Company: EAI
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0000065984-25-000012
Chunk: 642

Company: ENTERGY ARKANSAS, LLC
Filing Date: 2025-02-18
Form: 10-K
Item: Item 7
Chunk 642
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 City Council, Entergy New Orleans received approval to exclude other postretirement benefit expense credits from the formula rate plan evaluation filing.  To comply with the order, Entergy New Orleans began recording the other postretirement benefit expense credits to a regulatory liability account in September 2024.  At December 31, 2024, the balance in this regulatory liability account was approximately $1 million.Entergy Texas ReserveIn September 2020, Entergy Texas elected to establish a reserve, in accordance with PUCT regulations, to track the surplus or deficit in the annual amount of actuarially determined pension and other postretirement benefits chargeable to Entergy Texas’s expense.  The reserve amounts recorded are evaluated in each rate case filed by Entergy Texas and an amortization period is determined at that time.  At December 31, 2024, the balance in this reserve was approximately $15 million.Qualified Pension and Other Postretirement Plans’ AssetsThe Plan Administrator’s trust asset investment strategy is to invest the assets in a manner whereby long-term earnings on the assets (plus cash contributions) provide adequate funding for retiree benefit payments.  The mix of assets is based on an optimization study that identifies asset allocation targets in order to achieve the maximum return for an acceptable level of risk, while minimizing the expected contributions and pension and postretirement expense.In the optimization studies, the Plan Administrator formulates assumptions about characteristics, such as expected asset class investment returns, volatility (risk), and correlation coefficients among the various asset classes.  The future market assumptions used in the optimization study are determined by examining historical market characteristics of the various asset classes and making adjustments to reflect future conditions expected to prevail over the study period.The target asset allocation for pension adjusts dynamically based on the funded status of each plan within the trust.  The current targets are shown below.  The expectation is that the allocation to fixed income securities will increase as the pension plans’ funded status increases.  The following ranges were established to produce an acceptable, economically efficient plan to manage around the targets.For postretirement assets the target and range asset allocations (as shown below) reflect recommendations made in the latest optimization study.  The target asset allocations for postretirement assets adjust dynamically based on the funded status of each sub-account within each trust.  The current weighted-average targets shown below represent the aggregate of all targets for all sub-accounts within all trusts.

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Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements

Entergy’s qualified