Entergy 2010 Annual Report Download - page 95

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ENTERGY CORPORATION AND SUBSIDIARIES 2010
Notes to Consolidated Financial Statements continued
that are based on employees’ credited service and compensation
during the final years before retirement. The Entergy Corporation
Retirement Plan III includes a mandatory employee contribution
of 3% of earnings during the first 10 years of plan participation,
and allows voluntary contributions from 1% to 10% of earnings
for a limited group of employees.
The assets of the seven qualified pension plans are held
in a master trust established by Entergy. Each pension plan
maintains an undivided beneficial interest in each of the
investment accounts of the master trust that is maintained by
a trustee. Use of the master trust permits the commingling of
the trust assets of the pension plans of Entergy Corporation and
its Registrant Subsidiaries for investment and administrative
purposes. Although assets are commingled in the master trust,
the trustee maintains supporting records for the purpose of
allocating the equity in net earnings (loss) and the administrative
expenses of the investment accounts to the various participating
pension plans. The trustee determines the fair value of the fund
and calculates a daily earnings factor, including realized and
unrealized gains or losses, collected and accrued income, and
administrative expenses, and allocates earnings to each plan in
the master trust on a pro rata basis.
Further, within each pension plan, the record of each Registrant
Subsidiary’s beneficial interest in the plan assets is maintained
by the plan’s actuary and is updated quarterly. Assets for each
Registrant Subsidiary are increased for investment income and
contributions, and decreased for benefit payments. A plan’s
investment net income/(loss) (i.e. interest and dividends,
realized gains and losses and expenses) is allocated to the
Registrant Subsidiaries participating in that plan based on the
value of assets for each Registrant Subsidiary at the beginning
of the quarter adjusted for contributions and benefit payments
made during the quarter.
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. The assets
of the plans include common and preferred stocks, fixed-income
securities, interest in a money market fund, and insurance
contracts. The Registrant Subsidiaries’ pension costs are
recovered from customers as a component of cost of service in
each of their respective jurisdictions.
Components of Qualified Net Pension Cost and Other
Amounts Recognized as a Regulatory Asset and/or
Accumulated Other Comprehensive Income (AOCI)
Entergy Corporation and its subsidiaries’ total 2010, 2009, and
2008 qualified pension costs and amounts recognized as a
regulatory asset and/or other comprehensive income, including
amounts capitalized, included the following components
(in thousands):
2010 2009 2008
Net periodic pension cost:
Service cost - benefits earned
during the period $ 104,956 $ 89,646 $ 90,392
Interest cost on projected
benefit obligation 231,206 218,172 206,586
Expected return on assets (259,608) (249,220) (230,558)
Amortization of prior
service cost 4,658 4,997 5,063
Recognized net loss 65,901 22,401 26,834
Net periodic pension costs $ 147,113 $ 85,996 $ 98,317
Other changes in plan assets
and benefit obligations
recognized as a regulatory asset
and/or AOCI (before tax)
Arising this period:
Net (gain)/loss $ 232,279 $ 76,799 $ 965,069
Amounts reclassified from
regulatory asset and/or
accumulated AOCI
to net periodic pension cost in
the current year:
Amortization of prior
service cost (4,658) (4,997) (5,063)
Amortization of net loss (65,901) (22,401) (26,834)
Total $ 161,720 $ 49,401 $ 933,172
Total recognized as net periodic
pension cost, regulatory asset,
and/or AOCI (before tax) $ 308,834 $ 135,397 $1,031,489
Estimated amortization
amounts from regulatory
asset and/or AOCI to net
periodic cost in
the following year
Prior service cost $ 3,350 $ 4,658 $ 4,997
Net loss $ 92,977 $ 65,900 $ 22,401
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