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, 2017 and 2016, were as follows:



Components of TVA’s Benefit Plans
	For the Three Months Ended December 31
	Pension Benefits						Other Post-Retirement Benefits
	2017			2016			2017			2016
Service cost	$	14		$	17		$	4		$	5
Interest cost	118			116			5			5
Expected return on plan assets	(120		)	(114		)	—			—
Amortization of prior service credit	(25		)	(25		)	(6		)	(6		)
Recognized net actuarial loss	103			116			2			3
Total net periodic benefit cost as actuarially determined	90			110			5			7
Amount capitalized due to actions of regulator	(14		)	(34		)	—			—
Total net periodic benefit cost	$	76		$	76		$	5		$	7

As of October 1, 2016, TVARS’s Rules and Regulations require TVA to contribute to the pension plan the greater of the minimum contribution calculated by TVARS's actuary or $300 million for a period of 20 years or until the plan has reached a fully funded status if sooner than 20 years. The minimum required contribution for 2018 is $300 million. As of December 31, 2017, TVA had contributed $75 million to TVARS and expects to contribute the remaining $225 million by September 30, 2018. TVA contributed $800 million to TVARS in 2017, though the minimum required contribution was $300 million. TVA also contributed $23 million and $20 million to the 401(k) plan during the three months ended December 31, 2017 and 2016, 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 $12 million and $20 million, net of rebates and subsidies, to other post-retirement benefit plans for the three months ended December 31, 2017 and 2016, 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.