Retirement benefits

Defined benefit pension and other postretirement benefit plans information. For the first three months of 2014, the Company contributed $15 million ($14 million by the Utilities) to its pension and other postretirement benefit plans, compared to $21 million ($21 million by the Utilities) in the first three months of 2013. The Company’s current estimate of contributions to its pension and other postretirement benefit plans in 2014 is $59 million ($58 million by the Utilities, $1 million by HEI and nil by ASB), compared to $83 million ($81 million by the Utilities, $2 million by HEI and nil by ASB) in 2013. In addition, the Company expects to pay directly $2 million ($1 million by the Utilities) of benefits in 2014, compared to $2 million ($1 million by the Utilities) paid in 2013.

On July 6, 2012, President Obama signed the Moving Ahead for Progress in the 21st Century Act (MAP-21), which included provisions related to the funding and administration of pension plans. This law does not affect the Company’s or the Utilities' accounting for pension benefits; therefore, the net periodic benefit costs disclosed for the plans were not affected. The Company elected to apply MAP-21 for 2012, which improved the plans’ Adjusted Funding Target Attainment Percentage (AFTAP) for funding and benefit distribution purposes and thereby reduced the 2012 minimum funding requirement and lifted the restrictions on accelerated distribution options (which restrictions were in effect from April 1, 2011 to September 30, 2012) for HEI and the Utilities. MAP-21 caused the minimum required funding under Employee Retirement Income Security Act of 1974 (as amended) to be less than the net periodic cost for 2013 and is expected to have the same effect in 2014; therefore, to satisfy the requirements of the Utilities pension and OPEB tracking mechanisms, the Utilities expect to contribute the net periodic cost in 2014.

The Pension Protection Act provides that if a pension plan’s funded status falls below certain levels, more conservative assumptions must be used to value obligations under the pension plan. The HEI Retirement Plan met the threshold requirements in each of 2012 and 2013 so that the more conservative assumptions did not apply for either the 2013 or 2014 valuation of plan liabilities for purposes of calculating the minimum required contribution. Other factors could cause changes to the required contribution levels.

The components of net periodic benefit cost for HEI consolidated and Hawaiian Electric consolidated were as follows:



	Pension benefits						Other benefits
Three months ended March 31	2014			2013			2014			2013
(in thousands)
HEI consolidated
Service cost	$	12,127		$	14,089		$	883		$	1,049
Interest cost	18,001			16,106			2,160			1,931
Expected return on plan assets	(20,347		)	(18,085		)	(2,708		)	(2,562		)
Amortization of net prior service loss (gain)	22			(24		)	(448		)	(448		)
Amortization of net actuarial loss (gain)	5,038			9,819			(3		)	521
Net periodic benefit cost (credit)	14,841			21,905			(116		)	491
Impact of PUC D&Os	(3,011		)	(8,866		)	445			(397		)
Net periodic benefit cost (adjusted for impact of PUC D&Os)	$	11,830		$	13,039		$	329		$	94
Hawaiian Electric consolidated
Service cost	$	11,697		$	13,603		$	856		$	1,014
Interest cost	16,436			14,676			2,079			1,861
Expected return on plan assets	(18,171		)	(16,090		)	(2,663		)	(2,520		)
Amortization of net prior service loss (gain)	15			(116		)	(451		)	(451		)
Amortization of net actuarial loss	4,560			8,790			—			504
Net periodic benefit cost (credit)	14,537			20,863			(179		)	408
Impact of PUC D&Os	(3,011		)	(8,866		)	445			(397		)
Net periodic benefit cost (adjusted for impact of PUC D&Os)	$	11,526		$	11,997		$	266		$	11

HEI consolidated recorded retirement benefits expense of $8 million ($8 million by the Utilities) and $10 million ($9 million by the Utilities) in the first three months of 2014 and 2013, respectively, and charged the remaining net periodic benefit cost primarily to electric utility plant.

The Company and the Utilities have revised their prior year disclosures to correct the amount disclosed for the “Impact of PUC D&Os.” The misstatement was not considered to be material to previously issued financial statements. The table below illustrates the effects of this revision on the previous disclosures (the revised disclosures had no impact on the Company’s and the Utilities' Consolidated Balance Sheets, Consolidated Statements of Income or Consolidated Statements of Cash Flows):



	HEI consolidated									Hawaiian Electric consolidated
Three months ended March 31, 2013	As previously									As previously
(in thousands)	filed			As revised			Difference			filed			As revised			Difference
Pension benefits:
Impact of PUC D&Os	$	(7,436	)	$	(8,866	)	$	(1,430	)	$	(7,436	)	$	(8,866	)	$	(1,430	)
Net periodic benefit cost (adjusted
for impact of PUC D&Os)	14,469			13,039			(1,430		)	13,427			11,997			(1,430		)

(in millions)
Retirement benefits expense	$	11		$	10		$	(1	)	$	10		$	9		$	(1	)

The Utilities have implemented pension and OPEB tracking mechanisms under which all of their retirement benefit expenses (except for executive life and nonqualified pension plan expenses) determined in accordance with GAAP are recovered over time. Under the tracking mechanisms, these retirement benefit costs that are over/under amounts allowed in rates are charged/credited to a regulatory asset/liability. The regulatory asset/liability for each utility will be amortized over 5 years beginning with the issuance of the PUC's D&O in the respective utility’s next rate case.

Defined contribution plans information. For the first three months of 2014 and 2013, the Company’s expense for its defined contribution pension plans under the Hawaiian Electric Industries Retirement Savings Plan (HEIRSP) and the ASB 401(k) Plan was $1.1 million and $1.0 million, respectively, and cash contributions were $2.8 million and $2.4 million, respectively. For the first three months of 2014 and 2013, the Utilities’ expense for its defined contribution pension plan was $0.2 million and cash contributions were $0.2 million.