Note 8. Postretirement Benefits

Pension plans

Our pension plans consist of a noncontributory defined benefit pension plan covering substantially all employees and an unfunded supplemental employee retirement plan for certain members of executive and senior management. Although we are the sponsor of these postretirement plans and record the funded status of these plans, the Exchange and its subsidiaries reimburse us for approximately 59% of the annual benefit expense of these plans, which represents pension benefits for employees performing administrative services and their allocated share of costs for employees in departments that support the administrative functions.

An accelerated contribution of $40 million was made to the defined benefit pension plan in the first quarter of 2018, and an additional $40 million contribution was made in April 2018.

Prior to 2003, the employee pension plan purchased annuities from EFL for certain plan participants that were receiving benefit payments under the pension plan. These are nonparticipating annuity contracts under which EFL has unconditionally contracted to provide specified benefits to beneficiaries; however, the pension plan remains the primary obligor to the beneficiaries. A contingent liability of $18.3 million at June 30, 2018 exists in the event EFL does not honor the annuity contracts.

The cost of our pension plans are as follows:



	Three months ended June 30,						Six months ended June 30,
(in thousands)	2018			2017			2018			2017
Service cost for benefits earned	$	9,513		$	7,776		$	19,026		$	15,553
Interest cost on benefits obligation	8,845			8,568			17,691			17,137
Expected return on plan assets	(12,814		)	(10,316		)	(25,629		)	(20,633		)
Prior service cost amortization	338			218			676			436
Net actuarial loss amortization	3,202			2,325			6,404			4,650
Pension plan cost ⁽¹⁾	$	9,084		$	8,571		$	18,168		$	17,143


(1)	The components of pension plan costs other than the service cost component are included in the line item "Other income (expense)" in the Statements of Operations after reimbursements from the Exchange and its subsidiaries.