Page 66 - SWGas Annual Report 2015

Benefits expected to be paid for the pension, PBOP, and the SERP over the next 10 years are as follows (in
millions):

Pension 2016 2017 2018 2019 2020 2021-2025
PBOP
SERP $44.0 $45.5 $47.2 $48.9 $50.5 $283.5
3.9 4.1 4.3 4.5 4.5 21.3
2.8 2.8 2.8 2.9 2.9 14.1

No assurance can be made that actual funding and benefits paid will match these estimates.

For PBOP measurement purposes, the per capita cost of the covered health care benefits medical rate trend
assumption is 7.5% declining to 4.5%. The Company makes fixed contributions for health care benefits of
employees who retire after 1988, but pays all covered health care costs for employees who retired prior to 1989.
The medical trend rate assumption noted above applies to the benefit obligations of pre-1989 retirees only.

Components of net periodic benefit cost

Qualified SERP PBOP
Retirement Plan

2015 2014 2013 2015 2014 2013 2015 2014 2013

(Thousands of dollars)

Service cost $ 25,123 $ 21,360 $ 23,056 $ 320 $ 292 $ 373 $ 1,641 $ 1,101 $ 1,220

Interest cost 44,229 43,440 37,607 1,695 1,745 1,535 2,999 2,829 2,482

Expected return on plan assets (57,808) (53,342) (49,840) — — — (3,464) (3,264) (2,824)

Amortization of prior service

cost — — — — — — 1,335 355 355

Amortization of net actuarial

loss 32,743 22,873 32,261 1,293 783 971 345 — 945

Net periodic benefit cost $ 44,287 $ 34,331 $ 43,084 $3,308 $2,820 $2,879 $ 2,856 $ 1,021 $ 2,178

Weighted-average assumptions 4.25% 5.00% 4.25% 4.25% 5.00% 4.25% 4.25% 5.00% 4.25%
(net benefit cost) 7.75% 7.75% 8.00% 7.75% 7.75% 8.00% 7.75% 7.75% 8.00%

Discount rate 2.75% 3.25% 2.75% 2.75% 3.25% 2.75% N/A N/A N/A
Expected return on plan assets
Weighted-average rate of

compensation increase

Southwest Gas Corporation