Components of Net Periodic Benefit Cost

3 Months Ended

Mar. 31, 2022

Retirement Benefits [Abstract]

Components of Net Periodic Benefit Cost

Note 2 – Components of Net Periodic Benefit Cost

Southwest has a noncontributory qualified retirement plan with defined benefits covering substantially all employees and a separate unfunded supplemental retirement plan (“SERP”) which is limited to officers. Southwest also provides postretirement benefits other than pensions (“PBOP”) to its qualified retirees for health care, dental, and life insurance. The defined benefit qualified retirement plan, SERP and PBOP are not available to Southwest employees hired on or after January 1, 2022. Employees hired in 2022 or later periods are eligible for enhanced defined contributions as part of the Southwest 401(k) plan rather than participating in the defined benefit retirement plan.

The service cost component of net periodic benefit costs included in the table below is a component of an overhead loading process associated with the cost of labor. The overhead process ultimately results in allocation of service cost to the same accounts to which productive labor is charged. As a result, service costs become components of various accounts, primarily operations and maintenance expense, net regulated operations plant, and deferred charges and other assets for both the Company and Southwest. The other components of net periodic benefit cost are reflected in Other income (deductions) on the Condensed Consolidated Statements of Income of each entity.

	Qualified Retirement Plan
	March 31,
	Three Months				Twelve Months
	2022		2021		2022		2021
(Thousands of dollars)
Service cost	$	11,028	$	10,290	$	41,897	$	36,015
Interest cost	11,251		10,108		41,575		44,275
Expected return on plan assets	(19,978)		(18,088)		(74,242)		(67,060)
Amortization of net actuarial loss	8,117		10,489		39,583		37,507
Net periodic benefit cost	$	10,418	$	12,799	$	48,813	$	50,737
	SERP
	March 31,
	Three Months				Twelve Months
	2022		2021		2022		2021
(Thousands of dollars)
Service cost	$	106	$	131	$	501	$	422
Interest cost	360		358		1,433		1,561
Amortization of net actuarial loss	588		660		2,570		2,014
Net periodic benefit cost	$	1,054	$	1,149	$	4,504	$	3,997
	PBOP
	March 31,
	Three Months				Twelve Months
	2022		2021		2022		2021
(Thousands of dollars)
Service cost	$	485	$	423	$	1,753	$	1,608
Interest cost	613		548		2,258		2,485
Expected return on plan assets	(807)		(810)		(3,236)		(3,366)
Amortization of prior service costs	44		240		763		1,106
Net periodic benefit cost	$	335	$	401	$	1,538	$	1,833