7. PENSION PLANS AND OTHER EMPLOYEE BENEFITS

Evergy and certain of its subsidiaries maintain, and Westar Energy and KCP&L participate in, qualified non-contributory defined benefit pension plans covering the majority of Westar Energy's and KCP&L's employees as well as certain non-qualified plans covering certain active and retired officers. Evergy is also responsible for its 94% share of Wolf Creek Nuclear Operating Corporation (WCNOC) defined benefit plans, consisting of Westar Energy's and KCP&L's respective 47% shares.

For the majority of employees, pension benefits under these plans reflect the employees' compensation, years of service and age at retirement. However, for the plan covering Westar Energy's employees, the benefits for non-union employees hired between 2002 and the second quarter of 2018 and union employees hired beginning in 2012 are derived from a cash balance account formula. For the plans covering KCP&L's employees, the benefits for union employees hired beginning in 2014 are derived from a cash balance account formula and the plans were closed to future non-union employees in 2014.

Evergy and its subsidiaries also provide certain post-retirement health care and life insurance benefits for substantially all retired employees of Westar Energy and KCP&L and their respective shares of WCNOC's post-retirement benefit plans.

The Evergy Companies record pension and post-retirement expense in accordance with rate orders from the KCC and MPSC that allow the difference between pension and post-retirement costs under GAAP and costs for ratemaking to be recognized as a regulatory asset or liability. This difference between financial and regulatory accounting methods is due to timing and will be eliminated over the life of the plans.

The following tables provide the components of net periodic benefit costs prior to the effects of capitalization and sharing with joint owners of power plants.



	Pension Benefits									Post-Retirement Benefits
Three Months Ended June 30, 2018	Evergy			Westar Energy			KCP&L^(a)			Evergy			Westar Energy			KCP&L^(a)
Components of net periodic benefit costs	(millions)
Service cost	$	12.2		$	8.1		$	9.1		$	0.5		$	0.3		$	0.4
Interest cost	17.2			12.7			9.4			1.7			1.3			0.8
Expected return on plan assets	(18.3		)	(14.0		)	(10.6		)	(2.0		)	(1.7		)	(0.5		)
Amortization of unrecognized:
Prior service cost	0.1			0.1			0.1			0.1			0.1			—
Recognized net actuarial (gain)/loss	8.1			8.1			8.4			(0.2		)	(0.2		)	—
Net periodic benefit costs before regulatory adjustment	19.3			15.0			16.4			0.1			(0.2		)	0.7
Regulatory adjustment	3.0			2.8			0.7			(0.5		)	(0.5		)	(0.2		)
Net periodic benefit costs	$	22.3		$	17.8		$	17.1		$	(0.4	)	$	(0.7	)	$	0.5
^(a)KCP&L amounts are included in consolidated Evergy from the date of the closing of the merger, June 4, 2018 through June 30, 2018.

	Pension Benefits									Post-Retirement Benefits
Year to Date June 30, 2018	Evergy			Westar Energy			KCP&L^(a)			Evergy			Westar Energy			KCP&L^(a)
Components of net periodic benefit costs	(millions)
Service cost	$	20.2		$	16.1		$	18.3		$	0.8		$	0.6		$	0.7
Interest cost	29.9			25.4			18.9			2.9			2.5			1.7
Expected return on plan assets	(32.3		)	(28.0		)	(21.1		)	(3.7		)	(3.4		)	(1.0		)
Amortization of unrecognized:
Prior service cost	0.3			0.3			0.2			0.2			0.2			—
Recognized net actuarial (gain)/loss	16.3			16.3			16.7			(0.3		)	(0.3		)	(0.1		)
Net periodic benefit costs before regulatory adjustment	34.4			30.1			33.0			(0.1		)	(0.4		)	1.3
Regulatory adjustment	5.8			5.6			1.4			(0.9		)	(0.9		)	(0.3		)
Net periodic benefit costs	$	40.2		$	35.7		$	34.4		$	(1.0	)	$	(1.3	)	$	1.0

^(a)KCP&L amounts are included in consolidated Evergy from the date of the closing of the merger, June 4, 2018 through June 30, 2018.



	Pension Benefits									Post-Retirement Benefits
Three Months Ended June 30, 2017	Evergy			Westar Energy			KCP&L^(a)			Evergy			Westar Energy			KCP&L^(a)
Components of net periodic benefit costs	(millions)
Service cost	$	7.2		$	7.2		$	8.1		$	0.3		$	0.3		$	0.4
Interest cost	13.1			13.1			9.8			1.4			1.4			1.0
Expected return on plan assets	(13.4		)	(13.4		)	(9.5		)	(1.7		)	(1.7		)	(0.4		)
Amortization of unrecognized:
Prior service cost	0.2			0.2			0.1			0.1			0.1			—
Recognized net actuarial (gain)/loss	6.7			6.7			8.9			(0.2		)	(0.2		)	(0.1		)
Net periodic benefit costs before regulatory adjustment	13.8			13.8			17.4			(0.1		)	(0.1		)	0.9
Regulatory adjustment	3.5			3.5			2.2			(0.5		)	(0.5		)	0.4
Net periodic benefit costs	$	17.3		$	17.3		$	19.6		$	(0.6	)	$	(0.6	)	$	1.3
^(a)KCP&L amounts are not included in consolidated Evergy for the three months ended and year to date June 30, 2017.

	Pension Benefits									Post-Retirement Benefits
Year to Date June 30, 2017	Evergy			Westar Energy			KCP&L^(a)			Evergy			Westar Energy			KCP&L^(a)
Components of net periodic benefit costs	(millions)
Service cost	$	14.3		$	14.3		$	16.3		$	0.6		$	0.6		$	0.7
Interest cost	26.2			26.2			19.6			2.8			2.8			1.9
Expected return on plan assets	(26.8		)	(26.8		)	(19.1		)	(3.4		)	(3.4		)	(0.9		)
Amortization of unrecognized:
Prior service cost	0.4			0.4			0.2			0.2			0.2			—
Recognized net actuarial (gain)/loss	13.5			13.5			17.8			(0.4		)	(0.4		)	(0.2		)
Net periodic benefit costs before regulatory adjustment	27.6			27.6			34.8			(0.2		)	(0.2		)	1.5
Regulatory adjustment	7.0			7.0			4.1			(1.0		)	(1.0		)	1.0
Net periodic benefit costs	$	34.6		$	34.6		$	38.9		$	(1.2	)	$	(1.2	)	$	2.5

^(a)KCP&L amounts are not included in consolidated Evergy for the three months ended and year to date June 30, 2017.

The components of net periodic benefit costs other than the service cost component are included in other expense on the Evergy Companies' consolidated statements of income and comprehensive income.

Year to date June 30, 2018, Evergy and Westar Energy made pension contributions of $25.0 million and KCP&L made pension contributions of $13.7 million. Evergy expects to make additional pension contributions of $88.8 million in 2018 to satisfy the Employee Retirement Income Security Act of 1974, as amended (ERISA) funding requirements and KCC and MPSC rate orders, of which $17.4 million is expected to be paid by Westar Energy and $71.4 million is expected to be paid by KCP&L. Also in 2018, Evergy and KCP&L expect to make contributions of $4.6 million to the post-retirement benefit plans.