EMPLOYEE BENEFIT PLANS

12 Months Ended

Dec. 31, 2015

Notes to Consolidated Financial Statements [Abstract]

NOTE 7. EMPLOYEE BENEFIT PLANS

We are required by applicable U.S. GAAP to:

recognize an asset for a plan’s overfunded status or a liability for a plan’s underfunded status in the statement of financial position;
measure a plan’s assets and its obligations that determine its funded status as of the end of the fiscal year (with limited exceptions); and

recognize changes in the funded status of pension and other postretirement benefit plans in the year in which the changes occur. Generally, those changes are reported in other comprehensive income and as a separate component of shareholders’ equity.

The detailed information presented below covers the employee benefit plans of Sempra Energy and its principal subsidiaries.

Sempra Energy has funded and unfunded noncontributory traditional defined benefit and cash balance plans, including separate plans for SDG&E and SoCalGas, which collectively cover all eligible employees, including members of the Sempra Energy board of directors who were participants in a predecessor plan on or before June 1, 1998. Pension benefits under the traditional defined benefit plans are based on service and final average earnings, while the cash balance plans provide benefits using a career average earnings methodology.

IEnova has an unfunded noncontributory defined benefit plan covering all employees. Chilquinta Energía has an unfunded noncontributory defined benefit plan covering all employees hired before October 1, 1981. In addition, IEnova and Chilquinta Energía have an unfunded noncontributory termination indemnity obligation covering all employees. The plans generally provide defined benefits to retirees based on date of hire, years of service and final average earnings.

Sempra Energy also has other postretirement benefit plans (PBOP), including separate plans for SDG&E and SoCalGas, which collectively cover all domestic (except Willmut Gas) and certain foreign employees. The life insurance plans are both contributory and noncontributory, and the health care plans are contributory. Participants’ contributions are adjusted annually. Other postretirement benefits include medical benefits for retirees’ spouses.

Chilquinta Energía also has two noncontributory postretirement benefit plans which cover substantially all employees – a health care plan and an energy subsidy plan that provides for reduced energy rates. The health care plan includes benefits for retirees’ spouses and dependents.

Pension and other postretirement benefits costs and obligations are dependent on assumptions used in calculating such amounts. These assumptions include

discount rates
expected return on plan assets
health care cost trend rates
mortality rates
rate of compensation increases
termination and retirement rates
utilization of postretirement welfare benefits
payout elections (lump sum or annuity)
lump sum interest rates

We review these assumptions on an annual basis and update them as appropriate. We consider current market conditions, including interest rates, in making these assumptions. We use a December 31 measurement date for all of our plans.

Rabbi Trust

In support of its Supplemental Executive Retirement, Cash Balance Restoration and Deferred Compensation Plans, Sempra Energy maintains dedicated assets, including a Rabbi Trust and investments in life insurance contracts, which totaled $464 million and $512 million at December 31, 2015 and 2014, respectively.

Pension and Other Postretirement Benefit Plans

Benefit Plan Amendments Affecting 2015

During 2015, executive participants in a company nonqualified pension plan became eligible in this same plan for Supplemental Executive Retirement Plan benefits. Consistent with past practice, this was treated as a plan amendment and increased the recorded pension liability by $5 million at Sempra Energy Consolidated and $3 million at SoCalGas.

Effective January 1, 2016, the point of service medical benefit provided to retirees under the age of 65 at our domestic companies, except the represented retirees at SDG&E and retirees enrolled in one of the high deductible medical plans at SoCalGas, is no longer provided by the PBOP plans of the respective companies. This change resulted in a decrease in other postretirement benefit obligations of $9 million at each of Sempra Energy Consolidated and SoCalGas, and by a negligible amount at SDG&E.

Benefit Plan Amendments Affecting 2014

During 2014, executive participants in a company nonqualified pension plan became eligible in this same plan for Supplemental Executive Retirement Plan benefits. Consistent with past practice, this was treated as a plan amendment and increased the recorded pension liability by $4 million at Sempra Energy Consolidated.

Effective January 1, 2014, a new high deductible medical benefit was provided to all SDG&E and SoCalGas retirees under the age of 65, except the represented retirees at SoCalGas, participating in the companies’ PBOP plans. This benefit replaced a previous benefit provided by the SDG&E plans and was an added benefit in the SoCalGas plan. These changes resulted in an increase in other postretirement benefit obligations by a negligible amount at SDG&E and by $1 million at each of Sempra Energy Consolidated and SoCalGas.

Special Termination Benefits Affecting 2014

At SDG&E in 2014, all nonrepresented employees age 62 with 5 years of service and all other nonrepresented employees age 55 with 10 years of service that retired under the Voluntary Retirement Enhancement Program offered in that year received an additional postretirement health benefit in the form of a $50,000 Health Reimbursement Account (HRA). In accordance with U.S. GAAP, we elected to treat the benefit obligation attributable to the HRA as special termination benefits. This resulted in increases to the recorded liability for other postretirement benefits of approximately $5 million for each of Sempra Energy Consolidated and SDG&E in 2014.

Benefit Obligations and Assets

The following three tables provide a reconciliation of the changes in the plans’ projected benefit obligations and the fair value of assets during 2015 and 2014, and a statement of the funded status at December 31, 2015 and 2014:

PROJECTED BENEFIT OBLIGATION, FAIR VALUE OF ASSETS AND FUNDED STATUS
SEMPRA ENERGY CONSOLIDATED
(Dollars in millions)
	Pension benefits				Other postretirementbenefits
	2015		2014		2015		2014
CHANGE IN PROJECTED BENEFIT OBLIGATION
Net obligation at January 1	$	3,839	$	3,459	$	1,115	$	973
Service cost		114		101		26		24
Interest cost		154		161		44		49
Contributions from plan participants		―		―		19		17
Actuarial (gain) loss		(180)		441		(172)		105
Benefit payments		(273)		(217)		(60)		(58)
Plan amendments		5		4		(9)		1
Special termination benefits		―		―		―		5
Settlements and curtailments		(10)		(110)		―		(1)
Net obligation at December 31		3,649		3,839		963		1,115

CHANGE IN PLAN ASSETS
Fair value of plan assets at January 1		2,807		2,789		1,054		1,012
Actual return on plan assets		(73)		217		(21)		67
Employer contributions		33		128		11		16
Contributions from plan participants		―		―		19		17
Benefit payments		(273)		(217)		(60)		(58)
Settlements		(10)		(110)		―		―
Fair value of plan assets at December 31		2,484		2,807		1,003		1,054
Funded status at December 31	$	(1,165)	$	(1,032)	$	40	$	(61)
Net recorded (liability) asset at December 31	$	(1,165)	$	(1,032)	$	40	$	(61)

PROJECTED BENEFIT OBLIGATION, FAIR VALUE OF ASSETS AND FUNDED STATUS
SAN DIEGO GAS & ELECTRIC COMPANY
(Dollars in millions)
	Pension benefits				Other postretirementbenefits
	2015		2014		2015		2014
CHANGE IN PROJECTED BENEFIT OBLIGATION
Net obligation at January 1	$	1,011	$	939	$	200	$	171
Service cost		29		30		7		7
Interest cost		39		43		8		9
Contributions from plan participants		―		―		7		6
Actuarial (gain) loss		(52)		101		(43)		15
Benefit payments		(56)		(25)		(14)		(13)
Special termination benefits		―		―		―		5
Settlements		―		(87)		―		―
Transfer of liability (to) from other plans		(6)		10		―		―
Net obligation at December 31		965		1,011		165		200

CHANGE IN PLAN ASSETS
Fair value of plan assets at January 1		828		819		164		146
Actual return on plan assets		(24)		63		(3)		11
Employer contributions		2		56		7		14
Contributions from plan participants		―		―		7		6
Benefit payments		(56)		(25)		(14)		(13)
Settlements		―		(87)		―		―
Transfer of assets from other plans		2		2		―		―
Fair value of plan assets at December 31		752		828		161		164
Funded status at December 31	$	(213)	$	(183)	$	(4)	$	(36)
Net recorded liability at December 31	$	(213)	$	(183)	$	(4)	$	(36)

PROJECTED BENEFIT OBLIGATION, FAIR VALUE OF ASSETS AND FUNDED STATUS
SOUTHERN CALIFORNIA GAS COMPANY
(Dollars in millions)
	Pension benefits				Other postretirementbenefits
	2015		2014		2015		2014
CHANGE IN PROJECTED BENEFIT OBLIGATION
Net obligation at January 1	$	2,398	$	2,110	$	866	$	753
Service cost		74		60		17		16
Interest cost		98		100		34		38
Contributions from plan participants		―		―		12		11
Actuarial (gain) loss		(131)		300		(125)		90
Benefit payments		(187)		(163)		(43)		(43)
Plan amendments		3		―		(9)		1
Settlements		―		(10)		―		―
Transfer of liability from other plans		―		1		―		―
Net obligation at December 31		2,255		2,398		752		866

CHANGE IN PLAN ASSETS
Fair value of plan assets at January 1		1,763		1,758		870		848
Actual return on plan assets		(45)		138		(18)		54
Employer contributions		6		39		1		―
Contributions from plan participants		―		―		12		11
Benefit payments		(187)		(163)		(43)		(43)
Settlements		―		(10)		―		―
Transfer of assets from other plans		―		1		―		―
Fair value of plan assets at December 31		1,537		1,763		822		870
Funded status at December 31	$	(718)	$	(635)	$	70	$	4
Net recorded (liability) asset at December 31	$	(718)	$	(635)	$	70	$	4

New mortality table studies were released by the Society of Actuaries during 2014 that significantly increased life expectancy assumptions, and during 2015 that consisted of a new mortality improvement projection scale. We have incorporated these assumptions, adjusted for the Sempra Energy companies’ actual mortality experience, in our calculations for each of those years.

In 2015, the actuarial gains for pension plans were primarily due to:

an increase in weighted-average discount rates;
changes in salary scale at SoCalGas;
updated mortality rates;
a change in the rate used to convert annuity benefits to lump sums; and
the impact of updated census data at SDG&E; offset by
the impact of updated census data at Sempra Energy Consolidated and SoCalGas; and
changes in anticipated retirement rates.

In 2015, the actuarial gains for other postretirement benefit plans were primarily due to:

the impact of updated census data;
changes in termination and retirement rates;
an increase in weighted-average discount rates;
a decrease in the actual versus expected 2016 claims costs; and
updated mortality rates; offset by

changes in health care cost trend rates; and
changes in salary scale at SoCalGas.

In 2014, the actuarial losses for pension plans were primarily due to:

a decrease in weighted-average discount rates;
updated mortality rates; and
a change in the rate used to convert annuity benefits to lump sums at SoCalGas; offset by
the impact of updated census data at SoCalGas; and
a decrease in the cash balance interest crediting rate.

In 2014, the actuarial losses for other postretirement benefit plans were primarily due to:

a decrease in weighted-average discount rates;
updated mortality rates; and
the impact of updated census data at SDG&E and SoCalGas; offset by
a decrease in anticipated retiree and spousal participation rates.

Net Assets and Liabilities

The assets and liabilities of the pension and other postretirement benefit plans are affected by changing market conditions as well as when actual plan experience is different than assumed. Such events result in investment gains and losses, which we defer and recognize in pension and other postretirement benefit costs over a period of years. Our funded pension and other postretirement benefit plans use the asset smoothing method, except for those at SDG&E and the other postretirement benefit plan at Mobile Gas. This method develops an asset value that recognizes realized and unrealized investment gains and losses over a three-year period. This adjusted asset value, known as the market-related value of assets, is used in conjunction with an expected long-term rate of return to determine the expected return-on-assets component of net periodic cost. SDG&E does not use the asset smoothing method, but rather recognizes realized and unrealized investment gains and losses during the current year.

The 10-percent corridor accounting method is used at Sempra Energy Consolidated, SDG&E and SoCalGas. Under the corridor accounting method, if as of the beginning of a year unrecognized net gain or loss exceeds 10 percent of the greater of the projected benefit obligation or the market-related value of plan assets, the excess is amortized over the average remaining service period of active participants. The asset smoothing and 10-percent corridor accounting methods help mitigate volatility of net periodic costs from year to year.

We recognize the overfunded or underfunded status of defined benefit pension and other postretirement plans as assets or liabilities, respectively; unrecognized changes in these assets and/or liabilities are normally recorded in Accumulated Other Comprehensive Income (Loss) on the balance sheet. The California Utilities and Mobile Gas record regulatory assets and liabilities that offset the funded pension and other postretirement plans’ assets or liabilities, as these costs are expected to be recovered in future utility rates based on agreements with regulatory agencies. At Willmut Gas, pension contributions are recovered in rates on a prospective basis, but are not recorded as a regulatory asset pending recovery.

The California Utilities record annual pension and other postretirement net periodic benefit costs equal to the contributions to their plans as authorized by the CPUC. The annual contributions to the pension plans are limited to a minimum required funding amount as determined by the IRS. The annual contributions to the other postretirement plans are equal to the lesser of the maximum tax deductible amount or the net periodic cost calculated in accordance with U.S. GAAP for pension and other postretirement benefit plans. Mobile Gas records annual pension and other postretirement net periodic benefit costs based on an estimate of the net periodic cost at the beginning of the year calculated in accordance with U.S. GAAP for pension and other postretirement benefit plans, as authorized by the Alabama Public Service Commission. Any differences between booked net periodic benefit cost and amounts contributed to the pension and other postretirement plans for the California Utilities are disclosed as regulatory adjustments in accordance with U.S. GAAP for rate-regulated entities.

The net (liability) asset is included in the following categories on the Consolidated Balance Sheets at December 31:

PENSION AND OTHER POSTRETIREMENT BENEFIT OBLIGATIONS, NET OF PLAN ASSETS AT DECEMBER 31
(Dollars in millions)
	Pension benefits				Other postretirementbenefits
	2015		2014		2015		2014
Sempra Energy Consolidated:
Noncurrent assets	$	―	$	―	$	70	$	4
Current liabilities		(43)		(33)		―		―
Noncurrent liabilities		(1,122)		(999)		(30)		(65)
Net recorded (liability) asset	$	(1,165)	$	(1,032)	$	40	$	(61)
SDG&E:
Current liabilities	$	(5)	$	(3)	$	―	$	―
Noncurrent liabilities		(208)		(180)		(4)		(36)
Net recorded liability	$	(213)	$	(183)	$	(4)	$	(36)
SoCalGas:
Noncurrent assets	$	―	$	―	$	70	$	4
Current liabilities		(2)		(2)		―		―
Noncurrent liabilities		(716)		(633)		―		―
Net recorded (liability) asset	$	(718)	$	(635)	$	70	$	4

Amounts recorded in accumulated other comprehensive income (loss) at December 31, 2015 and 2014, net of income tax effects and amounts recorded as regulatory assets, are as follows:

AMOUNTS IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
(Dollars in millions)
	Pension benefits				Other postretirementbenefits
	2015		2014		2015		2014
Sempra Energy Consolidated:
Net actuarial (loss) gain	$	(84)	$	(82)	$	2	$	(1)
Prior service cost		(5)		(2)		―		―
Total	$	(89)	$	(84)	$	2	$	(1)
SDG&E:
Net actuarial loss	$	(8)	$	(13)
Prior service credit		―		1
Total	$	(8)	$	(12)
SoCalGas:
Net actuarial loss	$	(4)	$	(5)
Prior service (cost) credit		(1)		1
Total	$	(5)	$	(4)

The accumulated benefit obligation for defined benefit pension plans at December 31, 2015 and 2014 was as follows:

ACCUMULATED BENEFIT OBLIGATION
(Dollars in millions)
	Sempra Energy Consolidated				SDG&E				SoCalGas
	2015		2014		2015		2014		2015		2014
Accumulated benefit obligation	$	3,397	$	3,555	$	939	$	978	$	2,056	$	2,182

Sempra Energy, SDG&E, SoCalGas and Mobile Gas each have a funded pension plan. We also have unfunded pension plans at Sempra Energy, SDG&E, SoCalGas, IEnova and Chilquinta Energía. The following table shows the obligations of funded pension plans with benefit obligations in excess of plan assets at December 31:

OBLIGATIONS OF FUNDED PENSION PLANS
(Dollars in millions)
	2015		2014
Sempra Energy Consolidated:
Projected benefit obligation	$	3,410	$	3,592
Accumulated benefit obligation		3,183		3,343
Fair value of plan assets		2,484		2,807
SDG&E:
Projected benefit obligation	$	927	$	964
Accumulated benefit obligation		906		937
Fair value of plan assets		752		828
SoCalGas:
Projected benefit obligation	$	2,236	$	2,379
Accumulated benefit obligation		2,039		2,166
Fair value of plan assets		1,537		1,763

Net Periodic Benefit Cost

The following three tables provide the components of net periodic benefit cost and pretax amounts recognized in other comprehensive income (loss) for the years ended December 31:

NET PERIODIC BENEFIT COST AND AMOUNTS RECOGNIZED IN OTHER COMPREHENSIVE INCOME (LOSS)
SEMPRA ENERGY CONSOLIDATED
(Dollars in millions)
	Pension benefits						Other postretirement benefits
	2015		2014		2013		2015		2014		2013
NET PERIODIC BENEFIT COST
Service cost	$	114	$	101	$	109	$	26	$	24	$	28
Interest cost		154		161		148		44		49		44
Expected return on assets		(173)		(171)		(162)		(68)		(63)		(58)
Amortization of:
Prior service cost (credit)		11		11		4		(4)		(5)		(4)
Actuarial loss		38		18		54		―		―		7
Settlement and curtailment charges		4		31		2		―		(1)		―
Special termination benefits		―		―		―		―		5		5
Regulatory adjustment		(110)		(31)		(20)		12		6		6
Total net periodic benefit cost		38		120		135		10		15		28

CHANGES IN PLAN ASSETS AND BENEFIT OBLIGATIONS
RECOGNIZED IN OTHER COMPREHENSIVE INCOME (LOSS)
Net loss (gain)		17		38		(30)		(4)		1		(8)
Prior service cost		4		4		1		―		―		―
Amortization of actuarial loss		(14)		(23)		(9)		―		―		(1)
Total recognized in other comprehensive income (loss)		7		19		(38)		(4)		1		(9)
Total recognized in net periodic benefit cost and other comprehensive income (loss)	$	45	$	139	$	97	$	6	$	16	$	19

NET PERIODIC BENEFIT COST AND AMOUNTS RECOGNIZED IN OTHER COMPREHENSIVE INCOME (LOSS)
SAN DIEGO GAS & ELECTRIC COMPANY
(Dollars in millions)
	Pension benefits						Other postretirement benefits
	2015		2014		2013		2015		2014		2013
NET PERIODIC BENEFIT COST
Service cost	$	29	$	30	$	32	$	7	$	7	$	8
Interest cost		39		43		41		8		9		8
Expected return on assets		(54)		(55)		(52)		(11)		(10)		(8)
Amortization of:
Prior service cost		8		2		2		3		2		4
Actuarial loss		2		4		14		―		―		―
Settlement charge		―		19		1		―		―		―
Special termination benefits		―		―		―		―		5		2
Regulatory adjustment		(20)		12		14		―		1		―
Total net periodic benefit cost		4		55		52		7		14		14

CHANGES IN PLAN ASSETS AND BENEFIT OBLIGATIONS
RECOGNIZED IN OTHER COMPREHENSIVE INCOME (LOSS)
Net (gain) loss		(6)		8		(2)		―		―		―
Amortization of actuarial loss		(1)		(3)		(1)		―		―		―
Total recognized in other comprehensive (loss) income		(7)		5		(3)		―		―		―
Total recognized in net periodic benefit cost and other comprehensive (loss) income	$	(3)	$	60	$	49	$	7	$	14	$	14

NET PERIODIC BENEFIT COST AND AMOUNTS RECOGNIZED IN OTHER COMPREHENSIVE INCOME (LOSS)
SOUTHERN CALIFORNIA GAS COMPANY
(Dollars in millions)
	Pension benefits						Other postretirement benefits
	2015		2014		2013		2015		2014		2013
NET PERIODIC BENEFIT COST
Service cost	$	74	$	60	$	67	$	17	$	16	$	17
Interest cost		98		100		90		34		38		34
Expected return on assets		(106)		(104)		(98)		(56)		(51)		(48)
Amortization of:
Prior service cost (credit)		9		9		2		(7)		(8)		(8)
Actuarial loss		21		6		31		―		―		6
Settlement charge		―		4		―		―		―		―
Special termination benefits		―		―		―		―		―		2
Regulatory adjustment		(90)		(43)		(34)		12		5		6
Total net periodic benefit cost		6		32		58		―		―		9

CHANGES IN PLAN ASSETS AND BENEFIT OBLIGATIONS
RECOGNIZED IN OTHER COMPREHENSIVE INCOME (LOSS)
Net loss		―		5		3		―		―		―
Prior service cost		2		―		―		―		―		―
Amortization of actuarial loss		―		(5)		(1)		―		―		―
Total recognized in other comprehensive income		2		―		2		―		―		―
Total recognized in net periodic benefit cost and other comprehensive income	$	8	$	32	$	60	$	―	$	―	$	9

The estimated net loss for the pension and other postretirement benefit plans that will be amortized from accumulated other comprehensive income (loss) into net periodic benefit cost in 2016 is $8 million for Sempra Energy Consolidated, $1 million for SDG&E and a negligible amount for SoCalGas. The estimated prior service cost that will be similarly amortized in 2016 is $1 million for Sempra Energy Consolidated and negligible amounts for SDG&E and SoCalGas.

Assumptions for Pension and Other Postretirement Benefit Plans

Benefit Obligation and Net Periodic Benefit Cost

Except for the IEnova and Chilquinta Energía plans, we develop the discount rate assumptions based on the results of a third party modeling tool that develops the discount rate by matching each plan’s expected cash flows to interest rates and expected maturity values of individually selected bonds in a hypothetical portfolio. The model controls the level of accumulated surplus that may result from the selection of bonds based solely on their premium yields by limiting the number of years to look back for selection to 3 years for pre-30-year and 6 years for post-30-year benefit payments. Additionally, the model ensures that an adequate number of bonds are selected in the portfolio by limiting the amount of the plan’s benefit payments that can be met by a single bond to 7.5 percent.

We selected individual bonds from a universe of Bloomberg AA-rated bonds which:

have an outstanding issue of at least $50 million;
are non-callable (or callable with make-whole provisions);
exclude collateralized bonds; and
exclude the top and bottom 10 percent of yields to avoid relying on bonds which might be mispriced or misgraded.

This selection methodology also mitigates the impact of market volatility on the portfolio by excluding bonds with the following characteristics:

The issuer is on review for downgrade by a major rating agency if the downgrade would eliminate the issuer from the portfolio.
Recent events have caused significant price volatility to which rating agencies have not reacted.
Lack of liquidity is causing price quotes to vary significantly from broker to broker.

We believe that this bond selection approach provides the best estimate of discount rates to estimate settlement values for our plans’ benefit obligations as required by applicable U.S. GAAP.

We develop the discount rate assumptions for the plans at IEnova by constructing a synthetic government zero coupon bond yield curve from the available market data, based on duration matching, and we add a risk spread to allow for the yields of high-quality corporate bonds. We develop the discount rate assumptions for the plans at Chilquinta Energía based on 10-year Chilean government bond yields and the expected local long-term rate of inflation. These methods for developing the discount rate are required when there is no deep market for high quality corporate bonds.

Long-term return on assets is based on the weighted-average of the plans’ investment allocation as of the measurement date and the expected returns for those asset types.

We amortize prior service cost using straight line amortization over average future service (or average expected lifetime for plans where participants are substantially inactive employees), which is an alternative method allowed under GAAP.

The significant assumptions affecting benefit obligation and net periodic benefit cost are as follows:

WEIGHTED-AVERAGE ASSUMPTIONS USED TO DETERMINE BENEFIT OBLIGATION AT DECEMBER 31

	Pension benefits				Other postretirement benefits
	2015		2014		2015		2014
Sempra Energy Consolidated:
Discount rate	4.46	%	4.09	%	4.49	%	4.15	%
Rate of compensation increase	2.00-10.00		3.50-10.00		2.00-10.00		3.50-10.00
SDG&E:
Discount rate	4.35	%	4.00	%	4.50	%	4.15	%
Rate of compensation increase	2.00-10.00		3.50-10.00		2.00-10.00		3.50-10.00
SoCalGas:
Discount rate	4.50	%	4.15	%	4.50	%	4.15	%
Rate of compensation increase	2.00-10.00		3.50-10.00		2.00-10.00		3.50-10.00

WEIGHTED-AVERAGE ASSUMPTIONS USED TO DETERMINE NET PERIODIC BENEFIT COST FOR YEARS ENDED DECEMBER 31

	Pension benefits						Other postretirement benefits
	2015		2014		2013		2015		2014		2013
Sempra Energy Consolidated:
Discount rate	4.09	%	4.85	%	4.04	%	4.15	%	4.95	%	4.09	%
Expected return on plan assets	7.00		7.00		7.00		6.98		6.97		6.96
Rate of compensation increase	2.00-10.00		3.50-10.00		3.50-9.50		2.00-10.00		3.50-10.00		3.50-9.50
SDG&E:
Discount rate	4.00	%	4.69	%	3.94	%	4.15	%	5.00	%	4.10	%
Expected return on plan assets	7.00		7.00		7.00		6.91		6.88		6.81
Rate of compensation increase	2.00-10.00		3.50-10.00		3.50-9.50		2.00-10.00		3.50-10.00		N/A
SoCalGas:
Discount rate	4.15	%	4.94	%	4.10	%	4.15	%	4.95	%	4.10	%
Expected return on plan assets	7.00		7.00		7.00		7.00		7.00		7.00
Rate of compensation increase	2.00-10.00		3.50-10.00		3.50-9.50		2.00-10.00		3.50-10.00		3.50-9.50

Health Care Cost Trend Rates

Assumed health care cost trend rates have a significant effect on the amounts that we report for the health care plan costs. Following are the health care cost trend rates applicable to our postretirement benefit plans

ASSUMED HEALTH CARE COST TREND RATES AT DECEMBER 31

		Other postretirement benefit plans(1)
		Pre-65 retirees						Retirees aged 65 years and older
		2015		2014		2013		2015		2014		2013
Health care cost trend rate assumed for next year		8.10	%	7.75	%	8.25	%	5.50	%	5.25	%	5.50	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend)		5.00	%	5.00	%	5.00	%	4.50	%	4.50	%	4.50	%
Year the rate reaches the ultimate trend		2022		2020		2020		2022		2020		2020
(1)	Excludes Mobile Gas Plan. For Mobile Gas, the health care cost trend rate assumed for next year for all retirees was 8.10 percent, 7.75 percent and 7.50 percent in 2015, 2014 and 2013, respectively; the ultimate trend was 5.00 percent in 2015, 2014 and 2013; and the year the rate reaches the ultimate trend was 2022, 2020 and 2019 in 2015, 2014 and 2013, respectively. For Chilquinta Energía, the health care cost trend rate assumed for next year and all subsequent years was 3.00 percent in each of 2015, 2014 and 2013.

A one-percent change in assumed health care cost trend rates would have had the following effects in 2015:

EFFECT OF ONE-PERCENT CHANGE IN ASSUMED HEALTH CARE COST TREND RATES
(Dollars in millions)
	Sempra Energy
	Consolidated				SDG&E				SoCalGas
	1%		1%		1%		1%		1%		1%
	increase		decrease		increase		decrease		increase		decrease
Effect on total of service and interest
cost components of net periodic
postretirement health care benefit cost	$	7	$	(5)	$	1	$	(1)	$	5	$	(4)
Effect on the health care component of the
accumulated other postretirement
benefit obligations		74		(62)		5		(4)		67		(55)

Plan Assets

Investment Allocation Strategy for Sempra Energy’s Pension Master Trust

Sempra Energy’s pension master trust holds the investments for the pension and other postretirement benefit plans. We maintain additional trusts as we discuss below for certain of the California Utilities’ other postretirement benefit plans. Other than through indexing strategies, the trusts do not invest in securities of Sempra Energy.

The current asset allocation objective for the pension master trust is to protect the funded status of the plans while generating sufficient returns to cover future benefit payments and accruals. We assess the portfolio performance by comparing actual returns with relevant benchmarks. Currently, the pension plans’ target asset allocations are

38 percent domestic equity
26 percent international equity
18 percent long credit
5 percent global high yield credit
5 percent real assets
4 percent STRIPS
4 percent long government

The asset allocation of the plans is reviewed by our Plan Funding Committee and our Pension and Benefits Investment Committee (the Committees) on a regular basis. When evaluating strategic asset allocations, the Committees consider many variables, including:

long-term cost
variability and level of contributions
funded status
a range of expected outcomes over varying confidence levels

We maintain allocations at strategic levels with reasonable bands of variance.

In accordance with the Sempra Energy pension investment guidelines, derivative financial instruments may be used by the pension master trust’s equity and fixed income portfolio investment managers to equitize cash, hedge certain exposures, and as substitutes for certain types of fixed income securities.

Rate of Return Assumption

The expected return on assets in our pension and other postretirement benefit plans is based on the weighted-average of the plans’ investment allocations to specific asset classes as of the measurement date. We arrive at a 7 percent expected return on assets by considering both the historical and forecasted long-term rates of return on those asset classes. We expect a return of between 7 percent and 9 percent on return-seeking assets and between 3 percent and 5 percent for risk-mitigating assets. Certain trusts that hold assets for the SDG&E and Mobile Gas other postretirement benefit plans are subject to taxation, which impacts the expected after-tax return on assets in these plans.

Concentration of Risk

Plan assets are fully diversified across global equity and bond markets, and other than what is indicated by the target asset allocations, contain no concentration of risk in any one economic, industry, maturity or geographic sector.

Investment Strategy for SDG&E’s and SoCalGas’ Other Postretirement Benefit Plans

SDG&E’s and SoCalGas’ other postretirement benefit plans are funded by cash contributions from SDG&E and SoCalGas and their current retirees. The assets of these plans are placed into the pension master trust and other Voluntary Employee Beneficiary Association (VEBA) trusts. The assets in the VEBA trusts are invested at an allocation similar to the pension master trust, with 70 percent invested in return-seeking and 30 percent invested in risk-mitigating assets. This allocation is periodically reviewed to ensure that plan assets are best positioned to meet plan obligations.

Fair Value of Pension and Other Postretirement Benefit Plan Assets

We classify the investments in Sempra Energy’s pension master trust and the trusts for the California Utilities’ other postretirement benefit plans into:

Level 1, for securities valued using quoted prices from active markets for identical assets;
Level 2, for securities not traded on an active market but for which observable market inputs are readily available; and
Level 3, for securities and investments valued based on significant unobservable inputs. Investments are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

The following are descriptions of the valuation methods and assumptions we use to estimate the fair values of investments held by pension and other postretirement benefit plan trusts.

Equity Securities – Equity securities are valued using quoted prices listed on nationally recognized securities exchanges.

Fixed Income Securities – Certain fixed income securities are valued at the closing price reported in the active market in which the security is traded. Other fixed income securities are valued based on yields currently available on comparable securities of issuers with similar credit ratings. When quoted prices are not available for identical or similar securities, the security is valued under a discounted cash flows approach that maximizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable, such as credit and liquidity risks. Certain high yield fixed-income securities are valued by applying a price adjustment to the bid side to calculate a mean and ask value. Adjustments can vary based on maturity, credit standing, and reported trade frequencies. The bid to ask spread is determined by the investment manager based on the review of the available market information.

Registered Investment Companies – Investments in mutual funds sponsored by a registered investment company are valued based on exchange listed prices for equity and certain fixed income securities or are valued under a discounted cash flows approach that maximizes observable inputs, such as current yields of similar instruments, but includes adjustments for certain risks that may not be observable, such as credit and liquidity risks for the remaining fixed income securities.

Common/Collective Trusts – Investments in common/collective trust funds are valued based on the redemption price of units owned, which is based on the current fair value of the funds’ underlying assets.

Private Equity Funds – Investments in private equity funds do not trade in active markets. Fair value is determined by the fund managers, based on their review of the underlying investments as well as their utilization of discounted cash flows and other valuation models.

Venture Capital Funds – These funds consist of investments in private equities that are held by limited partnerships following various strategies, including venture capital and corporate finance. The partnerships generally have limited lives of 10 years, after which liquidating distributions will be received. Fair value is determined by attributing a proportionate share of net assets to an ownership interest in partners’ capital.

Real Estate Funds – Investments in real estate funds are valued based on the net asset value per share. Net asset value is based on the fair value of the underlying investments.

Derivative Financial Instruments – Forward currency contracts are valued at the prevailing forward exchange rate of the underlying currencies, and unrealized gain (loss) is recorded daily. Fixed income futures and options are marked to market daily. Equity index future contracts are valued at the last sales price quoted on the exchange on which they primarily trade.

The methods described are intended to produce a fair value calculation that is indicative of net realizable value or reflective of fair values. However, while management believes the valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

We provide more discussion of fair value measurements in Notes 1 and 10. The following tables set forth by level within the fair value hierarchy a summary of the investments in our pension and other postretirement benefit plan trusts measured at fair value on a recurring basis.

There were no transfers into or out of Level 1, Level 2 or Level 3 for Sempra Energy Consolidated, SDG&E or SoCalGas during the periods presented, nor any changes in the valuation techniques used in recurring fair value measurement.

The fair values of our pension plan assets by asset category are as follows:

FAIR VALUE MEASUREMENTS – INVESTMENT ASSETS OF PENSION PLANS
(Dollars in millions)
		Fair value at December 31, 2015
			Level 1		Level 2		Level 3		Total
SDG&E:
Equity securities:
Domestic(1)		$	269	$	―	$	―	$	269
Foreign			163		―		―		163
Domestic preferred			―		2		―		2
Foreign preferred			1		―		―		1
Registered investment companies			38		―		―		38
Fixed income securities:
U.S. Treasury securities			38		―		―		38
Domestic municipal bonds			―		9		―		9
Foreign government bonds			―		3		―		3
Domestic corporate bonds(2)			―		103		―		103
Foreign corporate bonds			―		30		―		30
Common/collective trusts(3)			―		94		―		94
Registered investment companies			―		2		―		2
Other investments(4)			―		―		1		1
Total investment assets(5)			509		243		1		753

SoCalGas:
Equity securities:
Domestic(1)			552		―		―		552
Foreign			334		―		―		334
Domestic preferred			―		4		―		4
Foreign preferred			2		1		―		3
Registered investment companies			77		―		―		77
Fixed income securities:
U.S. Treasury securities			76		―		―		76
Domestic municipal bonds			―		19		―		19
Foreign government bonds			―		6		―		6
Domestic corporate bonds(2)			―		209		―		209
Foreign corporate bonds			―		62		―		62
Common/collective trusts(3)			―		193		―		193
Registered investment companies			―		5		―		5
Other investments(4)			1		―		3		4
Total investment assets(6)			1,042		499		3		1,544

Other Sempra Energy:
Equity securities:
Domestic(1)			72		―		―		72
Foreign			43		―		―		43
Domestic preferred			―		1		―		1
Registered investment companies			9		―		―		9
Fixed income securities:
U.S. Treasury securities			10		―		―		10
Domestic municipal bonds			―		3		―		3
Foreign government bonds			―		1		―		1
Domestic corporate bonds(2)			―		26		―		26
Foreign corporate bonds			―		8		―		8
Common/collective trusts(3)			―		25		―		25
Total other Sempra Energy(7)			134		64		―		198
Total Sempra Energy Consolidated(8)		$	1,685	$	806	$	4	$	2,495
(1)	Investments in common stock of domestic corporations.
(2)	Bonds of U.S. issuers from diverse industries, primarily investment-grade.
(3)	Investments in common/collective trusts held in Sempra Energy’s Pension Master Trust.
(4)	Investments in venture capital and real estate funds, stated at net asset value, and derivative financial instruments.
(5)	Excludes cash and cash equivalents of $4 million, accounts payable of $7 million and transfers receivable from other plans of $2 million at SDG&E.
(6)	Excludes cash and cash equivalents of $9 million and accounts payable of $16 million at SoCalGas.
(7)	Excludes cash and cash equivalents of $1 million, accounts payable of $2 million and transfers payable to other plans of $2 million at Other Sempra Energy.
(8)	Excludes cash and cash equivalents of $14 million and accounts payable of $25 million at Sempra Energy Consolidated.

FAIR VALUE MEASUREMENTS – INVESTMENT ASSETS OF PENSION PLANS
(Dollars in millions)
		Fair value at December 31, 2014
			Level 1		Level 2		Level 3		Total
SDG&E:
Equity securities:
Domestic(1)		$	307	$	―	$	―	$	307
Foreign			186		―		―		186
Domestic preferred			―		1		―		1
Foreign preferred			1		―		―		1
Registered investment companies			40		―		―		40
Fixed income securities:
U.S. Treasury securities			38		―		―		38
Domestic municipal bonds			―		11		―		11
Foreign government bonds			―		12		―		12
Domestic corporate bonds(2)			―		117		―		117
Foreign corporate bonds			―		36		―		36
Common/collective trusts(3)			―		62		―		62
Registered investment companies			―		10		―		10
Other investments(4)			―		―		4		4
Total investment assets(5)			572		249		4		825

SoCalGas:
Equity securities:
Domestic(1)			651		―		―		651
Foreign			395		―		―		395
Domestic preferred			―		3		―		3
Foreign preferred			3		1		―		4
Registered investment companies			86		―		―		86
Fixed income securities:
U.S. Treasury securities			80		―		―		80
Domestic municipal bonds			―		24		―		24
Foreign government bonds			―		25		―		25
Domestic corporate bonds(2)			―		249		―		249
Foreign corporate bonds			―		77		―		77
Common/collective trusts(3)			―		132		―		132
Registered investment companies			―		21		―		21
Other investments(4)			1		―		8		9
Total investment assets(6)			1,216		532		8		1,756

Other Sempra Energy:
Equity securities:
Domestic(1)			81		―		―		81
Foreign			49		―		―		49
Foreign preferred			―		1		―		1
Registered investment companies			10		―		―		10
Fixed income securities:
U.S. Treasury securities			9		―		―		9
Domestic municipal bonds			―		4		―		4
Foreign government bonds			―		3		―		3
Domestic corporate bonds(2)			―		30		―		30
Foreign corporate bonds			―		9		―		9
Common/collective trusts(3)			―		16		―		16
Registered investment companies			―		2		―		2
Other investments(4)			―		―		1		1
Total other Sempra Energy(7)			149		65		1		215
Total Sempra Energy Consolidated(8)		$	1,937	$	846	$	13	$	2,796
(1)	Investments in common stock of domestic corporations include, on a combined basis at SDG&E, SoCalGas and Other Sempra Energy, 11,558 shares of Sempra Energy common stock at a value of $1 million.
(2)	Bonds of U.S. issuers from diverse industries, primarily investment-grade.
(3)	Investments in common/collective trusts held in Sempra Energy’s Pension Master Trust.
(4)	Investments in venture capital and real estate funds, stated at net asset value, and derivative financial instruments.
(5)	Excludes cash and cash equivalents of $3 million at SDG&E.
(6)	Excludes cash and cash equivalents of $7 million at SoCalGas.
(7)	Excludes cash and cash equivalents of $1 million at Other Sempra Energy.
(8)	Excludes cash and cash equivalents of $11 million at Sempra Energy Consolidated.

The fair values by asset category of the other postretirement benefit plan assets held in the pension master trust and in the additional trusts for SoCalGas’ other postretirement benefit plans and SDG&E’s other postretirement benefit plan (PBOP plan trusts) are as follows:

FAIR VALUE MEASUREMENTS – INVESTMENT ASSETS OF OTHER POSTRETIREMENT BENEFIT PLANS
(Dollars in millions)
		Fair value at December 31, 2015
			Level 1		Level 2		Level 3		Total
SDG&E:
Equity securities:
Domestic(1)		$	39	$	―	$	―	$	39
Foreign			24		―		―		24
Registered investment companies			41		―		―		41
Fixed income securities:
U.S. Treasury securities			5		―		―		5
Domestic municipal bonds			―		3		―		3
Domestic corporate bonds(2)			―		15		―		15
Foreign corporate bonds			―		4		―		4
Common/collective trusts(3)			―		14		―		14
Registered investment companies			―		16		―		16
Total investment assets(4)			109		52		―		161

SoCalGas:
Equity securities:
Domestic(1)			123		―		―		123
Foreign			74		―		―		74
Domestic preferred			―		1		―		1
Registered investment companies			43		―		―		43
Broad market funds			―		216		―		216
Fixed income securities:
U.S. Treasury securities			42		―		―		42
Domestic municipal bonds			―		7		―		7
Domestic corporate bonds(2)			―		87		―		87
Foreign government bonds			―		2		―		2
Foreign corporate bonds			―		28		―		28
Common/collective trusts(3)			―		151		―		151
Registered investment companies			―		49		―		49
Total investment assets(5)			282		541		―		823

Other Sempra Energy:
Equity securities:
Domestic(1)			5		―		―		5
Foreign			3		―		―		3
Domestic preferred			―		1		―		1
Registered investment companies			4		―		―		4
Fixed income securities:
U.S. Treasury securities			2		―		―		2
Domestic corporate bonds(2)			―		1		―		1
Foreign government bonds			―		1		―		1
Foreign corporate bonds			―		1		―		1
Common/collective trusts(3)			―		1		―		1
Registered investment companies			―		1		―		1
Total other Sempra Energy			14		6		―		20
Total Sempra Energy Consolidated(6)		$	405	$	599	$	―	$	1,004
(1)	Investments in common stock of domestic corporations.
(2)	Bonds of U.S. issuers from diverse industries, primarily investment-grade.
(3)	Investments in common/collective trusts held in PBOP plan VEBA trusts and in the pension master trust.
(4)	Excludes cash and cash equivalents of $1 million and accounts payable of $1 million held in SDG&E PBOP plan trusts.
(5)	Excludes cash and cash equivalents of $3 million and accounts payable of $4 million held in SoCalGas PBOP plan trusts.
(6)	Excludes cash and cash equivalents of $4 million and accounts payable of $5 million at Sempra Energy Consolidated.

FAIR VALUE MEASUREMENTS – INVESTMENT ASSETS OF OTHER POSTRETIREMENT BENEFIT PLANS
(Dollars in millions)
		Fair value at December 31, 2014
			Level 1		Level 2		Level 3		Total
SDG&E:
Equity securities:
Domestic(1)		$	41	$	―	$	―	$	41
Foreign			25		―		―		25
Registered investment companies			43		―		―		43
Fixed income securities:
U.S. Treasury securities			5		―		―		5
Domestic municipal bonds			―		3		―		3
Domestic corporate bonds(2)			―		16		―		16
Foreign government bonds			―		2		―		2
Foreign corporate bonds			―		5		―		5
Common/collective trusts(3)			―		8		―		8
Registered investment companies			―		16		―		16
Total investment assets			114		50		―		164

SoCalGas:
Equity securities:
Domestic(1)			133		―		―		133
Foreign			81		―		―		81
Domestic preferred			―		1		―		1
Foreign preferred			1		―		―		1
Registered investment companies			45		―		―		45
Broad market funds			―		222		―		222
Fixed income securities:
U.S. Treasury securities			16		―		―		16
Domestic municipal bonds			―		5		―		5
Domestic corporate bonds(2)			―		61		―		61
Foreign government bonds			―		5		―		5
Foreign corporate bonds			―		25		―		25
Common/collective trusts(3)			―		265		―		265
Registered investment companies			―		6		―		6
Other investments(4)			―		―		2		2
Total investment assets(5)			276		590		2		868

Other Sempra Energy:
Equity securities:
Domestic(1)			6		―		―		6
Foreign			3		―		―		3
Registered investment companies			4		―		―		4
Fixed income securities:
U.S. Treasury securities			1		―		―		1
Domestic corporate bonds(2)			―		2		―		2
Common/collective trusts(3)			―		1		―		1
Registered investment companies			―		2		―		2
Total other Sempra Energy(6)			14		5		―		19
Total Sempra Energy Consolidated(7)		$	404	$	645	$	2	$	1,051
(1)	Investments in common stock of domestic corporations include, on a combined basis at SDG&E, SoCalGas and Other Sempra Energy, 2,005 shares of Sempra Energy common stock at a value of $0.2 million.
(2)	Bonds of U.S. issuers from diverse industries, primarily investment-grade.
(3)	Investments in common/collective trusts held in PBOP plan VEBA trusts and in the pension master trust.
(4)	Investments in venture capital and real estate funds, stated at net asset value, and derivative financial instruments.
(5)	Excludes cash and cash equivalents of $2 million held in SoCalGas PBOP plan trusts.
(6)	Excludes cash and cash equivalents of $1 million held in Other Sempra Energy PBOP plan trusts.
(7)	Excludes cash and cash equivalents of $3 million at Sempra Energy Consolidated.

The investments of the pension master trust allocated to the pension and other postretirement benefit plans classified as Level 3 are private equity funds and represent a percentage of each plan’s total allocated assets as follows at December 31:

LEVEL 3 INVESTMENT ASSETS
(Dollars in millions)
	Pension plans								Other postretirement benefit plans
	Level 3 investment assets				% of total investment assets				Level 3 investment assets				% of total investment assets
	2015		2014		2015		2014		2015		2014		2015		2014
SDG&E	$	1	$	4	―	%	―	%	$	―	$	―	―	%	―	%
SoCalGas		3		8	―		―			―		2	―		―
All other		―		1	―		―			―		―	―		―
Sempra Energy Consolidated	$	4	$	13	―		―		$	―	$	2	―		―

The following table provides a reconciliation of changes in the fair value of investments classified as Level 3:

LEVEL 3 RECONCILIATIONS
(Dollars in millions)
		SDG&E		SoCalGas		All other		Sempra EnergyConsolidated
PENSION PLANS
Balance at January 1, 2014	$	6	$	13	$	2	$	21
Realized gains		1		2		―		3
Unrealized losses		(1)		(2)		―		(3)
Sales		(2)		(5)		(1)		(8)
Balance at December 31, 2014		4		8		1		13
Realized gains		1		1		―		2
Unrealized gains		―		2		―		2
Sales		(4)		(8)		(1)		(13)
Balance at December 31, 2015	$	1	$	3	$	―	$	4
OTHER POSTRETIREMENT BENEFIT PLANS
Balance at January 1, 2014	$	1	$	2	$	―	$	3
Unrealized losses		(1)		―		―		(1)
Balance at December 31, 2014		―		2		―		2
Sales		―		(2)		―		(2)
Balance at December 31, 2015	$	―	$	―	$	―	$	―

Future Payments

We expect to contribute the following amounts to our pension and other postretirement benefit plans in 2016:

The following table shows the total benefits we expect to pay for the next 10 years to current employees and retirees from the plans or from company assets.

EXPECTED BENEFIT PAYMENTS
(Dollars in millions)
	Sempra Energy Consolidated				SDG&E				SoCalGas
			Other				Other				Other
	Pension		postretirement		Pension		postretirement		Pension		postretirement
	benefits		benefits		benefits		benefits		benefits		benefits
2016	$	325	$	47	$	86	$	8	$	187	$	36
2017		310		50		84		9		187		38
2018		311		53		82		10		186		40
2019		298		56		80		10		180		42
2020		291		61		77		10		175		44
2021-2025		1,295		296		339		54		808		228

PROFIT SHARING PLANS

Under Chilean law, Chilquinta Energía is required to pay all employees either (1) 30 percent of Chilquinta Energía’s taxable income after deducting a 10 percent return on equity, allocated in proportion to the annual salary of each employee or (2) 25 percent of each employee’s annual salary, with a maximum mandatory profit sharing of 4.75 months of Chile’s legal minimum salary. Chilquinta Energía has elected the second option but calculates the profit sharing amounts with actual employee salaries instead of the legal minimum salary, resulting in a higher cost. The amounts are paid out each pay period. Chilquinta Energía recorded annual profit sharing expense of $3 million for 2015, $4 million for 2014 and $4 million for 2013 related to this plan.

Under Peruvian law, Luz del Sur is required to pay their employees 5 percent of Luz del Sur’s taxable income, paid once a year and allocated as follows: 50 percent based on each employee’s annual hours worked and 50 percent based on each employee’s annual salary. Luz del Sur recorded annual profit sharing expense of $10 million for 2015, $10 million for 2014 and $9 million for 2013 related to this plan.

SAVINGS PLANS

Sempra Energy offers trusteed savings plans to all domestic employees and to employees in Mexico. Participation in the plans is immediate for salary deferrals for all employees except for the represented employees at SoCalGas, who are eligible upon completion of one year of service. Subject to plan provisions, domestic employees may contribute from one percent to 50 percent of their eligible earnings, subject to annual IRS limits. In Mexico, employees may contribute up to 2 percent of the portion of their base salary that is less than 25 times the minimum wage and may contribute up to 5 percent of any portion of their base salary that is greater than 25 times the minimum wage.

Through March 27, 2015, Sempra Energy made matching contributions for all domestic employees after one year of the employee’s completed service. Beginning March 28, 2015, Sempra Energy makes matching contributions for domestic employees immediately as of the date of hire, except for represented employees at SoCalGas, who continue to receive matching contributions after one year of the employee’s completed service. Sempra Energy continues to make matching contributions immediately for employees in Mexico.

Also beginning March 28, 2015, employer contribution amounts for domestic employees, except for the represented employees at SoCalGas and employees at Mobile Gas, are equal to 50 percent of the first 6 percent, plus 20 percent of the next 5 percent, of eligible earnings contributed by employees. Prior to that, employer contribution amounts for these employees were 50 percent of the first 6 percent of eligible earnings contributed by the employees and, if certain company goals were met, an additional amount related to incentive compensation payments. Employer contribution amounts for represented employees at SoCalGas and employees at Mobile Gas remain generally equal to 50 percent of the first 6 percent of eligible earnings contributed by employees. Employees at Mobile Gas may also continue to receive an additional amount related to incentive compensation payments if certain company goals are met. Employer contributions for employees in Mexico remain equal to the contributions made by the employee.

Contributions to the savings plans were as follows:

The market value of Sempra Energy common stock held by the savings plans was $1.1 billion and $1.4 billion at December 31, 2015 and 2014, respectively.

EXPECTED CONTRIBUTIONS

(Dollars in millions)

Sempra Energy

Consolidated

Pension plans

Other postretirement benefit plans