Pension and Other Postretirement Plans

3 Months Ended

Mar. 31, 2021

Compensation and Retirement Disclosure [Abstract]

Pension and Other Postretirement Plans

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)		2021		2020
Pension Benefits
Components of net periodic benefit cost:
Service cost	$	1,422	$	1,316
Interest cost		2,272		3,023
Expected return on assets		(7,375)		(6,811)
Amortization of:
Prior service credit		(31)		(31)
Actuarial loss		1,580		1,286
Net periodic benefit (credit) cost	$	(2,132)	$	(1,217)
Postretirement Benefits
Components of net periodic benefit cost:
Service cost	$	351	$	311
Interest cost		384		573
Expected return on assets		(817)		(790)
Amortization of:
Transition obligation		1		1
Prior service credit		(380)		(667)
Actuarial loss		109		70
Net periodic benefit (credit) cost	$	(352)	$	(502)

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. For the three months ended March 31, 2021 and 2020, MGE recovered approximately $3.4 million and $0.4 million, respectively, of pension and other postretirement costs, which reduced the amount previously deferred and has not been reflected in the table above.