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Pension and Other Postretirement Benefits (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of Defined Benefit Plans Disclosures

The following table presents information about the PBO, fair value of plan assets, and funded status of the plans:


	PNM				TNMP
	Year Ended December 31,				Year Ended December 31,
	2022		2021		2022		2021
	(In thousands)
PBO at beginning of year	$	584,061	$	630,904	$	59,609	$	67,390
Service cost	—		—		—		—
Interest cost	16,857		16,143		1,720		1,741

Actuarial (gain)	(118,552)		(19,372)		(11,711)		(3,306)
Benefits paid	(48,721)		(43,614)		(3,403)		(3,678)
Settlements	—		—		(2,254)		(2,538)
PBO at end of year	433,645		584,061		43,961		59,609
Fair value of plan assets at beginning of year	576,707		587,530		62,942		66,149
Actual return on plan assets	(117,523)		32,791		(13,838)		3,009
Employer contributions	—		—		—		—
Benefits paid	(48,721)		(43,614)		(3,403)		(3,678)
Settlements	—		—		(2,254)		(2,538)
Fair value of plan assets at end of year	410,463		576,707		43,447		62,942
Funded status – asset (liability) for pension benefits	$	(23,182)	$	(7,354)	$	(514)	$	3,333

The following table presents information about the APBO, the fair value of plan assets, and the funded status of the plans:


	PNM				TNMP
	Year Ended December 31,				Year Ended December 31,
	2022		2021		2022		2021
	(In thousands)
APBO at beginning of year	$	66,984	$	75,196	$	10,570	$	11,938
Service cost	10		23		38		45
Interest cost	1,914		1,907		307		308
Participant contributions	1,431		1,617		219		135
Actuarial (gain)	(14,829)		(5,053)		(2,788)		(1,141)
Benefits paid	(6,396)		(6,706)		(641)		(715)
Curtailment loss	836		—		—		—

APBO at end of year	49,950		66,984		7,705		10,570
Fair value of plan assets at beginning of year	95,805		93,402		12,593		12,885
Actual return on plan assets	(23,156)		4,783		(3,453)		288
Employer contributions	2,617		2,709		—		—
Participant contributions	1,431		1,617		219		135
Benefits paid	(6,396)		(6,706)		(641)		(715)
Fair value of plan assets at end of year	70,301		95,805		8,718		12,593
Funded status – asset	$	20,351	$	28,821	$	1,013	$	2,023

Schedule of Assumptions Used

Actuarial (gain) loss results from changes in:


	PNM				TNMP
	Year Ended December 31,				Year Ended December 31,
	2022		2021		2022		2021
	(in thousands)
Discount rates	$	(111,478)	$	(19,989)	$	(11,697)	$	(2,017)
Demographic experience	(7,074)		617		(742)		(1,403)
Mortality rate	—		—		—		—
Other assumptions and experience	—		—		728		114
	$	(118,552)	$	(19,372)	$	(11,711)	$	(3,306)

The following significant weighted-average assumptions were used to determine the PBO and net periodic benefit cost (income). Should actual experience differ from actuarial assumptions, the PBO and net periodic benefit cost (income) would be affected.


	Year Ended December 31,
PNM	2022		2021		2020
Discount rate for determining December 31 PBO	5.74	%	3.00	%	2.66	%
Discount rate for determining net periodic benefit cost	3.00	%	2.66	%	3.42	%
Expected return on plan assets	5.50	%	5.50	%	5.90	%
Rate of compensation increase	N/A		N/A		N/A
TNMP
Discount rate for determining December 31 PBO	5.75	%	3.01	%	2.69	%
Discount rate for determining net periodic benefit cost	3.01	%	2.69	%	3.46	%
Expected return on plan assets	4.40	%	5.50	%	5.90	%
Rate of compensation increase	N/A		N/A		N/A

Actuarial (gain) loss results from changes in:


	PNM				TNMP
	Year Ended December 31,				Year Ended December 31,
	2022		2021		2022		2021
	(in thousands)
Discount rates	$	(11,876)	$	(2,042)	$	(2,469)	$	(423)
Claims, contributions, and demographic experience	(2,985)		(2,893)		(319)		(718)
Assumed participation rate	—		—		—		—
Mortality rate	—		—		—		—

Dental trend assumption	32		(118)		—		—
	$	(14,829)	$	(5,053)	$	(2,788)	$	(1,141)

The following significant weighted-average assumptions were used to determine the APBO and net periodic benefit cost. Should actual experience differ from actuarial assumptions, the APBO and net periodic benefit cost would be affected.


	Year Ended December 31,
PNM	2022		2021		2020
Discount rate for determining December 31 APBO	5.75	%	2.99	%	2.65	%
Discount rate for determining net periodic benefit cost	2.99	%	2.65	%	3.42	%
Expected return on plan assets	4.75	%	4.75	%	7.00	%
Rate of compensation increase	N/A		N/A		N/A
TNMP
Discount rate for determining December 31 APBO	5.75	%	2.99	%	2.65	%
Discount rate for determining net periodic benefit cost	2.99	%	2.65	%	3.42	%
Expected return on plan assets	3.80	%	3.80	%	5.60	%
Rate of compensation increase	N/A		N/A		N/A

The following significant weighted-average assumptions were used to determine the PBO and net periodic benefit cost. Should actual experience differ from actuarial assumptions, the PBO and net periodic benefit cost would be affected.


	Year Ended December 31,
PNM	2022		2021		2020
Discount rate for determining December 31 PBO	5.73	%	3.02	%	2.68	%
Discount rate for determining net periodic benefit cost	3.02	%	2.68	%	3.44	%
Long-term rate of return on plan assets	N/A		N/A		N/A
Rate of compensation increase	N/A		N/A		N/A
TNMP
Discount rate for determining December 31 PBO	5.75	%	3.01	%	2.69	%
Discount rate for determining net periodic benefit cost	3.01	%	2.69	%	3.46	%
Long-term rate of return on plan assets	N/A		N/A		N/A
Rate of compensation increase	N/A		N/A		N/A

Reclassification out of Accumulated Other Comprehensive Income

Information regarding AOCI is as follows:


	Accumulated Other Comprehensive Income (Loss)
	PNM						PNMR
	Unrealized Gains on Available-for-Sale Securities		Pension Liability Adjustment		Total		Fair Value Adjustment for Cash Flow Hedges		Total
	(In thousands)



Balance at December 31, 2019	$	10,638	$	(109,693)	$	(99,055)	$	(322)	$	(99,377)
Amounts reclassified from AOCI (pre-tax)	(9,497)		8,300		(1,197)		(1,740)		(2,937)
Income tax impact of amounts reclassified	2,412		(2,108)		304		442		746
Other OCI changes (pre-tax)	22,586		6,149		28,735		1,271		30,006
Income tax impact of other OCI changes	(5,736)		(1,562)		(7,298)		(323)		(7,621)
Net after-tax change	9,765		10,779		20,544		(350)		20,194

Balance at December 31, 2020	20,403		(98,914)		(78,511)		(672)		(79,183)


Amounts reclassified from AOCI (pre-tax)	(9,765)		8,348		(1,417)		(903)		(2,320)
Income tax impact of amounts reclassified	2,480		(2,120)		360		229		589
Other OCI changes (pre-tax)	(1,881)		12,111		10,230		1,804		12,034
Income tax impact of other OCI changes	478		(3,076)		(2,598)		(458)		(3,056)
Net after-tax change	(8,688)		15,263		6,575		672		7,247

Balance at December 31, 2021	11,715		(83,651)		(71,936)		—		(71,936)


Amounts reclassified from AOCI (pre-tax)	(3,827)		7,104		3,277		(1,176)		2,101
Income tax impact of amounts reclassified	972		(1,804)		(832)		299		(533)
Other OCI changes (pre-tax)	(1,928)		(4,565)		(6,493)		12,285		5,792
Income tax impact of other OCI changes	490		1,159		1,649		(3,121)		(1,472)
Net after-tax change	(4,293)		1,894		(2,399)		8,287		5,888

Balance at December 31, 2022	$	7,422	$	(81,757)	$	(74,335)	$	8,287	$	(66,048)

The following table presents pre-tax information about net actuarial (gain) loss in AOCI as of December 31, 2022.


	PNM		TNMP


	(In thousands)
Amounts in AOCI not yet recognized in net periodic benefit cost (income) at beginning of year	$	112,063	$	—
Experience loss	27,531		4,602
Regulatory asset (liability) adjustment	(22,282)		(4,602)

Amortization recognized in net periodic benefit (income)	(6,967)		—
Amounts in AOCI not yet recognized in net periodic benefit cost at end of year	$	110,345	$	—

The following table presents pre-tax information about net actuarial loss in AOCI as of December 31, 2022.


	December 31, 2022
	PNM		TNMP
	(In thousands)
Amount in AOCI not yet recognized in net periodic benefit cost at beginning of year	$	1,816	$	—
Experience (gain)	(1,628)		(2)
Regulatory asset adjustment	944		2
Amortization recognized in net periodic benefit (income)	(137)		—
Amount in AOCI not yet recognized in net periodic benefit cost at end of year	$	995	$	—

Schedule of Net Benefit Costs

The following table presents the components of net periodic benefit cost (income):


	Year Ended December 31,
	2022		2021		2020
	(In thousands)
PNM
Service cost	$	—	$	—	$	—
Interest cost	16,857		16,143		19,941
Expected return on plan assets	(28,563)		(28,531)		(29,453)
Amortization of net loss	15,794		18,166		17,860
Amortization of prior service cost	—		—		(554)
Net periodic benefit cost	$	4,088	$	5,778	$	7,794
TNMP
Service cost	$	—	$	—	$	—
Interest cost	1,720		1,741		2,177
Expected return on plan assets	(2,472)		(3,181)		(3,284)
Amortization of net loss	932		1,247		1,258
Amortization of prior service cost	—		—		—
Settlement loss	1,033		746		—
Net periodic benefit cost	$	1,213	$	553	$	151

The following table presents the components of net periodic benefit cost (income):


	Year Ended December 31,
	2022		2021		2020
	(In thousands)
PNM
Service cost	$	10	$	23	$	38
Interest cost	1,914		1,907		2,453
Expected return on plan assets	(4,351)		(4,167)		(5,548)
Amortization of net loss	—		—		348

Curtailment loss	$	836	$	—	$	—
Net periodic benefit (income)	$	(1,591)	$	(2,237)	$	(2,709)
TNMP
Service cost	$	38	$	45	$	46
Interest cost	307		308		373
Expected return on plan assets	(418)		(407)		(538)
Amortization of net (gain)	(520)		(322)		(323)

Net periodic benefit (income)	$	(593)	$	(376)	$	(442)

The following table presents the components of net periodic benefit cost:


	Year Ended December 31,
	2022		2021		2020
	(In thousands)
PNM
Service cost	$	—	$	—	$	—
Interest cost	362		363		491
Amortization of net loss	327		395		403
Amortization of prior service cost	—		—		—
Net periodic benefit cost	$	689	$	758	$	894
TNMP
Service cost	$	—	$	—	$	—
Interest cost	11		17		22
Amortization of net loss	—		33		24
Amortization of prior service cost	—		—		—
Net periodic benefit cost	$	11	$	50	$	46

Schedule of Expected Benefit Payments

The following pension benefit payments are expected to be paid:


	PNM		TNMP
	(In thousands)
2023	$	42,827	$	4,358
2024	41,621		4,236
2025	40,876		4,207
2026	39,528		4,139
2027	38,600		3,929
2028 - 2032	174,505		17,211

The following OPEB payments, which reflect expected future service and are net of participant contributions, are expected to be paid:


	PNM		TNMP
	(In thousands)
2023	$	5,880	$	621
2024	5,533		640
2025	5,157		643
2026	4,873		649
2027	4,593		641
2028 - 2032	19,200		2,980

The following executive retirement plan payments, which reflect expected future service, are expected:


	PNM		TNMP
	(In thousands)
2023	$	1,251	$	68
2024	1,208		61
2025	1,158		54
2026	1,102		48
2027	1,042		41
2028 - 2032	4,230		121

Schedule of Health Care Cost Trend Rates

The following table shows the assumed health care cost trend rates for the PNM OPEB plan:


	PNM
	December 31,
	2022		2021
Health care cost trend rate assumed for next year	6.25	%	6.00	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	4.75	%	4.75	%
Year that the rate reaches the ultimate trend rate	2029		2027

Schedule of Net Funded Status

For the executive retirement programs, the following table presents information about the PBO and funded status of the plans:


	PNM				TNMP
	Year Ended December 31,				Year Ended December 31,
	2022		2021		2022		2021
	(In thousands)
PBO at beginning of year	$	12,612	$	14,222	$	406	$	678
Service cost	—		—		—		—
Interest cost	362		363		11		17
Actuarial (gain)	(1,628)		(657)		(2)		(211)
Benefits paid	(1,304)		(1,316)		(71)		(78)
PBO at end of year – funded status	10,042		12,612		344		406
Less current liability	1,217		1,248		66		67
Non-current liability	$	8,825	$	11,364	$	278	$	339

Summary of Expenses for Other Retirement Plans

A summary of expenses for these other retirement plans is as follows:


	Year Ended December 31,
	2022		2021		2020
	(In thousands)
PNMR
401(k) plan	$	15,844	$	16,648	$	16,247
Non-qualified plan	$	(1,027)	$	3,594	$	2,090
PNM
401(k) plan	$	11,067	$	11,826	$	11,676
Non-qualified plan	$	(721)	$	2,622	$	1,544
TNMP
401(k) plan	$	4,776	$	4,823	$	4,572
Non-qualified plan	$	(305)	$	972	$	547