretirement Benefits

7.  Pension and Postretirement Benefits 

DP&L sponsors a defined benefit pension plan for the vast majority of its employees.   

We generally fund pension plan benefits as accrued in accordance with the minimum funding requirements of the Employee Retirement Income Security Act of 1974 (ERISA) and, in addition, make voluntary contributions from time to time.  There were no contributions made during the three months endedMarch 31, 2013 or 2012.

The amounts presented in the following tables for pension include the collective bargaining plan formula, the traditional management plan formula, the cash balance plan formula and the SERP, in the aggregate.  The amounts presented for postretirement include both health and life insurance. 

The net periodic benefit cost (income) of the pension and postretirement benefit plans for the three months endedMarch 31, 2013 and 2012 was: 

Net Periodic Benefit Cost / (Income)	Pension				Postretirement
	Three months ended March 31,		Three months ended March 31,		Three months ended March 31,		Three months ended March 31,
$ in millions	2013		2012		2013		2012
Service cost	$	1.8	$	1.5	$	0.1	$	0.1
Interest cost		3.9		4.3		0.2		0.3
Expected return on assets (a)		(5.9)		(5.7)		(0.1)		(0.1)
Amortization of unrecognized:
Actuarial loss / (gain)		2.3		2.7		(0.1)		(0.2)
Prior service cost		0.7		0.8		-		-
Net periodic benefit cost / (income)	$	2.8	$	3.6	$	0.1	$	0.1

(a)   For purposes of calculating the expected return on pension plan assets, under GAAP, the market-related value of assets (MRVA) is used.  GAAP requires that the difference between actual plan asset returns and estimated plan asset returns be included in the MRVA equally over a period not to exceed five years.  We use a methodology under which we include the difference between actual and estimated asset returns in the MRVA equally over a three year period.  The MRVA used in the calculation of expected return on pension plan assets for the 2013 and 2012 net periodic benefit cost was approximately $346.0 million and $335.0 million, respectively. 

Benefit payments, which reflect future service, are expected to be paid as follows:
Estimated Future Benefit Payments and Medicare Part D Reimbursements
$ in millions	Pension		Postretirement
2013	$	16.6	$	1.7
2014		22.5		2.2
2015		23.0		2.0
2016		23.3		1.9
2017		23.7		1.7
2018 - 2022		124.4		6.8