(12) Employee Benefit Plans

Pension Plans

Pension benefits for substantially all union employees are provided through the Alaska Electrical Pension Trust Fund and the UNITE HERE National Retirement Fund, multi-employer plans. Chugach pays an hourly amount per eligible union employee pursuant to the collective bargaining unit agreements. In these master, multi-employer plans, the accumulated benefits and plan assets are not determined or allocated separately to the individual employer.

Pension benefits for non-union employees are provided by the National Rural Electric Cooperative Association (NRECA) Retirement and Security Plan (RS Plan). The RS Plan is a defined benefit pension plan qualified under Section 401 and tax-exempt under Section 501(a) of the Internal Revenue Code. Under ASC 960, “Topic 960 – Plan Accounting – Defined Benefit Pension Plans,” the plan is a multi-employer plan, in which the accumulated benefits and plan assets are not determined or allocated separately to individual employers. Chugach makes annual contributions to the pension plan equal to the amounts accrued for pension expense. Chugach made contributions to all significant pension plans for the years ended December 31, 2012, 2011 and 2010 of $6.6 million, $6.0 million and $6.0 million, respectively. The rate and number of employees in all significant pension plans did not materially change for the years ended December 31, 2012, 2011 and 2010. The following table provides information regarding pension plans which Chugach considers individually significant:

(12) Employee Benefit Plans (continued)

Pension Plans (continued)


	Alaska Electrical Pension Plan³			NRECA Retirement Security Plan³
Employer Identification Number	92-6005171			53-0116145
Plan Number	001			333
Year-end Date	December 31			December 31
Expiration Date of CBA's	June 30,2013			N/A²
Subject to Funding Improvement Plan	No			No
Surcharge Paid	N/A			N/A
	2012	2011	2010	2012	2011	2010
Zone Status	Green	Green	Green	N/A¹	N/A¹	N/A¹
Required minimum contributions	None	None	None	N/A	N/A	N/A
Contributions (in millions)	$3.6	$3.0	$2.9	$3.0	$3.0	$3.1
Contributions > 5% of total plan contributions	Yes	Yes	Yes	No	No	No

¹A “zone status” determination is not required, and therefore not determined under the Pension Protection Act (PPA) of 2006. In total, the NRECA RS Plan was between 65 and less than 80 percent funded at January 1, 2012 and 2011, respectively, based on the PPA funding target and PPA actuarial value of assets on those dates.

²The CEO is the only non-union employee subject to an employment agreement, which is effective through July 1, 2013.

³The Alaska Electrical Pension Plan is publically available. The NRECA Retirement Security Plan is available on Chugach’s website at www.chugachelectric.com.

⁴The provisions of the PPA do not apply to the RS Plan, therefore, funding improvement plans and surcharges are not applicable. Future contribution requirements are determined each year as part of the actuarial valuation of the plan and may change as a result of plan experience.

Health and Welfare Plans

Health and welfare benefits for union employees are provided through the Alaska Electrical Health and Welfare Trust and the Alaska Hotel, Restaurant and Camp Employees Health and Welfare and Pension Trust Fund. Chugach participates in multi-employer plans that provide substantially all union workers with health care and other welfare benefits during their employment with Chugach. Chugach pays a defined amount per union employee pursuant to

collective bargaining unit agreements. Amounts charged to benefit costs and contributed to the health and welfare plans for these benefits for the years ending December 31, 2012, 2011, and 2010 were $4.3 million, $3.7 million, and $3.7 million, respectively.

Chugach participates in a multi-employer plan through the Group Benefits Program of NRECA for non-union employees. Amounts charged to benefit cost and contributed to this Plan for those benefits for the years ended December 31, 2012, 2011, and 2010 totaled $2.5 million, $2.4 million, and $2.2 million respectively.

(12) Employee Benefit Plans (continued)

Money Purchase Pension Plan

Chugach participates in a multi-employer defined contribution money purchase pension plan covering some employees who are covered by a collective bargaining agreement. Contributions to the Plan are made based on a percentage of each employee’s compensation. Contributions to the money purchase pension plan for the years ending December 31, 2012, 2011, and 2010 were $141.0 thousand, $128.7 thousand, and $124.1 thousand, respectively.

401(k) Plan

Chugach has a defined contribution 401(k) retirement plan which covers substantially all employees who, effective January 1, 2008, can participate immediately. Employees who elect to participate may contribute up to the Internal Revenue Service’s maximum of $17,000, $16,500, and $16,500 in 2012, 2011, and 2010 respectively, and allowed catch-up contributions for those over 50 years of age of $5,500, $5,500, and $5,500 in 2012, 2011, and 2010, respectively. Chugach does not make contributions to the plan.

Deferred Compensation

Chugach adopted NRECA’s unfunded Deferred Compensation Program (the Program) to allow highly compensated employees who elect to participate in the Program to defer a portion of their current compensation and avoid paying tax on the deferrals until received. The program is a non-qualified plan under Internal Revenue Code 457(b).

Deferred compensation accounts are established for the individual employees, however, they are considered to be owned by Chugach until a distribution is made. The amounts credited to the deferred compensation account, including gains or losses, are retained by Chugach until the entire amount credited to the account has been distributed to the participant or to the participant’s beneficiary. The balance of the Program for the years ending December 31, 2012, 2011 and 2010 was $570,027, $420,783 and $395,833, respectively.

Potential Termination Payments

Pursuant to a Chugach Operating Policy, non-represented employees, including the executive officers except the Chief Executive Officer, who are terminated by Chugach for reasons unrelated to employee performance are entitled to severance pay for each year or partial year of service as follows: two weeks for each year of service to a maximum of twenty-six (26) weeks for thirteen (13) years or more of service.