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Retirement benefits | 3 Months Ended
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Mar. 31, 2021
Retirement Benefits [Abstract] |
Retirement benefits | Retirement benefits Defined benefit pension and other postretirement benefit plans information. For the first three months of 2021, the Company contributed $9 million ($9 million by the Utilities) to its pension and other postretirement benefit plans, compared to $17 million ($17 million by the Utilities) in the first three months of 2020. The Company’s current estimate of total contributions to its pension and other postretirement benefit plans in 2021 is $52 million ($51 million by the Utilities, $1 million by HEI and nil by ASB), compared to $71 million ($70 million by the Utilities, $1 million by HEI and nil by ASB) in 2020. In addition, the Company expects to pay directly $3 million ($1 million by the Utilities) of benefits in 2021, compared to $2 million ($1 million by the Utilities) paid in 2020. The components of net periodic pension costs (NPPC) and net periodic benefit costs (NPBC) for HEI consolidated and Hawaiian Electric consolidated were as follows:
|  |  |  |  |  | Pension benefits |  | Other benefits
Three months ended March 31 |  |  |  | 2021 |  | 2020 |  | 2021 |  | 2020
(in thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
HEI consolidated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Service cost |  |  |  |  |  |  |  |  |  | $ | 20,464 |  |  | $ | 18,363 |  |  | $ | 705 |  |  | $ | 631 |
Interest cost |  |  |  |  |  |  |  |  |  | 18,801 |  |  | 20,163 |  |  | 1,569 |  |  | 1,855 |
Expected return on plan assets |  |  |  |  |  |  |  |  |  | (33,067) |  |  | (28,466) |  |  | (3,233) |  |  | (3,038) |
Amortization of net prior period (gain)/cost |  |  |  |  |  |  |  |  |  | — |  |  | 3 |  |  | (383) |  |  | (440) |
Amortization of net actuarial losses 1 |  |  |  |  |  |  |  |  |  | 1,556 |  |  | 8,057 |  |  | 254 |  |  | 50 |
Net periodic pension/benefit cost (return) |  |  |  |  |  |  |  |  |  | 7,754 |  |  | 18,120 |  |  | (1,088) |  |  | (942) |
Impact of PUC D&Os |  |  |  |  |  |  |  |  |  | 11,167 |  |  | 6,262 |  |  | 970 |  |  | 777 |
Net periodic pension/benefit cost (adjusted for impact of PUC D&Os) |  |  |  |  |  |  |  |  |  | $ | 18,921 |  |  | $ | 24,382 |  |  | $ | (118) |  |  | $ | (165) |
Hawaiian Electric consolidated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Service cost |  |  |  |  |  |  |  |  |  | $ | 19,994 |  |  | $ | 17,891 |  |  | $ | 699 |  |  | $ | 626 |
Interest cost |  |  |  |  |  |  |  |  |  | 17,531 |  |  | 18,715 |  |  | 1,504 |  |  | 1,782 |
Expected return on plan assets |  |  |  |  |  |  |  |  |  | (31,368) |  |  | (26,855) |  |  | (3,182) |  |  | (2,990) |
Amortization of net prior period (gain)/cost |  |  |  |  |  |  |  |  |  | — |  |  | 2 |  |  | (383) |  |  | (440) |
Amortization of net actuarial losses 1 |  |  |  |  |  |  |  |  |  | 2,559 |  |  | 7,368 |  |  | 250 |  |  | 51 |
Net periodic pension/benefit cost (return) |  |  |  |  |  |  |  |  |  | 8,716 |  |  | 17,121 |  |  | (1,112) |  |  | (971) |
Impact of PUC D&Os |  |  |  |  |  |  |  |  |  | 11,167 |  |  | 6,262 |  |  | 970 |  |  | 777 |
Net periodic pension/benefit cost (adjusted for impact of PUC D&Os) |  |  |  |  |  |  |  |  |  | $ | 19,883 |  |  | $ | 23,383 |  |  | $ | (142) |  |  | $ | (194) |
1 Three months ended March 31, 2021 amounts include the one-time cumulative impact of the change in accounting principle for the plans’ fixed income securities from the calculated market-related value method to the fair value method, which was recorded in the first quarter of 2021. HEI consolidated recorded retirement benefits expense of $11 million ($12 million by the Utilities) in the first three months of 2021 and $15 million ($14 million by the Utilities) in the first three months of 2020 and charged the remaining net periodic benefit cost primarily to electric utility plant. Effective January 1, 2021, the Company adopted a change in accounting principle for the plans’ fixed income securities from the calculated market-related value method to the fair value method in the calculation of the expected return on plan assets component of NPPC and NPBC. The remaining plan assets continue to use the calculated market-related value methodology. The Company considers the fair value approach to be preferable for its fixed-income securities portfolio because it results in a current reflection of the changes in the value of plan assets in a way similar to the obligations it is intended to hedge. The Company evaluated the effect of this change in accounting principle and deemed it to be immaterial to the historical financial statements of the Company and Hawaiian Electric and, therefore, did not account for the change retrospectively and recorded the cumulative effects from the change in accounting principle in earnings for non-Utility businesses in the first quarter of 2021. Amounts related to the Utilities were reflected as adjustments to regulatory assets as appropriate, consistent with the expected regulatory treatment as described in the following paragraph. 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, any actual costs determined in accordance with GAAP that are over/under amounts allowed in rates are charged/credited to a regulatory asset/liability. The regulatory asset/liability for each utility will then be amortized over 5 years beginning with the respective utility’s next rate case. Defined contribution plans information. For the first three months of 2021 and 2020, the Company’s expenses for its defined contribution plans under the Hawaiian Electric Industries Retirement Savings Plan (HEIRSP) and the ASB 401(k) Plan were $1.7 million and $1.8 million, respectively, and cash contributions were $1.8 million and $3.2 million, respectively. For the first three months of 2021 and 2020, the Utilities’ expenses and cash contributions for its defined contribution plan under the HEIRSP were $0.8 million and $0.7 million, respectively

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