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PENSION PLANS AND OTHER POSTRETIREMENT BENEFITS (Tables)

12 Months Ended

Sep. 30, 2013

Defined Contribution Pension and Other Postretirement Plans Disclosure [Abstract]

Net periodic postretirement benefit costs consisted of the following components:



(Thousands)	2013			2012			2011
Service cost – benefits earned during the period	$	10,162		$	8,060		$	7,676
Interest cost on accumulated postretirement benefit obligation	5,234			5,521			4,843
Expected return on plan assets	(4,447		)	(3,965		)	(3,646		)
Amortization of transition obligation	93			136			136
Amortization of prior service credit	3			(2,072		)	(2,328		)
Amortization of actuarial loss	5,300			4,261			4,443
Sub-total	16,345			11,941			11,124
Regulatory adjustment	(6,821		)	(2,417		)	(2,071		)
Net postretirement benefit cost	$	9,524		$	9,524		$	9,053

The net periodic pension costs include the following components:



(Thousands)	2013			2012			2011
Service cost – benefits earned during the period	$	9,209		$	9,203		$	9,553
Interest cost on projected benefit obligation	16,959			19,358			18,819
Expected return on plan assets	(19,358		)	(19,595		)	(18,849		)
Amortization of prior service cost	544			592			642
Amortization of actuarial loss	10,724			9,040			10,228
Loss on lump-sum settlements	26,996			20,051			943
Sub-total	45,074			38,649			21,336
Regulatory adjustment	(27,532		)	(18,579		)	(7,066		)
Net pension cost	$	17,542		$	20,070		$	14,270

Other changes in plan assets and benefit obligations recognized in other comprehensive income

Other changes in plan assets and postretirement benefit obligations recognized in other comprehensive income include the following:



(Thousands)	2013			2012			2011
Current year actuarial loss	$	16,300		$	10,138		$	1,696
Amortization of actuarial loss	(5,300		)	(4,261		)	(4,443		)
Amortization of prior service credit	(3		)	2,072			2,328
Amortization of transition obligation	(93		)	(136		)	(136		)
Sub-total	10,904			7,813			(555		)
Regulatory adjustment	(10,904		)	(7,813		)	555
Total recognized in other comprehensive income	$	—		$	—		$	—

Other changes in plan assets and pension benefit obligations recognized in other comprehensive income include the following:



(Thousands)	2013			2012			2011
Current year actuarial loss (gain)	$	17,030		$	32,884		$	(13,485	)
Amortization of actuarial loss	(10,724		)	(29,091		)	(11,171		)
Acceleration of loss recognized due to settlement	(26,996		)	—			—
Amortization of prior service cost	(544		)	(592		)	(642		)
Sub-total	(21,234		)	3,201			(25,298		)
Regulatory adjustment	21,159			(3,510		)	24,533
Total recognized in other comprehensive income	$	(75	)	$	(309	)	$	(765	)

Reconciliation of the beginning and Ending Balances of Benefit Obligation

The following table sets forth the reconciliation of the beginning and ending balances of the postretirement benefit obligation at September 30:



(Thousands)	2013			2012
Benefit obligation, beginning of year	$	127,217		$	103,991
Service cost	10,162			8,060
Interest cost	5,234			5,521
Actuarial loss (gain)	17,514			15,895
MGE acquisition	28,444			—
Gross benefits paid	(8,449		)	(6,250		)
Benefit obligation, end of year	$	180,122		$	127,217

The following table sets forth the reconciliation of the beginning and ending balances of the pension benefit obligation at September 30:



(Thousands)	2013			2012
Benefit obligation, beginning of year	$	412,171		$	384,163
Service cost	9,209			9,203
Interest cost	16,959			19,358
Actuarial (gain) loss	(23,921		)	52,161
MGE acquisition	151,424			—
Settlement loss	24,999			14,348
Gross benefits paid *	(87,023		)	(67,062		)
Benefit obligation, end of year	$	503,818		$	412,171
Accumulated benefit obligation, end of year	$	444,129		$	353,061


*	Includes $79,484 and $60,085 lump-sum payments recognized as settlements in fiscal years 2013 and 2012, respectively.

Fair Value of Plan Assets

The following table sets forth the reconciliation of the beginning and ending balances of the fair value of plan assets at September 30:



(Thousands)	2013			2012
Fair value of plan assets at beginning of year	$	67,442		$	51,744
Actual return on plan assets	5,660			9,722
Employer contributions	16,596			12,226
MGE acquisition	30,396			—
Gross benefits paid	(8,449		)	(6,250		)
Fair value of plan assets, end of year	$	111,645		$	67,442
Funded status of plans, end of year	$	(68,477	)	$	(59,775	)

The following table sets forth the reconciliation of the beginning and ending balances of the fair value of plan assets at September 30:



(Thousands)	2013			2012
Fair value of plan assets, beginning of year	$	274,130		$	247,959
Actual return on plan assets	3,387			53,220
Employer contributions	27,991			40,013
MGE acquisition	126,958			—
Gross benefits paid *	(87,023		)	(67,062		)
Fair value of plan assets, end of year	$	345,443		$	274,130
Funded status of plans, end of year	$	(158,375	)	$	(138,041	)


*	Includes $79,484 and $60,085 lump-sum payments recognized as settlements in fiscal years 2013 and 2012, respectively.

Amounts recognized in consolidated balance sheet

The following table sets forth the amounts recognized in the Consolidated Balance Sheets at September 30:



(Thousands)	2013			2012
Current liabilities	$	(442	)	$	(468	)
Noncurrent liabilities	(157,933		)	(137,573		)
Total	$	(158,375	)	$	(138,041	)
Pre-tax amounts recognized in accumulated other comprehensive income not yet recognized as components of net periodic pension cost consist of:
Net actuarial loss	$	115,775		$	136,464
Prior service costs	4,467			5,011
Sub-total	120,242			141,475
Adjustments for amounts included in Regulatory Assets	(116,686		)	(137,845		)
Total	$	3,556		$	3,630

The following table sets forth the amounts recognized in the Consolidated Balance Sheets at September 30:



(Thousands)	2013			2012
Noncurrent assets	$	2,543		$	—
Current liabilities	(300		)	(790		)
Noncurrent liabilities	(70,720		)	(58,985		)
Total	$	(68,477	)	$	(59,775	)
Pre-tax amounts recognized in accumulated other comprehensive income not yet recognized as components of net periodic postretirement benefit cost consist of:
Net actuarial loss	$	63,573		$	52,573
Prior service credit	(27		)	(24		)
Transition obligation	—			93
Sub-total	63,546			52,642
Adjustments for amounts included in Regulatory Assets	(63,546		)	(52,642		)
Total	$	—		$	—

Pre-tax amounts amortized from accumulated other comprehensive income into net periodic cost

At September 30, 2013, the following pre-tax amounts are expected to be amortized from accumulated other comprehensive income into net periodic postretirement benefit cost during fiscal year 2014:



(Thousands)
Amortization of net actuarial loss	$	6,021
Amortization of prior service cost	(4		)
Sub-total	6,017
Regulatory adjustment	(6,017		)
Total	$	—

At September 30, 2013, the following pre-tax amounts are expected to be amortized from accumulated other comprehensive income into net periodic pension cost during fiscal year 2014:



(Thousands)	2014
Amortization of net actuarial loss	$	7,088
Amortization of prior service cost	497
Sub-total	7,585
Regulatory adjustment	(7,196		)
Total	$	389

Assumptions used to calculate net periodic cost and benefit obligations.

The assumptions used to calculate the accumulated postretirement benefit obligations are as follows:



	2013	2012
Weighted average discount rate *	4.60%	3.80%
Weighted average rate of future compensation increase	3.00%	3.00%

The assumptions used to calculate the benefit obligations are as follows:



	2013	2012
Weighted average discount rate *	4.70%	3.95%
Weighted average rate of future compensation increase	3.00%	3.00%


*	Weighted average discount rate assumption for the MGE pension plan is 5.00%.

The assumptions used to calculate net periodic pension costs are as follows:



	2013	2012	2011
Weighted average discount rate*	3.95%	5.10%	4.75%
Weighted average rate of future compensation increase	3.00%	3.00%	3.00%
Expected long-term rate of return on plan assets	7.75%	7.75%	8.00%


*	Weighted average discount rate assumption for the MGE pension plan is 5.05%.

The assumptions used to calculate net periodic postretirement benefit costs are as follows:



	2013		2012		2011
Weighted average discount rate *	3.80	%	5.05	%	4.70	%
Weighted average rate of future compensation increase	3.00	%	3.00	%	3.00	%
Expected long-term rate of return on plan assets **	7.75	%	7.75	%	8.00	%


*	Weighted average discount rate assumption for the MGE postretirement plan is 5.05%.

** Expected long-term rate of return on plan assets assumption for the MGE postretirement plan is 5.75%.

Projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for plans that have projected benefit obligation and accumulated benefit obligation in excess of plan assets

Following are the projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for plans that have a projected benefit obligation and an accumulated benefit obligation in excess of plan assets:



(Thousands)	2013		2012
Projected benefit obligation	$	503,818	$	412,171
Accumulated benefit obligation	444,129		353,061
Fair value of plan assets	345,443		274,130

Targeted and actual plan assets by category

Following are the targeted and actual plan assets by category as of September 30 of each year:



	Target		2013 Actual		2012 Actual
Growth Strategy
Equity Markets	42.5	%	45.9	%	37.3	%
Commodities	2.5	%	1.6	%	2.2	%
Real Estate	2.5	%	3.0	%	2.2	%
Inflation-Indexed Securities	2.5	%	1.4	%	2.2	%
Debt Securities	50.0	%	43.3	%	41.1	%
Other*	—	%	4.8	%	15.0	%
Total	100.0	%	100.0	%	100.0	%

* Other investments in 2013 consist of cash equivalents. The relatively large cash position at September 30, 2012 was

due to a transition taking place between investment managers and was invested in debt securities in a matter of days.

Following are the targeted and actual plan assets by category as of September 30 of each year:



	Target		2013 Actual		2012 Actual
Equity Securities	60.0	%	59.0	%	59.0	%
Debt Securities	40.0	%	39.0	%	39.0	%
Other	—	%	2.0	%	2.0	%
Total	100.0	%	100.0	%	100.0	%

Expected benefit payments for the succeeding five fiscal years

Following are expected pension benefit payments for the succeeding five fiscal years, and in aggregate for the five years thereafter:



(Millions)	Pensions from Qualified Trust		Pensions from Laclede Gas Funds
2014	$	22.9	$	0.4
2015	25.3		0.5
2016	27.2		0.5
2017	30.8		0.6
2018	34.2		0.6
2019 – 2023	227.2		4.5

Following are expected postretirement benefit payments for the succeeding five fiscal years, and in aggregate for the five years thereafter:



(Millions)	Benefits Paid from Qualified Trust		Benefits Paid from Laclede Gas Funds
2014	$	9.5	$	0.3
2015	9.9		0.3
2016	10.7		0.3
2017	11.7		0.4
2018	12.8		0.4
2019 – 2023	84.1		2.2

Assumed medical cost trend rates and effect of an assumed 1% changed in assumed medical cost trend.

The assumed medical cost trend rates at September 30 are as follows:



	2013	2012
Medical cost trend assumed for next year	7.50%	7.00%
Rate to which the medical cost trend rate is assumed to decline (the ultimate medical cost trend rate)	5.00%	5.00%
Year the rate reaches the ultimate trend	2020	2017

The following table presents the effect of an assumed 1% change in the assumed medical cost trend rate:



(Thousands)	1% Increase		1% Decrease
Effect on net periodic postretirement benefit cost	$	1,520	$	(1,390	)
Effect on accumulated postretirement benefit obligation	7,060		(6,580		)

Fair value measurements of plan assets

The table below categorizes the fair value measurements of the Utility's’ pension plan assets:



(Thousands)	Quoted Prices in Active Markets (Level 1)		Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)		Total
As of September 30, 2013
Cash and cash equivalents	$	18,177	$	—		$	—	$	18,177
Stock/Bond mutual fund	—		115,817			—		115,817
Debt Securities
U.S. bond mutual funds	17,682		—			—		17,682
U.S. government	—		55,743			—		55,743
U.S. corporate	—		110,925			—		110,925
U.S. municipal	—		6,799			—		6,799
International	—		21,594			—		21,594
Derivative instruments (a)	—		(1,294		)	—		(1,294		)
Total	$	35,859	$	309,584		$	—	$	345,443

As of September 30, 2012
Cash and cash equivalents	$	57,614	$	—		$	—	$	57,614
Debt Securities
U.S. bond mutual funds	36,767		—			—		36,767
U.S. government	—		57,925			—		57,925
U.S. corporate	—		93,169			—		93,169
U.S. municipal	—		9,493			—		9,493
International	—		18,885			—		18,885
Derivative instruments (b)	—		277			—		277
Total	$	94,381	$	179,749		$	—	$	274,130


(a)	Derivative assets of $4,186 net of cash margin payable of $5,480.


(b)	Derivative assets of $3,027 net of cash margin payable of $2,750.

The table below categorizes the fair value measurements of The Utility's postretirement plan assets:



(Thousands)	Quoted Prices in Active Markets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
As of September 30, 2013
Cash and cash equivalents	$	1,411	$	—	$	—	$	1,411
U.S. stock/bond mutual fund	110,234		—		—		110,234
Total	$	111,645	$	—	$	—	$	111,645

As of September 30, 2012
Cash and cash equivalents	$	1,106	$	—	$	—	$	1,106
U.S. stock/bond mutual fund	66,336		—		—		66,336
Total	$	67,442	$	—	$	—	$	67,442