XML 80 R40.htm IDEA: XBRL DOCUMENT v2.4.0.6
Pension Plan and Employee Benefits (Tables)
 12 Months Ended
Dec. 31, 2012
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items]  
Reconciliation of Benefit Obligations, Plan Assets and Funded Status of Pension Plans
The employee pension plan and other benefits obligation plan assets and funded status at December 31, 2012 and 2011, are presented in the following table.
 
PENSION BENEFITS
 
 
OTHER BENEFITS
 
 
(THOUSANDS)
2012

 
2011

 
2012

 
2011

 
Change in benefit obligation
 
 
 
 
 
 
 
 
Benefit obligation at beginning of year
$
361,986

 
$
330,342

 
$
42,680

 
$
41,444

 
Service cost
8,312

 
8,390

 
1,461

 
1,532

 
Interest cost
18,254

 
17,629

 
2,239

 
1,818

 
Plan participants’ contributions
—

 
—

 
1,308

 
1,251

 
Actuarial loss
58,109

 
19,452

 
2,462

 
141

 
Expenses paid
(1,511
)
 
(1,208
)
 
—

 
—

 
Medicare D
—

 
—

 
—

 
206

 
Other adjustments (1)
—

 
—

 
—

 
452

 
Benefits paid
(13,581
)
 
(12,619
)
 
(4,581
)
 
(4,164
)
 
Benefit obligation at end of year
431,569

 
361,986

 
45,569

 
42,680

 
Change in plan assets
 

 
 

 
 

 
 

 
Fair value of plan assets at beginning of year
312,395

 
242,513

 
—

 
—

 
Actual return on plan assets
46,738

 
23,709

 
—

 
—

 
Employer contributions
—

 
60,000

 
—

 
—

 
Expenses paid
(1,511
)
 
(1,208
)
 
—

 
—

 
Benefits paid
(13,581
)
 
(12,619
)
 
—

 
—

 
Fair value of plan assets at end of year
344,041

 
312,395

 
—

 
—

 
Unfunded status
$
(87,528
)
 
$
(49,591
)
 
$
(45,569
)
 
$
(42,680
)
 
(1) During 2011, Cleco received $0.5 million for the Early Retiree Reinsurance Program.
Accumulated Benefit Obligation
The employee pension plan accumulated benefit obligation at December 31, 2012 and 2011, is presented in the following table.
 
PENSION BENEFITS
 
(THOUSANDS)
2012

 
2011

Accumulated benefit obligation
$
387,776

 
$
330,193
Amounts Recognized in Other Comprehensive Income
The authoritative guidelines for compensation of retirement benefits require the disclosure of the net actuarial gains/losses, transition obligations/assets, and prior period service costs included in other comprehensive income as a result of being included as a component of net periodic benefit costs. The following table presents those items for the employee pension plan and other benefits plan at December 31, 2012 and 2011.












 
PENSION BENEFITS
 
 
OTHER BENEFITS
 
(THOUSANDS)
2012

 
2011

 
2012

 
2011

Net actuarial loss occurring during year
$
32,177

 
$
20,389

 
$
2,461

 
$
141

Net actuarial loss amortized during year
$
8,346

 
$
5,556

 
$
1,479

 
$
1,010

Transition obligation amortized during year
$
—

 
$
—

 
$
20

 
$
20

Prior service (credit) amortized during year
$
(71
)
 
$
(71
)
 
$
—

 
$
(206
)
Amounts Recognized in Accumulated Other Comprehensive Income
The authoritative guidelines also require the disclosure of the net gains/losses, transition obligations/assets, and prior period service costs/credits in accumulated other comprehensive income that have not been recognized as components of net periodic benefit costs and the amounts expected to be recognized in 2013. The following table presents those items for the employee pension plan and other benefits plans for December 31, 2013, 2012, and 2011.
 
 

 
PENSION BENEFITS
 
 
 

 
OTHER BENEFITS
 
(THOUSANDS)
2013

 
2012

 
2011

 
2013

 
2012

 
2011

Net actuarial loss
$
12,513

 
$
157,017

 
$
133,186

 
$
1,176

(1) 
$
13,602

 
$
12,620

Transition obligation
$
—

 
$
—

 
$
—

 
$
20


$
35

 
$
55

Prior service (credit)
$
(71
)
 
$
(559
)
 
$
(630
)
 
$
—


$
—

 
$
—


(1) In 2013, Cleco received $194 thousand in Medicare Part D subsidies for the 2012 plan year, which will reduce the net actuarial loss for 2013.
Components of Net Periodic Pension and Other Benefit Costs
The components of net periodic pension and other benefits costs for 2012, 2011, and 2010 are as follows.
 
 

 
PENSION BENEFITS
 
 
 

 
OTHER BENEFITS
 
(THOUSANDS)
2012

 
2011

 
2010

 
2012

 
2011

 
2010

Components of periodic benefit costs
 
 
 
 
 
 
 
 
 
 
 
Service cost
$
8,312

 
$
8,390

 
$
7,451

 
$
1,461

 
$
1,532

 
$
1,511

Interest cost
18,254

 
17,629

 
17,145

 
2,239

 
1,818

 
1,965

Expected return on plan assets
(20,806
)
 
(24,646
)
 
(20,229
)
 
—

 
—

 
—

Amortizations:
 

 
 

 
 

 
 

 
 

 
 

Transition obligation
—

 
—

 
—

 
20

 
20

 
20

Prior period service cost
(71
)
 
(71
)
 
(71
)
 
—

 
(206
)
 
(2,021
)
Net loss
8,346

 
5,556

 
3,156

 
1,479

 
1,010

 
972

Net periodic benefit cost
$
14,035

 
$
6,858

 
$
7,452

 
$
5,199

 
$
4,174

 
$
2,447
Weighted-Average Assumptions Used to Determine Benefit Obligation and Net Periodic Costs
The assumptions used to determine the benefit obligation and the periodic costs are as follows.
 
PENSION BENEFITS
 
 
OTHER BENEFITS
 
 
2012

 
2011

 
2012

 
2011

Weighted-average assumptions used to determine the benefit obligation as of December 31:
 
 
 
 
 
 
 
Discount rate
4.19
%
 
5.08
%
 
3.54
%
 
4.51
%
Rate of compensation increase
3.334
%
 
3.415
%
 
N/A

 
N/A

 
 
PENSION BENEFITS
 
 
 

OTHER BENEFITS
 
 
2012

2011

2010

 
2012

2011

2010

Weighted-average assumptions used to determine the net benefit cost (income) for the year ended December 31:
 

 

 

 
 

 

 

Discount rate
5.08
%
5.43
%
5.91
%
 
4.51
%
4.61
%
5.29
%
Expected return on plan assets
6.61
%
7.80
%
7.80
%
 
N/A

N/A

N/A

Rate of compensation increase
3.373
%
4.119
%
4.265
%
 
N/A

N/A

N/A
Fair Value Allocation of Pension Plan Assets
The following tables disclose the pension plan’s fair value of financial assets measured on a recurring basis and within the scope of the authoritative guidance for fair value measurements and disclosures.
(THOUSANDS)
 
AT DEC. 31, 2012

 
QUOTED PRICES
IN ACTIVE
MARKETS FOR
IDENTICAL ASSETS
(LEVEL 1)

 
SIGNIFICANT
OTHER
OBSERVABLE
INPUTS
(LEVEL 2)

 
SIGNIFICANT
UNOBSERVABLE
INPUTS
(LEVEL 3)

Asset Description
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
6,336

 
$
—

 
$
6,336

 
$
—

Common stock
 
16,319

 
16,319

 
—

 
—

Preferred stock
 
379

 
379

 
—

 
—

Obligations of U.S. Government and U.S. Government Agencies
 
32,734

 
—

 
32,734

 
—

Mutual funds
 
25,042

 
25,042

 
—

 
—

Common/collective trust fund
 
 
 
 
 
 
 
 
     Domestic equity
 
54,198

 
—

 
54,198

 
—

     International equity
 
39,943

 
—

 
39,943

 
—

Real estate funds
 
17,341

 
—

 
—

 
17,341

Hedge fund-of-funds
 
2,587

 
—

 
—

 
2,587

Corporate debt
 
147,013

 
—

 
147,013

 
—

Total
 
$
341,892

 
$
41,740

 
$
280,224

 
$
19,928

 
 
 
 
 
 
 
 
 
 
Interest accrual
2,149

 
 
 
 
 
 
 
Total net assets
$
344,041

 
 
 
 
 
 

(THOUSANDS)
 
AT DEC. 31, 2011

 
QUOTED PRICES
IN ACTIVE
MARKETS FOR
IDENTICAL ASSETS
(LEVEL 1)

 
SIGNIFICANT
OTHER
OBSERVABLE
INPUTS
(LEVEL 2)

 
SIGNIFICANT
UNOBSERVABLE
INPUTS
(LEVEL 3)

Asset Description
 
 
 
 
 
 
 
 
Cash and cash equivalents
 
$
7,775

 
$
—

 
$
7,775

 
$
—

Common stock
 
15,242

 
—

 
15,242

 
—

Preferred stock
 
291

 
—

 
291

 
—

Obligations of U.S. Government and U.S. Government Agencies
 
28,501

 
—

 
28,501

 
—

Mutual funds
 
9,144

 
9,144

 
—

 
—

Common/collective trust fund
 
 
 
 
 
 
 
 
     Domestic equity
 
63,864

 
—

 
63,864

 
—

     International equity
 
30,813

 
—

 
30,813

 
—

Real estate funds
 
16,349

 
—

 
—

 
16,349

Hedge fund-of-funds
 
2,892

 
—

 
—

 
2,892

Corporate debt
 
135,326

 
—

 
135,326

 
—

Total
 
$
310,197

 
$
9,144

 
$
281,812

 
$
19,241

 
 
 
 
 
 
 
 
 
 
Interest accrual
2,198

—

 
 
 
 
 
 
Total net assets
$
312,395



 
 
 
 
 
Pension Plan Unobservable Input Reconciliation
The following is a reconciliation of the beginning and ending balances of the pension plan’s real estate funds and hedge fund-of-funds measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the years ended December 31, 2012 and 2011.
(THOUSANDS)
REAL ESTATE
FUNDS

 
HEDGE FUND
OF FUNDS

 
TOTAL

December 31, 2010
$
14,568

 
$
3,271

 
$
17,839

Realized gain
—

 
17

 
17

Unrealized gain
1,454

 
77

 
1,531

Purchases
327

 


 
327

Sales
—

 
(473
)
 
(473
)
December 31, 2011
$
16,349

 
$
2,892

 
$
19,241

Realized gain
—

 
2

 
2

Unrealized gain
734

 
130

 
864

Purchases
258

 
—

 
258

Sales
—

 
(437
)
 
(437
)
December 31, 2012
$
17,341

 
$
2,587

 
$
19,928
Investment Asset Allocation Targets
The following chart shows the resulting dynamic asset allocation based on the funded ratio at December 31, 2012:
 
PERCENT OF TOTAL PLAN ASSETS*
 
 
MINIMUM

 
TARGET

 
MAXIMUM

Return-seeking
 

 
 

 
 

Domestic equity
 
 
21
%
 
 
International equity
 
 
18
%
 
 
Real estate
 
 
8
%
 
 
Hedge fund-of-funds
 
 
2
%
 
 
Total return-seeking
43
%
 
49
%
 
53
%
Liability hedging
 
 
 
 
 
Fixed income- long government/credit
 
 
17
%
 
 
Fixed income - long credit
 
 
36
%
 
 
Total liability hedging
47
%
 
53
%
 
57
%
*Minimums and maximums within subcategories not intended to equal total for category.
Impact of Future Medicare Subsidies on Other Benefit costs
The estimated impact of future Medicare subsidies did not reduce the January 1, 2012 accumulated postretirement benefit obligation. The estimated impact of future Medicare subsidies reduced the January 1, 2011 accumulated postretirement benefit obligation by $0.4 million. The reduction in other benefit costs for the years ended December 31, 2012 and 2011, are presented in the following table.
 
AT DECEMBER 31,
 
(THOUSANDS)
2012

 
2011

Components of other benefit costs:
 
 
 
(Increase) reduction in interest cost
$
(8
)
 
$
(24
)
Reduction in net loss amortization
199

 
195

Reduction in prior period service cost amortization
—

 
50

Reduction in net other benefit cost
$
191

 
$
221
Assumed Health Care Cost Trend Rates
A one-percentage point change in assumed health care cost trend rates would have the following effects on other benefits.
 
ONE-PERCENTAGE POINT
 
(THOUSANDS)
INCREASE

 
DECREASE

Effect on total of service and interest cost components
$
14

 
$
(34
)
Effect on postretirement benefit obligation
$
318

 
$
(670
)
Projected Benefit Payments and Projected Receipts
The projected benefit payments and projected receipts pursuant to Medicare Part D subsidy, the employee pension plan, and other benefits obligation plan for each year through 2017 and the next five years thereafter are listed in the following table.
(THOUSANDS)
PENSION BENEFITS

 
OTHER BENEFITS, GROSS

 
MEDICARE D, RECEIPTS

2013
$
14,905

 
$
3,060

 
$
194

2014
$
15,742

 
$
3,279

 
$
—

2015
$
16,570

 
$
3,496

 
$
—

2016
$
17,562

 
$
3,680

 
$
—

2017
$
18,695

 
$
3,821

 
$
—

Next five years
$
112,906

 
$
19,863

 
$
—
SERP Benefits [Member]
  
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items]  
Reconciliation of Benefit Obligations, Plan Assets and Funded Status of Pension Plans
The SERP’s funded status at December 31, 2012 and 2011, is presented in the following table.
 
SERP BENEFITS
 
(THOUSANDS)
2012

 
2011

Change in benefit obligation
 
 
 
Benefit obligation at beginning of year
$
46,264

 
$
42,160

Service cost
1,487

 
1,566

Interest cost
2,526

 
2,105

Actuarial loss
11,651

 
2,529

Benefits paid
(2,506
)
 
(2,096
)
Benefit obligation at end of year
$
59,422

 
$
46,264
Accumulated Benefit Obligation
The SERP’s accumulated benefit obligation at December 31, 2012 and 2011, is presented in the following table.
 
SERP BENEFITS
 
(THOUSANDS)
2012

 
2011

Accumulated benefit obligation
$
53,350

 
$
42,410
Amounts Recognized in Other Comprehensive Income
The authoritative guidelines on compensation for retirement benefits require the disclosure of the net actuarial gains/losses, transition obligations/assets, and prior period service costs included in other comprehensive income as a result of being amortized as a component of net periodic benefit costs. The following table presents those items for the SERP at December 31, 2012 and 2011.
 
SERP BENEFITS
 
(THOUSANDS)
2012

 
2011

Net actuarial loss occurring during year
$
11,651

 
$
2,529

Net actuarial loss amortized during year
$
1,764

 
$
940

Prior service cost amortized during year
$
54

 
$
54
Amounts Recognized in Accumulated Other Comprehensive Income
The authoritative guidelines on compensation for retirement benefits also require the disclosure of the net gains/losses, transition obligations/assets, and prior period service costs/credit in accumulated other comprehensive income that have not been recognized as components of net periodic benefit costs and the amounts expected to be recognized in 2013. The following table presents those items for SERP for December 31, 2013, 2012, and 2011.
 
 
 
SERP BENEFITS
 
(THOUSANDS)
2013

 
2012

 
2011

Net actuarial loss
$
2,155

 
$
25,444

 
$
15,588

Prior service cost
$
54

 
$
280

 
$
334
Components of Net Periodic Pension and Other Benefit Costs
The components of the net SERP cost for 2012, 2011, and 2010 are as follows.
 
 
 
SERP BENEFITS
 
(THOUSANDS)
2012

 
2011

 
2010

Components of periodic benefit costs:
 
 
 
 
 
Service cost
$
1,487

 
$
1,566

 
$
1,531

Interest cost
2,526

 
2,105

 
2,122

Amortizations:
 

 
 

 
 

Prior period service cost
54

 
54

 
54

Net loss
1,764

 
940

 
924

Net periodic benefit cost
$
5,831

 
$
4,665

 
$
4,631
Weighted-Average Assumptions Used to Determine Benefit Obligation and Net Periodic Costs
The assumptions used to determine the benefit obligation and the periodic costs are as follows.
 
SERP
 
 
2012

 
2011

Weighted-average assumptions used to determine the benefit obligation as of December 31:
 
 
 
Discount rate
4.17
%
 
4.99
%
Rate of compensation increase
5.00
%
 
5.00
%
 
 
 
 
SERP
 
 
2012

 
2011

 
2010

Weighted-average assumptions used to determine the net benefit cost (income) for the year ended December 31:
 
 
 
 
 
Discount rate
4.99
%
 
5.26
%
 
5.78
%
Rate of compensation increase
5.00
%
 
5.00
%
 
5.00
%
Projected Benefit Payments and Projected Receipts
The projected benefit payments for the SERP for each year through 2017 and the next five years thereafter are shown in the following table.
(THOUSANDS)
2013

 
2014

 
2015

 
2016

 
2017

 
NEXT FIVE
YEARS

SERP
$
2,503

 
$
2,531

 
$
2,774

 
$
2,997

 
$
3,078

 
$
18,279
Defined Contribution Pension [Member]
  
Defined Benefit Plans and Other Postretirement Benefit Plans [Line Items]  
401(k) Plan Expense
Cleco’s 401(k) Plan expense for the years ended December 31, 2012, 2011, and 2010 is as follows:
 
FOR THE YEAR ENDED DEC. 31,
 
(THOUSANDS)
2012

 
2011

 
2010

401(k) Plan expense
$
4,375

 
$
3,917

 
$
3,709