XML 40 R18.htm IDEA: XBRL DOCUMENT v3.21.1
Pension and Other Postretirement Benefit Plans
 3 Months Ended
Mar. 31, 2021
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. 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 2020 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. Differences between TNMP's annual net periodic costs (income) and amounts included in its regulated rates are deferred to regulatory assets or liabilities, for recovery or refund in future rate proceedings.

PNM Plans

The following table presents the components of the PNM Plans’ net periodic benefit cost:

Three Months Ended March 31,
Pension Plan
OPEB Plan
Executive Retirement Program
202120202021202020212020
(In thousands)
Components of Net Periodic Benefit Cost
Service cost
$— $— $6 $10 $— $— 
Interest cost
4,036 4,985 477 613 90 122 
Expected return on plan assets
(7,133)(7,363)(1,042)(1,387)— — 
Amortization of net loss
4,541 4,465 — 87 100 101 
Amortization of prior service cost
— (138)— — — — 
Net Periodic Benefit Cost (Income)
$1,444 $1,949 $(559)$(677)$190 $223 

PNM did not make any contributions to its pension plan trust in the three months ended March 31, 2021 and 2020 and does not anticipate making any contributions to the pension plan in 2021 or 2022 but expects to contribute $10.8 million in 2023, $11.5 million in 2024, and $10.6 million in 2025 based on current law, funding requirements, and estimates of portfolio performance. Funding assumptions were developed using a discount rate of 2.9%. 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. PNM did not make any cash contributions to the OPEB trust in the three months ended March 31, 2021 and 2020, however, a portion of the disbursements attributable to the OPEB trust are paid by PNM and are therefore considered to be contributions to the OPEB plan. Payments by PNM on behalf of the PNM OPEB plan were $0.9 million and $1.1 million in the three months ended March 31, 2021 and 2020. These payments are expected to total $3.3 million in 2021 and $13.1 million for 2022-2025. Disbursements under the executive retirement program, which are funded by PNM and considered to be contributions to the plan, were $0.4 million and $0.3 million in the three months ended March 31, 2021 and 2020 and are expected to total $1.3 million during 2021 and $4.9 million for 2022-2025.

TNMP Plans

The following table presents the components of the TNMP Plans’ net periodic benefit cost:

Three Months Ended March 31,
Pension Plan
OPEB Plan
Executive Retirement Program
202120202021202020212020
(In thousands)
Components of Net Periodic Benefit Cost
Service cost
$— $— $11 $12 $— $— 
Interest cost
435 544 77 93 4 6 
Expected return on plan assets
(795)(821)(102)(134)— — 
Amortization of net (gain) loss
312 315 (80)(81)9 6 
Amortization of prior service cost
— — — — — — 
Net Periodic Benefit Cost (Income)
$(48)$38 $(94)$(110)$13 $12 
TNMP did not make any contributions to its pension plan trust in the three months ended March 31, 2021 and 2020 and does not anticipate making any contributions to the pension plan in 2021 through 2025 based on current law, funding requirements, and estimates of portfolio performance. Funding assumptions were developed using a discount rate of 2.9%. 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 did not make any contributions to the OPEB trust in the three months ended March 31, 2021 and 2020 and does not expect to make contributions to the OPEB trust during the period 2021-2025. Disbursements under the executive retirement program, which are funded by TNMP and considered to be contributions to the plan, were zero in the three months ended March 31, 2021 and 2020 and are expected to total $0.1 million during 2021 and $0.3 million in 2022-2025.