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Retirement benefits | 6 Months Ended
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Jun. 30, 2022
Retirement Benefits [Abstract] |
Retirement benefits | Retirement benefitsDefined benefit pension and other postretirement benefit plans information. For the first six months of 2022, the Company contributed $21 million ($20 million by the Utilities) to its pension and other postretirement benefit plans, compared to $23 million ($23 million by the Utilities) in the first six months of 2021. The Company’s current estimate of total contributions to its pension and other postretirement benefit plans in 2022 is $41 million ($41 million by the Utilities), compared to $52 million ($51 million by the Utilities) in 2021. In addition, the Company expects to pay directly $3 million ($1 million by the Utilities) of benefits in 2022, compared to $1 million ($1 million by the Utilities) paid in 2021. The components of net periodic pension costs (NPPC) and net periodic benefit costs (NPBC) for HEI consolidated and Hawaiian Electric consolidated were as follows:
|  | Three months ended June 30 |  | Six months ended June 30
|  | Pension benefits |  | Other benefits |  | Pension benefits |  | Other benefits
(in thousands) |  | 2022 |  | 2021 |  | 2022 |  | 2021 |  | 2022 |  | 2021 |  | 2022 |  | 2021
HEI consolidated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Service cost |  | $ | 19,823 |  |  | $ | 20,465 |  |  | $ | 657 |  |  | $ | 705 |  |  | $ | 39,647 |  |  | $ | 40,929 |  |  | $ | 1,313 |  |  | $ | 1,410 |
Interest cost |  | 19,810 |  |  | 18,800 |  |  | 1,638 |  |  | 1,569 |  |  | 39,621 |  |  | 37,601 |  |  | 3,275 |  |  | 3,138 |
Expected return on plan assets |  | (35,331) |  |  | (33,068) |  |  | (3,398) |  |  | (3,232) |  |  | (70,664) |  |  | (66,135) |  |  | (6,795) |  |  | (6,465) |
Amortization of net prior period gain |  | — |  |  | — |  |  | (232) |  |  | (384) |  |  | — |  |  | — |  |  | (464) |  |  | (767) |
Amortization of net actuarial (gain)/losses 1 |  | 6,297 |  |  | 8,431 |  |  | (3) |  |  | 44 |  |  | 12,594 |  |  | 9,987 |  |  | (6) |  |  | 298 |
Net periodic pension/benefit cost (return) |  | 10,599 |  |  | 14,628 |  |  | (1,338) |  |  | (1,298) |  |  | 21,198 |  |  | 22,382 |  |  | (2,677) |  |  | (2,386) |
Impact of PUC D&Os |  | 9,552 |  |  | 5,513 |  |  | 1,217 |  |  | 1,176 |  |  | 19,103 |  |  | 16,680 |  |  | 2,436 |  |  | 2,146 |
Net periodic pension/benefit cost (adjusted for impact of PUC D&Os) |  | $ | 20,151 |  |  | $ | 20,141 |  |  | $ | (121) |  |  | $ | (122) |  |  | $ | 40,301 |  |  | $ | 39,062 |  |  | $ | (241) |  |  | $ | (240) |
Hawaiian Electric consolidated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Service cost |  | $ | 19,317 |  |  | $ | 19,993 |  |  | $ | 649 |  |  | $ | 698 |  |  | $ | 38,635 |  |  | $ | 39,987 |  |  | $ | 1,298 |  |  | $ | 1,397 |
Interest cost |  | 18,461 |  |  | 17,531 |  |  | 1,572 |  |  | 1,504 |  |  | 36,923 |  |  | 35,062 |  |  | 3,145 |  |  | 3,008 |
Expected return on plan assets |  | (33,545) |  |  | (31,367) |  |  | (3,345) |  |  | (3,182) |  |  | (67,091) |  |  | (62,735) |  |  | (6,692) |  |  | (6,364) |
Amortization of net prior period gain |  | — |  |  | — |  |  | (231) |  |  | (382) |  |  | — |  |  | — |  |  | (462) |  |  | (765) |
Amortization of net actuarial losses 1 |  | 6,125 |  |  | 8,212 |  |  | — |  |  | 43 |  |  | 12,250 |  |  | 10,771 |  |  | — |  |  | 293 |
Net periodic pension/benefit cost (return) |  | 10,358 |  |  | 14,369 |  |  | (1,355) |  |  | (1,319) |  |  | 20,717 |  |  | 23,085 |  |  | (2,711) |  |  | (2,431) |
Impact of PUC D&Os |  | 9,552 |  |  | 5,513 |  |  | 1,217 |  |  | 1,176 |  |  | 19,103 |  |  | 16,680 |  |  | 2,436 |  |  | 2,146 |
Net periodic pension/benefit cost (adjusted for impact of PUC D&Os) |  | $ | 19,910 |  |  | $ | 19,882 |  |  | $ | (138) |  |  | $ | (143) |  |  | $ | 39,820 |  |  | $ | 39,765 |  |  | $ | (275) |  |  | $ | (285) |
1 Six months ended June 30, 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 $24 million ($23 million by the Utilities) in the first six months of 2022 and $23 million ($23 million by the Utilities) in the first six months of 2021 and charged the remaining net periodic benefit cost primarily to electric utility plant. 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 six months of 2022 and 2021, 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 $4.1 million and $3.2 million, respectively, and cash contributions were $3.5 million and $3.2 million, respectively. For the first six months of 2022 and 2021, the Utilities’ expenses and cash contributions for its defined contribution plan under the HEIRSP were $1.8 million and $1.5 million, respectively. Retirement benefit plan changes. On December 3, 2021, the Utilities’ union members ratified a new collective bargaining agreement, which included changes to retirement benefits for all new employees commencing employment on or after January 1, 2022. The changes ratified in the collective bargaining agreement apply to all employees of HEI and the Utilities first hired on or after January 1, 2022 (New Employees). New Employees are not eligible to participate in the HEI Pension Plan. Instead, New Employees will receive a non-elective employer contribution, equal to 10% of their annual compensation, subject to a vesting schedule, to their account under the HEIRSP, the defined contribution plan for HEI and the Utilities. Only New Employees are impacted by the retirement benefit plan changes. There are no retirement benefit plan changes for employees hired on or before December 31, 2021.

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