Statutes, codes, and regulations
New York Codes, Rules and Regulations
Title 16 - DEPARTMENT OF PUBLIC SERVICE
Appendices
Appendix 6-B

N.Y. Comp. Codes R. & Regs. tit. 16, Appendices, app 6-B

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Current through Register Vol. 46, No. 43, October 23, 2024
Appendix 6-B

DECLARATION OF POLICY

RE

UTILITY EMPLOYEE PENSION COSTS

Consistent with our opinion of March 9, 1950, we hold that employee pensions are elements of current labor costs and as such constitute a present benefit.

The treatment of costs of employee pensions in the determination of rates has been given consideration and the following general policy will govern in such proceedings.

1. All costs of a reasonable pension plan, not provided heretofore, will be allowed as operating expenses in determining rates. Where advance provision is being made for future pension payments, however, a portion of the charge may be considered deferrable to a later period, if in the judgment of the Commission an unreasonable proportion of the pension cost is being charged currently.
2. In determining, for a utility subject to Federal income tax and making advance provision for pension payments, whether its pension plan is a reasonable one, the Commission will give consideration to whether the plan is approved by or acceptable to the Commissioner of Internal Revenue for tax purposes.
3. Under ordinary circumstances no portion of the pension charges will be disallowed on the ground that it relates exclusively to a prior service period. However, where the adoption of a comprehensive program of advance provision is unreasonably deferred, the charges may be disallowed to the extent that the recognized liability on the date of adoption is increased and the increase is directly attributable to the extended lapse of time.
4. Ordinarily a utility will not be permitted to spread over a period of less than ten years provision for that portion of pension costs which are considered to arise from service prior to the date at which provision for future pension payments had been commenced or shall hereafter be commenced. The particular period is to be determined in each case with due regard to the financial burden involved.
5. While paragraph 1 recognizes all employee pension costs as operating expenses, this does not prohibit a utility from allocating to construction and retirement work orders and to clearing and other accounts an applicable portion of the cost of employee pensions.

N.Y. Comp. Codes R. & Regs. tit. 16, Appendices, app 6-B