Benefit Plans

TVA sponsors a qualified defined benefit pension plan ("pension plan") that covers most of its full-time employees hired before July 1, 2014, a qualified defined contribution plan ("401(k) plan") that covers most of its full-time employees, two unfunded post-retirement health care plans that provide for non-vested contributions toward the cost of eligible retirees' medical coverage, other postemployment benefits, such as workers' compensation, and the SERP. The pension plan and the 401(k) plan are administered by a separate legal entity, the TVA Retirement System ("TVARS"), which is governed by its own board of directors (the "TVARS Board").

The components of net periodic benefit cost and other amounts recognized as changes in regulatory assets for the three months ended December 31, 2016 and 2015, were as follows:



Components of TVA’s Benefit Plans
	For the Three Months Ended December 31
	Pension Benefits						Other Post-Retirement Benefits
	2016			2015			2016			2015
Service cost	$	17		$	32		$	5		$	4
Interest cost	116			140			5			7
Expected return on plan assets	(114		)	(111		)	—			—
Amortization of prior service credit	(25		)	(6		)	(6		)	(1		)
Recognized net actuarial loss	116			73			3			2
Total net periodic benefit cost as actuarially determined	110			128			7			12
Amount capitalized due to actions of regulator	(34		)	(58		)	—			—
Total net periodic benefit cost	$	76		$	70		$	7		$	12

TVA contributes to the pension plan such amounts as are necessary on an actuarial basis to provide the pension plan with assets sufficient to meet TVA-funded benefit obligations to be paid to members. TVA contributed $275 million to TVARS in 2016 and expects to contribute $300 million in 2017. As of December 31, 2016, TVA had contributed $75 million to TVARS and expects to contribute the remaining $225 million by September 30, 2017. TVA also contributed $20 million and $9 million to the 401(k) plan during the three months ended December 31, 2016 and 2015, respectively. TVA does not separately set aside assets to fund its other post-retirement benefit plans, but rather funds such benefits on an as-paid basis. TVA provided approximately $20 million and $17 million, net of rebates and subsidies, to other post-retirement benefit plans for the three months ended December 31, 2016 and 2015, respectively. TVA includes its cash contributions to the pension plan in the rate-making formula; accordingly, TVA recognizes pension costs as regulatory assets to the extent that the amount calculated under GAAP as pension expense differs from the amount TVA contributes to the pension plan.