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Note 11 - Pension Plan and Other Postretirement Benefits
 6 Months Ended
Jun. 30, 2020
Notes to Financial Statements  
Retirement Benefits [Text Block]

11. Pension Plan and Other Postretirement Benefits

 

Pension Plan—Components of net periodic pension benefit cost of the Company's noncontributory funded pension plan are as follows:

 

   

Three Months Ended June 30,

    

Six Months Ended June 30,

  

(in thousands)

  

2020

    

2019

    

2020

    

2019

  

Service Cost—Benefit Earned During the Period

   $ 1,656     $ 1,373     $ 3,311     $ 2,746  

Interest Cost on Projected Benefit Obligation

     3,263       3,603       6,526       7,206  

Expected Return on Assets

     (5,505 )     (5,324 )     (11,010 )     (10,649 )

Amortization of Prior-Service Cost:

                                

From Regulatory Asset

     -       2       -       3  

From Other Comprehensive Income1

     -       2       -       4  

Amortization of Net Actuarial Loss:

                                

From Regulatory Asset

     2,231       1,162       4,462       2,325  

From Other Comprehensive Income1

     55       26       110       53  

Net Periodic Pension Cost2

   $ 1700     $ 844     $ 3,399     $ 1,688  

1Corporate cost included in nonservice cost components of postretirement benefits.

                                

2Allocation of costs:

                                

Service costs included in OTP capital expenditures

   $ 432     $ 336     $ 855     $ 726  

Service costs included in electric operation and maintenance expenses

     1,185       1,004       2,377       1,954  

Service costs included in other nonelectric expenses

     39       33       79       66  

Nonservice costs capitalized as regulatory assets

     12       (130 )     23       (280 )

Nonservice costs included in nonservice cost components of postretirement benefits

     32       (399 )     65       (778 )

 

Cash flows—The Company had no minimum funding requirement as of December 31, 2019 but made a discretionary plan contribution of $11.2 million in January 2020.

 

Executive Survivor and Supplemental Retirement Plan—Components of net periodic pension benefit cost of the Company’s unfunded, nonqualified benefit plan for executive officers and certain key management employees are as follows:

 

   

Three Months Ended June 30,

    

Six Months Ended June 30,

  

(in thousands)

  

2020

    

2019

    

2020

    

2019

  

Service Cost—Benefit Earned During the Period

   $ 44     $ 104     $ 89     $ 209  

Interest Cost on Projected Benefit Obligation

     362       434       724       868  

Amortization of Prior Service Cost:

                                

From Regulatory Asset

     -       1       -       2  

From Other Comprehensive Income1

     -       4       -       8  

Amortization of Net Actuarial Loss:

                                

From Regulatory Asset

     24       31       47       62  

From Other Comprehensive Income1

     85       88       171       175  

Net Periodic Pension Cost2

   $ 515     $ 662     $ 1,031     $ 1,324  

1Amortization of prior service costs and net actuarial losses from other comprehensive income are included in nonservice cost components of postretirement benefits.

                               

2Allocation of Costs:

                                

Service costs included in electric operation and maintenance expenses

   $ -     $ 26     $ -     $ 52  

Service costs included in other nonelectric expenses

     44       78       89       157  

Nonservice costs included in nonservice cost components of postretirement benefits

     471       558       942       1,115  

 

Other Postretirement Benefits—Components of net periodic postretirement benefit cost for health insurance benefits for retired OTP and corporate employees, net of the effect of Medicare Part D Subsidy:

 

   

Three Months Ended June 30,

    

Six Months Ended June 30,

  

(in thousands)

  

2020

    

2019

    

2020

    

2019

  

Service Cost—Benefit Earned During the Period

   $ 462     $ 322     $ 924     $ 643  

Interest Cost on Projected Benefit Obligation

     599       772       1,197       1,542  

Amortization of Prior-Service Cost:

                                

From Regulatory Asset

     (1,170 )     -       (2,339 )     -  

From Other Comprehensive Income1

     (29 )     -       (58 )     -  

Amortization of Net Actuarial Loss:

                                

From Regulatory Asset

     1,052       392       2,103       785  

From Other Comprehensive Income1

     26       9       52       19  

Net Periodic Postretirement Benefit Cost2

   $ 940     $ 1,495     $ 1,879     $ 2,989  

Effect of Medicare Part D Subsidy

   $ 280     $ (44 )   $ 561     $ (89 )

1Corporate cost included in nonservice cost components of postretirement benefits.

                                

2Allocation of Costs:

                                

Service costs included in OTP capital expenditures

   $ 120     $ 79     $ 238     $ 170  

Service costs included in electric operation and maintenance expenses

     331       235       664       458  

Service costs included in other nonelectric expenses

     11       8       22       15  

Nonservice costs capitalized as regulatory assets

     124       288       246       621  

Nonservice costs included in nonservice cost components of postretirement benefits

     354       885       709       1,725