Entergy 2007 Annual Report Download - page 90

88
Entergy Corporation and Subsidiaries 2007
Notes to Consolidated Financial Statements continued
NOTE 11. RETIREMENT, OTHER POSTRETIREMENT BENEFITS,
AND DEFINED CONTRIBUTION PLANS
QUA L I F I E D PE N S I O N PL A N S
Entergy has seven qualied pension plans covering substantially all
of its employees: “Entergy Corporation Retirement Plan for Non-
Bargaining Employees,” “Entergy Corporation Retirement Plan for
Bargaining Employees,” “Entergy Corporation Retirement Plan II for
Non-Bargaining Employees,” “Entergy Corporation Retirement Plan
II for Bargaining Employees,” “Entergy Corporation Retirement Plan
III,” “Entergy Corporation Retirement Plan IV for Non-Bargaining
Employees,” and “Entergy Corporation Retirement Plan IV for
Bargaining Employees.” e Registrant Subsidiaries participate in
two of these plans: “Entergy Corporation Retirement Plan for Non-
Bargaining Employees” and “Entergy Corporation Retirement Plan
for Bargaining Employees.” Except for the Entergy Corporation
Retirement Plan III, the pension plans are noncontributory and
provide pension benets that are based on employees’ credited
service and compensation during the nal years before retirement.
e Entergy Corporation Retirement Plan III includes a mandatory
employee contribution of 3% of earnings during the rst 10 years of
plan participation, and allows voluntary contributions from 1% to
10% of earnings for a limited group of employees.
Entergy Corporation and its subsidiaries fund pension costs in
accordance with contribution guidelines established by the Employee
Retirement Income Security Act of 1974, as amended, and the Internal
Revenue Code of 1986, as amended. e assets of the plans include
common and preferred stocks, xed-income securities, interest
in a money market fund, and insurance contracts. e Registrant
Subsidiaries’ pension costs are recovered from customers as a
component of cost of service in each of their jurisdictions. Entergy
uses a December 31 measurement date for its pension plans.
In September 2006, FASB issued SFAS 158, “Employer’s
Accounting for Dened Benet Pension and Other Postretirement
Plans, an amendment of FASB Statements Nos. 87, 88, 106 and
132(R),” to be eective December 31, 2006. SFAS 158 requires an
employer to recognize in its balance sheet the funded status of its
benet plans. is is measured as the dierence between plan assets
at fair value and the benet obligation. Employers are to record
previously unrecognized gains and losses, prior service costs, and the
remaining transition asset or obligation as a result of adopting SFAS
87 and SFAS 106 as other comprehensive income (OCI) and/or as a
regulatory asset reective of the recovery mechanism for pension and
OPEB costs in the Utility’s jurisdictions. For the portion of Entergy
Gulf States Louisiana that is not regulated, the unrecognized prior
service cost, gains and losses, and transition asset/obligation for its
pension and other postretirement benet obligations are recorded
as other comprehensive income. Entergy Gulf States Louisiana
and Entergy Louisiana recover other postretirement benets costs
on a pay as you go basis and will record the unrecognized prior
service cost, gains and losses, and transition obligation for its other
postretirement benet obligation as other comprehensive income.
SFAS 158 also requires that changes in the funded status be recorded
as other comprehensive income and/or a regulatory asset in the
period in which the changes occur.
CO M P O N E N T S O F QUA L I F I E D NE T PE N S I O N CO S T A N D OT H E R
AM O U N T S RE C O G N I Z E D A S A RE G U L AT O R Y AS S E T A N D /O R
OT H E R CO M P R E H E N S I V E IN C O M E (OCI)
Entergy Corporation’s and its subsidiaries’ total 2007, 2006, and 2005
qualied pension costs and amounts recognized as a regulatory asset
and/or other comprehensive income, including amounts capitalized,
included the following components (in thousands):
2007 2006 2005
Net periodic pension cost:
Service cost - benets earned
during the period $ 96,565 $ 92,706 $ 82,520
Interest cost on projected
benet obligation 185,170 167,257 155,477
Expected return on assets (203,521) (177,930) (159,544)
Amortization of transition asset – – (662)
Amortization of prior service cost 5,531 5,462 4,863
Recognized net loss 45,775 43,721 35,604
Curtailment loss 2,336 – –
Special termination benet
loss 4,018 – –
Net periodic pension costs $ 135,874 $ 131,216 $ 118,258
Other changes in plan assets
and benet obligations
recognized as a regulatory asset
and/or OCI (before tax)
Arising this period:
Prior service cost $ 11,339
Net gain (68,853)
Amounts reclassied from
regulatory asset and/or
accumulated OCI
to net periodic pension cost in
the current year:
Amortization of prior
service credit (5,531)
Amortization of net gain (45,775)
Total $(108,820)
Total recognized as net periodic
pension cost, regulatory asset,
and/or OCI (before tax) $ 27,054
Estimated amortization
amounts from the regulatory
asset and/or accumulated
OCI to net periodic cost in
the following year
Prior service cost $ 5,064 $ 5,531
Net loss $ 25,641 $ 44,316