Components of Net Periodic Benefit Cost

3 Months Ended

Mar. 31, 2015

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Components of Net Periodic Benefit Cost

Note 2 – Components of Net Periodic Benefit Cost

Southwest has a noncontributory qualified retirement plan with defined benefits covering substantially all employees and a separate unfunded supplemental retirement plan (“SERP”) which is limited to officers. Southwest also provides postretirement benefits other than pensions (“PBOP”) to its qualified retirees for health care, dental, and life insurance.

Net periodic benefit costs included in the table below are components of an overhead loading process associated with the cost of labor. The overhead process ultimately results in allocation of net periodic benefit costs to the same accounts to which productive labor is charged. As a result, net periodic benefit costs become components of various accounts, primarily operations and maintenance expense, net utility plant, and deferred charges and other assets.

	Qualified Retirement Plan
	Period Ended March 31,
	Three Months						Twelve Months
	2015			2014			2015			2014
(Thousands of dollars)
Service cost	$	6,280		$	5,340		$	22,300		$	22,632
Interest cost		11,058			10,861			43,637			39,067
Expected return on plan assets		(14,452	)		(13,336	)		(54,458	)		(50,716	)
Amortization of net actuarial loss		8,185			5,718			25,340			29,913
Net periodic benefit cost	$	11,071		$	8,583		$	36,819		$	40,896
	SERP
	Period Ended March 31,
	Three Months						Twelve Months
	2015			2014			2015			2014
(Thousands of dollars)
Service cost	$	80		$	73		$	299		$	352
Interest cost		423			436			1,732			1,588
Amortization of net actuarial loss		324			196			911			924
Net periodic benefit cost	$	827		$	705		$	2,942		$	2,864
	PBOP
	Period Ended March 31,
	Three Months						Twelve Months
	2015			2014			2015			2014
(Thousands of dollars)
Service cost	$	411		$	276		$	1,236		$	1,191
Interest cost		749			707			2,871			2,569
Expected return on plan assets		(866	)		(816	)		(3,314	)		(2,934	)
Amortization of prior service costs		333			89			599			355
Amortization of net actuarial loss		87			—			87			709
Net periodic benefit cost	$	714		$	256		$	1,479		$	1,890