OG&E 2009 Annual Report Download - page 51

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1, 2000 participate in defined benefit postretirement plans. See Note 11 of Notes to Financial Statements for a further discussion.
At December 31, 2009, approximately 49.4 percent of the pension plan assets were invested in listed common stocks with the
balance invested in corporate debt and U.S. Government securities. In 2009, asset returns on the Pension Plan increased
approximately 22.9 percent from a decrease of approximately 25.1 percent in 2008 due to the decline in the equity market in
2008. During the same time, corporate bond yields, which are used in determining the discount rate for future pension obligations,
have continued to decline. OGE Energy could be required to make additional contributions if the value of its pension trust and
postretirement benefit plan trust assets are adversely impacted by a major market disruption in the future. During each of 2009 and
2008, OGE Energy made contributions to its Pension Plan of approximately $50.0 million to help ensure that the Pension Plan
maintains an adequate funded status. The level of funding is dependent on returns on plan assets and future discount rates. During
2010, OGE Energy may contribute up to $50.0 million to its Pension Plan, of which approximately $47.0 million is expected to be the
Company’s portion.
OGE Energy recorded a pension settlement charge and a retirement restoration plan settlement charge in 2007. The pension
settlement charge and retirement restoration plan settlement charge did not require a cash outlay by the Company and did not increase
the Company’s total pension expense or retirement restoration expense over time, as the charges were an acceleration of costs that
otherwise would have been recognized as pension expense or retirement restoration expense in future periods.
(In millions) OGE Energy Company’s Portion (A)
Pension Settlement Charge:
2007 $ 16.7 $ 13.3
Retirement Restoration Plan Settlement Charge:
2007 $ 2.3 $ 0.1
(A) The Company’s Oklahoma and Arkansas jurisdictional portion of these changes were recorded as a regulatory asset (see Note 1
of Notes to Financial Statements for a further discussion).
At December 31, 2009, the projected benefit obligation and fair value of assets of the Company’s portion of OGE Energy’s
Pension Plan and restoration of retirement income plan was approximately $478.2 million and $398.9 million, respectively, for an
underfunded status of approximately $79.3 million. Also, at December 31, 2009, the accumulated postretirement benefit obligation
and fair value of assets of the Company’s portion of OGE Energy’s postretirement benefit plans was approximately $232.5 million
and $52.5 million, respectively, for an underfunded status of approximately $180.0 million. The above amounts have been recorded in
Accrued Benefit Obligations with the offset recorded as a regulatory asset in the Company’s Balance Sheet as discussed in Note 1 of
Notes to Financial Statements. The amount recorded as a regulatory asset represents a net periodic benefit cost to be recognized in the
Statements of Income in future periods.
At December 31, 2008, the projected benefit obligation and fair value of assets of the Company’s portion of OGE Energy’s
Pension Plan and restoration of retirement income plan was approximately $433.7 million and $309.2 million, respectively, for an
underfunded status of approximately $124.5 million. Also, at December 31, 2008, the accumulated postretirement benefit obligation
and fair value of assets of the Company’s portion of OGE Energy’s postretirement benefit plans was approximately $191.9 million
and $55.1 million, respectively, for an underfunded status of approximately $136.8 million. The above amounts have been recorded in
Accrued Benefit Obligations with the offset recorded as a regulatory asset in the Company’s Balance Sheet as discussed in Note 1 of
Notes to Financial Statements. The amount recorded as a regulatory asset represents a net periodic benefit cost to be recognized in the
Statements of Income in future periods.
Pension Plan Costs and Assumptions
On August 17, 2006, President Bush signed The Pension Protection Act of 2006 (the “Pension Protection Act”) into
law. The Pension Protection Act makes changes to important aspects of qualified retirement plans. Many of the changes enacted as
part of the Pension Protection Act were required to be implemented as of the first plan year beginning in 2008. The Company has
implemented all of the required changes as part of the Pension Protection Act as discussed in Note 11 of Notes to Financial
Statements.
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