BENEFIT PLANS

Idaho Power has a noncontributory defined benefit pension plan (pension plan) and two nonqualified defined benefit plans for certain senior management employees called the Security Plan for Senior Management Employees I and Security Plan for Senior Management Employees II (collectively, SMSP). Idaho Power also has a nonqualified defined benefit pension plan for directors that was frozen in 2002. Remaining vested benefits from that plan are included with the SMSP in the disclosures below. The benefits under the pension plan are based on years of service and the employee’s final average earnings. Idaho Power also maintains a defined benefit postretirement benefit plan (consisting of health care and death benefits) that covers all employees who were enrolled in the active-employee group plan at the time of retirement as well as their spouses and qualifying dependents. The table below shows the components of net periodic benefit costs for the pension, SMSP, and postretirement benefits plans for the three months ended September 30, 2018 and 2017 (in thousands).



	Pension Plan						SMSP					Postretirement Benefits						Total
	2018			2017			2018			2017		2018			2017			2018			2017
Service cost	$	8,892		$	8,436		$	(79	)	$	189	$	263		$	245		$	9,076		$	8,870
Interest cost	9,761			9,739			1,062			1,079		660			695			11,483			11,513
Expected return on plan assets	(13,117		)	(11,285		)	—			—		(616		)	(576		)	(13,733		)	(11,861		)
Amortization of prior service cost	1			7			24			31		11			11			36			49
Amortization of net loss	3,381			3,298			947			742		—			—			4,328			4,040
Net periodic benefit cost	8,918			10,195			1,954			2,041		318			375			11,190			12,611
Regulatory deferral of net periodic benefit cost⁽¹⁾	(8,498		)	(9,708		)	—			—		—			—			(8,498		)	(9,708		)
Previously deferred pension costs recognized⁽¹⁾	4,288			4,288			—			—		—			—			4,288			4,288
Net periodic benefit cost recognized for financial reporting⁽¹⁾⁽²⁾	$	4,708		$	4,775		$	1,954		$	2,041	$	318		$	375		$	6,980		$	7,191

⁽¹⁾ Net periodic benefit costs for the pension plan are recognized for financial reporting based upon the authorization of each regulatory jurisdiction in which Idaho Power operates. Under IPUC order, the Idaho portion of net periodic benefit cost is recorded as a regulatory asset and is recognized in the income statement as those costs are recovered through rates.

⁽²⁾ Of total net periodic benefit cost recognized for financial reporting, $4.1 million and $4.4 million, respectively, was recognized in "Other operations and maintenance" and $2.9 million and $2.8 million, respectively, was recognized in "Other expense, net" on the condensed consolidated statements of income of the companies for the three months ended September 30, 2018 and 2017.

The table below shows the components of net periodic benefit costs for the pension, SMSP, and postretirement benefits plans for the nine months ended September 30, 2018 and 2017 (in thousands).



	Pension Plan						SMSP					Postretirement Benefits						Total
	2018			2017			2018			2017		2018			2017			2018			2017
Service cost	$	28,377		$	25,307		$	(237	)	$	569	$	789		$	731		$	28,929		$	26,607
Interest cost	29,125			29,217			3,186			3,236		1,982			2,087			34,293			34,540
Expected return on plan assets	(39,227		)	(33,854		)	—			—		(1,850		)	(1,730		)	(41,077		)	(35,584		)
Amortization of prior service cost	4			21			73			95		35			35			112			151
Amortization of net loss	10,169			9,893			2,841			2,223		—			—			13,010			12,116
Net periodic benefit cost	28,448			30,584			5,863			6,123		956			1,123			35,267			37,830
Regulatory deferral of net periodic benefit cost⁽¹⁾	(27,114		)	(28,991		)	—			—		—			—			(27,114		)	(28,991		)
Previously deferred pension costs recognized⁽¹⁾	12,865			12,865			—			—		—			—			12,865			12,865
Net periodic benefit cost recognized for financial reporting⁽¹⁾⁽²⁾	$	14,199		$	14,458		$	5,863		$	6,123	$	956		$	1,123		$	21,018		$	21,704

⁽²⁾ Of total net periodic benefit cost recognized for financial reporting, $12.3 million and $13.3 million, respectively, was recognized in "Other operations and maintenance" and $8.7 million and $8.4 million, respectively, was recognized in "Other expense, net" on the condensed consolidated statements of income of the companies for the nine months ended September 30, 2018 and 2017.

Idaho Power has no minimum contribution requirement to its defined benefit pension plan in 2018. However, during the nine months ended September 30, 2018, Idaho Power made $40 million of discretionary contributions to its defined benefit pension plan, which was applied to IDACORP's 2017 tax return. Idaho Power's contributions are made in a continued effort to balance the regulatory collection of these expenditures with the amount and timing of contributions and to mitigate the cost of being in an underfunded position. The primary impact of pension contributions is on the timing of cash flows, as the timing of cost recovery lags behind contributions.

Idaho Power also has an Employee Savings Plan that complies with Section 401(k) of the Internal Revenue Code and covers substantially all employees. Idaho Power matches specified percentages of employee contributions to the Employee Savings Plan.