v2.4.0.8
Pension and OPEB - Periodic Cost
 6 Months Ended
Jun. 30, 2013
PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS NET PERIODIC BENEFIT COSTS: [Abstract]  
Components of Pension and Other Postretirement Benefit Plans:
COMPONENTS OF PENSION AND OTHER POSTRETIREMENT BENEFIT (OPEB) PLANS NET PERIODIC BENEFIT COSTS:

Components of net periodic costs (benefits) for the three and six months ended June 30 are as follows:
 
Pension Benefits
 
Other Postretirement Benefits
 
Three Months Ended
 
Six Months Ended
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
June 30,
 
June 30,
 
June 30,
 
2013
 
2012
 
2013
 
2012
 
2013
 
2012
 
2013
 
2012
Service cost
$
5,581

 
$
4,850

 
$
11,287

 
$
10,003

 
$
4,849

 
$
4,566

 
$
9,698

 
$
9,766

Interest cost
8,909

 
9,415

 
17,752

 
18,793

 
29,619

 
32,795

 
59,237

 
68,322

Expected return on plan assets
(12,711
)
 
(11,452
)
 
(24,855
)
 
(23,079
)
 
—

 
—

 
—

 
—

Amortization of prior service cost (credits)
(407
)
 
(407
)
 
(815
)
 
(815
)
 
(7,804
)
 
(13,410
)
 
(15,608
)
 
(25,009
)
Recognized net actuarial loss
10,547

 
11,654

 
22,722

 
23,917

 
17,595

 
20,020

 
35,190

 
40,365

Settlement loss
5,087

 
—

 
32,202

 
—

 
—

 
—

 
—

 
—

Net periodic benefit cost
$
17,006

 
$
14,060

 
$
58,293

 
$
28,819

 
$
44,259

 
$
43,971

 
$
88,517

 
$
93,444



For the six months ended June 30, 2013, $34,376 was paid to the pension trust for pension benefits from operating cash flows. CONSOL Energy expects to contribute to the pension trust using prudent funding methods. Currently, depending on asset values and asset returns held in the trust, we expect to contribute $50,000 to the pension trust in 2013. Net periodic benefit costs are allocated to Costs of Goods Sold and Other Operating Charges and Selling, General and Administrative Expenses in the Consolidated Statements of Income.

According to the Defined Benefit Plans Topic of the Financial Accounting Standards Board (FASB) Accounting Standards Codification, if the lump sum distributions made for the plan year, which for CONSOL Energy is January 1 to December 31, exceed the total of the projected service cost and interest cost for the plan year, settlement accounting is required. Lump sum payments exceeded this threshold during the six months ended June 30, 2013. Accordingly, CONSOL Energy recognized expense of $5,087 and $32,202 for the three and six months ended June 30, 2013, respectively, in Costs of Goods Sold and Other Operating Charges in the Consolidated Statements of Income. The settlement charges represented a pro rata portion of the net unrecognized loss based on the percentage reduction in the projected benefit obligation due to the lump sum payments. The settlement charges noted above also resulted in a remeasurement of the pension plan at June 30 and March 31, 2013. The June 30, 2013 remeasurement resulted in a change to the discount rate to 4.84% from 4.12% at March 31, 2013. The June remeasurement reduced the pension liability by $48,957. The June settlement and corresponding remeasurement of the pension plan resulted in an adjustment of $33,414 in other comprehensive income, net of $20,630 in deferred taxes. The March 31, 2013 remeasurement resulted in a change to the discount rate to 4.12% from 4.00% at December 31, 2012. The March remeasurement reduced the pension liability by $29,916. The March settlement and corresponding remeasurement of the pension plan resulted in an adjustment of $35,261 in other comprehensive income, net of $21,770 in deferred taxes. Currently, the settlement and remeasurement of the pension plan will result in a $10,960 reduction to pension expense compared to what was originally expected to be recognized for the remaining six months of 2013. It is reasonably possible that CONSOL Energy will incur additional settlement charges in 2013, which would require the pension plan to be remeasured using updated assumptions.

CONSOL Energy does not expect to contribute to the other postretirement benefit plan in 2013. We intend to pay benefit claims as they become due. For the six months ended June 30, 2013, $83,106 of other postretirement benefits have been paid.