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Pension and other post-employment benefits
 12 Months Ended
Dec. 31, 2023
Retirement Benefits [Abstract]  
Pension and other post-employment benefits Pension and other post-employment benefits
The Company provides defined contribution pension plans to substantially all of its employees. The Company’s contributions for 2023 were $14,521 (2022 - $12,126).
The Company provides a defined benefit cash balance pension plan under which employees are credited with a percentage of base pay plus a prescribed interest rate credit. In conjunction with the utility acquisitions, the Company also assumes defined benefit pension, SERP and OPEB plans for qualifying employees in the related acquired businesses. The legacy plans are non-contributory defined pension plans covering substantially all employees of the acquired businesses. Benefits are based on each employee’s years of service and compensation. The Company permanently freezes the accrual of benefits for participants in legacy plans. Thereafter, employees accrue benefits under the Company’s cash balance plan. The OPEB plans provide health care and life insurance coverage to eligible retired employees. Eligibility is based on age and length of service requirements and, in most cases, retirees must cover a portion of the cost of their coverage.
10.Pension and other post-employment benefits (continued)
(a)Net pension and OPEB obligation
The following table sets forth the projected benefit obligations, fair value of plan assets, and funded status of the Company’s plans as of December 31:
 Pension benefitsOPEB
 2023202220232022
Change in projected benefit obligation
Projected benefit obligation, beginning of year$628,135 $765,618 $217,330 $292,646 
Projected benefit obligation assumed from business combination— 87,933 — 5,195 
Plan settlements
(3,226)(112)— — 
Service cost11,954 16,309 3,253 6,277 
Interest cost33,687 24,787 11,510 9,146 
Actuarial loss (gain)20,172 (198,074)(10,913)(82,991)
Contributions from retirees— — 2,189 2,220 
Plan amendments— — — (2,452)
Medicare Part D — — 355 367 
Benefits paid(42,801)(68,197)(14,226)(13,078)
Foreign exchange(53)(129)— — 
Projected benefit obligation, end of year$647,868 $628,135 $209,498 $217,330 
Change in plan assets
Fair value of plan assets, beginning of year569,255 648,864 172,167 192,375 
Plan assets acquired in business combination— 74,532 — 8,577 
Actual return on plan assets65,272 (109,118)22,620 (30,105)
Employer contributions22,326 23,296 10,677 11,811 
Plan settlements
(3,226)(112)— — 
Contributions from retirees— — 2,189 2,220 
Medicare Part D subsidy receipts— — 355 367 
Benefits paid(42,801)(68,197)(14,226)(13,078)
Foreign exchange2 (10)— — 
Fair value of plan assets, end of year$610,828 $569,255 $193,782 $172,167 
Unfunded status$(37,040)$(58,880)$(15,716)$(45,163)
Amounts recognized in the consolidated balance sheets consist of:
Non-current assets (note 11)12,598 12,264 35,879 14,218 
Current liabilities(1,416)(1,907)(3,164)(3,039)
Non-current liabilities(48,222)(69,237)(48,431)(56,342)
Net amount recognized
$(37,040)$(58,880)$(15,716)$(45,163)
The accumulated benefit obligations for the pension and OPEB plans are $827,559 and $815,589 as of December 31, 2023 and 2022, respectively.
10.Pension and other post-employment benefits (continued)
(a)Net pension and OPEB obligation (continued)
Information for pension and OPEB plans with an accumulated benefit obligation in excess of plan assets:
PensionOPEB
2023202220232022
Accumulated benefit obligation$425,842 $413,041 $71,089 $198,463 
Fair value of plan assets$393,857 $364,229 $18,793 $139,368 

Information for pension and OPEB plans with a projected benefit obligation in excess of plan assets:
PensionOPEB
2023202220232022
Projected benefit obligation$507,612 $489,140 $71,089 $198,463 
Fair value of plan assets$458,497 $417,994 $18,793 $139,368 

(b)Pension and post-employment actuarial changes
Change in AOCI, before taxPensionOPEB
 Actuarial losses (gains)Past service losses (gains)Actuarial losses (gains)Past service losses (gains)
Balance, January 1, 2022$15,807 $(4,195)$(15,630)$310 
Additions to AOCI(47,473)— (41,527)(24)
Amortization in current period(3,429)1,584 56 (2,476)
Amortization due to plan settlements15 — — — 
Reclassification to regulatory accounts34,409 (752)23,551 — 
Balance, December 31, 2022$(671)$(3,363)$(33,550)$(2,190)
Additions to AOCI(12,600)— (23,797)853 
Amortization in current period617 1,491 2,554 — 
Recognition of settlement gain235 — — — 
Reclassification to regulatory accounts5,517 (755)19,518 — 
Balance, December 31, 2023$(6,902)$(2,627)$(35,275)$(1,337)
The movements related to pension and OPEB in AOCI for Empire Electric System, Empire Gas Systems, St. Lawrence Gas System and Liberty NY Water System are reclassified to regulatory accounts since it is probable the unfunded amount of these plans will be afforded rate recovery (note 7(f)).
10.Pension and other post-employment benefits (continued)
(c)Assumptions
Weighted average assumptions used to determine net benefit obligation for 2023 and 2022 were as follows: 
 Pension benefitsOPEB
 2023202220232022
Discount rate5.19 %5.48 %5.22 %5.49 %
Interest crediting rate (for cash balance plans)4.48 %4.50 %N/AN/A
Rate of compensation increase3.60 %3.70 %N/AN/A
Health care cost trend rate
Before age 657.00 %6.00 %
Age 65 and after6.00 %6.00 %
Assumed ultimate medical inflation rate4.50 %4.75 %
Year in which ultimate rate is reached20342033
The mortality assumption for December 31, 2023 uses the Pri-2012 mortality table and the projected generationally scale MP-2021, adjusted to reflect the ultimate improvement rates in the 2021 Social Security Administration intermediate assumptions for plans in the United States. The mortality assumption for the Bermuda plan as of December 31, 2023 uses the 2014 Canadian Pensioners' Mortality Table combined with mortality improvement scale CPM-B.
In selecting an assumed discount rate, the Company uses a modelling process that involves selecting a portfolio of high-quality corporate debt issuances (AA or better) whose cash flows (via coupons or maturities) match the timing and amount of the Company’s expected future benefit payments. The Company considers the results of this modelling process, as well as overall rates of return on high-quality corporate bonds and changes in such rates over time, to determine its assumed discount rate.
The rate of return assumptions are based on projected long-term market returns for the various asset classes in which the plans are invested, weighted by the target asset allocations.
Weighted average assumptions used to determine net benefit cost for 2023 and 2022 were as follows: 
 Pension benefitsOPEB
 2023202220232022
Discount rate5.35 %2.94 %5.49 %3.00 %
Expected return on assets6.38 %6.19 %6.45 %6.48 %
Rate of compensation increase3.99 %3.91 %n/an/a
Health care cost trend rate
Before Age 656.00 %5.88 %
Age 65 and after6.00 %5.88 %
Assumed ultimate medical inflation rate4.75 %4.75 %
Year in which ultimate rate is reached20332031
10.Pension and other post-employment benefits (continued)
(d)Benefit costs
The following table lists the components of net benefit cost for the pension and OPEB plans. Service cost is recorded as part of operating expenses and non-service costs are recorded as part of Pension and other post-employment non-service costs in the consolidated statements of operations. The employee benefit costs related to businesses acquired are recorded in the consolidated statements of operations from the date of acquisition.
 Pension benefitsOPEB
 2023202220232022
Service cost$11,954 $16,309 $3,253 $6,277 
Non-service costs
Interest cost33,687 24,787 11,510 9,146 
Expected return on plan assets(31,990)(41,226)(9,736)(11,359)
Amortization of net actuarial loss(852)3,452 (3,559)(56)
Amortization of prior service credits(1,491)(1,584)(853)24 
Amortization due to plan settlements— (15)— — 
Amortization of regulatory accounts16,258 22,952 6,965 4,829 
$15,612 $8,366 $4,327 $2,584 
Net benefit cost$27,566 $24,675 $7,580 $8,861 
(e)Plan assets
The Company’s investment strategy for its pension and post-employment plan assets is to maintain a diversified portfolio of assets with the primary goal of meeting long-term cash requirements as they become due.
The Company’s target asset allocation is as follows:
Asset classTarget (%)Range (%)
Equity securities41.6 %
30% - 100%
Debt securities48.6 %
20% - 60%
Other9.8 %
0% - 20%
100 %

The fair values of investments as of December 31, 2023, by asset category, are as follows:
Asset class2023Percentage
Equity securities$376,158 47 %
Debt securities377,272 47 %
Other51,180 6 %
$804,610 100 %
As of December 31, 2023, the plan assets do not include any material investments in AQN. 
10.Pension and other post-employment benefits (continued)
(e)Plan assets (continued)
All investments as of December 31, 2023 are valued using Level 1 inputs except for $26,381 of institutional private equity investments using Level 3 fair value measurement. These private equity funds invest in the private equity secondary market and in the credit markets. These funds are not traded in the open market, and are valued based on the underlying securities within the funds. The underlying securities are valued at fair value by the fund managers by using securities exchange quotations, pricing services, obtaining broker-dealer quotations, reflecting valuations provided in the most recent financial reports, or at a good faith estimate using fair market value principles.
The following table summarizes the changes fair value of these Level 3 assets as of December 31:
Level 3
Balance, January 1, 2023$21,904 
Contributions into funds4,603 
Return on assets2,205 
Distributions(2,331)
Balance, December 31, 2023$26,381 
(f)Cash flows
The Company expects to contribute $23,248 to its pension plans and $3,583 to its post-employment benefit plans in 2024.
The expected benefit payments over the next ten years are as follows: 
202420252026202720282029-2033
Pension plan$48,271 $49,652 $49,389 $50,443 $50,751 $255,465 
OPEB$11,718 $12,303 $12,623 $13,105 $13,487 $71,230