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RETIREMENT BENEFIT OBLIGATIONS
 6 Months Ended
Jun. 30, 2020
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 Plan) 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, 2019 as filed with the SEC on January 30, 2020 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:
 
Used to Determine Plan Costs
   
2020
     2019  
Discount Rate
   
 
3.25
% 
      4.25 % 
Rate of Compensation Increase
   
 
3.00
% 
      3.00 % 
Expected Long-term rate of return on plan assets
   
 
7.40
% 
      7.75 % 
Health Care Cost Trend Rate Assumed for Next Year
   
 
7.00
% 
      7.00 % 
Ultimate Health Care Cost Trend Rate
   
 
4.50
% 
      4.50 % 
Year that Ultimate Health Care Cost Trend Rate is reached
   
 
2029
 
      2024  
The following tables provide the components of the Company’s Retirement plan costs ($000’s):
 
    
Pension Plan
    
PBOP Plan
    
SERP Plan
  
Three Months Ended June 30,
   
2020
    
2019
    
2020
    
2019
    
2020
    
2019
  
Service Cost
   
$
831
 
    $ 776     
$
675
 
    $ 576     
$
71
 
    $ 63  
Interest Cost
   
 
1,443
 
      1,621     
 
779
 
      856     
 
138
 
      145  
Expected Return on Plan Assets
   
 
(2,255
)
 
      (2,118 )    
 
(516
)
 
      (411 )    
 
—  
 
      —    
Prior Service Cost Amortization
   
 
80
 
      80     
 
303
 
      303     
 
14
 
      25  
Actuarial Loss Amortization
   
 
1,618
 
      1,081     
 
186
 
      57     
 
259
 
      156  
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Sub-total
      1,717        1,440        1,427        1,381        482        389  
Amounts Capitalized and Deferred
   
 
(807
)
 
  
   (597 )    
 
(695
 )
 
      (606 )    
 
(152)
 
      (112 ) 
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
Net Periodic Benefit Cost Recognized
   
$
910
 
    $ 843     
$
732
 
    $ 775     
$
330
 
    $ 277  
  
 
 
     
 
 
     
 
 
     
 
 
     
 
 
     
 
 
  
 
    
Pension Plan
    
PBOP Plan
    
SERP Plan
  
Six Months Ended June 30,
   
2020
    
2019
    
2020
    
2019
    
2020
    
2019
  
Service Cost
   
$
1,662
 
   $ 1,552    
$
1,350
 
   $ 1,152    
$
142
 
   $  123  
Interest Cost
   
 
2,887
 
     3,242    
 
1,559
 
     1,712    
 
275
 
     284  
Expected Return on Plan Assets
   
 
(4,510
) 
     (4,237 )   
 
(1,032
) 
     (822 )   
 
—  
 
     —    
Prior Service Cost Amortization
   
 
160
 
     160    
 
606
 
     606    
 
28
 
     28  
Actuarial Loss Amortization
   
 
3,236
 
     2,162    
 
372
 
     114    
 
518
 
     314  
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Sub-total
     
3,435
       2,879      
2,855
       2,762      
963
       749  
Amounts Capitalized and Deferred
   
 
(1,437
) 
     (1,009 )   
 
(1,227
) 
     (1,080 )   
 
(290
) 
     (215 ) 
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net Periodic Benefit Cost Recognized
   
$
1,998
 
   $ 1,870    
$
1,628
 
   $ 1,682    
$
673
 
   $ 534  
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Employer Contribution
s
As of June 30, 2020, the Company had not made any contributions to its Pension Plan and had made $1.4 million of contributions to its PBOP Plan in 2020. The Company, along with its subsidiaries, expects to continue to make contributions to its Pension and PBOP Plans in 2020 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 June 30, 2020, the Company had made $0.3 million of benefit
payments
under the SERP Plan in 2020. The Company presently anticipates making an additional $0.4 million of benefit payments under the SERP Plan in 2020.