Pension and Other Postretirement Plans

6 Months Ended

Jun. 30, 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						Six Months Ended
	June 30,						June 30,
(In thousands)	2022			2021			2022			2021
Pension Benefits
Components of net periodic benefit cost:
Service cost	$	1,195		$	1,442		$	2,532		$	2,864
Interest cost		2,784			2,288			5,580			4,560
Expected return on assets		(7,844	)		(7,368	)		(15,695	)		(14,743	)
Amortization of:
Prior service credit		(5	)		(31	)		(10	)		(62	)
Actuarial loss		484			1,743			1,208			3,323
Net periodic benefit (credit) cost	$	(3,386	)	$	(1,926	)	$	(6,385	)	$	(4,058	)
Postretirement Benefits
Components of net periodic benefit cost:
Service cost	$	314		$	373		$	647		$	724
Interest cost		479			390			970			774
Expected return on assets		(839	)		(821	)		(1,682	)		(1,638	)
Amortization of:
Transition obligation		—			1			1			1
Prior service credit		(75	)		(380	)		(149	)		(759	)
Actuarial loss		24			138			72			247
Net periodic benefit (credit) cost	$	(97	)	$	(299	)	$	(141	)	$	(651	)

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 and six months ended June 30, 2022, MGE recovered $0.3 million and $0.6 million of pension and other postretirement costs, respectively, compared to approximately $0.2 million and $3.6 million for the comparable periods in 2021. The recovery of these costs reduced the amount previously deferred and has not been reflected in the table above.

During the three and six months ended June 30, 2022, MGE deferred and recorded as a regulatory liability $0.8 million of savings from employee benefit plan costs compared to $2.6 million for the comparable periods in 2021. During the three and six months ended June 30, 2022, MGE refunded in rates $1.1 million and $2.1 million, respectively, of savings from 2021 employee benefit plan costs. The deferred savings has not been reflected in the table above.