Pension Plans and Other Postretirement Benefits (Tables)

12 Months Ended

Dec. 31, 2021

Compensation and Retirement Disclosure [Abstract]

Schedule of Benefit Obligations and Change in Plan Assets

a.Benefit Obligations and Plan Assets.

(In thousands)	Pension Benefits						Other Postretirement Benefits
Change in Benefit Obligations:	2021			2020			2021			2020
Net benefit obligation as of January 1,	$	461,215		$	410,651		$	86,360		$	80,901
Service cost		5,730			5,296			1,448			1,264
Interest cost		9,109			12,210			1,549			2,278
Plan participants' contributions		—			—			992			1,009
Actuarial loss (gain)(a)		3,871			50,325			(685	)		5,907
Gross benefits paid		(19,259	)		(17,267	)		(5,405	)		(5,245	)
Less: federal subsidy on benefits paid(b)		—			—			267			246
Benefit obligation as of December 31,	$	460,666		$	461,215		$	84,526		$	86,360
Change in Plan Assets:
Fair value of plan assets as of January 1,	$	429,538		$	386,033		$	51,735		$	48,889
Actual return on plan assets		61,487			58,935			6,814			6,514
Employer contributions		2,187			1,837			708			568
Plan participants' contributions		—			—			992			1,009
Gross benefits paid		(19,259	)		(17,267	)		(5,405	)		(5,245	)
Fair value of plan assets at end of year		473,953			429,538			54,844			51,735
Funded Status as of December 31,	$	13,287		$	(31,677	)	$	(29,682	)	$	(34,625	)

(a)In 2020, lower discount rates were the primary driver of the actuarial loss.

(b)In 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 was signed into law authorizing Medicare to provide prescription drug benefits to retirees. For the years ended December 31, 2021 and 2020, the subsidy due to MGE was $0.3 million and $0.2 million, respectively.

Schedule of Amounts Recognized in the Consolidated Balance Sheet

The amounts recognized in the consolidated balance sheets to reflect the funded status of the plans as of December 31 are as follows:

	Pension Benefits						Other Postretirement Benefits
(In thousands)	2021			2020			2021			2020
Long-term asset	$	58,757		$	13,873		$	—		$	—
Current liability		(2,342	)		(2,139	)		—			—
Long-term liability		(43,128	)		(43,411	)		(29,682	)		(34,625	)
Net liability	$	13,287		$	(31,677	)	$	(29,682	)	$	(34,625	)

Amounts Recognized in Regulatory Asset

The following table shows the amounts that have not yet been recognized in our net periodic benefit cost as of December 31 and are recorded as regulatory assets in the consolidated balance sheets:

	Pension Benefits						Other Postretirement Benefits
(In thousands)	2021			2020			2021			2020
Net actuarial loss	$	57,777		$	92,553		$	6,256		$	10,986
Prior service benefit		(20	)		(144	)		(297	)		(1,816	)
Transition obligation		—			—			12			15
Total	$	57,757		$	92,409		$	5,971		$	9,185

Schedule of Projected Benefit Obligations in Excess of Plan Assets

The projected benefit obligation and fair value of plan assets for pension plans with a projected benefit obligation in excess of plan assets were as follows:

(In thousands)	Pension Benefits
Projected Benefit Obligation in Excess of Plan Assets	2021		2020
Projected benefit obligation, end of year	$	45,470	$	45,550
Fair value of plan assets, end of year		—		—

Schedule of Accumulated Benefit Obligations in Excess of Plan Assets

The accumulated benefit obligation and fair value of plan assets with an accumulated benefit obligation in excess of plan assets were as follows:

(In thousands)	Pension Benefits				Other Postretirement Benefits
Accumulated Benefit Obligation in Excess of Plan Assets	2021		2020		2021		2020
Accumulated benefit obligation, end of year	$	43,831	$	43,384	$	84,526	$	86,360
Fair value of plan assets, end of year		—		—		54,844		51,735

Net Periodic Benefit Costs

(In thousands)	Pension Benefits									Other Postretirement Benefits
Components of Net Periodic Benefit Cost:	2021(a)			2020(a)			2019(a)			2021(a)			2020(a)			2019(a)
Service cost	$	5,730		$	5,296		$	4,692		$	1,448		$	1,264		$	1,110
Interest cost		9,109			12,210			14,302			1,549			2,278			2,893
Expected return on assets		(29,487	)		(27,229	)		(22,786	)		(3,277	)		(3,154	)		(2,723	)
Amortization of:
Transition obligation		—			—			—			3			3			3
Prior service (credit) cost		(124	)		(114	)		(117	)		(1,518	)		(2,669	)		(2,669	)
Actuarial loss		6,646			5,357			7,379			493			217			401
Net periodic benefit cost (credit)	$	(8,126	)	$	(4,480	)	$	3,470		$	(1,302	)	$	(2,061	)	$	(985	)

(a)During 2019, MGE deferred approximately $6.2 million of pension and other postretirement costs. During 2021 and 2020, MGE collected approximately $4.3 million and $0.9 million, respectively, of pension and other postretirement costs, which reduced the amount deferred in prior years. The impact of the deferral has not been reflected in the table above. See Footnote 8 for further information.

During the year ended December 30, 2021, MGE deferred $8.1 million of savings from 2021 employee benefit plan costs and recorded as a regulatory liability. The deferred savings has not been reflected in the table above. See Footnote 8 for additional information.

Plan Assumptions

c.Plan Assumptions.

The weighted-average assumptions used to determine the benefit obligations were as follows for the years ended December 31:

	Pension Benefits						Other Postretirement Benefits
	2021			2020			2021			2020
Discount rate		2.94	%		2.70	%		2.85	%		2.52	%
Rate of compensation increase		3.19	%		3.22	%	N/A			N/A
Assumed health care cost trend rates:
Health care cost trend rate assumed for next year	N/A			N/A				5.75	%		5.75	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	N/A			N/A				4.75	%		4.75	%
Year that the rate reaches the ultimate trend rate	N/A			N/A			2027			2027

MGE uses individual spot rates, instead of a weighted average of the yield curve spot rates, for measuring the service cost and interest cost components of net periodic benefit cost.

The weighted-average assumptions used to determine the net periodic cost were as follows for the years ended December 31:

	Pension Benefits									Other Postretirement Benefits
	2021			2020			2019			2021			2020			2019
Discount rate		2.70	%		3.42	%		4.32	%		2.52	%		3.30	%		4.24	%
Expected rate of return on plan assets		7.00	%		7.20	%		7.20	%		6.61	%		6.75	%		6.72	%
Rate of compensation increase		3.23	%		3.26	%		3.25	%	N/A			N/A			N/A

Fair Value of Plan Assets by Asset Category

The asset allocation for MGE's pension plans as of December 31, 2021 and 2020, and the target allocation for 2022, by asset category, follows:

	Target			Percentage of Plan Assets at Year End
	Allocation			2021			2020
Equity securities(a)		63.0	%		65.0	%		69.0	%
Fixed income securities		30.0	%		29.0	%		25.0	%
Real estate		7.0	%		6.0	%		6.0	%
Total		100.0	%		100.0	%		100.0	%

(a)Target allocations for equity securities are broken out as follows: 45.5% United States equity and 17.5% non-United States equity.

The fair values of MGE's plan assets by asset category as of December 31 are as follows:

(In thousands)	2021		2020
Cash and Cash Equivalents	$	1,428	$	1,180
Equity Securities:
U.S. Large Cap		162,060		151,218
U.S. Mid Cap		38,755		37,389
U.S. Small Cap		47,657		50,456
International Blend		87,781		87,461
Fixed Income Securities:
Short-Term Fund		5,222		4,215
High Yield Bond		25,190		22,683
Long Duration Bond		119,867		92,657
Real Estate		37,170		30,005
Insurance Continuance Fund		1,599		1,506
Fixed Rate Fund		2,068		2,503
Total	$	528,797	$	481,273

Benefit Payments, Fiscal Year Maturity

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid as follows:

	Pension		Other Postretirement Benefits
(In thousands)	Pension Benefits		Gross Postretirement Benefits		Expected Medicare Part D Subsidy			Net Postretirement Benefits
2022	$	19,736	$	4,713	$	(304	)	$	4,409
2023		20,474		4,982		(333	)		4,649
2024		21,197		5,281		(363	)		4,918
2025		21,897		5,533		(395	)		5,138
2026		22,497		5,567		(430	)		5,137
2027 - 2031		117,862		27,651		(2,541	)		25,110