PENSION PLANS AND OTHER POSTRETIREMENT BENEFIT PLANS

Avista Utilities

Avista Utilities’ maintained the same pension and other postretirement plans during the three months ended March 31, 2019 as those described as of December 31, 2018. The Company’s funding policy is to contribute at least the minimum amounts that are required to be funded under the Employee Retirement Income Security Act, but not more than the maximum amounts that are currently deductible for income tax purposes. The Company contributed $7.3 million in cash to the pension plan for the three months ended March 31, 2019 and it expects to contribute a total of $22.0 million in 2019.

The Company uses a December 31 measurement date for its defined benefit pension and other postretirement benefit plans. The following table sets forth the components of net periodic benefit costs for the three months ended March 31 (dollars in thousands):



	Pension Benefits						Other Postretirement Benefits
	2019			2018			2019			2018
Service cost (a)	$	4,874		$	5,450		$	772		$	804
Interest cost	7,138			6,466			1,372			1,197
Expected return on plan assets	(7,815		)	(8,250		)	(718		)	(500		)
Amortization of prior service cost	75			75			(275		)	(815		)
Net loss recognition	2,415			2,088			1,246			1,655
Net periodic benefit cost	$	6,687		$	5,829		$	2,397		$	2,341


(a)	Total service costs in the table above are recorded to the same accounts as labor expense. Labor and benefits expense is recorded to various projects based on whether the work is a capital project or an operating expense. Approximately 40 percent of all labor and benefits is capitalized to utility property and 60 percent is expensed to utility other operating expenses.