Pension and Other Postretirement Plans

3 Months Ended

Mar. 31, 2022

Retirement Benefits [Abstract]

Pension and Other Postretirement Plans

5.Pension and Other Postretirement Plans - MGE Energy and MGE.

MGE maintains qualified and nonqualified pension plans, health care, and life insurance benefits and defined contribution 401(k) benefit plans for its employees and retirees.

The components of net periodic benefit cost, other than the service cost component, are recorded in "Other income, net" on the consolidated statements of income. The service cost component is recorded in "Other operations and maintenance" on the consolidated statements of income. MGE has regulatory treatment and recognizes regulatory assets or liabilities for timing differences between when net periodic benefit costs are recovered and when costs are recognized.

The following table presents the components of net periodic benefit costs recognized.

	Three Months Ended
	March 31,
(In thousands)	2022			2021
Pension Benefits
Components of net periodic benefit cost:
Service cost	$	1,337		$	1,422
Interest cost		2,796			2,272
Expected return on assets		(7,851	)		(7,375	)
Amortization of:
Prior service credit		(5	)		(31	)
Actuarial loss		724			1,580
Net periodic benefit (credit) cost	$	(2,999	)	$	(2,132	)
Postretirement Benefits
Components of net periodic benefit cost:
Service cost	$	333		$	351
Interest cost		491			384
Expected return on assets		(843	)		(817	)
Amortization of:
Transition obligation		1			1
Prior service credit		(74	)		(380	)
Actuarial loss		48			109
Net periodic benefit (credit) cost	$	(44	)	$	(352	)

As approved by the PSCW, MGE is allowed to defer differences between actual employee benefit plan costs and costs reflected in current rates. The deferred costs may be recovered or refunded in MGE's next rate filing. During the three months ended March 31, 2022 and 2021, MGE recovered $0.3 million and $3.4 million of pension and other postretirement costs, respectively. The recovery of these costs reduced the amount previously deferred and has not been reflected in the table above.

During the three months ended March 31, 2022, MGE returned $1.0 million of savings from 2021 employee benefit plan costs. The deferred savings has not been reflected in the table above.