Employee Benefit Plans

9 Months Ended

Sep. 30, 2012

Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]

Employee Benefit Plans

EMPLOYEE BENEFIT PLANS

The components of net pension expense for the Company’s two defined benefit non-contributory pension plans and certain nonqualified supplemental pension plans were:

	Three months ended September 30,						Nine months ended September 30,
(in thousands)	2012			2011			2012			2011
Components of net periodic benefit cost:
Service cost	$	2,632		$	2,293		$	7,895		$	6,879
Interest cost	2,700			2,740			8,101			8,220
Expected long-term return on assets	(3,563		)	(3,868		)	(10,689		)	(11,603		)
Actuarial loss	2,099			1,609			6,297			4,826
Prior service cost amortization	129			124			388			372
Net periodic expense	$	3,997		$	2,898		$	11,992		$	8,694

During the third quarter of 2012, the Moving Ahead for Progress in the 21st Century Act (MAP-21) was signed into law. This law included pension funding stabilization measures designed to stabilize the discount rate used to determine funding requirements. The impact of MAP-21 on Energen's pension plans was to reduce the required contributions during 2012 from approximately $12.8 million to $2.1 million to the qualified pension plans. These contribution requirements were satisfied during the third quarter of 2012 by applying the plans' funding balances, as established under Internal Revenue Code Section 430(f). It is not anticipated that the funded status of the qualified pension plans will fall below statutory thresholds requiring accelerated funding or constraints on benefit levels or plan administration. No additional discretionary contributions are currently expected to be made to the pension plans by the Company during 2012. For the three months and nine months ending September 30, 2012, the Company made benefit payments aggregating $36,000 and $2.3 million, respectively, to retirees from the nonqualified supplemental retirement plans and expects to make additional benefit payments of approximately $36,000 through the remainder of 2012.

The components of net periodic postretirement benefit expense for the Company’s postretirement benefit plans were:

	Three months ended September 30,						Nine months ended September 30,
(in thousands)	2012			2011			2012			2011
Components of net periodic benefit cost:
Service cost	$	463		$	442		$	1,390		$	1,327
Interest cost	1,062			1,111			3,186			3,332
Expected long-term return on assets	(1,109		)	(1,104		)	(3,328		)	(3,314		)
Actuarial loss	9			—			27			—
Transition amortization	479			479			1,438			1,438
Net periodic expense	$	904		$	928		$	2,713		$	2,783

For the three months and nine months ended September 30, 2012, the Company made contributions aggregating $0.9 million and $2.7 million, respectively, to the postretirement benefit plans. The Company expects to make additional discretionary contributions of approximately $0.9 million to the postretirement benefit plans through the remainder of 2012.