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EMPLOYEE BENEFIT PLANS
 12 Months Ended
Dec. 31, 2023
Employee Benefit and Share-Based Payment Arrangement, Noncash Expense [Abstract]  
EMPLOYEE BENEFIT PLANS EMPLOYEE BENEFIT PLANS
Pension Plan and Postretirement Benefits Other than Pensions (“PBOP”)

PG&E Corporation and the Utility sponsor a non-contributory defined benefit pension plan for eligible employees hired before December 31, 2012 and a cash balance plan for those eligible employees hired after this date or who made a one-time election to participate (“Pension Plan”).  Certain trusts underlying these plans are qualified trusts under the IRC.  If certain conditions are met, PG&E Corporation and the Utility can deduct payments made to the qualified trusts, subject to certain limitations.  PG&E Corporation’s and the Utility’s funding policy is to contribute tax-deductible amounts, consistent with applicable regulatory decisions and federal minimum funding requirements.  On an annual basis, the Utility funds the pension plan up to the amount it is authorized to recover through rates.

PG&E Corporation and the Utility also sponsor contributory postretirement medical plans for retirees and their eligible dependents, and non-contributory postretirement life insurance plans for eligible employees and retirees.  PG&E Corporation and the Utility use a fiscal year-end measurement date for all plans.
Change in Plan Assets, Benefit Obligations, and Funded Status

The following tables show the reconciliation of changes in plan assets, benefit obligations, and the plans’ aggregate funded status for pension benefits and other benefits for PG&E Corporation during 2023 and 2022:

Pension Plan
(in millions)20232022
Change in plan assets:
Fair value of plan assets at beginning of year$16,369 $21,895 
Actual return on plan assets1,518 (4,916)
Company contributions336 339 
Benefits and expenses paid(1,012)(949)
Fair value of plan assets at end of year$17,211 $16,369 
Change in benefit obligation:
Benefit obligation at beginning of year$16,608 $22,759 
Service cost for benefits earned379 575 
Interest cost913 692 
Actuarial loss (gain) (1)
809 (6,471)
Plan amendments— — 
Benefits and expenses paid(1,012)(947)
Benefit obligation at end of year (2)
$17,697 $16,608 
Funded Status:
Current liability$(9)$(8)
Noncurrent liability(477)(231)
Net liability at end of year
$(486)$(239)
(1) The actuarial loss for the year ended December 31, 2023 was due to a decrease in the discount rate used to measure the projected benefit obligation and unfavorable changes in the demographic assumptions; the actuarial gain for the year ended December 31, 2022 was due to an increase in the discount rate used to measure the projected benefit obligation, offset by unfavorable changes in the demographic assumptions.
(2) PG&E Corporation’s accumulated benefit obligation was $16.3 billion and $15.4 billion at December 31, 2023 and 2022, respectively.
Postretirement Benefits Other than Pensions
(in millions)20232022
Change in plan assets:
Fair value of plan assets at beginning of year$2,336 $3,102 
Actual return on plan assets260 (693)
Company contributions5 26 
Plan participant contribution81 81 
Benefits and expenses paid(183)(180)
Fair value of plan assets at end of year$2,499 $2,336 
Change in benefit obligation:
Benefit obligation at beginning of year$1,339 $1,766 
Service cost for benefits earned38 62 
Interest cost73 53 
Actuarial loss (gain) (1)
8 (486)
Benefits and expenses paid(165)(162)
Federal subsidy on benefits paid3 3 
Plan participant contributions81 81 
Voluntary separation program-related termination benefits (2)
— 22 
Benefit obligation at end of year$1,377 $1,339 
Funded Status: (3)
Noncurrent asset$1,122 $997 
Noncurrent liability— — 
Net asset at end of year$1,122 $997 
(1) The actuarial loss for the year ended December 31, 2023 was primarily due to a decrease in the discount rate used to measure the accumulated benefit obligations, offset by favorable changes in claims cost and demographic assumptions. The actuarial gain for the year ended December 31, 2022 was primarily due to an increase in the discount rate used to measure the accumulated benefit obligations, offset by unfavorable changes in demographic assumptions.
(2) Represents voluntary separation program related credits to employee retirement health savings accounts. See “Voluntary Separation Program” in Note 3 of the Notes to the Consolidated Financial Statements in Item 8 of the 2022 Form 10-K.
(3) At December 31, 2023 and 2022, the postretirement medical plan and the postretirement life insurance plan were in overfunded positions. The projected benefit obligation and the fair value of plan assets for the postretirement life insurance plan were $275 million and $292 million as of December 31, 2023, and $259 million and $266 million as of December 31, 2022, respectively.

There was no material difference between PG&E Corporation and the Utility for the information disclosed above.

Components of Net Periodic Benefit Cost

PG&E Corporation and the Utility sponsor a non-contributory defined benefit pension plan and cash balance plan.  Both plans are included in “Pension Benefits” below.  Post-retirement medical and life insurance plans are included in “Other Benefits” below.
Net periodic benefit costs as reflected in PG&E Corporation’s Consolidated Statements of Income were as follows:

Pension Plan
(in millions)202320222021
Service cost for benefits earned (1)
$379 $575 $587 
Interest cost913 692 645 
Expected return on plan assets(981)(1,189)(1,046)
Amortization of prior service cost(4)(4)(6)
Amortization of net actuarial loss1 2 6 
Net periodic benefit cost308 76 186 
Less: transfer to regulatory account (2)
25 254 147 
Total expense recognized$333 $330 $333 
(1) A portion of service costs are capitalized pursuant to ASU 2017-07.
(2) The Utility recorded these amounts to a regulatory account as they are probable of recovery through future rates.

Postretirement Benefits Other than Pensions
(in millions)202320222021
Service cost for benefits earned (1)
$38 $62 $63 
Interest cost73 53 51 
Expected return on plan assets(132)(130)(137)
Amortization of prior service cost3 7 14 
Amortization of net actuarial gain(19)(40)(33)
Special termination benefits— 22 — 
Net periodic benefit cost$(37)$(26)$(42)
(1) A portion of service costs are capitalized pursuant to ASU 2017-07.

Non-service costs are reflected in Other income, net on the Consolidated Statements of Income. Service costs are reflected in Operating and maintenance on the Consolidated Statements of Income.

There was no material difference between PG&E Corporation and the Utility for the information disclosed above.

Components of Accumulated Other Comprehensive Income

PG&E Corporation and the Utility record unrecognized prior service costs and unrecognized gains and losses related to pension and post-retirement benefits other than pension as components of accumulated other comprehensive income, net of tax.  In addition, regulatory adjustments are recorded in the Consolidated Statements of Income and Consolidated Balance Sheets to reflect the difference between expense or income calculated in accordance with GAAP for accounting purposes and expense or income for ratemaking purposes, which is based on authorized plan contributions.  For pension benefits, a regulatory asset or liability is recorded for amounts that would otherwise be recorded to accumulated other comprehensive income.  For post-retirement benefits other than pension, the Utility generally records a regulatory liability for amounts that would otherwise be recorded to accumulated other comprehensive income.  As the Utility is unable to record a regulatory asset for these other benefits, the charge remains in accumulated other comprehensive income (loss).
Valuation Assumptions

The following weighted average year-end actuarial assumptions were used in determining the plans’ projected benefit obligations and net benefit costs.
 Pension PlanPBOP Plans
 December 31,December 31,
 202320222021202320222021
Discount rate5.21 %5.54 %3.03 %
5.18 - 5.22%
5.50 - 5.54%
2.97 - 3.04%
Rate of future compensation increases3.80 %3.80 %3.80 %N/AN/AN/A
Expected return on plan assets6.00 %6.10 %5.50 %
3.70 - 7.00%
3.70 - 7.30%
3.30 - 6.40%
Interest crediting rate for cash balance plan3.86 %4.19 %1.95 %N/AN/AN/A

The assumed health care cost trend rate as of December 31, 2023 was 6.25%, gradually decreasing to the ultimate trend rate of approximately 4.5% in 2031 and beyond.

Expected rates of return on plan assets were developed by estimating future stock and bond returns and then applying these returns to the target asset allocations of the employee benefit plan trusts, resulting in a weighted average rate of return on plan assets.  Returns on fixed-income debt investments were projected based on real maturity and credit spreads added to a long-term inflation rate.  Returns on equity investments were projected based on estimates of dividend yield and real earnings growth added to a long-term inflation rate.  For the pension plan, the assumed return of 6.0% compares to a ten-year actual return of 5.3%.  The rate used to discount pension benefits and other benefits was based on a yield curve developed from market data of over approximately 858 Aa-grade non-callable bonds at December 31, 2023.  This yield curve has discount rates that vary based on the duration of the obligations.  The estimated future cash flows for the pension benefits and other benefit obligations were matched to the corresponding rates on the yield curve to derive a weighted average discount rate.

Investment Policies and Strategies

The financial position of PG&E Corporation’s and the Utility’s funded status is the difference between the fair value of plan assets and projected benefit obligations.  Volatility in funded status occurs when asset values change differently from liability values and can result in fluctuations in costs in financial reporting, as well as the amount of minimum contributions required under the Employee Retirement Income Security Act of 1974, as amended.  PG&E Corporation’s and the Utility’s investment policies and strategies are designed to increase the ratio of trust assets to plan liabilities at an acceptable level of funded status volatility.

The trusts’ asset allocations are meant to manage volatility, reduce costs, and diversify its holdings.  Interest rate, credit, and equity risk are the key determinants of PG&E Corporation’s and the Utility’s funded status volatility.  In addition to affecting the trusts’ fixed income portfolio market values, interest rate changes also influence liability valuations as discount rates move with current bond yields.  To manage volatility, PG&E Corporation’s and the Utility’s trusts hold significant allocations in long maturity fixed-income investments. Although they contribute to funded status volatility, equity investments are held to reduce long-term funding costs due to their higher expected return.  Real assets and absolute return investments are held to diversify the trust’s holdings in equity and fixed-income investments by exhibiting returns with low correlation to the direction of these markets. Real assets include global real estate investment trusts (“REITS”), global listed infrastructure equities, and private real estate funds.  Absolute return investments include hedge fund portfolios.

Derivative instruments such as equity index futures are used to meet target equity exposure. Derivative instruments, such as equity index futures and U.S. treasury futures, are also used to rebalance the allocation between fixed income and equity of the pension’s portfolio. Foreign currency exchange contracts are used to hedge a portion of the non-U.S. dollar exposure of global equity investments.
The target asset allocation percentages for major categories of trust assets for pension and other benefit plans are as follows:
 Pension PlanPBOP Plans
 202420232022202420232022
Global equity securities26 %26 %30 %29 %28 %26 %
Absolute return1 %1 %2 %— %1 %1 %
Real assets8 %8 %8 %3 %3 %3 %
Fixed-income securities65 %65 %60 %68 %68 %70 %
Total100 %100 %100 %100 %100 %100 %

PG&E Corporation and the Utility apply a risk management framework for managing the risks associated with employee benefit plan trust assets.  The guiding principles of this risk management framework are the clear articulation of roles and responsibilities, appropriate delegation of authority, and proper accountability and documentation.  Trust investment policies and investment manager guidelines include provisions designed to ensure prudent diversification, manage risk through appropriate use of physical direct asset holdings and derivative securities, and identify permitted and prohibited investments.

Fair Value Measurements

The following tables present the fair value of plan assets for pension and other benefits plans by major asset category at December 31, 2023 and 2022.
 Fair Value Measurements
 At December 31,
 20232022
(in millions)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Pension Plan:        
Short-term investments$565 $86 $— $651 $461 $126 $— $587 
Global equity securities1,270 — — 1,270 1,430 — — 1,430 
Real assets472 — — 472 426 — — 426 
Fixed-income securities1,926 6,802 13 8,741 1,946 6,086 8 8,040 
Assets measured at NAV— — — 6,080 — — — 5,886 
Total$4,233 $6,888 $13 $17,214 $4,263 $6,212 $8 $16,369 
PBOP Plans:        
Short-term investments$30 $— $— $30 $26 $— $— $26 
Global equity securities66 — — 66 83 — — 83 
Real assets32 — — 32 29 — — 29 
Fixed-income securities422 795 1 1,218 406 702 1 1,109 
Assets measured at NAV— — — 1,160 — — — 1,100 
Total$550 $795 $1 $2,506 $544 $702 $1 $2,347 
Total plan assets at fair value   $19,720    $18,716 

In addition to the total plan assets disclosed at fair value in the table above, the trusts had other net liabilities of $10 million and $11 million at December 31, 2023 and 2022, respectively, comprised primarily of cash, accounts receivable, deferred taxes, and accounts payable.

Valuation Techniques

The following describes the valuation techniques used to measure the fair value of the assets and liabilities shown in the table above.  All investments that are valued using a NAV per share can be redeemed quarterly with a notice not to exceed 90 days.

Short-Term Investments

Short-term investments consist primarily of commingled funds across government, credit, and asset-backed sectors. These securities are categorized as Level 1 and Level 2 assets.
Global Equity Securities

The global equity category includes investments in common stock and equity-index futures.  Equity investments in common stock are actively traded on public exchanges and are therefore considered Level 1 assets.  These equity investments are generally valued based on unadjusted prices in active markets for identical securities.  Equity-index futures are valued based on unadjusted prices in active markets and are Level 1 assets.

Real Assets

The real asset category includes portfolios of commodity futures, global REITS, global listed infrastructure equities, and private real estate funds.  The commodity futures, global REITS, and global listed infrastructure equities are actively traded on a public exchange and are therefore considered Level 1 assets.

Fixed-Income Securities

Fixed-income securities are primarily composed of U.S. government and agency securities, municipal securities, and other fixed-income securities, including corporate debt securities.  U.S. government and agency securities primarily consist of U.S. Treasury securities that are classified as Level 1 because the fair value is determined by observable market prices in active markets.  A market approach is generally used to estimate the fair value of debt securities classified as Level 2 using evaluated pricing data such as broker quotes, for similar securities adjusted for observable differences.  Significant inputs used in the valuation model generally include benchmark yield curves and issuer spreads.  The external credit ratings, coupon rate, and maturity of each security are considered in the valuation model, as applicable.

Assets Measured at NAV Using Practical Expedient

Investments in the trusts that are measured at fair value using the NAV per share practical expedient have not been classified in the fair value hierarchy tables above. The fair value amounts are included in the tables above in order to reconcile to the amounts presented in the Consolidated Balance Sheets. These investments include commingled funds that are composed of equity securities traded publicly on exchanges, fixed-income securities that are composed primarily of U.S. government securities, credit securities and asset-backed securities, and real assets and absolute return investments that are held to diversify the trust’s holdings in equity and fixed-income securities.

Transfers Between Levels

No material transfers between levels occurred in the years ended December 31, 2023 or 2022.
Level 3 Reconciliation

The following table is a reconciliation of changes in the fair value of instruments for the pension plan that have been classified as Level 3 for the years ended December 31, 2023 and 2022:
(in millions)
For the year ended December 31, 2023
Fixed-Income
Balance at beginning of year$8 
Actual return on plan assets:
Relating to assets still held at the reporting date2 
Relating to assets sold during the period(1)
Purchases, issuances, sales, and settlements:
Purchases10 
Settlements(6)
Balance at end of year$13 
  
(in millions)
For the year ended December 31, 2022
Fixed-Income
Balance at beginning of year$27 
Actual return on plan assets:
  Relating to assets still held at the reporting date1 
Relating to assets sold during the period— 
Purchases, issuances, sales, and settlements:
Purchases6 
Settlements(26)
Balance at end of year$8 

There were no material transfers out of Level 3 in 2023 or 2022.

Cash Flow Information

Employer Contributions

PG&E Corporation and the Utility contributed $336 million to the pension benefit plans, $31 million to the long-term disability trusts, and $5 million to the other postretirement benefit plans in 2023.  These contributions are consistent with PG&E Corporation’s and the Utility’s funding policy, which is to contribute amounts that are tax-deductible and consistent with applicable regulatory decisions and federal minimum funding requirements. The Utility’s pension benefits met all the funding requirements under the Employee Retirement Income Security Act.  PG&E Corporation and the Utility expect to make total contributions of approximately $327 million to the pension plan in 2024. PG&E Corporation and the Utility plan to contribute $31 million to the long-term disability trusts in 2024, as authorized in the 2023 GRC.

Benefits Payments and Receipts

As of December 31, 2023, the estimated benefits expected to be paid and the estimated federal subsidies expected to be received in each of the next five fiscal years, and in aggregate for the five fiscal years thereafter, are as follows:
(in millions)Pension
Plan		PBOP
Plans		Federal
Subsidy
2024957 93 (4)
20251,040 93 (1)
20261,066 96 (1)
20271,089 87 (1)
20281,111 89 (1)
Thereafter in the succeeding five years5,802 471 (4)
There were no material differences between the estimated benefits expected to be paid by PG&E Corporation and paid by the Utility for the years presented above.  There were also no material differences between the estimated subsidies expected to be received by PG&E Corporation and received by the Utility for the years presented above.

Retirement Savings Plan

PG&E Corporation sponsors a retirement savings plan, which qualifies as a 401(k) defined contribution benefit plan under the IRC. This plan permits eligible employees to make pre-tax and after-tax contributions into the plan and provides for employer contributions to be made to eligible participants.  Total expenses recognized for defined contribution benefit plans reflected in PG&E Corporation’s Consolidated Statements of Income were $158 million, $144 million, and $133 million in 2023, 2022, and 2021, respectively. Beginning January 1, 2019 PG&E Corporation changed its default matching contributions under its 401(k) plan from PG&E Corporation common stock to cash. Beginning in March 2019, at PG&E Corporation’s directive, the 401(k) plan trustee began purchasing new shares in the PG&E Corporation common stock fund on the open market rather than directly from PG&E Corporation.

There were no material differences between the employer contribution expense for PG&E Corporation and the Utility for the years presented above.