Company: CNLHP
Filing Date: 2025-02-14
Form Type: 10-K
Source: 0000072741-25-000007
Chunk: 212

Company: CONNECTICUT LIGHT & POWER CO
Filing Date: 2025-02-14
Form: 10-K
Item: Item 7
Chunk 212
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 in future years’ pension expense, subject to exceeding the 10 percent corridor.  A decrease in the discount rate at December 31st would also result in a decrease in the interest cost component and an increase in the service cost component of the subsequent year’s benefit plan expense. 

The calculated expected return on plan assets is compared to the actual return or loss on plan assets at the end of each year to determine the investment gains or losses to be immediately reflected in unamortized actuarial gains and losses.  An underperformance of our pension plan investment returns relative to the expected returns would increase our pension liability at December 31st, resulting in a higher unamortized actuarial loss to be recognized in future years’ pension expense, subject to exceeding the 10 percent corridor, and a lower expected return on assets component of pension expense in future years’ pension expense.

Net Periodic Benefit Expense/Income:  Pension, SERP and PBOP expense/income is determined by our actuaries and consists of service cost and prior service cost/credit, interest cost based on the discounting of the obligations, amortization of actuarial gains and losses, and the expected return on plan assets.  For the Pension and SERP Plans, pre-tax net periodic benefit income was $76.8 million, $108.4 million and $181.6 million for the years ended December 31, 2024, 2023 and 2022, respectively.  For the PBOP Plans, pre-tax net periodic benefit income was $64.3 million, $57.3 million and $79.8 million for the years ended December 31, 2024, 2023 and 2022, respectively.  

The change in pension, SERP and PBOP expense/income arising from the annual remeasurement does not fully impact earnings.  Our Massachusetts utilities recover qualified pension and PBOP expenses related to their distribution operations through a rate reconciling mechanism that fully tracks the change in net pension and PBOP expenses each year, therefore the change in their pension and PBOP expense does not impact earnings.  Our electric transmission companies' rates provide for an annual true-up of estimated to actual costs, which include pension expenses, therefore the change in their pension expense does not impact earnings.  Any differences between the fixed level of PBOP expense included in our formula rate and the PBOP expense calculated in accordance with authoritative accounting guidance is accumulated as a regulatory asset or liability, and is expected,