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Retirement Benefit Obligations
 6 Months Ended
Jun. 30, 2011
Retirement Benefit Obligations  
Retirement Benefit Obligations

NOTE 9: RETIREMENT BENEFIT OBLIGATIONS

The Company co-sponsors the Unitil Corporation Retirement Plan (Pension Plan), the Unitil Retiree Health and Welfare Benefits Plan (PBOP Plan), and the Unitil Corporation Supplemental Executive Retirement Plan (SERP) to provide certain pension and postretirement benefits for its retirees and current employees. Please see Note 10 to the Consolidated Financial Statements in the Company's Form 10-K for the year ended December 31, 2010 as filed with the SEC on February 3, 2011 for additional information regarding these plans.

The following table includes the key weighted average assumptions used in determining the Company's benefit plan costs and obligations:

 

     2011     2010  

Used to Determine Plan Costs

     

Discount Rate

      5.35 %      5.75 % 

Rate of Compensation Increase

      3.50 %      3.50 % 

Expected Long-term rate of return on plan assets

      8.50 %      8.50 % 

Health Care Cost Trend Rate Assumed for Next Year

      7.00 %      7.50 % 

Ultimate Health Care Cost Trend Rate

      4.00 %      4.00 % 

Year that Ultimate Health Care Cost Trend Rate is reached

      2017        2017   

The following tables provide the components of the Company's Retirement plan costs ($000's):

 

     Pension Plan     PBOP Plan     SERP  

Three Months Ended June 30,

    2011     2010     2011     2010     2011      2010  

Service Cost

    $ 735      $ 652      $ 479      $ 366      $ 71       $ 71   

Interest Cost

      1,171        1,115        570        504        57         57   

Expected Return on Plan Assets

      (1,210 )     (1,046 )     (204 )      (149 )      —           —     

Prior Service Cost Amortization

      62        64        432        394        3         1   

Transition Obligation Amortization

      —          —          5        6        —           —     

Actuarial Loss Amortization

      783        602        —          —          19         33   
                                                 

Sub-total

      1,541       1,387       1,282        1,121        150         162   

Amounts Capitalized and Deferred

      (677 )      (481 )      (401 )      (237 )      —           —     
                                                 

Net Periodic Benefit Cost Recognized

    $ 864      $ 906      $ 881      $ 884      $ 150       $ 162   
                                                 
     Pension Plan     PBOP Plan     SERP  

Six Months Ended June 30,

    2011     2010     2011     2010     2011      2010  

Service Cost

    $ 1,471      $ 1,304      $ 959      $ 733      $ 142       $ 142   

Interest Cost

      2,342        2,229        1,139        1,008        113         114   

Expected Return on Plan Assets

      (2,420 )     (2,091 )     (409 )      (299 )      —           —     

Prior Service Cost Amortization

      125        127        864        789        6         2   

Transition Obligation Amortization

      —          —          11        11        —           —     

Actuarial Loss Amortization

      1,566        1,203        —          —          39         66   
                                                 

Sub-total

      3,084       2,772       2,564        2,242        300         324   

Amounts Capitalized and Deferred

      (1,180 )      (1,103 )      (634 )      (587 )      —           —     
                                                 

Net Periodic Benefit Cost Recognized

    $ 1,904      $ 1,669      $ 1,930      $ 1,655      $ 300       $ 324   
                                                 

 

Employer Contributions

The Company has made $7.7 million of contributions to the Pension Plan in 2011. The Company, along with its subsidiaries, expects to continue to make contributions to its Pension Plan in 2011 and future years at minimum required and discretionary funding levels consistent with the amounts recovered in the distribution utilities' rates for these Pension Plan costs.

As of June 30, 2011, the Company had made $26,000 of contributions to the SERP Plan in 2011. The Company presently anticipates contributing an additional $27,000 to the SERP Plan in 2011.