PENSION AND POSTRETIREMENT MEDICAL BENEFITS

3 Months Ended

Mar. 31, 2011

PENSION AND POSTRETIREMENT MEDICAL BENEFITS [Abstract]

PENSION AND POSTRETIREMENT MEDICAL BENEFITS

NOTE 12 - PENSION AND POSTRETIREMENT MEDICAL BENEFITS

The fair value of Pension Plan trust assets was $110.6 million at June 30, 2011 and $107.4 million at December 31, 2010. The unfunded accrued pension benefit obligation recorded on the Condensed Consolidated Balance Sheets was $18.7 million at June 30, 2011 and $21.1 million at December 31, 2010.

The fair value of Postretirement Plan trust assets was $20.4 million at June 30, 2011 and $18.4 million at December 31, 2010.  The unfunded accrued postretirement benefit obligation recorded on the Condensed Consolidated Balance Sheets was $5.8 million at June 30, 2011, and $6.8 million at December 31, 2010.

Components of net periodic benefit costs follow (dollars in thousands):

Pension Benefits	Three months ended June 30						Six months ended June 30
	2011			2010			2011			2010
Service cost	$	1,142		$	1,026		$	2,284		$	2,052
Interest cost		1,851			1,754			3,702			3,508
Expected return on plan assets		(2,120	)		(2,063	)		(4,240	)		(4,126	)
Amortization of prior service cost		104			107			208			214
Amortization of net actuarial loss		60			0			120			0
Net periodic benefit cost		1,037			824			2,074			1,648
Less amounts capitalized		230			229			442			318
Net benefit costs expensed	$	807		$	595		$	1,632		$	1,330

Postretirement Benefits	Three months ended June 30						Six months ended June 30
	2011			2010			2011			2010
Service cost	$	198		$	228		$	396		$	456
Interest cost		330			395			660			790
Expected return on plan assets		(357	)		(301	)		(714	)		(602	)
Amortization of transition obligation		64			64			128			128
Amortization of prior service cost		70			70			140			140
Amortization of net actuarial loss		51			242			102			484
Net periodic benefit cost		356			698			712			1,396
Less amounts capitalized		79			193			152			269
Net benefit costs expensed	$	277		$	505		$	560		$	1,127

Investment Strategy Our pension investment policy seeks to achieve sufficient growth to enable the Pension Plan to meet our future benefit obligations to participants, maintain certain funded ratios and minimize near-term cost volatility.  Current guidelines specify generally that 54 percent of plan assets be invested in equity securities and 46 percent of plan assets be invested in debt securities.  In the third quarter, we will revise our investment policy to reflect 45 percent equity securities, 45 percent debt securities, and 10 percent alternative investments.  This new asset allocation is expected to reduce the risk of loss in the overall pension portfolio.  The debt securities are primarily comprised of long-duration bonds to match changes in plan liabilities.

Our postretirement medical benefit plan investment policy seeks to achieve sufficient funding levels to meet future benefit obligations to participants and minimize near-term cost volatility.  Current guidelines specify generally that 60 percent of the plan assets be invested in equity securities and 40 percent be invested in debt securities.  Fixed-income securities are of a shorter duration to better match the cash flows of the postretirement medical obligation.

Trust Fund Contributions:  In April 2011, we contributed $4.1 million to the pension trust fund and in June 2011 we contributed $1.4 million to the postretirement medical fund.  In July 2010, we contributed $2.7 million to the pension trust fund and $3.3 million to the postretirement medical trust fund.