Retirement benefits

9 Months Ended

Sep. 30, 2020

Retirement Benefits [Abstract]

Retirement benefits

Retirement benefits

Defined benefit pension and other postretirement benefit plans information.  For the first nine months of 2020, the Company contributed $53 million ($52 million by the Utilities) to its pension and other postretirement benefit plans, compared to $36 million ($36 million by the Utilities) in the first nine months of 2019. The Company’s current estimate of total contributions to its pension and other postretirement benefit plans in 2020 is $71 million ($70 million by the Utilities, $1 million by HEI and nil by ASB), compared to $49 million ($48 million by the Utilities, $1 million by HEI and nil by ASB) in 2019. In addition, the Company expects to pay directly $2 million ($1 million by the Utilities) of benefits in 2020, compared to $2 million ($1 million by the Utilities) paid in 2019.

The components of net periodic pension costs (NPPC) and net periodic benefit costs (NPBC) 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)	2020		2019		2020		2019		2020		2019		2020		2019
HEI consolidated
Service cost	$	18,341	$	15,800	$	641	$	573	$	55,066	$	46,564	$	1,903	$	1,656
Interest cost	20,660		21,150		1,842		2,006		60,987		63,216		5,553		6,000
Expected return on plan assets	(28,422)		(27,991)		(3,023)		(3,101)		(85,353)		(83,988)		(9,100)		(9,273)
Amortization of net prior period (gain)/cost	2		(10)		(474)		(451)		7		(32)		(1,355)		(1,355)
Amortization of net actuarial (gains)/losses	8,944		3,989		53		(3)		25,059		11,667		154		(10)
Net periodic pension/benefit cost (return)	19,525		12,938		(961)		(976)		55,766		37,427		(2,845)		(2,982)
Impact of PUC D&Os	4,976		11,554		835		821		17,499		36,111		2,389		2,443
Net periodic pension/benefit cost (adjusted for impact of PUC D&Os)	$	24,501	$	24,492	$	(126)	$	(155)	$	73,265	$	73,538	$	(456)	$	(539)
Hawaiian Electric consolidated
Service cost	$	17,921	$	15,344	$	635	$	568	$	53,703	$	45,346	$	1,886	$	1,643
Interest cost	19,183		19,560		1,764		1,920		56,613		58,388		5,327		5,755
Expected return on plan assets	(26,815)		(26,146)		(2,986)		(3,064)		(80,527)		(78,474)		(8,966)		(9,135)
Amortization of net prior period (gain)/cost	1		2		(474)		(451)		6		6		(1,353)		(1,353)
Amortization of net actuarial losses	8,188		3,841		53		—		22,925		10,993		155		—
Net periodic pension/benefit cost (return)	18,478		12,601		(1,008)		(1,027)		52,720		36,259		(2,951)		(3,090)
Impact of PUC D&Os	4,976		11,554		835		821		17,499		36,111		2,389		2,443
Net periodic pension/benefit cost (adjusted for impact of PUC D&Os)	$	23,454	$	24,155	$	(173)	$	(206)	$	70,219	$	72,370	$	(562)	$	(647)

HEI consolidated recorded retirement benefits expense of $46 million ($43 million by the Utilities) in the first nine months of 2020 and $44 million ($43 million by the Utilities) in the first nine months of 2019 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, any actual costs determined in accordance with GAAP that are over/under amounts allowed in rates are charged/credited to a regulatory asset/liability. The regulatory asset/liability for each utility will then be amortized over 5 years beginning with the respective utility’s next rate case.

Defined contribution plans information.  For the first nine months of 2020 and 2019, the Company’s expenses for its defined contribution plans under the Hawaiian Electric Industries Retirement Savings Plan (HEIRSP) and the ASB 401(k) Plan were $5.5 million and $5.1 million, respectively, and cash contributions were $6.0 million and $6.0 million, respectively. For the first nine months of 2020 and 2019, the Utilities’ expenses for its defined contribution plan under the HEIRSP were $2.1 million and $1.9 million, respectively, and cash contributions were $2.1 million and $1.9 million, respectively.