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91
Pension and SERP
As of December 31, 2013
As of December 31, 2012
NSTAR
NSTAR
(Millions of Dollars)
CL&P
Electric (2)
PSNH
WMECO
CL&P
Electric (2)
PSNH
WMECO
Change in Benefit Obligation
Benefit Obligation as of Beginning of Year
$
(1,178.0)
$
(1,430.0)
$
(576.0)
$
(243.1)
$
(1,043.8)
$
(1,346.2)
$
(497.9)
$
(215.8)
Service Cost
(24.9)
(33.1)
(13.1)
(4.7)
(21.8)
(30.3)
(11.8)
(4.1)
Interest Cost
(48.3)
(58.0)
(23.6)
(10.0)
(51.2)
(58.9)
(24.4)
(10.5)
Actuarial Gain/(Loss)
110.7
96.6
62.4
22.4
(117.4)
(63.6)
(61.3)
(24.0)
Benefits Paid - Pension
56.6
71.2
21.1
11.5
55.9
69.0
19.7
11.3
Benefits Paid - SERP
0.5
-
0.2
-
0.3
-
-
-
SERP Curtailment
-
-
-
-
-
-
(0.3)
-
Benefit Obligation as of End of Year
$
(1,083.4)
$
(1,353.3)
$
(529.0)
$
(223.9)
$
(1,178.0)
$
(1,430.0)
$
(576.0)
$
(243.1)
Change in Pension Plan Assets
Fair Value of Plan Assets as of Beginning of Year
$
937.6
$
1,069.1
$
386.6
$
218.5
$
869.6
$
988.5
$
279.7
$
202.0
Employer Contributions
-
82.0
108.3
-
-
25.0
87.7
-
Actual Return on Plan Assets
135.3
155.4
54.8
33.4
123.9
124.6
38.9
27.8
Benefits Paid
(56.6)
(71.2)
(21.1)
(11.5)
(55.9)
(69.0)
(19.7)
(11.3)
Fair Value of Plan Assets as of End of Year
$
1,016.3
$
1,235.3
$
528.6
$
240.4
$
937.6
$
1,069.1
$
386.6
$
218.5
Funded Status as of December 31st
$
(67.1)
$
(118.0)
$
(0.4)
$
16.5
$
(240.4)
$
(360.9)
$
(189.4)
$
(24.6)
(1) NSTAR amounts were included in NU beginning April 10, 2012.
(2) NSTAR Electric amounts do not include benefit obligations of the NSTAR SERP Plan.
As of December 31, 2013, prepaid pension assets of $3 million and $17 million for PSNH and WMECO, respectively, were included in
Other Long-Term Assets on their accompanying balance sheets. Pension and SERP benefits funded status includes the current
portion of the SERP liability, which is included in Other Current Liabilities on the accompanying balance sheets.
Although NU maintains marketable securities in a supplemental benefit trust, the plan itself does not contain any assets. See Note 6,
"Marketable Securities," to the financial statements.
The accumulated benefit obligation for the Pension and SERP Plans is as follows:
Pension and SERP
As of December 31,
(Millions of Dollars)
2013
2012
NU
$
4,538.8
$
4,622.1
CL&P
1,058.0
1,061.8
NSTAR Electric (1)
1,280.6
1,353.1
PSNH
520.1
515.9
WMECO
220.6
221.3
(1) NSTAR Electric amounts do not include the accumulated benefit obligation for the SERP Plan.
The following actuarial assumptions were used in calculating the Pension and SERP Plans' year end funded status:
Pension and SERP
As of December 31,
2013
2012
NUSCO Pension and SERP Plans
Discount Rate
5.03
%
4.24
%
Compensation/Progression Rate
3.50
%
3.50
%
NSTAR Pension and SERP Plans
Discount Rate
4.85
%
4.13
%
Compensation/Progression Rate
4.00
%
4.00
%
Pension and SERP Expense: For the NUSCO Plans, NU allocates net periodic pension expense to its subsidiaries based on the actual
participant demographic data for each subsidiary's participants. Benefit payments to participants and contributions are also tracked for
each subsidiary. The actual investment return in the trust each year is allocated to each of the subsidiaries annually in proportion to the
investment return expected to be earned during the year. For the NSTAR Pension Plan, the net periodic pension expense recorded at
NSTAR Electric represents the full cost of the plan and then a portion of the costs are allocated to affiliated companies based on
participant demographic data.