Eversource 2012 Annual Report Download - page 110

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For further information, see Note 1B, "Summary of Significant Accounting Policies – Basis of Presentation," to the consolidated financial
statements.
WMECO maintains a trust that holds marketable securities to fund amounts due to the DOE for the disposal of WMECO's Prior Period
Spent Nuclear Fuel. CYAPC also maintain trusts to fund amounts due to the DOE for the disposal of spent nuclear fuel. For further
information on these trusts, see Note 6, "Marketable Securities," to the consolidated financial statements.
10. EMPLOYEE BENEFITS
A. Pension Benefits and Postretirement Benefits Other Than Pensions
NUSCO sponsors a defined benefit retirement plan that covers most employees, including CL&P, PSNH, and WMECO employees,
hired before 2006 (or as negotiated, for bargaining unit employees), referred to as the NUSCO Pension Plan. NSTAR Electric serves as
plan sponsor for a defined benefit retirement plan that covers most employees of NSTAR Electric & Gas, hired before October 1, 2012,
or as negotiated by bargaining unit employees, referred to as the NSTAR Pension Plan. Both plans are subject to the provisions of
ERISA, as amended by the PPA of 2006. NUSCO and NSTAR Electric & Gas each maintain SERPs and other non-qualified defined
benefit retirement plans (herein collectively referred to as the SERP Plans), which provide benefits in excess of Internal Revenue Code
limitations to eligible current and retired participants that would have otherwise been provided under the Pension Plans.
NUSCO and NSTAR Electric & Gas also sponsor defined benefit postretirement plans that provide certain retiree health care benefits,
primarily medical and dental, and life insurance benefits to retiring employees that meet certain age and service eligibility requirements
(NUSCO PBOP Plans and NSTAR PBOP Plan, respectively). Under certain circumstances, eligible retirees are required to contribute
to the costs of postretirement benefits. The benefits provided under the NUSCO and NSTAR PBOP Plans are not vested and the
Company has the right to modify any benefit provision subject to applicable laws at that time.
The funded status of the Pension, SERP and PBOP Plans is calculated based on the difference between the benefit obligation and the
fair value of plan assets. The funded status of the Pension, SERP and PBOP Plans is recorded on the consolidated balance sheets as
a liability with an offset to Accumulated Other Comprehensive Income/(Loss). Pension, SERP and PBOP costs for the Regulated
companies are recorded as Regulatory Assets as these amounts are recovered from customers. Regulatory accounting was also
applied to the portions of the NUSCO and NSTAR Electric & Gas costs that support the Regulated companies, as these costs are also
recovered from customers. Pension and PBOP costs for the unregulated companies are recorded on an after-tax basis to Accumulated
Other Comprehensive Income/(Loss). For further information, see Note 3, "Regulatory Accounting," and Note 15, "Accumulated Other
Comprehensive Income/(Loss)," to the consolidated financial statements. The SERP Plans do not have plan assets.
For the NUSCO Pension and PBOP Plans, the expected return on plan assets is calculated by applying the assumed rate of return to a
four-year rolling average of plan asset fair values, which reduces year-to-year volatility. Investment gains or losses for this purpose are
the difference between the calculated expected return and the actual return. As investment gains and losses are reflected in the
average plan asset fair values, they are subject to amortization with other unrecognized actuarial gains or losses. For the NSTAR
Pension and PBOP Plans, the entire difference between the actual return and calculated expected return on plan assets is reflected as
a component of unrecognized actuarial gain or loss. Unrecognized actuarial gains or losses are amortized as a component of Pension
and PBOP expense over the estimated average future employee service period.
Pension and SERP Plans: The funded status of each of the plans is recorded on the respective sponsor's balance sheet: NUSCO
(NUSCO Pension and NUSCO SERP), NSTAR Electric (NSTAR Pension) and NSTAR Electric & Gas (NSTAR SERP). The NUSCO
plans are accounted for under the multiple-employer approach while the NSTAR plans are accounted for under the multi-employer
approach. Accordingly, the balance sheet of NSTAR Electric reflects the full funded status of the NSTAR Pension Plan.