Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2017

The following table sets forth the plans' funded status as of December 31, 2017 and 2016. The measurement of assets and obligations of the plans is as of December 31, 2017 and 2016.

Obligations and Funded Status At December 31	2017			2016

Change in Benefit Obligation
Pension benefit obligation beginning of year	$	40,754		$	39,469
Service cost		1,080			1,018
Interest cost		1,592			1,599
Actuarial (gain) loss		2,645			(43	)
Benefit payments		(1,435	)		(1,289	)
Pension benefit obligation end of year		44,636			40,754

Change in Plan Assets
Fair value of plan assets beginning of year		35,467			31,835
Actual return on plan assets		5,107			2,621
Employer contributions		2,300			2,300
Benefits paid		(1,435	)		(1,289	)
Fair value of plan assets end of year		41,439			35,467

Funded Status of Plans at End of Year	$	(3,197	)	$	(5,287	)

Changes in Plan Assets and Benefit Obligations Recognized in Regulatory Assets

Changes in plan assets and benefit obligations recognized in regulatory assets are as follows:

	2017			2016
Net gain arising during the period	$	(66	)	$	(432	)
Recognized net actuarial loss		(493	)		(561	)
Recognized prior service credit		13			13
Total changes in regulatory asset during the year	$	(546	)	$	(980	)

Amounts recognized in regulatory assets that have not yet been recognized as components of net periodic benefit cost consist of the following at December 31:

Amounts Recognized in Regulatory Assets That Have Not Yet Been Recognized as Components of Net Periodic Benefit Cost

	2017			2016
Net loss	$	8,895		$	9,454
Prior service credit		(101	)		(114	)
Regulatory asset	$	8,794		$	9,340

Components of Net Periodic Benefit Cost

Components of net periodic benefit cost are as follows:

	2017			2016			2015
Service cost	$	1,080		$	1,018		$	1,166
Interest cost		1,592			1,599			1,515
Expected return on plan assets		(2,395	)		(2,233	)		(2,229	)
Amortization of loss		493			561			705
Amortization of prior service credit		(13	)		(13	)		(13	)
Rate-regulated adjustment		1,543			1,368			1,156
Net periodic benefit cost	$	2,300		$	2,300		$	2,300

The rate-regulated adjustment set forth above is required in order to reflect pension expense for the Company in accordance with the method used in establishing water rates. The Company is permitted by rate order of the PPUC to expense pension costs to the extent of contributions and defer the remaining expense to regulatory assets to be collected in rates at a later date as additional contributions are made. During 2017, the deferral decreased by $1,543.

Regulatory Assets to be Reclassified into Net Periodic Benefit Cost Over Next Fiscal Year

The estimated costs for the defined benefit pension plans relating to the December 31, 2017 balance sheet that will be amortized from regulatory assets into net periodic benefit cost over the next fiscal year are as follows:

Net loss	$	453
Net prior service credit		(13	)
		440

Benefit Payments Expected to be Paid

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid in each of the next five years and the subsequent five years in the aggregate:

2018				2019				2020				2021				2022						2023-2027
	$	1,714			$	1,852			$	1,865			$	1,928			$	2,007			$	11,717

Projected Benefit Obligation and Fair Value of Plan Assets

The following tables show the projected benefit obligation, the accumulated benefit obligation and the fair value of plan assets as of December 31:

	2017		2016
Projected benefit obligation	$	44,636	$	40,754
Fair value of plan assets		41,439		35,467

Accumulated Benefit Obligation and Fair Value of Plan Assets

	2017		2016
Accumulated benefit obligation	$	41,390	$	37,822
Fair value of plan assets		41,439		35,467

Weighted-Average Assumptions Used

Weighted-average assumptions used to determine benefit obligations at December 31:

	2017	2016
Discount rate	3.50%	4.00%
Rate of compensation increase	2.50% - 3.00%	2.50% - 3.00%

Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31:

	2017	2016	2015
Discount rate	4.00%	4.20%	3.80%
Expected long-term return on plan assets	6.75%	6.75%	7.00%
Rate of compensation increase	2.50% - 3.00%	2.50% - 3.00%	3.00%

Fair Values of Pension Plan Assets

The fair values of the Company's pension plan assets at December 31, 2017 and 2016 by asset category and fair value hierarchy level are as follows. The majority of the valuations are based on quoted prices on active markets (Level 1), with the remaining valuations based on broker/dealer quotes, active market makers, models, and yield curves (Level 2).

	Total Fair Value				Quoted Prices in Active Markets for Identical Assets (Level 1)				Significant Other Observable Inputs (Level 2)
Asset Category	2017		2016		2017		2016		2017		2016
Cash and Money Market Funds (a)	$	1,968	$	635	$	1,968	$	635	$	-	$	-
Equity Securities:
Common Equity Securities (b)		2,606		2,969		2,606		2,969		-		-
Equity Mutual Funds (c)		23,416		21,107		23,416		21,107		-		-
Fixed Income Securities:
U.S. Treasury Obligations		1,106		853		-		-		1,106		853
Corporate and Foreign Bonds (d)		5,153		3,439		-		-		5,153		3,439
Fixed Income Mutual Funds (e)		7,190		6,464		7,190		6,464		-		-
Total Plan Assets	$	41,439	$	35,467	$	35,180	$	31,175	$	6,259	$	4,292

(a)

The portfolios are designed to keep up to one year of distributions in immediately available funds. The Company was more heavily-weighted in cash as of December 31, 2017 due to the timing of employer contributions.

(b)

This category includes investments in U.S. common stocks and foreign stocks trading in the U.S. widely distributed among consumer discretionary, consumer staples, healthcare, information technology, financial services, telecommunications, industrials, materials, and energy. The individual stocks are primarily large cap stocks which track with the S&P 500.

(c)

This category currently includes a majority of investments in closed-end mutual funds as well as domestic equity mutual funds and international mutual funds which give the portfolio exposure to mid and large cap index funds as well as international diversified index funds.

(d)

This category currently includes only U.S. corporate bonds and notes widely distributed among consumer discretionary, consumer staples, healthcare, information technology and financial services.

(e)

This category includes fixed income investments in mutual funds which include government, corporate and mortgage securities of both the U.S. and other countries. The mortgage-backed securities and non-U.S. corporate and sovereign investments add further diversity to the fixed income portion of the portfolio.