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 post-employment 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 and six months ended March 31, 2018 and 2017, were as follows:



Components of TVA's Benefit Plans
	For the Three Months Ended March 31												For the Six Months Ended March 31
	Pension Benefits						Other Post-Retirement Benefits						Pension Benefits						Other Post-Retirement Benefits
	2018			2017			2018			2017			2018			2017			2018			2017
Service cost	$	13		$	13		$	3		$	5		$	27		$	30		$	7		$	9
Interest cost	119			116			4			4			237			232			9			11
Expected return on plan assets	(119		)	(114		)	—			—			(239		)	(228		)	—			—
Amortization of prior service credit	(24		)	(24		)	(5		)	(10		)	(49		)	(49		)	(11		)	(11		)
Recognized net actuarial loss	101			120			2			5			204			236			4			7
Total net periodic benefit cost as actuarially determined	90			111			4			4			180			221			9			16
Amount capitalized due to actions of regulator	(13		)	(34		)	—			—			(27		)	(68		)	—			—
Total net periodic benefit cost	$	77		$	77		$	4		$	4		$	153		$	153		$	9		$	16

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 March 31, 2018, TVA had contributed $150 million to TVARS and expects to contribute the remaining $150 million by September 30, 2018. TVA contributed $800 million to TVARS in 2017, though the minimum required contribution was $300 million. TVA also contributed $42 million to the 401(k) plan during both the six months ended March 31, 2018 and 2017. 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 $9 million and $17 million, net of rebates and subsidies, to other post-retirement benefit plans for the six months ended March 31, 2018 and 2017, 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.