Retirement Plans and Other Benefits
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Mar. 31, 2014
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Retirement Plans and Other Benefits | 4. Retirement Plans and Other Benefits
Pinnacle West sponsors a qualified defined benefit and account balance pension plan, a non-qualified supplemental excess benefit retirement plan, and other postretirement benefit plans for the employees of Pinnacle West and our subsidiaries. Pinnacle West uses a December 31 measurement date for its pension and other postretirement benefit plans. The market-related value of our plan assets is their fair value at the measurement date.
Certain pension and other postretirement benefit costs in excess of amounts recovered in electric retail rates were deferred in 2011 and 2012 as a regulatory asset for future recovery, pursuant to APS’s 2009 retail rate case settlement. Pursuant to this order, we began amortizing the regulatory asset over three years beginning in July 2012. We amortized approximately $2 million for the three months ended March 31, 2014 and 2013, respectively. The following table provides details of the plans’ net periodic benefit costs and the portion of these costs charged to expense (including administrative costs and excluding amounts capitalized as overhead construction, billed to electric plant participants or charged or amortized to the regulatory asset) (dollars in millions):
Contributions
The minimum contributions for the pension plan total $141 million for the next three years under the recently enacted Moving Ahead for Progress in the 21st Century Act (zero in 2014, $19 million in 2015, and $122 million in 2016). Instead, we expect to make voluntary contributions totaling $300 million for the next three years ($175 million in 2014, of which $105 million was already contributed in early 2014, up to $100 million in 2015, and up to $25 million in 2016). The contributions to our other postretirement benefit plans for 2014, 2015 and 2016 are expected to be approximately $10 million each year. |