XML 70 R46.htm IDEA: XBRL DOCUMENT v3.10.0.1
Retirement benefits (Tables)
 12 Months Ended
Dec. 31, 2018
Retirement Benefits [Abstract]  
Schedule of changes in the obligations and assets of the Company's retirement benefit plans and the changes in AOCI (gross) and the funded status
The changes in the obligations and assets of the Company’s and Utilities’ retirement benefit plans and the changes in AOCI (gross) for 2018 and 2017 and the funded status of these plans and amounts related to these plans reflected in the Company’s and Utilities’ consolidated balance sheet as of December 31, 2018 and 2017 were as follows:
 
2018
 
2017
(in thousands)
Pension
benefits
 
Other
benefits
 
Pension
benefits
 
Other
benefits
HEI consolidated
 
 
 
 
 
 
 
Benefit obligation, January 1
$
2,094,356

 
$
212,601

 
$
1,935,494

 
$
233,835

Service cost
68,987

 
2,721

 
64,906

 
3,374

Interest cost
77,374

 
7,933

 
81,185

 
9,453

Actuarial losses (gains)
(171,226
)
 
(25,977
)
 
87,399

 
(25,557
)
Participants contributions
—

 
2,505

 
—

 
2,078

Benefits paid and expenses
(78,107
)
 
(11,117
)
 
(74,628
)
 
(10,582
)
Benefit obligation, December 31
1,991,384

 
188,666

 
2,094,356

 
212,601

Fair value of plan assets, January 1
1,618,703

 
193,995

 
1,369,701

 
174,251

Actual return on plan assets
(101,406
)
 
(11,846
)
 
255,324

 
28,248

Employer contributions
38,496

 
—

 
66,983

 
—

Participants contributions
—

 
2,505

 
—

 
2,078

Benefits paid and expenses
(76,726
)
 
(10,961
)
 
(73,305
)
 
(10,582
)
Fair value of plan assets, December 31
1,479,067

 
173,693

 
1,618,703

 
193,995

Accrued benefit asset (liability), December 31
$
(512,317
)
 
$
(14,973
)
 
$
(475,653
)
 
$
(18,606
)
Other assets
$
10,930

 
$
—

 
$
15,443

 
$
—

Defined benefit pension and other postretirement benefit plans liability
(523,247
)
 
(14,973
)
 
(491,096
)
 
(18,606
)
Accrued benefit asset (liability), December 31
$
(512,317
)
 
$
(14,973
)
 
$
(475,653
)
 
$
(18,606
)
AOCI debit, January 1 (excluding impact of PUC D&Os)
$
527,830

 
$
1,474

 
$
619,451

 
$
42,290

Recognized during year – prior service credit
42

 
1,805

 
55

 
1,793

Recognized during year – net actuarial losses
(30,084
)
 
(95
)
 
(26,496
)
 
(1,130
)
Occurring during year – net actuarial losses (gains)
39,132

 
(1,222
)
 
(65,180
)
 
(41,479
)
AOCI debit before cumulative impact of PUC D&Os, December 31
536,920

 
1,962

 
527,830

 
1,474

Cumulative impact of PUC D&Os
(498,944
)
 
(4,929
)
 
(489,894
)
 
(2,767
)
AOCI debit/(credit), December 31
$
37,976

 
$
(2,967
)
 
$
37,936

 
$
(1,293
)
Net actuarial loss
$
536,954

 
$
8,865

 
$
527,907

 
$
10,183

Prior service gain
(34
)
 
(6,903
)
 
(77
)
 
(8,709
)
AOCI debit before cumulative impact of PUC D&Os, December 31
536,920

 
1,962

 
527,830

 
1,474

Cumulative impact of PUC D&Os
(498,944
)
 
(4,929
)
 
(489,894
)
 
(2,767
)
AOCI debit/(credit), December 31
37,976

 
(2,967
)
 
37,936

 
(1,293
)
Income taxes (benefits)
(10,023
)
 
765

 
(9,986
)
 
333

AOCI debit/(credit), net of taxes (benefits), December 31
$
27,953

 
$
(2,202
)
 
$
27,950

 
$
(960
)
As of December 31, 2018 and 2017, the other postretirement benefit plans shown in the table above had ABOs in excess of plan assets.
 
2018
 
2017
(in thousands)
Pension
benefits
 
Other
benefits
 
Pension
benefits
 
Other
benefits
Hawaiian Electric consolidated
 
 
 
 
 
 
 
Benefit obligation, January 1
$
1,928,648

 
$
204,644

 
$
1,779,626

 
$
225,723

Service cost
67,359

 
2,704

 
63,059

 
3,353

Interest cost
71,294

 
7,628

 
74,632

 
9,115

Actuarial losses (gains)
(158,258
)
 
(25,330
)
 
80,186

 
(25,172
)
Participants contributions
—

 
2,472

 
—

 
2,047

Benefits paid and expenses
(71,535
)
 
(10,958
)
 
(68,691
)
 
(10,419
)
Transfers
145

 
2

 
(164
)
 
(3
)
Benefit obligation, December 31
1,837,653

 
181,162

 
1,928,648

 
204,644

Fair value of plan assets, January 1
1,468,403

 
190,814

 
1,233,184

 
171,383

Actual return on plan assets
(91,836
)
 
(11,625
)
 
237,830

 
27,806

Employer contributions
37,550

 
—

 
65,669

 
—

Participants contributions
—

 
2,472

 
—

 
2,047

Benefits paid and expenses
(71,060
)
 
(10,801
)
 
(68,225
)
 
(10,419
)
Other
56

 
2

 
(55
)
 
(3
)
Fair value of plan assets, December 31
1,343,113

 
170,862

 
1,468,403

 
190,814

Accrued benefit liability, December 31
$
(494,540
)
 
$
(10,300
)
 
$
(460,245
)
 
$
(13,830
)
Other liabilities (short-term)
(512
)
 
(669
)
 
(494
)
 
(633
)
Defined benefit pension and other postretirement benefit plans liability
(494,028
)
 
(9,631
)
 
(459,751
)
 
(13,197
)
Accrued benefit liability, December 31
$
(494,540
)
 
$
(10,300
)
 
$
(460,245
)
 
$
(13,830
)
AOCI debit, January 1 (excluding impact of PUC D&Os)
$
493,464

 
$
839

 
$
579,725

 
$
40,967

Recognized during year – prior service credit (cost)
(8
)
 
1,803

 
(8
)
 
1,804

Recognized during year – net actuarial losses
(27,302
)
 
(98
)
 
(24,392
)
 
(1,102
)
Occurring during year – net actuarial losses (gains)
36,035

 
(993
)
 
(61,861
)
 
(40,830
)
AOCI debit before cumulative impact of PUC D&Os, December 31
502,189

 
1,551

 
493,464

 
839

Cumulative impact of PUC D&Os
(498,944
)
 
(4,929
)
 
(489,894
)
 
(2,767
)
AOCI debit/(credit), December 31
$
3,245

 
$
(3,378
)
 
$
3,570

 
$
(1,928
)
Net actuarial loss
$
502,173

 
$
8,439

 
$
493,439

 
$
9,531

Prior service cost (gain)
16

 
(6,888
)
 
25

 
(8,692
)
AOCI debit before cumulative impact of PUC D&Os, December 31
502,189

 
1,551

 
493,464

 
839

Cumulative impact of PUC D&Os
(498,944
)
 
(4,929
)
 
(489,894
)
 
(2,767
)
AOCI debit/(credit), December 31
3,245

 
(3,378
)
 
3,570

 
(1,928
)
Income taxes (benefits)
(836
)
 
870

 
(920
)
 
497

AOCI debit/(credit), net of taxes (benefits), December 31
$
2,409

 
$
(2,508
)
 
$
2,650

 
$
(1,431
)
Schedule of weighted-average asset allocation of defined benefit retirement plans
The asset allocation of defined benefit retirement plans to equity and fixed income securities (excluding cash) and related investment policy targets and ranges were as follows:
 
Pension benefits1
 
Other benefits2
 
 
 
 
 
Investment policy
 
 
 
 
 
Investment policy
December 31
2018

 
2017

 
Target

 
Range
 
2018

 
2017

 
Target

 
Range
Assets held by category
 

 
 

 
 

 
 
 
 

 
 

 
 

 
 
Equity securities
69
%
 
73
%
 
70
%
 
65-75
 
70
%
 
73
%
 
70
%
 
65-75
Fixed income securities
31

 
27

 
30

 
25-35
 
30

 
27

 
30

 
25-35
 
100
%
 
100
%
 
100
%
 
 
 
100
%
 
100
%
 
100
%
 
 

1  
Asset allocation is applicable to only HEI and the Utilities. As of December 31, 2018 and 2017, nearly all of ASB’s pension assets were invested in fixed income securities.
2 
Asset allocation is applicable to only HEI and the Utilities. ASB does not fund its other benefits.
Schedule of assets held in various trusts are measured at fair value on a recurring basis
Assets held in various trusts for the retirement benefit plans are measured at fair value on a recurring basis and were as follows:
 
Pension benefits
 
Other benefits
 
 
 
Fair value measurements using
 
 
 
Fair value measurements using
(in millions)
December 31
 
Quoted prices in active markets for identical assets
(Level 1)
 
Significant other observable inputs
(Level 2)
 
Significant unobservable inputs
(Level 3)
 
December 31
 
Level 1
 
Level 2
 
Level 3
2018
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Equity securities
$
507

 
$
507

 
$
—

 
$
—

 
$
65

 
$
65

 
$
—

 
$
—

Equity index and exchange-traded funds
348

 
348

 
—

 
—

 
42

 
42

 
—

 
—

Equity investments at net asset value (NAV)
65

 
—

 
—

 
—

 
10

 
—

 
—

 
—

   Total equity investments
920

 
855

 
—

 
—

 
117

 
107

 
—

 
—

Fixed income securities and public mutual funds
310

 
123

 
187

 
—

 
47

 
45

 
2

 
—

Fixed income investments at NAV
208

 
—

 
—

 
—

 
4

 
—

 
—

 
—

   Total fixed income investments
518

 
123

 
187

 
—

 
51

 
45

 
2

 
—

Cash equivalents at NAV
36

 
—

 
—

 
—

 
5

 
—

 
—

 
—

Total
1,474

 
$
978

 
$
187

 
$
—

 
173

 
$
152

 
$
2

 
$
—

Cash, receivables and payables, net
5

 
 

 
 

 
 

 
1

 
 

 
 

 
 

Fair value of plan assets
$
1,479

 
 

 
 

 
 

 
$
174

 
 

 
 

 
 

2017
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Equity securities
$
568

 
$
568

 
$
—

 
$
—

 
$
75

 
$
75

 
$
—

 
$
—

Equity index and exchange-traded funds
435

 
435

 
—

 
—

 
52

 
52

 
—

 
—

Equity investments at NAV
76

 
—

 
—

 
—

 
12

 
—

 
—

 
—

   Total equity investments
1,079

 
1,003

 
—

 
—

 
139

 
127

 
—

 
—

Fixed income securities and public mutual funds
297

 
81

 
216

 
—

 
46

 
43

 
3

 
—

Fixed income investments at NAV
203

 
—

 
—

 
—

 
4

 
—

 
—

 
—

   Total fixed income investments
500

 
81

 
216

 
—

 
50

 
43

 
3

 
—

Cash equivalents at NAV
36

 
—

 
—

 
—

 
5

 
—

 
—

 
—

Total
1,615

 
$
1,084

 
$
216

 
$
—

 
194

 
$
170

 
$
3

 
$
—

Cash, receivables and payables, net
4

 
 

 
 

 
 

 
—

 
 

 
 

 
 

Fair value of plan assets
$
1,619

 
 

 
 

 
 

 
$
194

 
 

 
 

 
 


 
Pension benefits
 
Other benefits
Measured at net asset value
December 31

 
Redemption frequency
 
Redemption notice period
 
December 31

 
Redemption frequency
 
Redemption notice period
(in millions)
 
 
 
 
 
 
 
 
 
 
 
2018
 
 
 
 
 
 
 
 
 
 
 
Non U.S. equity funds (a)
$
65

 
Daily-Monthly
 
5 - 30 days
 
$
10

 
Daily-Monthly
 
5-30 days
Fixed income investments (b)
208

 
Monthly
 
15 days
 
4

 
Monthly
 
15 days
Cash equivalents (c)
36

 
Daily
 
0-1 day
 
5

 
Daily
 
0-1 day
 
$
309

 
 
 
 
 
$
19

 
 
 
 
2017
 
 
 
 
 
 
 
 
 
 
 
Non U.S. equity funds (a)
$
76

 
Daily-Monthly
 
5 - 30 days
 
$
12

 
Daily-Monthly
 
5-30 days
Fixed income investments (b)
203

 
Monthly
 
15 days
 
4

 
Monthly
 
15 days
Cash equivalents (c)
36

 
Daily
 
0-1 day
 
5

 
Daily
 
0-1 day
 
$
315

 
 
 
 
 
$
21

 
 
 
 
None of the investments presented in the tables above have unfunded commitments.
(a)
Represents investments in funds that primarily invest in non-U.S., emerging markets equities. Redemption frequency for pension benefits assets as of December 31, 2018 and 2017 both were: daily, 32% and monthly, 68%. Redemption frequency for other benefits assets as of December 31, 2018 were: daily, 27% and monthly, 73% and as of December 31, 2017 were: daily, 26% and monthly, 74%.
(b )
Represents investments in fixed income securities invested in a US-dollar denominated fund that seeks to exceed the Barclays Capital Long Corporate A or better Index through investments in US-dollar denominated fixed income securities and commingled vehicles.
(c)
Represents investments in cash equivalent funds. This class includes funds that invest primarily in securities issued or guaranteed by the U.S. government or its agencies or instrumentalities. For pension benefits, the fund may also invest in fixed income securities of investment grade issuers
Schedule of weighted-average assumptions used in accounting for plans
The following weighted-average assumptions were used in the accounting for the plans:
 
Pension benefits
 
Other benefits
December 31
2018
 
2017
 
2016
 
2018
 
2017
 
2016
Benefit obligation
 
 
 
 
 
 
 
 
 
 
 
Discount rate
4.31
%
 
3.74
%
 
4.26
%
 
4.34
%
 
3.72
%
 
4.22
%
Rate of compensation increase
3.50

 
3.50

 
3.50

 
NA   

 
NA   

 
NA   

Net periodic pension/benefit cost (years ended)
 
 
 
 
 
 
 
 
 
 
 
Discount rate
3.74

 
4.26

 
4.60

 
3.72

 
4.22

 
4.57

Expected return on plan assets1
7.50

 
7.50

 
7.75

 
7.50

 
7.50

 
7.75

Rate of compensation increase2
3.50

 
3.50

 
3.50

 
NA   

 
NA   

 
NA   

NA  Not applicable
1 HEI’s and Utilities’ plan assets only. For 2018, 2017 and 2016, ASB’s expected return on plan assets was 3.94%, 4.46% and 4.80%, respectively.
2 The Company and the Utilities use a graded rate of compensation increase assumption based on age. The rate provided above is an average across all future years of service for the current population.
Schedule of components of net periodic benefit cost for consolidated HEI
The components of NPPC and NPBC were as follows:
 
Pension benefits
 
Other benefits
(in thousands)
2018
 
2017
 
2016
 
2018
 
2017
 
2016
HEI consolidated
 
 
 
 
 
 
 
 
 
 
 
Service cost
$
68,987

 
$
64,906

 
$
60,555

 
$
2,721

 
$
3,374

 
$
3,331

Interest cost
77,374

 
81,185

 
81,549

 
7,933

 
9,453

 
9,670

Expected return on plan assets
(108,953
)
 
(102,745
)
 
(98,559
)
 
(12,908
)
 
(12,326
)
 
(12,273
)
Amortization of net prior service (gain) cost
(42
)
 
(55
)
 
(57
)
 
(1,805
)
 
(1,793
)
 
(1,793
)
Amortization of net actuarial losses
30,084

 
26,496

 
24,832

 
95

 
1,130

 
804

Net periodic pension/benefit cost
67,450

 
69,787

 
68,320

 
(3,964
)
 
(162
)
 
(261
)
Impact of PUC D&Os
25,828

 
(18,004
)
 
(18,117
)
 
3,842

 
1,211

 
1,343

Net periodic pension/benefit cost (adjusted for impact of PUC D&Os)
$
93,278

 
$
51,783

 
$
50,203

 
$
(122
)
 
$
1,049

 
$
1,082

Hawaiian Electric consolidated
 
 
 
 
 
 
 
 
 
 
 
Service cost
$
67,359

 
$
63,059

 
$
58,796

 
$
2,704

 
$
3,353

 
$
3,284

Interest cost
71,294

 
74,632

 
74,808

 
7,628

 
9,115

 
9,337

Expected return on plan assets
(102,368
)
 
(95,892
)
 
(91,633
)
 
(12,713
)
 
(12,147
)
 
(12,096
)
Amortization of net prior service (gain) cost
8

 
8

 
13

 
(1,803
)
 
(1,804
)
 
(1,803
)
Amortization of net actuarial losses
27,302

 
24,392

 
22,693

 
98

 
1,102

 
793

Net periodic pension/benefit cost
63,595

 
66,199

 
64,677

 
(4,086
)
 
(381
)
 
(485
)
Impact of PUC D&Os
25,828

 
(18,004
)
 
(18,117
)
 
3,842

 
1,211

 
1,343

Net periodic pension/benefit cost (adjusted for impact of PUC D&Os)
$
89,423

 
$
48,195

 
$
46,560

 
$
(244
)
 
$
830

 
$
858
Schedule of amounts in accumulated other comprehensive Income (loss) to be recognized over next fiscal year
The estimated prior service credit and net actuarial loss for defined benefit plans that will be amortized from AOCI or regulatory assets into NPPC and NPBC during 2019 is as follows:
 
HEI consolidated
 
Hawaiian Electric consolidated
(in millions)
Pension benefits
 
Other benefits
 
Pension benefits
 
Other benefits
Estimated prior service credit
$
—

 
$
(1.8
)
 
$
—

 
$
(1.8
)
Net actuarial loss
15.4

 
—

 
14.3

 
—
Schedule of projected benefit obligations and assets
Additional information on the defined benefit pension plans’ accumulated benefit obligations (ABOs), which do not consider projected pay increases (unlike the PBOs shown in the table above), PBOs and assets were as follows:
 
HEI consolidated
 
Hawaiian Electric consolidated
December 31
2018
 
2017
 
2018
 
2017
(in billions)
 
 
 
 
 
 
 
Defined benefit plans - ABOs
$
1.7

 
$
1.8

 
$
1.6

 
$
1.7

Defined benefit plans with ABO in excess of plan assets
 
 
 
 
 
 
 
     ABOs
1.6

 
1.7

 
1.6

 
1.7

     Plan assets
1.4

 
1.5

 
1.3

 
1.5

Defined benefit plans with PBOs in excess of plan assets
 
 
 
 
 
 
 
     PBOs
1.9

 
2.0

 
1.8

 
1.9

     Plan assets
1.4

 
1.5

 
1.3

 
1.5