Components of Net Periodic Benefit Cost

3 Months Ended

Mar. 31, 2019

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.

The service cost component of 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 that portion of overall net periodic benefit costs to the same accounts to which productive labor is charged. As a result, service costs become components of various accounts, primarily operations and maintenance expense, net utility plant, and deferred charges and other assets for both the Company and Southwest. The other components of net periodic benefit cost are reflected in Other income (deductions) on the Condensed Consolidated Statements of Income of the Company and Southwest.



	Qualified Retirement Plan
	Period Ended March 31,
	Three Months						Twelve Months
	2019			2018			2019			2018
(Thousands of dollars)
Service cost	$	6,466		$	7,139		$	27,882		$	24,683
Interest cost	12,252			11,043			45,383			45,606
Expected return on plan assets	(15,061		)	(14,689		)	(59,127		)	(56,086		)
Amortization of net actuarial loss	5,589			8,029			29,675			26,032
Net periodic benefit cost	$	9,246		$	11,522		$	43,813		$	40,235

	SERP
	Period Ended March 31,
	Three Months						Twelve Months
	2019			2018			2019			2018
(Thousands of dollars)
Service cost	$	66		$	61		$	250		$	292
Interest cost	440			415			1,683			1,827
Amortization of net actuarial loss	255			375			1,382			1,456
Net periodic benefit cost	$	761		$	851		$	3,315		$	3,575

	PBOP
	Period Ended March 31,
	Three Months						Twelve Months
	2019			2018			2019			2018
(Thousands of dollars)
Service cost	$	319		$	368		$	1,424		$	1,469
Interest cost	762			687			2,823			3,111
Expected return on plan assets	(789		)	(930		)	(3,577		)	(3,448		)
Amortization of prior service costs	317			334			1,318			1,335
Net periodic benefit cost	$	609		$	459		$	1,988		$	2,467