Algonquin Power & Utilities Corp. – Consolidated Financial Statements ALGONQUIN POWER & UTILITIES CORP.  Notes to the Consolidated Financial Statements  December 31, 2012 and 2011   (in thousands of Canadian dollars except as noted and amounts per share)  The following table lists the components of net benefit costs for the pension plans and OPEB  recorded as part of administrative expenses in the Consolidated Statement of Operations.  The employee benefit costs related to business acquired are recorded in the Consolidated  Statement of Operations from the date of acquisition. The portion of employee benefit  capitalized as cost of construction is insignificant.  The net actuarial loss for the defined benefit pension plan that will be amortized from  accumulated other comprehensive income into net periodic benefit cost over the next fiscal  year are $11 and $37, respectively. The Company’s investment strategy for its pension and post-retirement plan assets is to  maintain a diversified portfolio of assets with the primary goal of meeting long-term cash  requirements as they become due. The total amount of plan assets acquired through  business acquisitions in 2012 was determined but had not been transferred to the Company  as at December 31, 2012. An estimate of the assets to be transferred adjusted for estimated  return, contributions and benefits was used to estimate the funded status at December 31,  2012. Detailed investment allocation decisions will be finalized following the plan asset  transfer that is expected to occur in the first quarter of 2013.  The Company expects to contribute $2,309 to its pension plans and $1,311 to its postretirement benefit plans in 2013.  2012 Annual Report 110 11.  Pension and other post-retirement benefits (continued)  (c) Assumptions (continued)  (d) Benefit costs (e) Plan assets  2013 2014 2015 2016 2017 2018- 2022  Pension plan  $ 4,269  $ 4,590 $ 4,693 $ 4,973 $ 5,262  $ 28,635 OPEB 1,311 1,416 1,520 1,588 1,663 10,008 The expected benefit payments over the next ten years are as follows:  (f) Cash flows Pension benefits OPEB 2012 2011 2012 2011 Service cost  $ 1,288 $ 180 $ 803  $ - Interest cost  1,906 - 606  - Expected return on plan assets  (1,785) - -  - Amortization of net actuarial loss  2 - 32  - Net benefit cost  $ 1,411 $ 180 $ 1,441  $ - 2012 Effect of a 1 percentage point increase in the HCCTR on:  Year-end benefit obligation  $ 4,153 Total service and interest cost  177 Effect of a 1 percentage point decrease in the HCCTR on: Year-end benefit obligation  $ (3,356) Total service and interest cost   (142) The effect of a one percent change in the assumed health care cost trend rate (HCCTR) for 2012 is as follows: 