Retirement benefits

Defined benefit pension and other postretirement benefit plans information. For the first nine months of 2015, the Company contributed $66 million ($65 million by the Utilities) to its pension and other postretirement benefit plans, compared to $45 million ($44 million by the Utilities) in the first nine months of 2014. The Company’s current estimate of contributions to its pension and other postretirement benefit plans in 2015 is $88 million ($86 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.

The Pension Protection Act of 2006 (Pension Protection Act) signed into law on August 17, 2006, amended the Employee Retirement Income Security Act of 1974 (ERISA). Among other things, the Pension Protection Act changed the funding rules for qualified pension plans. On August 8, 2014, President Obama signed the latest change to the Pension Protection Act, the Highway and Transportation Funding Act of 2014 (HATFA). HATFA resulted in an increase of the Adjusted Funding Target Attainment Percentage (AFTAP) for benefit distribution purposes and eased funding requirements effective with the 2014 plan year (a plan sponsor could have elected to apply the provisions of HATFA to 2013, but the Company did not so elect). As a result, the minimum funding requirements for the HEI Retirement Plan under ERISA are less than the net periodic cost for 2014 and 2015. 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, 2014 and 2015 so that the more conservative assumptions did not apply for either 2014 or 2015 and will not apply for 2016. 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 September 30												Nine months ended September 30
	Pension benefits						Other benefits						Pension benefits						Other benefits
(in thousands)	2015			2014			2015			2014			2015			2014			2015			2014
HEI consolidated
Service cost	$	16,577		$	12,306		$	982		$	870		$	49,683		$	36,958		$	2,945		$	2,619
Interest cost	19,229			18,044			2,254			2,137			57,731			54,158			6,757			6,414
Expected return on plan assets	(22,126		)	(20,337		)	(2,912		)	(2,724		)	(66,426		)	(61,018		)	(8,753		)	(8,180		)
Amortization of net prior service loss (gain)	1			22			(448		)	(448		)	3			66			(1,345		)	(1,345		)
Amortization of net actuarial loss (gain)	9,191			5,064			450			(2		)	27,608			15,240			1,346			(8		)
Net periodic benefit cost (credit)	22,872			15,099			326			(167		)	68,599			45,404			950			(500		)
Impact of PUC D&Os	(10,017		)	(3,331		)	(60		)	494			(29,994		)	(9,993		)	(180		)	1,482
Net periodic benefit cost (adjusted for impact of PUC D&Os)	$	12,855		$	11,768		$	266		$	327		$	38,605		$	35,411		$	770		$	982
Hawaiian Electric consolidated
Service cost	$	16,066		$	11,900		$	967		$	848		$	48,197		$	35,698		$	2,902		$	2,544
Interest cost	17,632			16,495			2,175			2,058			52,897			49,484			6,525			6,175
Expected return on plan assets	(20,635		)	(18,167		)	(2,873		)	(2,684		)	(61,906		)	(54,496		)	(8,621		)	(8,054		)
Amortization of net prior service loss (gain)	10			15			(450		)	(451		)	30			46			(1,352		)	(1,353		)
Amortization of net actuarial loss	8,342			4,616			438			—			25,028			13,845			1,315			—
Net periodic benefit cost (credit)	21,415			14,859			257			(229		)	64,246			44,577			769			(688		)
Impact of PUC D&Os	(10,017		)	(3,331		)	(60		)	494			(29,994		)	(9,993		)	(180		)	1,482
Net periodic benefit cost (adjusted for impact of PUC D&Os)	$	11,398		$	11,528		$	197		$	265		$	34,252		$	34,584		$	589		$	794

HEI consolidated recorded retirement benefits expense of $27 million ($22 million by the Utilities) and $24 million ($23 million by the Utilities) in the first nine 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 nine 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 $4.0 million and $3.4 million, respectively, and cash contributions were $4.3 million and $4.2 million, respectively. For the first nine months of 2015 and 2014, the Utilities’ expense for its defined contribution pension plan under the HEIRSP was $1.1 million and $0.7 million, respectively, and cash contributions were $1.1 million and $0.7 million, respectively.