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RETIREMENT BENEFIT OBLIGATIONS
 9 Months Ended
Sep. 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 Annual Report on 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 September 30,
   
2020
     2019    
2020
     2019    
2020
     2019  
Service Cost
   
$
829
 
   $ 776    
$
673
 
   $ 576    
$
70
 
   $ 62  
Interest Cost
   
 
1,445
 
     1,621    
 
782
 
     857    
 
137
 
     142  
Expected Return on Plan Assets
   
 
(2,254
) 
     (2,119 )   
 
(515
) 
     (412 )   
 
—  
 
     —    
Prior Service Cost Amortization
   
 
80
 
     80    
 
301
 
     304    
 
15
 
     14  
Actuarial Loss Amortization
   
 
1,618
 
     1,081    
 
187
 
     56    
 
259
 
     157  
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Sub-total
   
 
1,718
 
     1,439    
 
1,428
 
     1,381    
 
481
 
     375  
Amounts Capitalized and Deferred
   
 
(861
) 
     (650 )   
 
(860
) 
     (650 )   
 
(144
) 
     (107 ) 
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net Periodic Benefit Cost Recognized
   
$
857
 
   $ 789    
$
568
 
   $ 731    
$
337
 
   $ 268  
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
    
Pension Plan
    
PBOP Plan
    
SERP Plan
  
Nine Months Ended September 30,
   
2020
     2019    
2020
     2019    
2020
     2019  
Service Cost
   
$
2,491
 
   $ 2,328    
$
2,023
 
   $ 1,728    
$
212
 
   $ 185  
Interest Cost
   
 
4,332
 
     4,863    
 
2,341
 
     2,569    
 
412
 
     426  
Expected Return on Plan Assets
   
 
(6,764
) 
     (6,356 )   
 
(1,547
) 
     (1,234 )   
 
—  
 
     —    
Prior Service Cost Amortization
   
 
240
 
     240    
 
907
 
     910    
 
43
 
     42  
Actuarial Loss Amortization
   
 
4,854
 
     3,243    
 
559
 
     170    
 
777
 
     471  
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Sub-total
   
 
5,153
 
     4,318    
 
4,283
 
     4,143    
 
1,444
 
     1,124  
Amounts Capitalized and Deferred
   
 
(2,298
) 
     (1,659 )   
 
(2,087
) 
     (1,730 )   
 
(434
) 
     (322 ) 
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Net Periodic Benefit Cost Recognized
   
$
2,855
 
   $ 2,659    
$
2,196
 
   $ 2,413    
$
1,010
 
   $ 802  
  
 
 
    
 
 
    
 
 
    
 
 
    
 
 
    
 
 
  
Employer Contributions
As of September 30, 2020, the Company had made $4.7 million and $2.8 million of contributions to its Pension and PBOP Plans, respectively 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 September 30, 2020, the Company had made $0.5 million of benefit payments under the SERP Plan in 2020. The Company presently anticipates making an additional $0.2 million of benefit payments under the SERP Plan in 2020.