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Pension and Other Postretirement Benefit Plans
 9 Months Ended
Sep. 30, 2019
Retirement Benefits [Abstract]  
Pension and Other Postretirement Benefit Plans
Pension and Other Postretirement Benefit Plans

PNMR and its subsidiaries maintain qualified defined benefit pension plans, postretirement benefit plans providing medical and dental benefits, and executive retirement programs (collectively, the “PNM Plans” and “TNMP Plans”). PNMR maintains the legal obligation for the benefits owed to participants under these plans. The periodic costs or income of the PNM Plans and TNMP Plans are included in regulated rates to the extent attributable to regulated operations. In accordance with GAAP, the Company presents the service cost component of its net periodic benefit costs in administrative and general expenses and the non-service costs components in other income (deductions), net of amounts capitalized or deferred to regulatory assets and liabilities, on the Condensed Consolidated Statements of Earnings. PNM and TNMP receive a regulated return on the amounts funded for pension and OPEB plans in excess of accumulated periodic cost or income to the extent included in retail rates (a “prepaid pension asset”).

Additional information concerning pension and OPEB plans is contained in Note 11 of the Notes to Consolidated Financial Statements in the 2018 Annual Reports on Form 10-K. Annual net periodic benefit cost for the plans is actuarially determined using the methods and assumptions set forth in that note and is recognized ratably throughout the year.

PNM Plans

The following table presents the components of the PNM Plans’ net periodic benefit cost:
 
Three Months Ended September 30,
 
Pension Plan
 
OPEB Plan
 
Executive Retirement Program
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
 
(In thousands)
Components of Net Periodic Benefit Cost
 
 
 
 
 
 
 
 
 
 
 
Service cost
$
—

 
$
—

 
$
13

 
$
21

 
$
—

 
$
—

Interest cost
6,294

 
6,068

 
829

 
860

 
163

 
155

Expected return on plan assets
(8,527
)
 
(8,672
)
 
(1,320
)
 
(1,353
)
 
—

 
—

Amortization of net (gain) loss
3,880

 
4,087

 
169

 
588

 
79

 
90

Amortization of prior service cost
(241
)
 
(241
)
 
(99
)
 
(416
)
 
—

 
—

Net Periodic Benefit Cost (Income)
$
1,406

 
$
1,242

 
$
(408
)
 
$
(300
)
 
$
242

 
$
245

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30,
 
Pension Plan
 
OPEB Plan
 
Executive Retirement Program
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
 
(In thousands)
Components of Net Periodic Benefit Cost
 
 
 
 
 
 
 
 
 
 
 
Service cost
$
—

 
$
—

 
$
39

 
$
62

 
$
—

 
$
—

Interest cost
18,881

 
18,203

 
2,487

 
2,579

 
487

 
467

Expected return on plan assets
(25,577
)
 
(26,014
)
 
(3,956
)
 
(4,061
)
 
—

 
—

Amortization of net (gain) loss
11,639

 
12,261

 
507

 
1,765

 
237

 
269

Amortization of prior service cost
(724
)
 
(724
)
 
(297
)
 
(1,248
)
 
—

 
—

Net Periodic Benefit Cost (Income)
$
4,219

 
$
3,726

 
$
(1,220
)
 
$
(903
)
 
$
724

 
$
736


PNM did not make any contributions to its pension plan trust in the nine months ended September 30, 2019 and 2018 and does not anticipate making any contributions to the pension plan in 2019-2021, but expects to contribute $23.0 million in 2022 and $27.4 million in 2023, based on current law, funding requirements, and estimates of portfolio performance. The funding assumptions were developed using a discount rate of 3.5%. Actual amounts to be funded in the future will be dependent on the actuarial assumptions at that time, including the appropriate discount rate. PNM may make additional contributions at its discretion. Disbursements attributable to the OPEB trust, a portion of which are funded by PNM and considered to be contributions to the
OPEB plan, were $0.9 million and $2.4 million in the three and nine months ended September 30, 2019. PNM made no cash contributions to the OPEB trust in the three and nine months ended September 30, 2018, however, PNM funded disbursements attributable to a portion of the OPEB trust of $0.9 million and $1.5 million. Although PNM does not expect to make any cash contributions to the OPEB trust in 2019-2023, disbursements attributable to the OPEB plan that are expected to be funded by PNM are estimated to be $3.7 million in 2019 and $13.7 million for 2020-2023. Disbursements under the executive retirement program, which are funded by PNM and considered to be contributions to the plan, were $0.4 million and $1.1 million in the three and nine months ended September 30, 2019 and $0.4 million and $1.3 million in the three and nine months ended September 30, 2018 and are expected to total $1.5 million during 2019 and $5.6 million for 2020-2023.

TNMP Plans

The following table presents the components of the TNMP Plans’ net periodic benefit cost:
 
Three Months Ended September 30,
 
Pension Plan
 
OPEB Plan
 
Executive Retirement Program
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
 
(In thousands)
Components of Net Periodic Benefit Cost
 
 
 
 
 
 
 
 
 
 
 
Service cost
$
—

 
$
—

 
$
12

 
$
33

 
$
—

 
$
—

Interest cost
672

 
656

 
113

 
119

 
7

 
7

Expected return on plan assets
(967
)
 
(991
)
 
(129
)
 
(135
)
 
—

 
—

Amortization of net (gain) loss
235

 
272

 
(111
)
 
(56
)
 
4

 
4

Amortization of prior service cost
—

 
—

 
—

 
—

 
—

 
—

Net Periodic Benefit Cost (Income)
$
(60
)
 
$
(63
)
 
$
(115
)
 
$
(39
)
 
$
11

 
$
11

 
 
 
 
 
 
 
 
 
 
 
 
 
Nine Months Ended September 30,
 
Pension Plan
 
OPEB Plan
 
Executive Retirement Program
 
2019
 
2018
 
2019
 
2018
 
2019
 
2018
 
(In thousands)
Components of Net Periodic Benefit Cost
 
 
 
 
 
 
 
 
 
 
 
Service cost
$
—

 
$
—

 
$
39

 
$
100

 
$
—

 
$
—

Interest cost
2,015

 
1,968

 
338

 
358

 
24

 
22

Expected return on plan assets
(2,901
)
 
(2,972
)
 
(387
)
 
(406
)
 
—

 
—

Amortization of net (gain) loss
706

 
816

 
(332
)
 
(170
)
 
11

 
11

Amortization of prior service cost
—

 
—

 
—

 
—

 
—

 
—

Net Periodic Benefit Cost (Income)
$
(180
)
 
$
(188
)
 
$
(342
)
 
$
(118
)
 
$
35

 
$
33



TNMP did not make any contributions to its pension plan trust in the nine months ended September 30, 2019 and 2018 and does not anticipate making any contributions in 2019-2021, but expects to contribute $1.0 million in 2022 and $3.7 million in 2023, based on current law, funding requirements, and estimates of portfolio performance. The funding assumptions were developed using a discount rate of 3.5%. Actual amounts to be funded in the future will depend on the actuarial assumptions at that time, including the appropriate discount rate. TNMP may make additional contributions at its discretion. TNMP made no contributions to the OPEB trust in the three and nine months ended September 30, 2019 and zero and $0.3 million in the three and nine months ended September 30, 2018. TNMP does not expect to make contributions to the OPEB trust during the period 2019-2023. Disbursements under the executive retirement program, which are funded by TNMP and considered to be contributions to the plan, were less than $0.1 million in the three and nine months ended September 30, 2019 and 2018 and are expected to total $0.1 million during 2019 and $0.3 million in 2020-2023.