Note 8. Postretirement Benefits

Pension plans

Our pension plans consist of a noncontributory defined benefit pension plan covering substantially all employees and an unfunded supplemental employee retirement plan for certain members of executive and senior management. Although we are the sponsor of these postretirement plans and record the funded status of these plans, the Exchange and its subsidiaries reimburse us for approximately 59% of the annual benefit expense of these plans, which represents pension benefits for employees performing administrative services and their allocated share of costs for employees in departments that support the administrative functions.

Accelerated contributions of $80 million were made to the defined benefit pension plan in the first half of 2018.

Prior to 2003, the employee pension plan purchased annuities from EFL for certain plan participants that were receiving benefit payments under the pension plan. These are nonparticipating annuity contracts under which EFL has unconditionally contracted to provide specified benefits to beneficiaries; however, the pension plan remains the primary obligor to the beneficiaries. A contingent liability of $18.1 million at September 30, 2018 exists in the event EFL does not honor the annuity contracts.

The cost of our pension plans are as follows:



	Three months ended September 30,						Nine months ended September 30,
(in thousands)	2018			2017			2018			2017
Service cost for benefits earned	$	9,513		$	7,777		$	28,539		$	23,330
Interest cost on benefits obligation	8,845			8,569			26,536			25,706
Expected return on plan assets	(12,815		)	(10,317		)	(38,444		)	(30,950		)
Prior service cost amortization	339			218			1,015			654
Net actuarial loss amortization	3,202			2,325			9,606			6,975
Pension plan cost ⁽¹⁾	$	9,084		$	8,572		$	27,252		$	25,715


(1)	The components of pension plan costs other than the service cost component are included in the line item "Other income (expense)" in the Statements of Operations after reimbursements from the Exchange and its subsidiaries.