RETIREMENT BENEFITS

Southern Company has a defined benefit, trusteed, pension plan covering substantially all employees. The qualified pension plan is funded in accordance with requirements of the Employee Retirement Income Security Act of 1974, as amended. No mandatory contributions to the qualified pension plan are anticipated for the year ending December 31, 2016. Southern Company also provides certain defined benefit pension plans for a selected group of management and highly compensated employees. Benefits under these non-qualified pension plans are funded on a cash basis. In addition, Southern Company provides certain medical care and life insurance benefits for retired employees through other postretirement benefit plans. The traditional electric operating companies fund related other postretirement trusts to the extent required by their respective regulatory commissions.

See Note 2 to the financial statements of Southern Company, Alabama Power, Georgia Power, Gulf Power, and Mississippi Power in Item 8 of the Form 10-K for additional information.

Southern Company Gas has a defined benefit, trusteed, pension plan covering eligible employees. The qualified pension plan is funded in accordance with requirements of the Employee Retirement Income Security Act of 1974, as amended. Southern Company Gas made a $125 million voluntary contribution to the qualified pension plan in September 2016. Southern Company Gas also provides certain defined benefit and defined contribution plans for a selected group of management and highly compensated employees. Benefits under these non-qualified plans are largely unfunded and benefits are primarily paid using corporate assets. In addition, Southern Company Gas provides certain medical care and life insurance benefits for eligible retired employees through a postretirement benefit plan. Southern Company Gas also has a separate unfunded supplemental retirement health care plan that provides medical care and life insurance benefits to employees of discontinued businesses.

Components of the net periodic benefit costs for the three and nine months ended September 30, 2016 and 2015 were as follows:



Pension Plans	Southern Company			Alabama Power			Georgia Power			Gulf Power			Mississippi Power
	(in millions)
Three Months Ended September 30, 2016
Service cost	$	68		$	14		$	17		$	3		$	3
Interest cost	110			23			34			5			4
Expected return on plan assets	(203		)	(46		)	(64		)	(9		)	(9		)
Amortization:
Prior service costs	3			1			1			—			1
Net (gain)/loss	45			10			14			2			2
Net periodic pension cost	$	23		$	2		$	2		$	1		$	1
Nine Months Ended September 30, 2016
Service cost	$	192		$	43		$	52		$	9		$	9
Interest cost	311			71			102			14			14
Expected return on plan assets	(577		)	(138		)	(193		)	(26		)	(26		)
Amortization:
Prior service costs	10			2			4			1			1
Net (gain)/loss	120			30			41			5			5
Net periodic pension cost	$	56		$	8		$	6		$	3		$	3
Three Months Ended September 30, 2015
Service cost	$	65		$	14		$	18		$	3		$	3
Interest cost	111			26			38			5			5
Expected return on plan assets	(181		)	(44		)	(62		)	(8		)	(8		)
Amortization:
Prior service costs	6			2			2			1			—
Net (gain)/loss	53			14			19			2			3
Net periodic pension cost	$	54		$	12		$	15		$	3		$	3
Nine Months Ended September 30, 2015
Service cost	$	193		$	44		$	54		$	9		$	9
Interest cost	333			79			115			15			16
Expected return on plan assets	(543		)	(133		)	(188		)	(24		)	(25		)
Amortization:
Prior service costs	19			5			7			1			1
Net (gain)/loss	161			41			57			7			8
Net periodic pension cost	$	163		$	36		$	45		$	8		$	9



Postretirement Benefits	Southern Company			Alabama Power			Georgia Power			Gulf Power			Mississippi Power
	(in millions)
Three Months Ended September 30, 2016
Service cost	$	6		$	1		$	2		$	—		$	—
Interest cost	20			5			7			1			—
Expected return on plan assets	(16		)	(6		)	(6		)	—			—
Amortization:
Prior service costs	1			1			—			—			—
Net (gain)/loss	5			—			3			—			1
Net periodic postretirement benefit cost	$	16		$	1		$	6		$	1		$	1
Nine Months Ended September 30, 2016
Service cost	$	17		$	4		$	5		$	1		$	1
Interest cost	55			14			22			2			2
Expected return on plan assets	(44		)	(19		)	(17		)	(1		)	(1		)
Amortization:
Prior service costs	4			3			1			—			—
Net (gain)/loss	12			1			7			—			1
Net periodic postretirement benefit cost	$	44		$	3		$	18		$	2		$	3
Three Months Ended September 30, 2015
Service cost	$	6		$	1		$	2		$	1		$	—
Interest cost	20			5			9			—			1
Expected return on plan assets	(15		)	(6		)	(6		)	—			—
Amortization:
Prior service costs	1			2			—			—			—
Net (gain)/loss	4			—			2			—			—
Net periodic postretirement benefit cost	$	16		$	2		$	7		$	1		$	1
Nine Months Ended September 30, 2015
Service cost	$	17		$	4		$	5		$	1		$	1
Interest cost	59			15			26			2			3
Expected return on plan assets	(44		)	(19		)	(18		)	(1		)	(1		)
Amortization:
Prior service costs	3			3			—			—			—
Net (gain)/loss	13			1			8			—			—
Net periodic postretirement benefit cost	$	48		$	4		$	21		$	2		$	3