Retirement benefits

Defined benefit pension and other postretirement benefit plans information. For the first three months of 2015, the Company contributed $21 million ($21 million by the Utilities) to its pension and other postretirement benefit plans, compared to $15 million ($14 million by the Utilities) in the first three months of 2014. The Company’s current estimate of contributions to its pension and other postretirement benefit plans in 2015 is $86 million ($84 million by the Utilities, $2 million by HEI and nil by ASB), compared to $60 million ($59 million by the Utilities, $1 million by HEI and nil by ASB) in 2014. In addition, the Company expects to pay directly $2 million ($1 million by the Utilities) of benefits in 2015, compared to $2 million ($1 million by the Utilities) paid in 2014.

On August 8, 2014 and July 6, 2012, President Obama signed the Highway and Transportation Funding Act of 2014 (HATFA) and the Moving Ahead for Progress in the 21st Century Act (MAP-21), respectively, which included provisions related to the funding and administration of pension plans with no impact to the Company’s or the Utilities' accounting for pension benefits; therefore, the net periodic benefit costs disclosed for the plans were not affected. The Company elected to apply HATFA for 2014, which improved the plans’ Adjusted Funding Target Attainment Percentage for funding and benefit distribution purposes and thereby reduced the 2014 minimum funding requirement. HATFA caused the minimum required funding under the Employee Retirement Income Security Act of 1974, as amended (ERISA) to be less than the net periodic cost for 2014; therefore, to satisfy the requirements of the Utilities pension and OPEB tracking mechanisms, the Utilities contributed the net periodic cost in 2014 and expect to contribute the net periodic cost in 2015.

The Pension Protection Act provides that if a pension plan’s funded status falls below certain levels, more conservative assumptions must be used to value obligations under the pension plan. The HEI Retirement Plan met the threshold requirements in each of 2013 and 2014 so that the more conservative assumptions did not apply for either the 2014 or 2015 valuation of plan liabilities for purposes of calculating the minimum required contribution. Other factors could cause changes to the required contribution levels.

The components of net periodic benefit cost for HEI consolidated and Hawaiian Electric consolidated were as follows:



	Three months ended March 31
	Pension benefits						Other benefits
(in thousands)	2015			2014			2015			2014
HEI consolidated
Service cost	$	16,466		$	12,127		$	869		$	883
Interest cost	19,139			18,001			2,235			2,160
Expected return on plan assets	(22,151		)	(20,347		)	(2,907		)	(2,708		)
Amortization of net prior service loss (gain)	1			22			(448		)	(448		)
Amortization of net actuarial loss (gain)	8,962			5,038			430			(3		)
Net periodic benefit cost (credit)	22,417			14,841			179			(116		)
Impact of PUC D&Os	(9,513		)	(3,011		)	98			445
Net periodic benefit cost (adjusted for impact of PUC D&Os)	$	12,904		$	11,830		$	277		$	329
Hawaiian Electric consolidated
Service cost	$	15,983		$	11,697		$	855		$	856
Interest cost	17,516			16,436			2,159			2,079
Expected return on plan assets	(20,632		)	(18,171		)	(2,859		)	(2,663		)
Amortization of net prior service loss (gain)	10			15			(451		)	(451		)
Amortization of net actuarial loss	8,094			4,560			422			—
Net periodic benefit cost (credit)	20,971			14,537			126			(179		)
Impact of PUC D&Os	(9,513		)	(3,011		)	98			445
Net periodic benefit cost (adjusted for impact of PUC D&Os)	$	11,458		$	11,526		$	224		$	266

HEI consolidated recorded retirement benefits expense of $9 million ($8 million by the Utilities) and $8 million ($8 million by the Utilities) in the first three months of 2015 and 2014, respectively, and charged the remaining net periodic benefit cost primarily to electric utility plant.

The Utilities have implemented pension and OPEB tracking mechanisms under which all of their retirement benefit expenses (except for executive life and nonqualified pension plan expenses) determined in accordance with GAAP are recovered over time. Under the tracking mechanisms, these retirement benefit costs that are over/under amounts allowed in rates are charged/credited to a regulatory asset/liability. The regulatory asset/liability for each utility will be amortized over 5 years beginning with the issuance of the PUC’s D&O in the respective utility’s next rate case.

Defined contribution plans information. For the first three months of 2015 and 2014, the Company’s expense for its defined contribution pension plans under the Hawaiian Electric Industries Retirement Savings Plan (HEIRSP) and the ASB 401(k) Plan was $1.4 million and $1.1 million, respectively, and cash contributions were $2.5 million and $2.8 million, respectively. For the first three months of 2015 and 2014, the Utilities’ expense for its defined contribution pension plan under the HEIRSP was $0.4 million and $0.2 million, respectively, and cash contributions were $0.4 million and $0.2 million, respectively.