Xcel Energy 2012 Annual Report Download - page 118

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Defined Contribution Plans
Xcel Energy maintains 401(k) and other defined contribution plans that cover substantially all employees. Total contributions to
these plans were approximately $28.0 million in 2012, $27.1 million in 2011 and $27.3 million in 2010.
Postretirement Health Care Benefits
Xcel Energy has a contributory health and welfare benefit plan that provides health care and death benefits to certain Xcel Energy
retirees.
• The former NSP, which includes NSP-Minnesota and NSP-Wisconsin, discontinued contributing toward health care
benefits for nonbargaining employees retiring after 1998 and for bargaining employees of NSP-Minnesota and NSP-
Wisconsin who retired after 1999.
• Xcel Energy discontinued contributing toward health care benefits for former NCE, which includes PSCo and SPS,
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 NCE who retired after 1998, bargaining employees of the former NCE 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 1993, Xcel Energy adopted accounting guidance regarding other non-pension postretirement benefits and elected to amortize
the unrecognized 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
postretirement benefit costs. The Colorado jurisdictional postretirement benefit costs deferred during the transition period were
amortized to expense on a straight-line basis over the 15-year period from 1998 to 2012. PSCo transitioned to full accrual
accounting for postretirement benefit costs between 1993 and 1997.
Plan Assets — Certain state agencies that regulate Xcel Energy Inc.’s utility subsidiaries also have issued guidelines related to the
funding of postretirement benefit costs. SPS is required to fund postretirement benefit costs for Texas and New Mexico
jurisdictional amounts collected in rates and PSCo is required to fund postretirement benefit 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.
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 asset portfolio. The assets are invested in a portfolio according to
Xcel Energy’s return, liquidity and diversification objectives to provide a source of funding for plan obligations and minimize the
necessity of contributions to the plan, within appropriate levels of risk. The principal mechanism for achieving these objectives is
the projected allocation of assets to selected asset classes, given the long-term risk, return, correlation, and liquidity characteristics
of each particular asset class. There were no significant concentrations of risk in any particular industry, index, or entity.
Investment-return volatility is not considered to be a material factor in postretirement health care costs.
The following tables present, for each of the fair value hierarchy levels, Xcel Energy’s postretirement benefit plan assets that are
measured at fair value as of Dec. 31, 2012 and 2011:
Dec. 31, 2012
(Thousands of Dollars) Level 1 Level 2 Level 3 Total
Cash equivalents ................................
...............
$ 91,278 $
-
$ - $ 91,278
Derivatives................................
.....................
-
4
- 4
Government securities ................................
..........
-
73,449
- 73,449
Insurance contracts ................................
.............
-
50,008
- 50,008
Corporate bonds ................................
................
-
43,810
- 43,810
Asset-backed securities ................................
.........
-
-
757 757
Mortgage-backed securities................................
......
-
-
39,958 39,958
Commingled funds ................................
.............
-
228,423
- 228,423
Other ................................
..........................
-
(46,845
) - (46,845)
Total................................
.........................
$ 91,278 $
348,849
$ 40,715 $ 480,842