Employee Benefits

12 Months Ended

Dec. 31, 2012

Employee Benefits [Abstract]

Pension and Other Postretirement Benefits Disclosure [Text Block]

Employee Benefits

Pension and Other Postretirement Benefit Plans

Two of our subsidiaries, Kinder Morgan Canada Inc. and Trans Mountain Pipeline Inc. (as general partner of Trans Mountain Pipeline L.P.) are sponsors of pension plans for eligible Trans Mountain pipeline system employees.  The plans include registered defined benefit pension plans, supplemental unfunded arrangements (which provide pension benefits in excess of statutory limits), and defined contributory plans.  These subsidiaries also provide postretirement benefits other than pensions for retired employees.  Our combined net periodic benefit costs for these Trans Mountain pension and other postretirement benefit plans for 2012, 2011 and 2010 were $11 million, $7 million and $4 million, respectively, recognized ratably over each year.  As of December 31, 2012, we estimate our overall net periodic pension and other postretirement benefit costs for these plans for 2013 will be approximately $12 million, although this estimate could change if there is a significant event, such as a plan amendment or a plan curtailment, which would require a remeasurement of liabilities.  Furthermore, we expect to contribute approximately $12 million to these benefit plans in 2013.

Our subsidiary, TGP, also provides postretirement benefits other than pensions for certain retired employees.  The costs for this plan are prefunded to the extent such costs are recoverable through natural gas pipeline transportation rates. Our combined net periodic benefit costs for the TGP other postretirement benefit plan for 2012 was a credit (increase to income) of $2 million, recognized ratably over the seven months we included TGP in our consolidated results. As of December 31, 2012, we estimate our overall net periodic other postretirement benefit cost for this plan for 2013 will be a credit of approximately $3 million, although this estimate could change if there is a significant event, such as a plan amendment or a plan curtailment, which would require a remeasurement of liabilities.  Furthermore, we expect to make no contributions to this benefit plan in 2013.

Additionally, our subsidiary SFPP, L.P. has incurred certain liabilities for postretirement benefits to certain current and former employees, their covered dependents, and their beneficiaries. However, the net periodic benefit costs, contributions and liability amounts associated with the SFPP, L.P. postretirement benefit plan are not material to our consolidated income statements or balance sheets.

As of December 31, 2012 and 2011, the recorded value of our benefit liabilities for all of our pension and other .postretirement benefit plans was a combined $74 million and $70 million, respectively.  As of December 31, 2012, the TGP other postretirement benefit plan was overfunded by $32 million. We consider our overall pension and other postretirement benefit liability exposure and the fair value of our pension and other postretirement plan assets to be minimal in relation to the value of our total consolidated assets and net income.  

Multiemployer Plans

As a result of acquiring several terminal operations, primarily our acquisition of Kinder Morgan Bulk Terminals, Inc. effective July 1, 1998, we participate in several multi-employer pension plans for the benefit of employees who are union members.  We do not administer these plans and contribute to them in accordance with the provisions of negotiated labor contracts.  Other benefits include a self-insured health and welfare insurance plan and an employee health plan where employees may contribute for their dependents’ health care costs.  Amounts charged to expense for these plans for each of the years ended December 31, 2012, 2011 and 2010 were $11 million, $12 million and $10 million, respectively.  We consider our overall multi-employer pension plan liability exposure to be minimal in relation to the value of our total consolidated assets and net income.

Kinder Morgan Savings Plan    

The Kinder Morgan Savings Plan is a defined contribution 401(k) plan.  The Savings Plan permits all full-time employees of KMI and KMGP Services Company, Inc. to contribute between 1% and 50% of base compensation, on a pre-tax basis, into participant accounts.  Currently, our general partner contributes an amount equal to 5% of base compensation per year for most plan participants. However, for certain plan participants, employee contributions and general partner contributions are based on collective bargaining agreements. Plan assets are held and distributed pursuant to a trust agreement.  The total amount charged to expense for the Kinder Morgan Savings Plan was $16 million during 2012, $17 million during 2011, and $13 million during 2010.

Cash Balance Retirement Plan

Employees of KMGP Services Company, Inc. and KMI are also eligible to participate in a Cash Balance Retirement Plan.  Certain employees continue to accrue benefits through a career-pay formula (“grandfathered” according to age and years of service on December 31, 2000), or collective bargaining arrangements.  All other employees accrue benefits through a personal retirement account in the Cash Balance Retirement Plan.  Under the plan, KMI credits each participating employee’s personal retirement account an amount equal to a percentage of eligible compensation every pay period. Currently, KMI contributes a percentage of eligible compensation equal to (i) 4%, for participants having a combined age and years of eligible service as of December of the prior year of less than 50; or (ii) 5%, for participants having a combined age and years of eligible service as of December of the prior year equal to or greater than 50. Effective January 1, 2013, KMI amended the plan and began crediting contribution amounts equal to 4% or 5% of eligible compensation every pay period to each participating employee’s personal retirement account. Prior to this amendment, KMI credited 3% of employees’ eligible compensation to their personal retirement accounts. Employees become fully vested in the plan after three years, and they may take a lump sum distribution upon termination of employment or retirement.

In addition, interest is credited to the personal retirement accounts at a rate equal to the five-year U.S. Treasury note rate plus 0.25% since January 1, 2011. Prior to January 1, 2011, interest was credited to the personal retirement accounts at the 30-year U.S. Treasury bond rate, or an approved substitute, in effect each year.  This interest rate credit change allows KMI to invest the plan’s assets in a manner that preserves capital and controls volatility.  Furthermore, the revised interest rate complies with the safe harbor regulations as defined by the U.S. Department of Labor and is expected to reduce the plan’s long-term cost.