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Retirement Plan And Other Post-Retirement Benefits
 12 Months Ended
Sep. 30, 2022
Retirement Benefits [Abstract]  
Retirement Plan And Other Post-Retirement Benefits Retirement Plan and Other Post-Retirement Benefits
The Company has a tax-qualified, noncontributory, defined-benefit retirement plan (Retirement Plan). The Retirement Plan covers certain non-collectively bargained employees hired before July 1, 2003 and certain collectively bargained employees hired before November 1, 2003. Certain non-collectively bargained employees hired after June 30, 2003 and certain collectively bargained employees hired after October 31, 2003 are eligible for a Retirement Savings Account benefit provided under the Company’s defined contribution Tax-Deferred Savings Plans. Costs associated with the Retirement Savings Account were $5.3 million, $4.8 million and $4.2 million for the years ended September 30, 2022, 2021 and 2020, respectively. Costs associated with the Company’s contributions to the Tax-Deferred Savings Plans, exclusive of the costs associated with the Retirement Savings Account, were $7.8 million, $7.2 million, and $6.7 million for the years ended September 30, 2022, 2021 and 2020, respectively.
The Company provides health care and life insurance benefits (other post-retirement benefits) for a majority of its retired employees. The other post-retirement benefits cover certain non-collectively bargained employees hired before January 1, 2003 and certain collectively bargained employees hired before October 31, 2003.
The Company’s policy is to fund the Retirement Plan with at least an amount necessary to satisfy the minimum funding requirements of applicable laws and regulations and not more than the maximum amount deductible for federal income tax purposes. The Company has established VEBA trusts for its other post-retirement benefits. Contributions to the VEBA trusts are tax deductible, subject to limitations contained in the Internal Revenue Code and regulations and are made to fund employees’ other post-retirement benefits, as well as benefits as they are paid to current retirees. In addition, the Company has established 401(h) accounts for its other post-retirement benefits. They are separate accounts within the Retirement Plan trust used to pay retiree medical benefits for the associated participants in the Retirement Plan. Although these accounts are in the Retirement Plan trust, for funding status purposes as shown below, the 401(h) accounts are included in Fair Value of Assets under Other Post-Retirement Benefits. Contributions are tax-deductible when made, subject to limitations contained in the Internal Revenue Code and regulations.
The expected return on Retirement Plan assets, a component of net periodic benefit cost shown in the tables below, is applied to the market-related value of plan assets. The market-related value of plan assets is the market value as of the measurement date adjusted for variances between actual returns and expected returns (from previous years) that have not been reflected in net periodic benefit costs. The expected return on other
post-retirement benefit assets (i.e. the VEBA trusts and 401(h) accounts), which is a component of net periodic benefit cost shown in the tables below, is applied to the fair value of assets as of the measurement date.
Reconciliations of the Benefit Obligations, Plan Assets and Funded Status, as well as the components of Net Periodic Benefit Cost and the Weighted Average Assumptions of the Retirement Plan and other post-retirement benefits are shown in the tables below. The components of net periodic benefit cost other than service cost are presented in Other Income (Deductions) on the Consolidated Statements of Income. The date used to measure the Benefit Obligations, Plan Assets and Funded Status is September 30 for fiscal years 2022, 2021 and 2020.
 Retirement PlanOther Post-Retirement Benefits
 Year Ended September 30Year Ended September 30
 202220212020202220212020
 (Thousands)
Change in Benefit Obligation
Benefit Obligation at Beginning of Period
$1,098,456$1,139,105$1,097,625$431,213$476,722$468,163
Service Cost8,7589,8659,3181,3281,6021,609
Interest Cost22,82721,68629,9309,0669,30312,913
Plan Participants’ Contributions———3,2713,2163,058
Retiree Drug Subsidy Receipts———3121,2441,411
Actuarial (Gain) Loss(251,173)(8,141)65,908(120,276)(34,729)16,396
Benefits Paid(65,040)(64,059)(63,676)(25,631)(26,145)(26,828)
Benefit Obligation at End of Period
$813,828$1,098,456$1,139,105$299,283$431,213$476,722
Change in Plan Assets
Fair Value of Assets at Beginning of Period
$1,095,729$1,016,796$968,449$575,565$547,885$524,127
Actual Return on Plan Assets(205,884)122,99287,402(94,849)47,54144,448
Employer Contributions20,40020,00024,6213,0823,0683,080
Plan Participants’ Contributions———3,2713,2163,058
Benefits Paid(65,040)(64,059)(63,676)(25,631)(26,145)(26,828)
Fair Value of Assets at End of Period
$845,205$1,095,729$1,016,796$461,438$575,565$547,885
Net Amount Recognized at End of Period (Funded Status)
$31,377$(2,727)$(122,309)$162,155$144,352$71,163
Amounts Recognized in the Balance Sheets Consist of:
Non-Current Liabilities$—$(2,727)$(122,309)$(3,065)$(4,799)$(4,872)
Non-Current Assets31,377——165,220149,15176,035
Net Amount Recognized at End of Period
$31,377$(2,727)$(122,309)$162,155$144,352$71,163
Accumulated Benefit Obligation$793,555$1,060,659$1,096,427N/AN/AN/A
Weighted Average Assumptions Used to Determine Benefit Obligation at September 30
Discount Rate5.57 %2.75 %2.66 %5.56 %2.76 %2.71 %
Rate of Compensation Increase4.60 %4.70 %4.70 %4.60 %4.70 %4.70 %
 Retirement PlanOther Post-Retirement Benefits
 Year Ended September 30Year Ended September 30
 202220212020202220212020
 (Thousands)
Components of Net Periodic Benefit Cost
Service Cost$8,758$9,865$9,318$1,328$1,602$1,609
Interest Cost22,82721,68629,9309,0669,30312,913
Expected Return on Plan Assets(52,294)(58,148)(60,063)(29,359)(28,964)(29,232)
Amortization of Prior Service Cost (Credit)
537631729(429)(429)(429)
Recognition of Actuarial (Gain) Loss(1)26,40536,81439,384(7,610)849535
Net Amortization and Deferral for Regulatory Purposes
16,85414,0635,35921,34028,01025,596
Net Periodic Benefit Cost (Income)$23,087$24,911$24,657$(5,664)$10,371$10,992
Weighted Average Assumptions Used to Determine Net Periodic Benefit Cost at September 30
Effective Discount Rate for Benefit Obligations
2.75 %2.66 %3.15 %2.76 %2.71 %3.17 %
Effective Rate for Interest on Benefit Obligations
2.14 %1.96 %2.81 %2.17 %2.01 %2.84 %
Effective Discount Rate for Service Cost
2.95 %3.01 %3.31 %3.00 %3.20 %3.39 %
Effective Rate for Interest on Service Cost
2.70 %2.60 %3.12 %2.93 %2.98 %3.30 %
Expected Return on Plan Assets5.20 %6.00 %6.40 %5.20 %5.40 %5.70 %
Rate of Compensation Increase4.70 %4.70 %4.70 %4.70 %4.70 %4.70 %
(1)Distribution Corporation’s New York jurisdiction calculates the amortization of the actuarial loss on a vintage year basis over 10 years, as mandated by the NYPSC. All the other subsidiaries of the Company utilize the corridor approach.
The Net Periodic Benefit Cost (Income) in the table above includes the effects of regulation. The Company recovers pension and other post-retirement benefit costs in its Utility and Pipeline and Storage segments in accordance with the applicable regulatory commission authorizations. Certain of those commission authorizations established tracking mechanisms which allow the Company to record the difference between the amount of pension and other post-retirement benefit costs recoverable in rates and the amounts of such costs as determined under the existing authoritative guidance as either a regulatory asset or liability, as appropriate. Any activity under the tracking mechanisms (including the amortization of pension and other post-retirement regulatory assets and liabilities) is reflected in the Net Amortization and Deferral for Regulatory Purposes line item above.
In addition to the Retirement Plan discussed above, the Company also has Non-Qualified benefit plans that cover a group of management employees whose income level has exceeded certain IRS thresholds or who have been designated as participants by the Chief Executive Officer of the Company. These plans provide for defined benefit payments upon retirement of the management employee, or to the spouse upon death of the management employee. The net periodic benefit costs associated with these plans were $8.9 million, $8.3
million and $8.9 million in 2022, 2021 and 2020, respectively. The components of net periodic benefit cost other than service costs associated with these plans are presented in Other Income (Deductions) on the Consolidated Statements of Income. The accumulated benefit obligations for the plans were $64.9 million, $76.9 million and $78.7 million at September 30, 2022, 2021 and 2020, respectively. The projected benefit obligations for the plans were $77.2 million, $95.8 million and $98.1 million at September 30, 2022, 2021 and 2020, respectively. At September 30, 2022, $17.5 million of the projected benefit obligation is recorded in Other Accruals and Current Liabilities and the remaining $59.7 million is recorded in Other Liabilities on the Consolidated Balance Sheets. At September 30, 2021, $15.4 million of the projected benefit obligation was recorded in Other Accruals and Current Liabilities and the remaining $80.4 million was recorded in Other Liabilities on the Consolidated Balance Sheets. At September 30, 2020, $14.5 million of the projected benefit obligation was recorded in Other Accruals and Current Liabilities and the remaining $83.6 million was recorded in Other Liabilities on the Consolidated Balance Sheets. The weighted average discount rates for these plans were 5.49%, 2.15% and 1.92% as of September 30, 2022, 2021 and 2020, respectively and the weighted average rate of compensation increase for these plans was 8.00% as of September 30, 2022, 2021 and 2020.
The cumulative amounts recognized in accumulated other comprehensive income (loss), regulatory assets, and regulatory liabilities through fiscal 2022, as well as the changes in such amounts during 2022, are presented in the table below:
Retirement
Plan		Other
Post-Retirement
Benefits		Non-Qualified
Benefit Plans
 (Thousands)
Amounts Recognized in Accumulated Other Comprehensive Income (Loss), Regulatory Assets and Regulatory Liabilities(1)
Net Actuarial Gain (Loss)$(86,133)$14,569 $(18,718)
Prior Service (Cost) Credit(2,472)1,543 — 
Net Amount Recognized$(88,605)$16,112 $(18,718)
Changes to Accumulated Other Comprehensive Income (Loss), Regulatory Assets and Regulatory Liabilities Recognized During Fiscal 2022(1)
Decrease (Increase) in Actuarial Loss, excluding amortization(2)$(7,006)$(3,932)$8,222 
Change due to Amortization of Actuarial Loss26,405 (7,610)6,301 
Prior Service (Cost) Credit537 (429)— 
Net Change$19,936 $(11,971)$14,523 
(1)Amounts presented are shown before recognizing deferred taxes.
(2)Amounts presented include the impact of actuarial gains/losses related to return on assets, as well as the Actuarial (Gain) Loss amounts presented in the Change in Benefit Obligation.
In order to adjust the funded status of its pension (tax-qualified and non-qualified) and other post-retirement benefit plans at September 30, 2022, the Company recorded a $1.9 million decrease to Other Regulatory Assets in the Company’s Utility and Pipeline and Storage segments and a $20.6 million (pre-tax) increase to Accumulated Other Comprehensive Income.
The effect of the discount rate change for the Retirement Plan in 2022 was to decrease the projected benefit obligation of the Retirement Plan by $262.2 million. The mortality improvement projection scale was updated, which increased the projected benefit obligation of the Retirement Plan in 2022 by $1.8 million. Other actuarial experience increased the projected benefit obligation for the Retirement Plan in 2022 by $9.2 million. The effect of the discount rate change for the Retirement Plan in 2021 was to decrease the projected benefit
obligation of the Retirement Plan by $11.2 million. The effect of the discount rate change for the Retirement Plan in 2020 was to increase the projected benefit obligation of the Retirement Plan by $61.3 million.
The Company made cash contributions totaling $20.4 million to the Retirement Plan during the year ended September 30, 2022. The Company expects that the annual contribution to the Retirement Plan in 2023 will be in the range of zero to $8.0 million.
The following Retirement Plan benefit payments, which reflect expected future service, are expected to be paid by the Retirement Plan during the next five years and the five years thereafter: $67.6 million in 2023; $67.7 million in 2024; $67.3 million in 2025; $66.9 million in 2026; $66.2 million in 2027; and $316.1 million in the five years thereafter.
The effect of the discount rate change in 2022 was to decrease the other post-retirement benefit obligation by $98.9 million. The mortality improvement projection scale was updated, which increased the other post-retirement benefit obligation in 2022 by $1.1 million. Other actuarial experience decreased the other post-retirement benefit obligation in 2022 by $22.5 million, the majority of which was attributable to a revision in assumed per-capita claims cost, premiums, retiree contributions and retiree drug subsidy assumptions based on actual experience.
The effect of the discount rate change in 2021 was to decrease the other post-retirement benefit obligation by $2.5 million. The mortality improvement projection scale was updated, which decreased the other post-retirement benefit obligation in 2021 by $2.0 million. The health care cost trend rates were updated, which decreased the other post-retirement benefit obligation in 2021 by $3.7 million. Other actuarial experience decreased the other post-retirement benefit obligation in 2021 by $26.6 million, the majority of which was attributable to a revision in assumed per-capita claims cost, premiums, retiree contributions and retiree drug subsidy assumptions based on actual experience.
The effect of the discount rate change in 2020 was to increase the other post-retirement benefit obligation by $25.4 million. The mortality improvement projection scale was updated, which decreased the other post-retirement benefit obligation in 2020 by $2.5 million. Other actuarial experience decreased the other post-retirement benefit obligation in 2020 by $6.5 million, the majority of which was attributable to a revision in assumed per-capita claims cost, premiums, retiree contributions and retiree drug subsidy assumptions based on actual experience.
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 provides for a prescription drug benefit under Medicare (Medicare Part D), as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D.
The estimated gross other post-retirement benefit payments and gross amount of Medicare Part D prescription drug subsidy receipts are as follows (dollars in thousands):
Benefit PaymentsSubsidy Receipts
2023$26,221 $(1,829)
2024$26,337 $(1,929)
2025$26,376 $(2,014)
2026$26,291 $(2,096)
2027$26,140 $(2,162)
2028 through 2032
$125,765 $(11,391)
 
Assumed health care cost trend rates as of September 30 were:
202220212020
Rate of Medical Cost Increase for Pre Age 65 Participants5.30 %(1)5.38 %(1)5.42 %(2)
Rate of Medical Cost Increase for Post Age 65 Participants4.84 %(1)4.84 %(1)4.75 %(2)
Annual Rate of Increase in the Per Capita Cost of Covered Prescription Drug Benefits
6.29 %(1)6.53 %(1)6.80 %(2)
Annual Rate of Increase in the Per Capita Medicare Part B Reimbursement
4.84 %(1)4.84 %(1)4.75 %(2)
Annual Rate of Increase in the Per Capita Medicare Part D Subsidy
5.96 %(1)6.15 %(1)6.20 %(2)
(1)It was assumed that this rate would gradually decline to 4% by 2046.
(2)It was assumed that this rate would gradually decline to 4.5% by 2039.
The Company made cash contributions totaling $2.8 million to its VEBA trusts during the year ended September 30, 2022. In addition, the Company made direct payments of $0.3 million to retirees not covered by the VEBA trusts and 401(h) accounts during the year ended September 30, 2022. The Company does not expect to make any contributions to its VEBA trusts in 2023.
Investment Valuation
The Retirement Plan assets and other post-retirement benefit assets are valued under the current fair value framework. See Note I — Fair Value Measurements for further discussion regarding the definition and levels of fair value hierarchy established by the authoritative guidance.
The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. Below is a listing of the major categories of plan assets held as of September 30, 2022 and 2021, as well as the associated level within the fair value hierarchy in which the fair value measurements in their entirety fall, based on the lowest level input that is significant to the fair value measurement in its entirety (dollars in thousands):
At September 30, 2022
Total
Fair Value		Level 1Level 2Level 3Measured
at NAV(7)
Retirement Plan Investments
Domestic Equities(1)$41,633 $41,633 $— $— $— 
International Equities(2)1,363 — — — 1,363 
Global Equities(3)44,434 — — — 44,434 
Domestic Fixed Income(4)658,833 — 579,606 — 79,227 
International Fixed Income(5)7,782 — 7,782 — — 
Real Estate140,739 — — — 140,739 
Cash Held in Collective Trust Funds17,388 — — — 17,388 
Total Retirement Plan Investments912,172 41,633 587,388 — 283,151 
401(h) Investments(73,044)(3,310)(46,694)— (23,040)
Total Retirement Plan Investments (excluding 401(h) Investments)
$839,128 $38,323 $540,694 $— $260,111 
Miscellaneous Accruals, Interest Receivables, and Non-Interest Cash
6,077 
Total Retirement Plan Assets$845,205 
At September 30, 2021
Total
Fair Value		Level 1Level 2Level 3Measured
at NAV(7)
Retirement Plan Investments
Domestic Equities(1)$56,511 $146 $— $— $56,365 
International Equities(2)28,917 — — — 28,917 
Global Equities(3)95,865 — — — 95,865 
Domestic Fixed Income(4)818,361 1,447 758,417 — 58,497 
International Fixed Income(5)13,773 — 13,773 — — 
Global Fixed Income(6)42,454 — — — 42,454 
Real Estate119,451 — — 319 119,132 
Cash Held in Collective Trust Funds27,471 — — — 27,471 
Total Retirement Plan Investments1,202,803 1,593 772,190 319 428,701 
401(h) Investments(90,429)(121)(58,840)(24)(31,444)
Total Retirement Plan Investments (excluding 401(h) Investments)
$1,112,374 $1,472 $713,350 $295 $397,257 
Miscellaneous Accruals, Interest Receivables, and Non-Interest Cash
(16,645)
Total Retirement Plan Assets$1,095,729 
(1)Domestic Equities include mostly collective trust funds, common stock, and exchange traded funds.
(2)International Equities are comprised of collective trust funds.
(3)Global Equities are comprised of collective trust funds.
(4)Domestic Fixed Income securities include mostly collective trust funds, corporate/government bonds and mortgages, and exchange traded funds.
(5)International Fixed Income securities are comprised mostly of corporate/government bonds.
(6)Global Fixed Income securities are comprised of a collective trust fund.
(7)Reflects the authoritative guidance related to investments measured at net asset value (NAV).
At September 30, 2022
Total
Fair Value		Level 1Level 2Level 3Measured
at NAV(1)
Other Post-Retirement Benefit Assets held in VEBA Trusts
Collective Trust Funds — Global Equities
$104,554 $— $— $— $104,554 
Exchange Traded Funds — Fixed Income270,581 270,581 — — — 
Cash Held in Collective Trust Funds10,635 — — — 10,635 
Total VEBA Trust Investments385,770 270,581 — — 115,189 
401(h) Investments73,044 3,310 46,694 — 23,040 
Total Investments (including 401(h) Investments)
$458,814 $273,891 $46,694 $— $138,229 
Miscellaneous Accruals (including Current and Deferred Taxes, Claims Incurred But Not Reported, Administrative)2,624 
Total Other Post-Retirement Benefit Assets
$461,438 
At September 30, 2021
Total
Fair Value		Level 1Level 2Level 3Measured
at NAV(1)
Other Post-Retirement Benefit Assets held in VEBA Trusts
Collective Trust Funds — Global Equities$165,226 $— $— $— $165,226 
Exchange Traded Funds — Fixed Income313,392 313,392 — — — 
Cash Held in Collective Trust Funds9,700 — — — 9,700 
Total VEBA Trust Investments488,318 313,392 — — 174,926 
401(h) Investments90,429 121 58,840 24 31,444 
Total Investments (including 401(h) Investments)
$578,747 $313,513 $58,840 $24 $206,370 
Miscellaneous Accruals (Including Current and Deferred Taxes, Claims Incurred But Not Reported, Administrative)
(3,182)
Total Other Post-Retirement Benefit Assets
$575,565 
(1)Reflects the authoritative guidance related to investments measured at net asset value (NAV).
The fair values disclosed in the above tables may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
The following tables provide a reconciliation of the beginning and ending balances of the Retirement Plan and other post-retirement benefit assets measured at fair value on a recurring basis where the determination of fair value includes significant unobservable inputs (Level 3). For the years ended September 30, 2022 and September 30, 2021, there were no transfers from Level 1 to Level 2. In addition, as shown in the following tables, there were no transfers in or out of Level 3.
 Retirement Plan Level 3 Assets
(Thousands)
 Real
Estate		Excluding
401(h)
Investments		Total
Balance at September 30, 2020
$471 $(35)$436 
Unrealized Gains/(Losses)(152)11 (141)
Sales— — — 
Balance at September 30, 2021
319 (24)295 
Unrealized Gains/(Losses)234 (18)216 
Sales(553)42 (511)
Balance at September 30, 2022
$— $— $— 
 Other Post-Retirement Benefit Level 3 Assets
(Thousands)
 401(h)
Investments
 
Balance at September 30, 2020
$35 
Unrealized Gains/(Losses)(11)
Sales— 
Balance at September 30, 2021
24 
Unrealized Gains/(Losses)18 
Sales(42)
Balance at September 30, 2022
$— 
The Company’s assumption regarding the expected long-term rate of return on plan assets is 6.90% (Retirement Plan) and 5.70% (other post-retirement benefits), effective for fiscal 2023. The return assumption reflects the anticipated long-term rate of return on the plan’s current and future assets. The Company utilizes projected capital market conditions and the plan’s target asset class and investment manager allocations to set the assumption regarding the expected return on plan assets.
The long-term investment objective of the Retirement Plan trust, the VEBA trusts and the 401(h) accounts is to achieve the target total return in accordance with the Company’s risk tolerance. Assets are diversified utilizing a mix of equities, fixed income and other securities (including real estate). Risk tolerance is established through consideration of plan liabilities, plan funded status and corporate financial condition. The assets of the Retirement Plan trust, VEBA trusts and the 401(h) accounts have no significant concentrations of risk in any one country (other than the United States), industry or entity. In fiscal 2021 and fiscal 2022, capital market conditions led to significant improvements in the funded status of the Retirement Plan. As a result, the Company reduced the return seeking portion of its assets during both years, particularly equity securities and return seeking fixed income securities, held in the Retirement Plan, and increased its allocation to hedging fixed income securities in conjunction with the Company’s liability driven investment strategy. The actual asset allocations as of September 30, 2022 are noted in the table above, and such allocations are subject to change, but the majority of the assets will remain hedging fixed income assets. Given the level of the VEBA trust and 401(h) assets in relation to the Other Post-Retirement Benefits, the majority of those assets are and will remain in fixed income securities.
Investment managers are retained to manage separate pools of assets. Comparative market and peer group performance of individual managers and the total fund are monitored on a regular basis, and reviewed by the Company’s Retirement Committee on at least a quarterly basis.
The Company determines the service and interest cost components of net periodic benefit cost using the spot rate approach, which uses individual spot rates along the yield curve that correspond to the timing of each benefit payment in order to determine the discount rate. The individual spot rates along the yield curve are determined by an above mean methodology in that the coupon interest rates that are in the lower 50th percentile are excluded based on the assumption that the Company would not utilize more expensive (i.e. lower yield) instruments to settle its liabilities.