8. PENSION AND OTHER POSTRETIREMENT BENEFIT COSTS

NW Natural recognizes the service cost component of net periodic benefit cost for the pension and other postretirement benefit plans in operations and maintenance expense in the consolidated statements of comprehensive income. The other non-service cost components are recognized in other income (expense), net in the consolidated statements of comprehensive income. The following table provides the components of net periodic benefit cost for the pension and other postretirement benefit plans:



	Three Months Ended September 30,												Nine Months Ended September 30,
	Pension Benefits						Other Postretirement Benefits						Pension Benefits						Other Postretirement Benefits
In thousands	2018			2017			2018			2017			2018			2017			2018			2017
Service cost	$	1,757		$	1,881		$	80		$	98		$	5,371		$	5,621		$	239		$	295
Interest cost	4,336			4,484			241			274			12,702			13,428			723			822
Expected return on plan assets	(5,143		)	(5,112		)	—			—			(15,444		)	(15,337		)	—			—
Amortization of prior service costs	11			32			(117		)	(117		)	32			95			(351		)	(351		)
Amortization of net actuarial loss	5,650			3,656			110			138			14,697			10,899			332			415
Net periodic benefit cost	6,611			4,941			314			393			17,358			14,706			943			1,181
Amount allocated to construction	(659		)	(1,581		)	(27		)	(136		)	(2,026		)	(4,660		)	(82		)	(403		)
Amount deferred to regulatory balancing account⁽¹⁾	(3,878		)	(1,484		)	—			—			(9,381		)	(4,519		)	—			—
Net amount charged to expense	$	2,074		$	1,876		$	287		$	257		$	5,951		$	5,527		$	861		$	778

⁽¹⁾

The deferral of defined benefit pension plan expenses above or below the amount set in rates was approved by the OPUC, with recovery of these deferred amounts through the implementation of a balancing account. On October 26, 2018 the OPUC ordered that the balancing account be frozen as of October 31, 2018, with recovery subject to future proceedings. Effective November 1, 2018 the OPUC authorized an additional $8.1 million to be included in rates for defined benefit pension plan expenses. Deferred pension expense balances include accrued interest at the utility’s authorized rate of return, with the equity portion of the interest recognized when amounts are collected in rates. See Note 2 in the 2017 Form 10-K.

The following table presents amounts recognized in accumulated other comprehensive loss (AOCL) and the changes in AOCL related to non-qualified employee benefit plans:



	Three Months Ended September 30,						Nine Months Ended September 30,
In thousands	2018			2017			2018			2017
Beginning balance	$	(8,131	)	$	(6,678	)	$	(8,438	)	$	(6,951	)
Amounts reclassified from AOCL:
Amortization of actuarial losses	209			248			627			698
Total reclassifications before tax	209			248			627			698
Tax (benefit) expense	(55		)	(98		)	(166		)	(275		)
Total reclassifications for the period	154			150			461			423
Ending balance	$	(7,977	)	$	(6,528	)	$	(7,977	)	$	(6,528	)

Employer Contributions to Company-Sponsored Defined Benefit Pension Plans

For the nine months ended September 30, 2018, NW Natural made cash contributions totaling $11.7 million to qualified defined benefit pension plans. NW Natural expects further plan contributions of $3.9 million during the remainder of 2018.

Defined Contribution Plan

The Retirement K Savings Plan is a qualified defined contribution plan under Internal Revenue Code Sections 401(a) and 401(k). Employer contributions totaled $5.0 million and $4.1 million for the nine months ended September 30, 2018 and 2017, respectively.

See Note 8 in the 2017 Form 10-K for more information concerning these retirement and other postretirement benefit plans.