Employee Benefits

Pension and other postretirement benefits

The Company provides pension and other postretirement benefits to certain employees through three retirement benefit plans: the QEP Resources, Inc. Retirement Plan (the Pension Plan), the Supplemental Executive Retirement Plan (SERP), and a postretirement medical plan (the Medical Plan).

The Pension Plan is a closed, qualified defined-benefit pension plan that is funded and provides pension benefits to certain QEP employees. During the nine months ended September 30, 2015, the Company made contributions of $2.0 million to the Pension Plan and expects to contribute $2.0 million to the Pension Plan during the remainder of 2015. Contributions to the Pension Plan increase plan assets.

As a result of the Company's 2014 divestitures and expected retirements in 2015, the number of active participants in the Pension Plan is expected to fall below 50 employees by December 31, 2015, which is below the minimum number of active participants for a plan to be qualified under the Internal Revenue Services' participation rules. In order to prevent disqualification, the Pension Plan was amended in June 2015 and will be frozen effective January 1, 2016, such that employees do not earn additional defined benefits for future services. This change resulted in a non-cash curtailment loss of $11.2 million recognized on the Condensed Consolidated Statements of Operations within "General and administrative" expense during the nine months ended September 30, 2015.

The SERP is a nonqualified retirement plan that is unfunded and provides pension benefits to certain QEP employees. During the nine months ended September 30, 2015, the Company made contributions of $2.9 million to its SERP and expects to contribute an additional $1.5 million to its SERP during the remainder of 2015. Contributions to the SERP are used to fund current benefit payments. The SERP was amended and restated in June 2015 and will be closed to new participants effective January 1, 2016.

The Medical Plan is unfunded and provides other postretirement benefits including certain health care and life insurance benefits for certain retired employees. During the nine months ended September 30, 2015, the Company made contributions of $0.4 million to its Medical Plan and expects to contribute an additional $0.1 million to its Medical Plan during the remainder of 2015. Contributions to the Medical Plan are used to fund current benefit payments.

The following table sets forth the Company’s net periodic benefit costs related to its Pension Plan, SERP and Medical Plan:



	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2015			2014			2015			2014
Pension Plan and SERP benefits	(in millions)
Service cost	$	0.5		$	0.6		$	1.5		$	2.0
Interest cost	1.3			1.2			3.7			4.0
Expected return on plan assets	(1.5		)	(1.4		)	(4.3		)	(3.8		)
Amortization of prior service costs ⁽¹⁾	0.4			1.1			1.3			3.6
Amortization of actuarial losses ⁽¹⁾	0.1			0.2			0.4			0.6
Curtailment loss ⁽²⁾	—			—			11.2			2.0
Special termination benefits ⁽³⁾	—			—			—			0.3
Periodic expense	$	0.8		$	1.7		$	13.8		$	8.7

Medical Plan benefits
Interest cost	$	0.1		$	—		$	0.2		$	0.2
Amortization of prior service costs ⁽¹⁾	—			0.1			0.1			0.3
Curtailment loss ⁽²⁾	—			—			—			0.4
Periodic expense	$	0.1		$	0.1		$	0.3		$	0.9

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⁽¹⁾	Amortization of prior service costs and actuarial losses out of accumulated other comprehensive income are recognized in the Condensed Consolidated Statements of Operations in "General and administrative."

⁽²⁾

A curtailment is recognized immediately when there is a significant reduction in, or an elimination of, defined benefit accruals for current employees' future services. For the nine months ended September 30, 2015, these expenses are included on the Condensed Consolidated Statements of Operations within "General and administrative" expense as the expenses incurred in that period related to the Pension Plan amendment (see above). For the nine months ended September 30, 2014, these expenses are included within "Net gain (loss) from asset sales" as the expenses incurred in that period related to the Midcontinent property sales (see Note 3 – Acquisitions and Divestitures).


⁽³⁾	During the nine months ended September 30, 2014, the Company recognized special termination benefits on the Condensed Consolidated Statements of Operations within "Net gain (loss) from asset sales" as the expense related to the Midcontinent property sales (see Note 3 – Acquisitions and Divestitures).

During the three and nine months ended September 30, 2015, for continuing operations, QEP recognized $0.9 million and $14.1 million, respectively, in employee benefit expense, compared to $1.4 million and $8.2 million, respectively, during the three and nine months ended September 30, 2014. During the three and nine months ended September 30, 2014, for discontinued operations, QEP recognized $0.4 million and $1.4 million, respectively, in employee benefit expense.