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Retirement Benefit Obligations
 3 Months Ended
Mar. 31, 2013
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 9 to the Consolidated Financial Statements in the Company’s Form 10-K for the year ended December 31, 2012 as filed with the SEC on January 30, 2013 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:

 

     2013     2012  

Used to Determine Plan Costs

     

Discount Rate

      4.00 %      4.60 % 

Rate of Compensation Increase

      3.00 %      3.00 % 

Expected Long-term rate of return on plan assets

      8.50 %      8.50 % 

Health Care Cost Trend Rate Assumed for Next Year

      8.00 %      6.50 % 

Ultimate Health Care Cost Trend Rate

      4.00 %      4.00 % 

Year that Ultimate Health Care Cost Trend Rate is reached

      2017        2017   

 

The following table provides the components of the Company’s Retirement plan costs ($000’s):

 

     Pension Plan     PBOP Plan     SERP  

Three Months Ended March 31,

    2013     2012     2013     2012     2013      2012  

Service Cost

    $ 893      $ 807      $ 631      $ 517      $ 18       $ 72   

Interest Cost

      1,142        1,158        612        576        60         53   

Expected Return on Plan Assets

      (1,489 )     (1,347 )     (180 )      (174 )      —           —     

Prior Service Cost Amortization

      52        47        425        432        3         3   

Transition Obligation Amortization

      —          —          —          5        —           —     

Actuarial Loss Amortization

      1,059        904        196        32        46         16   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Sub-total

      1,657       1,569       1,684        1,388        127         144   

Amounts Capitalized and Deferred

      (616 )      (557 )      (769 )      (420 )      —           —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Net Periodic Benefit Cost Recognized

    $ 1,041      $ 1,012      $ 915      $ 968      $ 127       $ 144   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Employer Contributions

As of March 31, 2013, the Company had not made any contributions to its Pension and PBOP Plans in 2013. The Company, along with its subsidiaries, expects to continue to make contributions to its Pension and PBOP Plans in 2013 and future years at minimum required and discretionary funding levels consistent with the amounts recovered in the distribution utilities’ rates for these Pension and PBOP Plan costs.

As of March 31, 2013, the Company had made $13,000 of contributions to the SERP Plan in 2013. The Company presently anticipates contributing an additional $40,000 to the SERP Plan in 2013.