Energy Transfer 2012 Annual Report Download - page 199
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F - 54
Pension and Other Postretirement Benefit Plans
Southern Union
Southern Union has funded non-contributory defined benefit pension plans that cover substantially all employees of Southern
Union's distribution operations. Normal retirement age is 65, but certain plan provisions allow for earlier retirement. Pension
benefits are calculated under formulas principally based on average earnings and length of service for salaried and non-union
employees and average earnings and length of service or negotiated non-wage based formulas for union employees.
The 2012 postretirement benefits expense for Southern Union reflects the impact of curtailment accounting as postretirement
benefits for all active participants who did not meet certain criteria were eliminated. The Company previously had
postretirement health care and life insurance plans that covered substantially all Distribution and Transportation and Storage
segment employees as well as all Corporate employees. The health care plans generally provide for cost sharing between
Southern Union and its retirees in the form of retiree contributions, deductibles, coinsurance, and a fixed cost cap on the
amount Southern Union pays annually to provide future retiree health care coverage under certain of these plans.
Sunoco
Sunoco has both funded and unfunded noncontributory defined benefit pension plans (see "defined benefit plans"). Sunoco
also has plans which provide health care benefits for substantially all of its current retirees ("postretirement benefit plans").
The postretirement benefit plans are unfunded and the costs are shared by Sunoco and its retirees. Prior to the Sunoco Merger
on October 5, 2012, pension benefits under Sunoco's defined benefit plans were frozen for most of the participants in these
plans at which time Sunoco instituted a discretionary profit-sharing contribution on behalf of these employees in its defined
contribution plan. Postretirement medical benefits were also phased down or eliminated for all employees retiring after July
1, 2010. Sunoco has established a trust for its postretirement benefit liabilities by making a tax-deductible contribution of
approximately $200 million and restructuring the retiree medical plan to eliminate Sunoco's liability beyond this funded
amount. The retiree medical plan change eliminated substantially all of Sunoco's future exposure to variances between actual
results and assumptions used to estimate retiree medical plan obligations.
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