Employee Postretirement Benefits

3 Months Ended

Mar. 31, 2017

Compensation And Retirement Disclosure [Abstract]

Employee Postretirement Benefits

5. Employee Postretirement Benefits

TEC is a participant in the comprehensive retirement plans of TECO Energy. The following table presents detail related to TECO Energy’s periodic expense for pension and other postretirement benefits. Amounts disclosed for TECO Energy’s pension benefits include the amounts related to its qualified pension plan and non-qualified, non-contributory SERP.

TECO Energy Pension Expense
(millions)	Pension Benefits							Other Postretirement Benefits
Three months ended March 31,	2017				2016			2017			2016
Components of net periodic benefit expense
Service cost	$	5			$	5		$	1		$	1
Interest cost		7				8			2			2
Expected return on assets		(12	)			(11	)		0			0
Amortization of:
Prior service (benefit) cost		0				0			(1	)		(1	)
Actuarial loss		4				3			0			0
Settlement cost		7		(1)		0			0			0
Net pension expense recognized in the    TECO Energy Consolidated Condensed Statements of Income	$	11			$	5		$	2		$	2

(1) Represents TECO Energy’s SERP settlement charge as a result of retirements that occurred subsequent to the Merger with Emera. The charge did not impact TEC’s financial statements.

TEC’s portion of the net pension expense for the three months ended March 31, 2017 and 2016, respectively, was $3 million and $3 million for pension benefits, and $1 million and $2 million for other postretirement benefits.  

For the January 1, 2017 measurement, TECO Energy assumed a long-term EROA of 7.00% and a discount rate of 4.160% for pension benefits under its qualified pension plan.  For the January 1, 2017 measurement of TECO Energy’s other postretirement benefits, TECO Energy used a discount rate of 4.280%.

TECO Energy made contributions of $14 million and $5 million to its qualified pension plan in the three months ended March 31, 2017 and 2016, respectively. TEC’s portion of these contributions was $11 million and $4 million, respectively.

Included in the benefit expenses discussed above, for the three months ended March 31, 2017 and 2016, TEC reclassified $2 million and $2 million, respectively, of unamortized prior service benefit and actuarial losses from regulatory assets to net income.