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Pension Plan and Employee Benefits
 9 Months Ended
Sep. 30, 2021
Retirement Benefits [Abstract]  
Pension Plan and Employee Benefits
Note 8 — Pension Plan and Employee Benefits

Pension Plan and Other Benefits Plan
Employees hired before August 1, 2007, are covered by a non-contributory, defined benefit pension plan. Based on the funding assumptions at December 31, 2020, and the funding relief provided by the American Rescue Plan Act, which was signed by the President on March 11, 2021, management estimates that no pension contributions will be required through 2025. Cleco has not made, and does not expect to make, any contributions to the pension plan in 2021.
Cleco Power is the plan sponsor and Support Group is the plan administrator. Benefits under the plan reflect an employee’s years of service, age at retirement, and accrued benefit at retirement.
Cleco’s retirees may be eligible to receive Other Benefits. Dependents of Cleco’s retirees may also be eligible to receive Other Benefits with the exception of life insurance benefits.
The non-service components of net periodic pension and Other Benefits cost are included in Other income (expense), net within Cleco and Cleco Power’s Condensed Consolidated Statements of Income. The components of net periodic pension and Other Benefits cost for the three and nine months ended September 30, 2021, and 2020 were as follows:
PENSION BENEFITSOTHER BENEFITS
FOR THE THREE MONTHS ENDED SEPT. 30,FOR THE THREE MONTHS ENDED SEPT. 30,
(THOUSANDS)2021202020212020
Components of periodic benefit costs
Service cost$2,629 $2,455 $629 $600 
Interest cost4,667 5,204 317 418 
Expected return on plan assets(5,700)(6,244)— — 
Amortizations
Prior period service credit— (15)— — 
Net loss5,184 4,073 373 362 
Net periodic benefit cost6,780 5,473 1,319 1,380 
Special/contractual termination benefits3,270 — — — 
Total benefit cost$10,050 $5,473 $1,319 $1,380 

PENSION BENEFITSOTHER BENEFITS
FOR THE NINE MONTHS ENDED SEPT. 30,FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)2021202020212020
Components of periodic benefit costs
Service cost$7,887 $7,365 $1,819 $1,615 
Interest cost14,001 15,612 962 1,238 
Expected return on plan assets(17,101)(18,731)— — 
Amortizations
Prior period service credit— (45)— — 
Net loss15,553 12,222 1,143 1,042 
Net periodic benefit cost20,340 16,423 3,924 3,895 
Special/contractual termination benefits3,270 — — — 
Total benefit cost$23,610 $16,423 $3,924 $3,895 

Effective September 30, 2021, the pension plan was amended to offer an enhanced pension benefit to certain employees participating in the plan that elect to retire during a certain retirement window. Those certain employees who elected by September 30, 2021, to receive the enhanced pension benefits will receive a 10% increase in calculated pension benefits. This resulted in a special termination benefit cost for Cleco Power and Support Group of $2.4 million and $0.9 million, respectively, included as an expense of the pension plan.
Because Cleco Power is the pension plan sponsor and the related trust holds the assets, the net unfunded status of the pension plan is reflected at Cleco Power. The liability of Cleco’s other subsidiaries is transferred with a like amount of assets to Cleco Power monthly. The expense of the pension plan related to Cleco’s other subsidiaries for the three and nine months ended September 30, 2021, was $1.8 million and $3.6 million, respectively. The expense of the pension plan related to Cleco’s other subsidiaries for the three and nine months ended September 30, 2020, was $0.9 million and $2.6 million, respectively.
Cleco Holdings is the plan sponsor for the other benefit plans. There are no assets set aside in a trust, and the liabilities are reported on the individual subsidiaries’ financial statements. The expense related to other benefits reflected in Cleco Power’s Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2021, was $1.2 million and $3.6 million, respectively. The expense related to other benefits reflected in Cleco Power’s Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2020, was $1.1 million and $3.6 million, respectively. The current and non-current portions of
the Other Benefits liability for Cleco and Cleco Power at September 30, 2021, and December 31, 2020, were as follows:

Cleco
(THOUSANDS)AT SEPT. 30, 2021AT DEC. 31, 2020
Current$4,463 $4,463 
Non-current$51,306 $51,868 

Cleco Power
(THOUSANDS)AT SEPT. 30, 2021AT DEC. 31, 2020
Current$3,865 $3,865 
Non-current$40,261 $40,734 

SERP
Certain Cleco officers are covered by SERP. Cleco does not fund the SERP liability, but instead pays for current benefits out of general funds available. Cleco Power has formed a rabbi trust. The life insurance policies issued on SERP participants designate the rabbi trust as the beneficiary. Market conditions could have a significant impact on the cash surrender value of the life insurance policies. Proceeds from the life insurance policies are expected to be used to pay the SERP participants’ death benefits, as well as future SERP payments. However, because SERP is a non-qualified plan, the assets of the trust could be used to satisfy general creditors of Cleco Power in the event of insolvency. All SERP benefits are paid out of general cash available of the respective companies that employed the officer. Cleco Power is the plan sponsor and Support Group is the plan administrator.
The non-service components of net periodic benefit cost related to SERP are included in Other income (expense), net within Cleco and Cleco Power’s Condensed Consolidated
Statements of Income. The components of the net periodic benefit cost related to SERP for the three and nine months ended September 30, 2021, and 2020 were as follows:

FOR THE THREE MONTHS ENDED SEPT. 30,FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)2021202020212020
Components of periodic benefit costs
Service cost $59 $100 $174 $300 
Interest cost634 733 1,903 2,199 
Amortizations
Prior period service credit(54)(54)(161)(161)
Net loss307 796 921 2,388 
Net periodic benefit cost$946 $1,575 $2,837 $4,726 

The expense related to SERP reflected on Cleco Power’s Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2021, was $0.1 million and $0.4 million, respectively. The expense related to SERP reflected on Cleco Power’s Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2020, was $0.2 million and $0.7 million, respectively.
Liabilities relating to SERP are reported on the individual subsidiaries’ financial statements. The current and non-current portions of the SERP liability for Cleco and Cleco Power at September 30, 2021, and December 31, 2020, were as follows:

Cleco
(THOUSANDS)AT SEPT. 30, 2021AT DEC. 31, 2020
Current$4,703 $4,703 
Non-current$90,880 $92,522 

Cleco Power
(THOUSANDS)AT SEPT. 30, 2021AT DEC. 31, 2020
Current$711 $711 
Non-current$19,240 $19,828 
401(k) Plan
Cleco’s 401(k) Plan is intended to provide active, eligible employees with voluntary, long-term savings and investment opportunities. The 401(k) Plan is a defined contribution plan and is subject to the applicable provisions of the Employee Retirement Income Security Act of 1974. In accordance with the 401(k) Plan, employer contributions are made in the form of cash. Cash contributions are invested in proportion to the participant’s voluntary contribution investment choices. Participation in the Plan is voluntary, and active Cleco employees are eligible to participate. Cleco’s 401(k) Plan expense for the three and nine months ended September 30, 2021, and 2020 was as follows:

 FOR THE THREE MONTHS ENDED SEPT. 30,FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)2021202020212020
401(k) Plan expense
$2,512 $2,356 $7,391 $7,509 

Cleco Power is the plan sponsor for the 401(k) Plan. The expense of the 401(k) Plan related to Cleco’s other
subsidiaries for the three and nine months ended September 30, 2021, and 2020 was as follows:

 FOR THE THREE MONTHS ENDED SEPT. 30,FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)2021202020212020
401(k) Plan expense
$1,185 $996 $3,511 $3,491 

Effective September 30, 2021, the 401(k) plan was amended to offer an enhanced 401(k) benefit to certain employees participating in the plan that elect to retire during a certain retirement window. Those certain employees who elected by September 30, 2021, to receive the enhanced 401(k) benefits will receive a one-time contribution up to 30% of the employee’s 2021 base salary in accordance with IRS contribution limits. This resulted in a one-time benefit cost of $0.2 million included as an expense of the 401(k) plan.