Pension and Postretirement Benefits

9 Months Ended

Sep. 30, 2014

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 ERISA and, in addition, make voluntary contributions from time to time. There were no contributions made during the three and nine months ended September 30, 2014 or 2013, 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, 2014 and 2013 was:



Net Periodic Benefit Cost / (Income)	Pension				Postretirement
	Three months ended				Three months ended
	September 30,				September 30,
$ in millions	2014		2013		2014		2013
Service cost	$	1.5	$	1.8	$	-	$	-
Interest cost		4.3		3.8		0.2		0.2
Expected return on plan assets (a)		(5.8)		(5.8)		-		-
Amortization of unrecognized:
Prior service cost		0.4		0.3		-		-
Actuarial loss / (gain)		0.9		1.3		(0.1)		(0.1)
Net periodic benefit cost	$	1.3	$	1.4	$	0.1	$	0.1



Net Periodic Benefit Cost / (Income)	Pension				Postretirement
	Nine months ended				Nine months ended
	September 30,				September 30,
$ in millions	2014		2013		2014		2013
Service cost	$	4.5	$	5.4	$	0.1	$	0.1
Interest cost		13.1		11.6		0.6		0.6
Expected return on plan assets (a)		(17.2)		(17.6)		(0.1)		(0.2)
Amortization of unrecognized:
Prior service cost		1.1		1.1		-		-
Actuarial loss / (gain)		2.6		3.7		(0.4)		(0.3)
Net periodic benefit cost	$	4.1	$	4.2	$	0.2	$	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 2014 and 2013 net periodic benefit cost was approximately $351 million and $346 million, respectively.



Benefit payments and Medicare Part D reimbursements, which reflect future service, are estimated to be paid as follows:

$ in millions	Pension		Postretirement

2014	$	6.3	$	0.5
2015		23.9		2.1
2016		23.9		2.0
2017		24.3		1.8
2018		24.6		1.6
2019 - 2023		126.5		6.7

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.

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 ended September 30, 2014 and 2013 was:



Net Periodic Benefit Cost / (Income)	Pension				Postretirement
	Three months ended				Three months ended
	September 30,				September 30,
$ in millions	2014		2013		2014		2013
Service cost	$	1.5	$	1.8	$	-	$	-
Interest cost		4.3		3.8		0.2		0.2
Expected return on plan assets (a)		(5.7)		(5.8)		(0.1)		(0.1)
Amortization of unrecognized:
Prior service cost		0.7		0.7		0.1		0.1
Actuarial loss / (gain)		1.6		2.3		(0.2)		(0.2)
Net periodic benefit cost	$	2.4	$	2.8	$	-	$	-



Net Periodic Benefit Cost / (Income)	Pension				Postretirement
	Nine months ended				Nine months ended
	September 30,				September 30,
$ in millions	2014		2013		2014		2013
Service cost	$	4.4	$	5.4	$	0.1	$	0.1
Interest cost		13.0		11.6		0.6		0.6
Expected return on plan assets (a)		(17.0)		(17.6)		(0.2)		(0.2)
Amortization of unrecognized:
Prior service cost		2.1		2.1		0.1		0.1
Actuarial loss / (gain)		4.8		6.9		(0.5)		(0.5)
Net periodic benefit cost	$	7.3	$	8.4	$	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 2014 and 2013 net periodic benefit cost was approximately $351 million and $346 million, respectively.



Benefit payments and Medicare Part D reimbursements, which reflect future service, are estimated to be paid as follows:

$ in millions	Pension		Postretirement

2014	$	6.3	$	0.5
2015		23.9		2.1
2016		23.9		2.0
2017		24.3		1.8
2018		24.6		1.6
2019 - 2023		126.5		6.7