OG&E 2009 Annual Report Download - page 89

Restoration of Retirement Income Plan
OGE Energy provides a restoration of retirement income plan to those participants in OGE Energy’s Pension Plan whose
benefits are subject to certain limitations under the Internal Revenue Code (the “Code”). The benefits payable under this restoration
of retirement income plan are equivalent to the amounts that would have been payable under the Pension Plan but for these
limitations. The restoration of retirement income plan is intended to be an unfunded plan.
OGE Energy expects to pay benefits related to its Pension Plan and restoration of retirement income plan on behalf of the
Company of approximately $39.9 million in 2010, $47.0 million in 2011, $59.6 million in 2012, $59.1 million in 2013, $57.2 million
in 2014 and an aggregate of $221.1 million in years 2015 to 2019. These expected benefits are based on the same assumptions used to
measure OGE Energy’s benefit obligation at the end of the year and include benefits attributable to estimated future employee service.
Postretirement Benefit Plans
In addition to providing pension benefits, OGE Energy provides certain medical and life insurance benefits for eligible retired
members (“postretirement benefits”). Regular, full-time, active employees hired prior to February 1, 2000 whose age and years of
credited service total or exceed 80 or have attained age 55 with 10 years of vesting service at the time of retirement are entitled to
postretirement medical benefits while employees hired on or after February 1, 2000 are not entitled to postretirement medical benefits.
Prior to January 1, 2008, all regular, full-time, active employees whose age and years of credited service total or exceed 80 or have
attained age 55 with five years of vesting service at the time of retirement are entitled to postretirement life insurance
benefits. Effective January 1, 2008, all regular, full-time, active employees whose age and years of credited service total or exceed 80
or have attained age 55 with three years of vesting service at the time of retirement are entitled to postretirement life insurance
benefits. Eligible retirees must contribute such amount as OGE Energy specifies from time to time toward the cost of coverage for
postretirement benefits. The benefits are subject to deductibles, co-payment provisions and other limitations. The Company charges
to expense the postretirement benefit costs and includes an annual amount as a component of the cost-of-service in future ratemaking
proceedings.
Plan Assets
The following table is a summary of OGE Energy’s postretirement benefit plans’ assets that are measured at fair value on a
recurring basis at December 31, 2009, of which approximately $52.5 million is the Company’s portion. There were no Level 2
investments held by the postretirement benefit plans at December 31, 2009.
(In millions) Total Level 1 Level 3
Group retiree medical insurance contract (A) $ 49.3 $ --- $ 49.3
U.S. mutual fund (B) 4.9 4.9 ---
Cash 0.8 0.8 ---
Total $ 55.0 $ 5.7 $ 49.3
(A) This category represents a group retiree medical insurance contract which invests in a pool of mutual funds, bonds and money
market accounts, of which a significant portion is comprised of mortgage-backed securities.
(B) This category represents investments in a U.S. equity mutual fund.
The postretirement benefit plans Level 3 investment includes an investment in a group retiree medical insurance
contract. The unobservable input included in the valuation of the contract includes the approach for determining the allocation of the
postretirement benefit plans pro-rata share of the total assets in the contract.
The following table is a summary of OGE Energy’s postretirement benefit plans’ assets that are measured at fair value on a
recurring basis using significant unobservable inputs (Level 3).
Group retiree
medical insurance
contract
Year Ended December 31 (In millions) 2009
Balance at January 1 $ 55.1
Actual return on plan assets relating to assets held at the reporting date (5.8)
Purchases, sales, issuances and settlements, net ---
Transfers in and/or out of Level 3 ---
Balance at December 31 $ 49.3
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