XML 56 R16.htm IDEA: XBRL DOCUMENT v2.4.1.9
PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS
3 Months Ended
Dec. 31, 2014
Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract]  
PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS
PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS

This footnote includes all pension plans of the Company whether historical plans or those acquired as part of the purchase of certain assets and liabilities of MGE on September 1, 2013 or those acquired in the Alagasco Transaction on August 31, 2014. The net pension and postretirement obligations were re-measured at the applicable acquisition dates as well as at the fiscal year end.
Pension Plans
The pension plans of Laclede Group consist of plans for employees at the Missouri Utilities and plans covering employees of Alagasco.
The Missouri Utilities have non-contributory, defined benefit, trusteed forms of pension plans covering the majority of their employees. Plan assets consist primarily of corporate and US government obligations and a growth segment consisting of exposure to equity markets, commodities, real estate and inflation-indexed securities, achieved through derivative instruments and investments in diversified mutual funds.
Alagasco has non-contributory, defined benefit, trusteed forms of pension plans covering the majority of its employees. Qualified plan assets are comprised of United States equities consisting of mutual and commingled funds with varying strategies, global equities consisting of mutual funds, alternative investments of limited partnerships and commingled and mutual funds, and fixed income investments.
The net periodic pension cost for the Company included the following components:
($ Millions)
Three Months Ended 
 December 31,
Laclede Group
2014
 
2013
Service cost – benefits earned during the period
$
4.3

 
$
2.4

Interest cost on projected benefit obligation
7.5

 
6.0

Expected return on plan assets
(9.4
)
 
(6.6
)
Amortization of prior service cost and other
0.1

 
0.1

Amortization of prior regulatory assets and liabilities
1.5

 

Amortization of actuarial loss

1.9

 
1.8

Sub-total
5.9

 
3.7

Regulatory adjustment
3.4

 
2.9

Net pension cost
$
9.3

 
$
6.6



The net periodic pension cost for Laclede Gas included the following components:
($ Millions)
Three Months Ended 
 December 31,
Laclede Gas
2014
 
2013
Service cost – benefits earned during the period
$
2.8

 
$
2.4

Interest cost on projected benefit obligation
5.9

 
6.0

Expected return on plan assets
(7.3
)
 
(6.6
)
Amortization of prior service cost and other
0.1

 
0.1

Amortization of actuarial loss
1.9

 
1.8

Sub-total
3.4

 
3.7

Regulatory adjustment
3.4

 
2.9

Net pension cost
$
6.8

 
$
6.6



The net periodic pension cost for Alagasco included the following components:
($ Millions)
Three Months Ended 
 December 31,
Alagasco
2014
 
2013
Service cost – benefits earned during the period
$
1.5

 
$
2.1

Interest cost on projected benefit obligation
1.6

 
1.7

Expected return on plan assets
(2.1
)
 
(2.2
)
Amortization of prior regulatory assets and liabilities
1.5

 

Amortization of actuarial loss

 
1.3

Settlement charge

 
0.8

Sub-total
2.5

 
3.7

Regulatory adjustment

 

Net pension cost
$
2.5

 
$
3.7


Pursuant to the provisions of the Missouri Utilities' and Alagasco's pension plans, pension obligations may be satisfied by lump-sum cash payments. Pursuant to a MoPSC Order, lump-sum payments are recognized as settlements (which can result in gains or losses) only if the total of such payments exceeds 100% of the sum of service and interest costs in a specific year. Lump-sum payments during the three months ended December 31, 2014 were $0.9 for the Missouri Utilities and $1.0 for Alagasco.
The funding policy of the Utilities is to contribute an amount not less than the minimum required by government funding standards, nor more than the maximum deductible amount for federal income tax purposes. Fiscal year 2015 contributions to Laclede Gas' pension plans through December 31, 2014 were $5.4 to the qualified trusts and $0.1 to the non-qualified plans. There were no fiscal 2015 contributions to the Alagasco pension plans through December 31, 2014.
Contributions to the Missouri Utilities' pension plans for the remaining nine months of fiscal 2015 are anticipated to be approximately $21.0 to the qualified trusts and $0.5 to the non-qualified plans. There are no expected contributions to Alagasco's pension plans for the remaining nine months of fiscal 2015.
Postretirement Benefits
The Utilities provide certain life insurance benefits at retirement. Laclede Gas plans provide for medical insurance after early retirement until age 65. For retirements prior to January 1, 2015, the MGE plans provided medical insurance after retirement until death. For retirements after January 1, 2015, the MGE plans provide medical insurance after early retirement until age 65. The transition obligation not yet included in postretirement benefit cost is being amortized over 20 years. Under the Alagasco plans, medical insurance is currently available upon retirement until death for certain retirees depending on the type of employee and the date the employee was originally hired.
Net periodic postretirement benefit cost for the Company consisted of the following components:
($ Millions)
Three Months Ended 
 December 31,
Laclede Group
2014
 
2013
Service cost – benefits earned during the period
$
3.2

 
$
2.8

Interest cost on accumulated postretirement benefit obligation
2.8

 
2.2

Expected return on plan assets
(3.3
)
 
(1.7
)
Amortization of prior service credit
0.2

 

Amortization of actuarial loss and other
1.3

 
1.5

Amortization of prior regulatory assets and liabilities

(0.4
)
 

Sub-total
3.8

 
4.8

Regulatory adjustment
(2.3
)
 
(2.4
)
Net postretirement benefit cost
$
1.5

 
$
2.4


Net periodic postretirement benefit cost for Laclede Gas consisted of the following components:
($ Millions)
Three Months Ended 
 December 31,
Laclede Gas
2014
 
2013
Service cost – benefits earned during the period
$
3.1

 
$
2.8

Interest cost on accumulated postretirement benefit obligation
2.1

 
2.2

Expected return on plan assets
(2.0
)
 
(1.7
)
Amortization of prior service cost
0.2

 

Amortization of actuarial loss
1.3

 
1.5

Sub-total
4.7

 
4.8

Regulatory adjustment
(2.3
)
 
(2.4
)
Net postretirement benefit cost
$
2.4

 
$
2.4


Net periodic postretirement benefit cost for Alagasco consisted of the following components:
($ Millions)
Three Months Ended 
 December 31,
Alagasco
2014
 
2013
Service cost – benefits earned during the period
$
0.1

 
$
0.3

Interest cost on accumulated postretirement benefit obligation
0.7

 
0.7

Expected return on plan assets
(1.3
)
 
(1.0
)
Amortization of actuarial loss and other

 
(0.1
)
Amortization of prior regulatory assets and liabilities
(0.4
)
 

Amortization of transition obligation

 
0.2

Sub-total
(0.9
)
 
0.1

Regulatory adjustment

 

Net postretirement benefit cost
$
(0.9
)
 
$
0.1


Missouri and Alabama state law provides for the recovery in rates of costs accrued pursuant to GAAP provided that such costs are funded through an independent, external funding mechanism. The Missouri Utilities established Voluntary Employees’ Beneficiary Association (VEBA) and Rabbi Trusts as its external funding mechanisms. The assets of VEBA and Rabbi Trusts consist primarily of money market securities and mutual funds invested in stocks and bonds.
The Utilities' funding policy is to contribute amounts to the trusts equal to the periodic benefit cost calculated pursuant to GAAP as recovered in rates. There were no contributions to the postretirement plans during the three months ended December 31, 2014. Contributions to the postretirement plans for the remaining nine months of fiscal year 2015 are anticipated to be $18.1 to the qualified trusts and $0.3 paid directly to participants from the Missouri Utilities' funds. There are not expected to be any contributions to the postretirement plans for the remaining nine months of fiscal year 2015 for the Alagasco plans.