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Pension and Other Postretirement Benefits (Tables)

12 Months Ended

Dec. 31, 2023

The rates are presented in the table below:


	December 31,
	2023		2022
Discount rate	5.00	%	5.25	%
Weighted-average rate of compensation increase	3.50	%	3.25	%
Asset return assumption	6.75	%	6.75	%

Schedule of Defined Benefit Plans Disclosures

The following table sets forth the retirement plan, SERP, and PBOP funded statuses and amounts recognized on the Consolidated Balance Sheets and Consolidated Statements of Income.


	Year Ended December 31,
	2023									2022
(Thousands of dollars)	Qualified Retirement Plan			SERP			PBOP			Qualified Retirement Plan			SERP			PBOP
Change in benefit obligations:
Benefit obligation for service rendered to date at beginning of year (PBO/PBO/APBO)	$	1,159,451		$	42,097		$	65,437		$	1,531,197		$	49,530		$	84,226
Service cost	25,840			250			1,269			44,110			424			1,941
Interest cost	59,165			2,123			3,302			45,006			1,441			2,452

Actuarial loss (gain)	62,109			3,995			941			(399,066)			(6,134)			(18,260)
Benefits paid	(65,388)			(3,434)			(4,940)			(61,796)			(3,164)			(4,922)
Benefit obligation at end of year (PBO/PBO/APBO)	1,241,177			45,031			66,009			1,159,451			42,097			65,437
Change in plan assets:
Market value of plan assets at beginning of year	1,030,044			—			38,459			1,366,043			—			52,168
Actual return on plan assets	145,716			—			4,626			(330,203)			—			(6,036)
Employer contributions	56,000			3,434			—			56,000			3,164			—
Benefits paid	(65,388)			(3,434)			(7,165)			(61,796)			(3,164)			(7,673)
Market value of plan assets at end of year	1,166,372			—			35,920			1,030,044			—			38,459
Funded status at year end	$	(74,805)		$	(45,031)		$	(30,089)		$	(129,407)		$	(42,097)		$	(26,978)
Weighted-average assumptions (benefit obligation):
Discount rate	5.00		%	5.00		%	5.00		%	5.25		%	5.25		%	5.25		%
Weighted-average rate of compensation increase	3.50		%	3.50		%	N/A			3.25		%	3.25		%	N/A

Schedule of Accumulated Benefit Obligation

The accumulated benefit obligation for the retirement plan and the SERP is presented below:


	December 31,
(Thousands of dollars)	2023		2022
Retirement plan	$	1,143,204	$	1,074,493
SERP	40,635		39,263

Schedule of Expected Benefit Payments

Benefits expected to be paid for pension, SERP, and PBOP over the next 10 years are as follows:


(Millions of dollars)	2024		2025		2026		2027		2028		2029-2033
Pension	$	68.0	$	69.0	$	70.0	$	72.0	$	73.0	$	389.0
SERP	3.4		3.3		3.3		3.2		3.2		15.4
PBOP	4.9		4.9		5.0		5.0		5.0		25.1

Schedule of Net Benefit Cost

Components of net periodic benefit cost:


	Qualified Retirement Plan						SERP						PBOP
(Thousands of dollars)	2023		2022		2021		2023		2022		2021		2023		2022		2021
Service cost	$25,840		$44,110		$41,159		$250		$424		$526		$1,269		$1,941		$1,691
Interest cost	59,165		45,006		40,432		2,123		1,441		1,431		3,302		2,452		2,193
Expected return on plan assets	(84,062)		(79,913)		(72,352)		—		—		—		(2,424)		(3,228)		(3,239)
Amortization of prior service cost	—		—		—		—		—		—		175		175		959
Amortization of net actuarial loss	336		32,468		41,955		998		2,350		2,642		—		—		—
Net periodic benefit cost	$1,279		$41,671		$51,194		$3,371		$4,215		$4,599		$2,322		$1,340		$1,604
Weighted-average assumptions (net benefit cost)
Discount rate	5.25	%	3.00	%	2.75	%	5.25	%	3.00	%	2.75	%	5.25	%	3.00	%	2.75	%
Expected return on plan assets	6.75	%	6.50	%	6.50	%	N/A		N/A		N/A		6.75	%	6.50	%	6.50	%
Weighted-average rate of compensation increase	3.25	%	3.25	%	3.00	%	3.25	%	3.25	%	3.00	%	N/A		N/A		N/A

Schedule of Amounts Recognized in Other Comprehensive Income

The following table represents amounts (before income tax impacts) included in AOCI (in the tables above), that have not yet been recognized in net periodic benefit cost:


	December 31,
(Thousands of dollars)	2023		2022
Net actuarial loss	$	(361,968)	$	(360,113)
Prior service cost	(1,178)		(1,353)
Less: amount recognized in regulatory assets	309,794		311,124
Recognized in AOCI	$	(53,352)	$	(50,342)

Other Changes in Plan Assets and Benefit Obligations Recognized in Net Periodic Benefit Cost and Other Comprehensive Income


	Year Ended December 31,
	2023								2022								2021
(Thousands of dollars)	Total		Qualified Retirement Plan		SERP		PBOP		Total		Qualified Retirement Plan		SERP		PBOP		Total		Qualified Retirement Plan		SERP		PBOP
Net actuarial loss (gain) (a)	$	3,188	$	455	$	3,995	$	(1,262)	$	(4,079)	$	11,049	$	(6,133)	$	(8,995)	$	(59,176)	$	(54,892)	$	(3,245)	$	(1,039)
Amortization of prior service cost (b)	(175)		—		—		(175)		(175)		—		—		(175)		(959)		—		—		(959)
Amortization of net actuarial loss (b)	(1,333)		(335)		(998)		—		(34,818)		(32,468)		(2,350)		—		(44,597)		(41,955)		(2,642)		—

Regulatory adjustment	1,330		(107)		—		1,437		28,232		19,062		—		9,170		88,194		86,196		—		1,998
Recognized in other comprehensive (income) loss	3,010		13		2,997		—		(10,840)		(2,357)		(8,483)		—		(16,538)		(10,651)		(5,887)		—
Net periodic benefit costs recognized in net income	6,972		1,279		3,371		2,322		47,226		41,671		4,215		1,340		57,397		51,194		4,599		1,604
Total of amount recognized in net periodic benefit cost and other comprehensive (income) loss	$	9,982	$	1,292	$	6,368	$	2,322	$	36,386	$	39,314	$	(4,268)	$	1,340	$	40,859	$	40,543	$	(1,288)	$	1,604

Schedule of Fair Value of Plan Assets

The following table sets forth, by level within the three-level fair value hierarchy, the fair values of the assets of the qualified pension plan and the PBOP as of December 31, 2023 and 2022. The SERP has no assets.


	December 31,
	2023						2022
(Thousands of dollars)	Qualified Retirement Plan		PBOP		Total		Qualified Retirement Plan		PBOP		Total
Assets at fair value:
Level 1 – Quoted prices in active markets for identical financial assets
Mutual funds	$	—	$	34,891	$	34,891	$	—	$	31,631	$	31,631
Total Level 1 Assets (1)	—		34,891		34,891		—		31,631		31,631
Level 2 – Significant other observable inputs
Commingled trust equity funds (2)
Global	234,123		97		234,220		266,368		1,673		268,041
International	105,908		44		105,952		117,976		741		118,717
U.S. equity securities	164,966		68		165,034		184,300		1,159		185,459
Emerging markets	54,489		22		54,511		62,436		392		62,828
Commingled trust fixed income funds (3)	597,828		246		598,074		390,070		2,450		392,520
Pooled funds and mutual funds	6,593		552		7,145		6,359		412		6,771
Government fixed income and mortgage backed securities	165		—		165		159		1		160
Total Level 2 assets (4)	1,164,072		1,029		1,165,101		1,027,668		6,828		1,034,496
Total Plan assets at fair value	1,164,072		35,920		1,199,992		1,027,668		38,459		1,066,127
Insurance company general account contracts (5)	2,300		—		2,300		2,376		—		2,376
Total Plan assets	$	1,166,372	$	35,920	$	1,202,292	$	1,030,044	$	38,459	$	1,068,503

(1)The Mutual funds category above is a balanced fund that invests in a diversified portfolio of common stocks, preferred stocks, and fixed-income securities. Under normal circumstances the balanced fund will hold no more than 75%, and no less than 25%, of its total assets in equity securities. The fund seeks regular income, conservation of principal, and an opportunity for long-term growth of principal and income.

(2)The commingled trust equity funds include common collective trusts that invest in a diversified portfolio of securities regularly traded on securities exchanges. These funds are shown in the above table at net asset value (“NAV”), which is the value of securities in the fund less the amount of any liabilities outstanding. Strategies employed by the funds include investment in:

▪Global equities, including domestic equities

▪International developed countries equities

▪Domestic equities

▪Emerging markets equities

Shares in the commingled trust equity funds may be redeemed given one business day notice. While they are trust equity funds and reported at NAV, due to the short redemption notice period, the lack of redemption fees, the fact that the underlying investments are exchange-traded, and that substantial liabilities do not exist subject to the NAV calculation, these investments are viewed as indirectly observable (Level 2) in the fair value hierarchy and are therefore not excluded from the body of the fair value table as a reconciling item.

The global fund provides diversified exposure to global equity markets. The fund seeks to provide long-term capital growth by investing primarily in securities listed on the major developed equity markets of the U.S., Europe, and Asia, as well as within those listed on emerging country equity markets on a tactical basis.

The international fund invests in international financial markets, primarily those of developed economies in Europe and the Pacific Basin. The fund invests primarily in equity securities issued by foreign corporations, but may invest in other securities perceived as offering attractive investment return opportunities.

The domestic equities securities funds include a large and medium capitalization fund and a small capitalization fund. The large and medium capitalization fund is designed to track the performance of the large and medium capitalization companies contained in the index, which represents approximately 90% of the market capitalization of the U.S. stock market. The small capitalization fund is designed to provide maximum long-term appreciation through investments that are well diversified by industry.

The emerging markets fund invests in countries defined as an emerging market country. Fund investments are made directly in each country or, where direct investment is inefficient or prohibited, through appropriate financial instruments or participation in commingled funds. Major emerging markets include Brazil, India, China, and other developing countries around the world.

(3)The commingled trust fixed income funds consist primarily of fixed income debt securities issued by the U.S. Treasury, government agencies, and fixed income debt securities issued by corporations. The fixed income fund investments may include the use of high yield, international fixed income securities and other instruments, including derivatives, to ensure prudent diversification over a broad spectrum

of investments. The changes in the value of the fixed income funds are intended to offset the changes in the pension plan liabilities due to changes in the discount rate.

These funds are shown in the above table at NAV. Investments in the commingled trust fixed equity funds may be redeemed given one business day notice. While they are fixed income funds and reported at NAV, due to the short redemption notice period, the lack of redemption fees, the fact that the underlying investments are exchange-traded, and that substantial liabilities do not exist subject to the NAV calculation, these investments are viewed as indirectly observable (Level 2), and are also not excluded from the body of the fair value table as a reconciling item.

(4)With the exception of items (2) and (3), which are discussed above, the Level 2 assets consist mainly of pooled funds and mutual funds. These funds are collective short-term funds that invest in Treasury bills and money market funds and are used as a temporary cash repository.

(5)The insurance company general account contracts are annuity insurance contracts used to pay the pensions of employees who retired prior to 1989. The balance of the account disclosed in the above table is the contract value, which is the result of deposits, withdrawals, and interest credits.