Pension Plans and Postretirement Benefits Other Than Pensions

Pension Plans

As part of the pension funding provisions contained in the Surface Transportation Extension Act of 2012 passed by Congress in June 2012, SCE's projected 2012 plan contributions have been reduced to $172 million from $263 million, pending a final interest rate to be issued by the IRS. SCE made contributions of $55 million during the six months ended June 30, 2012 and in July 2012, made a further required $58 million contribution to the pension fund. Contributions to date exceed the $55 million currently being collected through customer rates. In the 2012 GRC, SCE requested recovery of plan contributions of $168 million with recovery of any undercollection through the continuation of the existing balancing account mechanism. This proposal has been challenged by intervenors and is pending the outcome of the 2012 GRC decision. Annual contributions to these plans are expected to be, at a minimum, equal to the related annual expense.

Expense components are:



	Three months ended June 30,						Six months ended June 30,
(in millions)	2012			2011			2012			2011
Service cost	$	37		$	38		$	74		$	76
Interest cost	45			47			90			94
Expected return on plan assets	(55		)	(56		)	(110		)	(112		)
Amortization of prior service cost	1			2			2			4
Amortization of net loss	15			4			30			8
Expense under accounting standards	$	43		$	35		$	86		$	70
Regulatory adjustment (deferred)	27			(6		)	54			(12		)
Total expense recognized	$	70		$	29		$	140		$	58

Postretirement Benefits Other Than Pensions

SCE made contributions of $10 million during the six months ended June 30, 2012 and expects to make $52 million of additional contributions during the remainder of 2012. SCE's 2012 annual contributions are expected to be recovered through CPUC-approved regulatory mechanisms. Annual contributions are expected to be, at a minimum, equal to the total annual expense for these plans. Benefits under these plans, with some exceptions, are generally unvested and subject to change.

Expense components are:



	Three months ended June 30,						Six months ended June 30,
(in millions)	2012			2011			2012			2011
Service cost	$	12		$	10		$	24		$	20
Interest cost	28			31			56			62
Expected return on plan assets	(27		)	(27		)	(54		)	(54		)
Amortization of prior service credit	(9		)	(9		)	(18		)	(18		)
Amortization of net loss	11			9			22			18
Total expense	$	15		$	14		$	30		$	28

Transfer of Certain Postretirement Benefits to Edison International

In March 2012, Edison International agreed to assume the liabilities for active employees of SCE and its subsidiaries under the specified plans related to deferred compensation and executive post retirement benefits. SCE is obligated to reimburse Edison International upon settlement of liabilities on an after tax basis. Included in the consolidated balance sheet at June 30, 2012 was $113 million related to this obligation.