Pension and Postretirement Benefits

9 Months Ended

Sep. 30, 2013

Pension and Postretirement Benefits

7.  Pension and Postretirement Benefits 

DP&L sponsors a defined benefit pension plan for the vast majority of its employees.   

We generally fund pension plan benefits as accrued in accordance with the minimum funding requirements of the Employee Retirement Income Security Act of 1974 (ERISA) and, in addition, make voluntary contributions from time to time.  There were no contributions made during the three and nine months endedSeptember 30, 2013 or 2012, respectively. 

The amounts presented in the following tables for pension include both the collective bargaining plan formula, the traditional management plan formula, the cash balance plan formula and the SERP, in the aggregate.  The amounts presented for postretirement include both health and life insurance. 

The net periodic benefit cost/(income) of the pension and postretirement benefit plans for the three and nine months ended September 30, 2013 and 2012 was: 

Net Periodic Benefit Cost / (Income)	Pension				Postretirement
	Three months ended September 30,				Three months ended September 30,
$ in millions	2013		2012		2013		2012
Service cost	$	1.8	$	1.5	$	-	$	-
Interest cost		3.8		4.3		0.2		0.2
Expected return on plan assets (a)		(5.8)		(5.7)		-		(0.1)
Amortization of unrecognized:
Actuarial loss / (gain)		1.3		1.3		(0.1)		(0.1)
Prior service cost		0.3		0.4		-		-
Net periodic benefit cost before adjustments		1.4		1.8		0.1		-
Settlement cost (b)		-		0.2		-		-
Net periodic benefit cost	$	1.4	$	2.0	$	0.1	$	-

Net Periodic Benefit Cost / (Income)	Pension				Postretirement
	Nine months ended September 30,				Nine months ended September 30,
$ in millions	2013		2012		2013		2012
Service cost	$	5.4	$	4.6	$	0.1	$	0.1
Interest cost		11.6		12.9		0.6		0.6
Expected return on plan assets (a)		(17.6)		(17.0)		(0.2)		(0.2)
Amortization of unrecognized:
Actuarial loss / (gain)		3.7		3.7		(0.3)		(0.5)
Prior service cost		1.1		1.1		-		-
Net periodic benefit cost before adjustments		4.2		5.3		0.2		-
Settlement cost (b)		-		0.2		-		-
Net periodic benefit cost	$	4.2	$	5.5	$	0.2	$	-

(a)   For purposes of calculating the expected return on pension plan assets, under GAAP, the market-related value of assets (MRVA) is used.  GAAP requires that the difference between actual plan asset returns and estimated plan asset returns be included in the MRVA equally over a period not to exceed five years.  We use a methodology under which we include the difference between actual and estimated asset returns in the MRVA equally over a three year period.  The MRVA used in the calculation of expected return on pension plan assets for the 2013 and 2012 net periodic benefit cost was approximately $346.0 million and $336.0 million, respectively. 

(b)   The settlement cost relates to a former officer who has elected to receive a lump sum distribution in 2012 from the Supplemental Executive Retirement Plan.

Benefit payments and Medicare Part D reimbursements, which reflect future service, are estimated to be paid as follows:
$ in millions	Pension		Postretirement
2013	$	5.5	$	0.6
2014		22.5		2.2
2015		23.0		2.0
2016		23.3		1.9
2017		23.7		1.7
2018 - 2022		122.6		6.8

DP&L [Member]

Pension and Postretirement Benefits

7.  Pension and Postretirement Benefits 

DP&L sponsors a defined benefit pension plan for the vast majority of its employees.   

We generally fund pension plan benefits as accrued in accordance with the minimum funding requirements of the Employee Retirement Income Security Act of 1974 (ERISA) and, in addition, make voluntary contributions from time to time.  There were no contributions made during the three and nine months endedSeptember 30, 2013 or 2012. 

The amounts presented in the following tables for pension include the collective bargaining plan formula, the traditional management plan formula, the cash balance plan formula and the SERP, in the aggregate.  The amounts presented for postretirement include both health and life insurance. 

The net periodic benefit cost (income) of the pension and postretirement benefit plans for the three and nine months endedSeptember 30, 2013 and 2012 was: 

Net Periodic Benefit Cost / (Income)	Pension				Postretirement
	Three months ended September 30,				Three months ended September 30,
$ in millions	2013		2012		2013		2012
Service cost	$	1.8	$	1.5	$	-	$	-
Interest cost		3.8		4.3		0.2		0.2
Expected return on plan assets (a)		(5.8)		(5.7)		(0.1)		(0.1)
Amortization of unrecognized:
Actuarial loss / (gain)		2.3		2.4		(0.2)		(0.2)
Prior service cost		0.7		0.7		0.1		0.1
Net periodic benefit cost before adjustments		2.8		3.2		-		-
Settlement cost (b)		-		0.5		-		-
Net periodic benefit cost	$	2.8	$	3.7	$	-	$	-

Net Periodic Benefit Cost / (Income)	Pension				Postretirement
	Nine months ended September 30,				Nine months ended September 30,
$ in millions	2013		2012		2013		2012
Service cost	$	5.4	$	4.6	$	0.1	$	0.1
Interest cost		11.6		12.9		0.6		0.6
Expected return on plan assets (a)		(17.6)		(17.0)		(0.2)		(0.2)
Amortization of unrecognized:
Actuarial loss / (gain)		6.9		7.1		(0.5)		(0.7)
Prior service cost		2.1		2.2		0.1		0.1
Net periodic benefit cost / (income) before adjustments		8.4		9.8		0.1		(0.1)
Settlement cost (b)		-		0.5		-		-
Net periodic benefit cost / (income)	$	8.4	$	10.3	$	0.1	$	(0.1)

(a)   For purposes of calculating the expected return on pension plan assets, under GAAP, the market-related value of assets (MRVA) is used.  GAAP requires that the difference between actual plan asset returns and estimated plan asset returns be included in the MRVA equally over a period not to exceed five years.  We use a methodology under which we include the difference between actual and estimated asset returns in the MRVA equally over a three year period.  The MRVA used in the calculation of expected return on pension plan assets for the three and nine months endedSeptember 30, 2013 and 2012 net periodic benefit cost was approximately $346.0 million and $335.0 million, respectively. 

(b)   The settlement cost relates to a former officer who has elected to receive a lump sum distribution in 2012 from the Supplemental Executive Retirement Plan.

Benefit payments and Medicare Part D reimbursements, which reflect future service, are estimated to be paid as follows:
$ in millions	Pension		Postretirement
2013	$	5.5	$	0.6
2014		22.5		2.2
2015		23.0		2.0
2016		23.3		1.9
2017		23.7		1.7
2018 - 2022		122.6		6.8