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Retirement Benefit Obligations
 6 Months Ended
Jun. 30, 2012
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, 2011 as filed with the SEC on February 1, 2012 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:

 

     2012     2011  

Used to Determine Plan Costs

     

Discount Rate

      4.60 %      5.35 % 

Rate of Compensation Increase

      3.00 %      3.50 % 

Expected Long-term rate of return on plan assets

      8.50 %      8.50 % 

Health Care Cost Trend Rate Assumed for Next Year

      6.50 %      7.00 % 

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,

    2012     2011     2012     2011     2012    2011  

Service Cost

    $ 807      $ 735      $ 517      $ 479      $72    $ 71   

Interest Cost

      1,158        1,171        576        570      53      57   

Expected Return on Plan Assets

      (1,347 )     (1,210 )     (174 )      (204 )    —        —     

Prior Service Cost Amortization

      47        62        432        432      3      3   

Transition Obligation Amortization

      —          —          5        5      —        —     

Actuarial Loss Amortization

      904        783        32        —        16      19   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

   

 

 

  

Sub-total

      1,569       1,541       1,388        1,282      144      150   

Amounts Capitalized and Deferred

      (725 )      (677 )      (560 )      (401 )    —        —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

   

 

 

  

Net Periodic Benefit Cost Recognized

    $ 844      $ 864      $   828      $   881      $  144    $ 150   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

   

 

 

  

 

     Pension Plan     PBOP Plan     SERP  

Six Months Ended June 30,

    2012     2011     2012     2011     2012      2011  

Service Cost

    $ 1,613      $ 1,471      $ 1,033      $ 959      $ 144       $ 142   

Interest Cost

      2,317        2,342        1,151        1,139        106         113   

Expected Return on Plan Assets

      (2,695 )     (2,420 )     (348 )      (409 )      —           —     

Prior Service Cost Amortization

      94        125        864        864        6         6   

Transition Obligation Amortization

      —          —          11        11        —           —     

Actuarial Loss Amortization

      1,808        1,566        65        —          32         39   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Sub-total

      3,137       3,084       2,776        2,564        288         300   

Amounts Capitalized and Deferred

      (1,281 )      (1,180 )      (980 )      (634 )      —           —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net Periodic Benefit Cost Recognized

    $ 1,856      $ 1,904      $ 1,796      $ 1,930      $ 288       $ 300   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Employer Contributions

As of June 30, 2012, the Company had made $6.3 million of contributions to its Pension Plan in 2012. The Company, along with its subsidiaries, expects to continue to make contributions to its Pension Plan in 2012 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, 2012, the Company had made $26,000 of contributions to the SERP Plan in 2012. The Company presently anticipates contributing an additional $27,000 to the SERP Plan in 2012.