National Grid 2008 Annual Report Download - page 325

BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 26538
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-2.B.6.1, Doc: 6, Page: 119
Description: EXH 2(B).6.1
0/2723.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/723/2*
BOWNE INTEGRATED TYPESETTING SYSTEM
CRC: 26538
Name: NATIONAL GRID
Date: 17-JUN-2008 03:10:51.35Operator: BNY99999TPhone: [phone]Site: BOWNE OF NEW YORK
Y59930.SUB, DocName: EX-2.B.6.1, Doc: 6, Page: 119 Description: EXH 2(B).6.1
0/2723.00.00.00Y59930BNY
[E/O] EDGAR 2 *Y59930/723/2*
subsidiaries, had recorded re
g
ulatory assets in the amount of $80 million at March 31, 2006 because they fully recover all
pension costs.
Defined Contribution Plan
The Company also has several defined contribution pension plans primarily (section 401(k) employee savin
g
s fund plans) that
cover substantially all employees. Employer matchin
g
contributions of approximately $19 million and $11 million were expensed
in fiscal year 2007 and 2006, respectively.
Settlement Losses
The Company’s pension plans have losses that have yet to be reco
g
nized in the income statement as a result of chan
g
es in the
value of the projected benefit obli
g
ation and the plan assets due to expenses different from that assumed and from chan
g
es in
actuarial assumptions. Under SFAS No. 88, “Employers’ Accountin
g
for Settlements and Curtailments of Defined Benefit
Pension Plans and for Termination Benefits”, a company must reco
g
nize a portion of its loss immediately when payouts from a
plan exceed a certain amount. Nia
g
ara Mohawk reco
g
nized a settlement loss of approximately $26 million durin
g
the fiscal year
ended March 31, 2007 due to plan payouts that exceeded the threshold as prescribed in SFAS No. 88. Durin
g
fiscal year 2007,
Niagara Mohawk and the PSC staff reached an agreement to recover approximately 50% of this pension settlement loss.
Postretirement Benefits Other than Pensions
The Company’s total net periodic benefit cost of PBOPs for the fiscal years ended March 31, 2007 and 2006 included the
following components:
The following table provides a reconciliation of the PBOP plans’ funded status and the amounts reco
g
nized in the balance
sheet at March 31:
F-34
2007 2006
(In thousands
)
Service cost $ 28,178 $ 28,293
Interest cost 121,538 112,407
Expected return on plan assets (76,743) (73,782)
Amortization of
p
rior service cost 13,331 13,330
Amortization of net loss 43,896 45,648
Net periodic benefit cost $ 130,200 $ 125,896
2007 2006
(In thousands)
Benefit obli
g
ation at be
g
innin
g
of
p
eriod $
(
2,124,767
)
$
(
2,019,009
)
Service cost (28,178) (28,293)
Interest cost
(
121,538
)
(
112,407
)
Actuarial loss (6,852) (71,103)
Benefits
p
aid 118,341 106,045
Medicare subsidy (5,392) —
Ac
q
uisition of Rhode Island
g
as PBOP obli
g
ation*
(
47,640
)
—
Benefit obli
g
ation at end of
p
eriod
(
2,216,026
)
(
2,124,767
)
Fair value of
p
lan assets at be
g
innin
g
of
p
eriod 988,189 922,173