Xcel Energy 2008 Annual Report Download - page 122
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• Xcel Energy discontinued contributing toward health care benefits for former NCE nonbargaining employees
retiring after June 30, 2003.
• Employees of NCE who retired in 2002 continue to receive employer-subsidized health care benefits.
• Nonbargaining employees of the former NSP who retired after 1998, bargaining employees of the former NSP
who retired after 1999 and nonbargaining employees of NCE who retired after June 30, 2003, are eligible to
participate in the Xcel Energy health care program with no employer subsidy.
In conjunction with the 1993 adoption of SFAS No. 106 — Employers’ Accounting for Postretirement Benefits Other Than
Pension, Xcel Energy elected to amortize the unrecognized accumulated postretirement benefit obligation (APBO) on a
straight-line basis over 20 years.
Regulatory agencies for nearly all of Xcel Energy’s retail and wholesale utility customers have allowed rate recovery of
accrued benefit costs under SFAS No. 106. The Colorado jurisdictional SFAS No. 106 costs deferred during the
transition period are being amortized to expense on a straight-line basis over the 15-year period from 1998 to 2012.
NSP-Minnesota also transitioned to full accrual accounting for SFAS No. 106 costs, with regulatory differences fully
amortized prior to 1997.
Plan Assets — Certain state agencies that regulate Xcel Energy’s utility subsidiaries also have issued guidelines related to
the funding of SFAS No. 106 costs. SPS is required to fund SFAS No. 106 costs for Texas and New Mexico
jurisdictional amounts collected in rates and PSCo is required to fund SFAS No. 106 costs in irrevocable external trusts
that are dedicated to the payment of these postretirement benefits. Also, a portion of the assets contributed on behalf of
nonbargaining retirees has been funded into a sub-account of the Xcel Energy pension plans. These assets are invested
in a manner consistent with the investment strategy for the pension plan.
The actual composition of postretirement benefit plan assets at Dec. 31 was:
2008 2007
Equity and equity mutual fund securities ............................................. 49% 67%
Fixed income/debt securities ..................................................... 29 21
Cash equivalents ............................................................ 22 11
Nontraditional investments ...................................................... — 1
100% 100%
Xcel Energy bases its investment-return assumption for the postretirement health care fund assets on expected long-term
performance for each of the investment types included in its postretirement health care asset portfolio. Investment-
return volatility is not considered to be a material factor in postretirement health care costs.
112