Employee Postretirement Benefits

15 Months Ended

Jun. 30, 2012

Employee Postretirement Benefits

5. Employee Postretirement Benefits

Included in the table below is the periodic expense for pension and other postretirement benefits offered by the company.

Pension Expense
(millions)	Pension Benefits						Other Postretirement Benefits
Three months ended June 30,	2012			2011			2012		2011
Components of net periodic benefit expense
Service cost	$	4.1		$	3.8		$	0.5	$	0.5
Interest cost on projected benefit obligations		7.6			7.7			2.6		2.7
Expected return on assets		(8.9	)		(9.5	)		0.0		0.0
Amortization of:
Transition obligation		0.0			0.0			0.5		0.6
Prior service (benefit) cost		(0.1	)		(0.1	)		0.2		0.2
Actuarial loss (gain)		3.9			2.8			0.0		(0.1	)
Net pension expense recognized in the TECO Energy Consolidated Condensed Statements of Income	$	6.6		$	4.7		$	3.8	$	3.9
Six months ended June 30,
Components of net periodic benefit expense
Service cost	$	8.5		$	8.0		$	1.2	$	1.1
Interest cost on projected benefit obligations		15.0			15.5			5.1		5.5
Expected return on assets		(18.5	)		(19.2	)		0.0		0.0
Amortization of:
Transition obligation		0.0			0.0			0.9		1.2
Prior service (benefit) cost		(0.2	)		(0.2	)		0.4		0.4
Actuarial loss		7.6			5.6			0.0		0.0
Net pension expense recognized in the TECO Energy Consolidated Condensed Statements of Income	$	12.4		$	9.7		$	7.6	$	8.2

For the fiscal 2012 plan year, TECO Energy assumed a long-term EROA of 7.50% and a discount rate of 4.797% for pension benefits under its qualified pension plan, and a discount rate of 4.744% for its other postretirement benefits as of their Jan. 1, 2012 measurement dates. Additionally, TECO Energy made contributions of $20.1 million to its pension plan for the six months ended June 30, 2012.

For the three and six months ended June 30, 2012, TECO Energy and its subsidiaries reclassed $0.8 million and $1.5 million, respectively, of unamortized transition obligation, prior service cost and actuarial losses from AOCI to net income as part of periodic benefit expense. In addition, during the three and six months ended June 30, 2012, TEC reclassed $3.8 million and $7.3 million, respectively, of unamortized transition obligation, prior service cost and actuarial losses from regulatory assets to net income as part of periodic benefit expense.

In July 2012, the President signed into law the Moving Ahead for Progress in the 21st Century Act (MAP-21). MAP-21 provides funding relief for pension plan sponsors by stabilizing discount rates used in calculating the required minimum pension contributions and increasing PBGC premium rates to be paid by plan sponsors. The company is currently evaluating the impact MAP-21 will have on its pension contributions and on future PBGC premiums, and expects the required minimum pension contributions to be lower than the levels previously projected.

Tampa Electric Co [Member]

Employee Postretirement Benefits

5. Employee Postretirement Benefits

TEC is a participant in the comprehensive retirement plans of TECO Energy. Amounts allocable to all participants of the TECO Energy retirement plans are found in Note 5, Employee Postretirement Benefits, in the TECO Energy, Inc. Notes to Consolidated Condensed Financial Statements. TEC’s portion of the net pension expense for the three months ended June 30, 2012 and 2011, respectively, was $5.0 million and $3.1 million for pension benefits, and $3.1 million and $3.2 million for other postretirement benefits. TEC’s portion of the net pension expense for the six months ended June 30, 2012 and 2011, respectively, was $9.2 million and $6.7 million for pension benefits, and $6.2 million and $6.7 million for other postretirement benefits.

For the fiscal 2012 plan year, TECO Energy assumed a long-term EROA of 7.50% and a discount rate of 4.797% for pension benefits under its qualified pension plan, and a discount rate of 4.744% for its other postretirement benefits as of their Jan. 1, 2012 measurement dates. Additionally, TECO Energy made contributions of $20.1 million to its pension plan in the six months ended June 30, 2012. TEC’s portion of the contributions was $15.7 million.

Included in the benefit expenses discussed above, for the three and six months ended June 30, 2012, TEC reclassed $3.8 million and $7.3 million, respectively, of unamortized transition obligation, prior service cost and actuarial losses from regulatory assets to net income.

In July 2012, the President signed into law the Moving Ahead for Progress in the 21st Century Act (MAP-21). MAP-21 provides funding relief for pension plan sponsors by stabilizing discount rates used in calculating the required minimum pension contributions and increasing PBGC premium rates to be paid by plan sponsors. TEC is currently evaluating the impact MAP-21 will have on its pension contributions and on future PBGC premiums, and expects the required minimum pension contributions to be lower than the levels previously projected.