Note 12 — Defined Benefit Pension and Other Postretirement Plans

The U.S. Pension Plan is a defined benefit pension plan for employees hired prior to January 1, 2009, of UGI, UGI Utilities, PNG, CPG and certain of UGI’s other domestic wholly owned subsidiaries. U.S. Pension Plan benefits are based on years of service, age and employee compensation. We also provide postretirement health care benefits to certain retirees and postretirement life insurance benefits to nearly all U.S. active and retired employees. In addition, employees of UGI France and its subsidiaries are covered by certain defined benefit pension and postretirement plans.

The service cost component of our pension and other postretirement plans, net of amounts capitalized, are reflected in “Operating and administrative expenses” on the Condensed Consolidated Statements of Income. The non-service cost component, net of amounts capitalized, are reflected in “Other non-operating income (expense), net” on the Condensed Consolidated Statements of Income. Net periodic pension cost and other postretirement benefit cost include the following components:



	Pension Benefits						Other Postretirement Benefits
Three Months Ended March 31,	2019			2018			2019			2018
Service cost	$	2.6		$	2.8		$	0.1		$	0.2
Interest cost	6.8			6.5			0.2			0.2
Expected return on assets	(9.1		)	(8.6		)	(0.2		)	(0.2		)
Amortization of:
Prior service cost (benefit)	—			0.1			(0.2		)	—
Actuarial loss	2.0			3.3			—			—
Net benefit cost (benefit)	2.3			4.1			(0.1		)	0.2
Change in associated regulatory liabilities	—			—			(0.4		)	(0.1		)
Net benefit cost (benefit) after change in regulatory liabilities	$	2.3		$	4.1		$	(0.5	)	$	0.1

	Pension Benefits						Other Postretirement Benefits
Six Months Ended March 31,	2019			2018			2019			2018
Service cost	$	5.1		$	5.6		$	0.1		$	0.4
Interest cost	13.6			13.0			0.4			0.4
Expected return on assets	(18.1		)	(17.2		)	(0.4		)	(0.4		)
Amortization of:
Prior service cost (benefit)	0.1			0.2			(0.3		)	(0.1		)
Actuarial loss	3.9			6.6			—			—
Net benefit cost (benefit)	4.6			8.2			(0.2		)	0.3
Change in associated regulatory liabilities	—			—			(0.7		)	(0.2		)
Net benefit cost (benefit) after change in regulatory liabilities	$	4.6		$	8.2		$	(0.9	)	$	0.1

The U.S. Pension Plan’s assets are held in trust and consist principally of publicly traded, diversified equity and fixed income mutual funds and, to a much lesser extent, UGI Common Stock. It is our general policy to fund amounts for U.S. Pension Plan benefits equal to at least the minimum required contribution set forth in applicable employee benefit laws. During the six months ended March 31, 2019 and 2018, the Company made cash contributions to the U.S. Pension Plan of $5.0 and $6.7, respectively. The Company expects to make additional cash contributions of approximately $6.5 to the U.S. Pension Plan during the remainder of Fiscal 2019.

UGI Utilities has established a VEBA trust to pay retiree health care and life insurance benefits by depositing into the VEBA the annual amount of postretirement benefits costs, if any. The difference between such cash deposits or expense recorded and the amounts included in UGI Gas’ and Electric Utility’s rates, if any, is deferred for future recovery from, or refund to, ratepayers. There were no required contributions to the VEBA during the six months ended March 31, 2019 and 2018.

We also sponsor unfunded and non-qualified supplemental executive defined benefit retirement plans. Net costs associated with these plans for the three and six months ended March 31, 2019 and 2018, were not material.