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Employee Benefit Plans
 6 Months Ended
Jun. 30, 2012
Employee Benefit Plans [Abstract]  
Employee Benefit Plans
8. Employee Benefit Plans

Net periodic benefit costs for our pension and post-retirement benefits plans for the three and six months ended June 30, 2012 and 2011 are set forth in the following table:

 

                                                                                 
                                        Chesapeake              
    Chesapeake     FPU     Chesapeake     Postretirement     FPU  
    Pension Plan     Pension Plan     SERP     Plan     Medical Plan  

For the Three Months Ended June 30,

   2012     2011     2012     2011     2012     2011     2012     2011     2012     2011  
(in thousands)                                                            

Service Cost

   $ —       $ —       $ —       $ —       $ —       $ —       $ —       $ —       $ 40     $ 27  

Interest Cost

     125       130       639       672       22       27       15       15       45       39  

Expected return on plan assets

     (109 )      (101 )      (657 )      (684 )      —         —         —         —         —         —    

Amortization of prior service cost

     (2 )      (2 )      —         —         5       5       (20 )      —         —         —    

Amortization of net loss

     85       39       44       —         12       9       17       —         22       5  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net periodic cost (benefit)

     99       66       26       (12 )      39       41       12       15       107       71  

Amortization of pre-merger regulatory asset

     —         —         191       191       —         —         —         —         2       2  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total periodic cost

   $ 99     $ 66     $ 217     $ 179     $ 39     $ 41     $ 12     $ 15     $ 109     $ 73  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
                   
                                        Chesapeake              
    Chesapeake     FPU     Chesapeake     Postretirement     FPU  
    Pension Plan     Pension Plan     SERP     Plan     Medical Plan  

For the Six Months Ended June 30,

   2012     2011     2012     2011     2012     2011     2012     2011     2012     2011  
(in thousands)                                                            

Service Cost

   $ —       $ —       $ —       $ —       $ —       $ —       $ —       $ —       $ 80     $ 53  

Interest Cost

     250       260       1,278       1,343       45       54       30       30       90       78  

Expected return on plan assets

     (218 )      (202 )      (1,315 )      (1,368 )      —         —         —         —         —         —    

Amortization of prior service cost

     (3 )      (3 )      —         —         10       10       (40 )      —         —         —    

Amortization of net loss

     170       78       88       —         23       19       35       —         45       10  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net periodic cost (benefit)

     199       133       51       (25 )      78       83       25       30       215       141  

Settlement expense

     —         217       —         —         —         —         —         —         —         —    

Amortization of pre-merger regulatory asset

     —         —         381       381       —         —         —         —         4       4  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total periodic cost

   $ 199     $ 350     $ 432     $ 356     $ 78     $ 83     $ 25     $ 30     $ 219     $ 145  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

We expect to record pension and postretirement benefit costs of approximately $1.9 million for 2012. Included in that amount is $769,000 related to continued amortization of the FPU pension regulatory asset, which represents the portion attributable to FPU’s regulated energy operations of the changes in funded status that occurred but were not recognized as part of net periodic benefit costs prior to the merger. This was deferred as a regulatory asset by FPU prior to the merger to be recovered through rates pursuant to a previous order by the Florida PSC. The unamortized balance of this regulatory asset was $5.5 million and $5.9 million at June 30, 2012 and December 31, 2011, respectively.

During the three and six months ended June 30, 2012, we contributed $110,000 and $273,000 respectively, to the Chesapeake pension plan. We also contributed $413,000 and $705,000, respectively, to the FPU pension plan during the three and six months ended June 30, 2012. On June 29, 2012, the U.S. Congress passed the “Moving Ahead for Progress in the 21st century Act” (also known as the “Transportation and Student Loan Bill”). Included in this legislation was pension funding relief, which allowed pension sponsors to use 25-year average corporate bond rates rather than current interest rates, which are lower, to measure pension obligations for pension funding purposes. Although this legislation does not affect accounting for pension plans, the use of higher interest rates to measure pension obligations for funding purposes reduces the minimum pension contribution requirements. We initially estimated our 2012 contributions to the Chesapeake and FPU pension plans to be $1.3 million and $2.0 million, respectively, which include minimum contribution payments required in 2012 using the current interest rate to measure pension obligations and any additional contributions that we may make to maintain a certain level of funding in those plans. We estimate that the new legislation could reduce our 2012 contributions to the Chesapeake and FPU pension plans by as much as $915,000 and $1.2 million, respectively.

 

The Chesapeake Pension Supplemental Executive Retirement Plan (“SERP”), the Chesapeake Postretirement Plan and the FPU Medical Plan are unfunded and are expected to be paid out of our general funds. Cash benefits paid under the Chesapeake Pension SERP for the three and six months ended June 30, 2012, were $22,000 and $45,000, respectively; we expect to pay cash benefits of approximately $88,000 in 2012. Cash benefits paid for the Chesapeake Postretirement Plan, primarily for medical claims for the three and six months ended June 30, 2012, totaled $28,000 and $40,000, respectively, and we have estimated that approximately $87,000 will be paid for such benefits in 2012. Cash benefits paid for the FPU Medical Plan, primarily for medical claims for the three and six months ended June 30, 2012, totaled $100,000 and $158,000, respectively. We have estimated that approximately $193,000 will be paid for such benefits in 2012.