Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2018

Pension plan and other postretirement benefit plan obligations and plan assets and includes a statement of the plans funded status

The following table summarizes the changes in pension plan and other postretirement benefit plan obligations and plan assets and includes a statement of the plans’ funded status for Dominion Energy and Dominion Energy Gas (for employees represented by collective bargaining units):


	Pension Benefits						Other Postretirement Benefits
Year Ended December 31,	2018			2017			2018			2017
(millions, except percentages)
Dominion Energy
Changes in benefit obligation:
Benefit obligation at beginning of year	$	9,052		$	8,132		$	1,529		$	1,478
Service cost		157			138			27			26
Interest cost		337			345			56			60
Benefits paid		(358	)		(323	)		(87	)		(83	)
Actuarial (gains) losses during the year		(688	)		830			(158	)		119
Plan amendments⁽¹⁾		—			5			(4	)		(73	)
Settlements and curtailments⁽²⁾		—			(75	)		—			2
Benefit obligation at end of year	$	8,500		$	9,052		$	1,363		$	1,529
Changes in fair value of plan assets:
Fair value of plan assets at beginning of year	$	8,062		$	7,016		$	1,729		$	1,512
Actual return (loss) on plan assets		(513	)		1,327			(92	)		236
Employer contributions		6			118			12			13
Benefits paid		(358	)		(323	)		(68	)		(32	)
Settlements⁽²⁾		—			(76	)		—			—
Fair value of plan assets at end of year	$	7,197		$	8,062		$	1,581		$	1,729
Funded status at end of year	$	(1,303	)	$	(990	)	$	218		$	200
Amounts recognized in the Consolidated Balance Sheets at December 31:
Noncurrent pension and other postretirement benefit assets	$	1,003		$	1,117		$	276		$	261
Other current liabilities		(34	)		(8	)		(2	)		—
Noncurrent pension and other postretirement benefit liabilities		(2,272	)		(2,099	)		(56	)		(61	)
Net amount recognized	$	(1,303	)	$	(990	)	$	218		$	200
Significant assumptions used to determine benefit obligations as of December 31:
Discount rate		4.42%–4.43%			3.80%–3.81%			4.37%–4.38%			3.76%
Weighted average rate of increase for compensation		4.32%			4.09%			4.30%-4.55%			3.95%-4.11%
Dominion Energy Gas
Changes in benefit obligation:
Benefit obligation at beginning of year	$	773		$	683		$	290		$	320
Service cost		18			15			4			4
Interest cost		29			30			11			12
Benefits paid		(34	)		(33	)		(18	)		(19	)
Actuarial (gains) losses during the year		(56	)		78			(27	)		34
Plan amendments⁽¹⁾		—			—			(4	)		(61	)
Benefit obligation at end of year	$	730		$	773		$	256		$	290
Changes in fair value of plan assets:
Fair value of plan assets at beginning of year	$	1,803		$	1,542		$	333		$	299
Actual return (loss) on plan assets		(113	)		294			(16	)		41
Employer contributions		—			—			12			12
Benefits paid		(34	)		(33	)		(18	)		(19	)
Fair value of plan assets at end of year	$	1,656		$	1,803		$	311		$	333
Funded status at end of year	$	926		$	1,030		$	55		$	43
Amounts recognized in the Consolidated Balance Sheets at December 31:
Noncurrent pension and other postretirement benefit assets	$	926		$	1,030		$	63		$	57
Noncurrent pension and other postretirement benefit liabilities⁽³⁾		—			—			(8	)		(14	)
Net amount recognized	$	926		$	1,030		$	55		$	43
Significant assumptions used to determine benefit obligations as of December 31:
Discount rate		4.42	%		3.81	%		4.37	%		3.76	%
Weighted average rate of increase for compensation		4.55	%		4.11	%		n/a			n/a

(1)

2017 amounts relate primarily to a plan amendment that changed post-65 retiree medical coverage for certain current and future Local 69 retirees effective July 1, 2017.

(2)

2017 amount relates primarily to settlement and curtailment as a result of the voluntary and involuntary separation programs at Dominion Energy Questar.

(3)

Reflected in other deferred credits and other liabilities in Dominion Energy Gas’ Consolidated Balance Sheets.

Benefit obligation in excess of plan asset

The following table provides information on the benefit obligations and fair value of plan assets for plans with a benefit obligation in excess of plan assets for Dominion Energy and Dominion Energy Gas (for employees represented by collective bargaining units):


	Pension Benefits				Other Postretirement Benefits
As of December 31,	2018		2017		2018		2017
(millions)
Dominion Energy
Benefit obligation	$	7,705	$	8,209		$164		$191
Fair value of plan assets		5,398		6,103		136		156
Dominion Energy Gas
Benefit obligation	$	—	$	—		$134		$157
Fair value of plan assets		—		—		126		143

Accumulated benefit obligation in excess of plan assets

The following table provides information on the ABO and fair value of plan assets for Dominion Energy’s pension plans with an ABO in excess of plan assets:


As of December 31,	2018		2017
(millions)
Accumulated benefit obligation	$	7,056	$	7,392
Fair value of plan assets		5,398		6,103

Benefit payments expected future service

The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid for Dominion Energy and Dominion Energy Gas’ (for employees represented by collective bargaining units) plans:


	Estimated Future Benefit Payments
	Pension Benefits		Other Postretirement Benefits
(millions)
Dominion Energy
2019		$407		$98
2020		405		99
2021		426		99
2022		442		99
2023		465		98
2024-2028	2,548		461
Dominion Energy Gas
2019		$37		$19
2020		39		19
2021		40		19
2022		42		19
2023		43		19
2024-2028		223		90

Fair values of pension and post retirement plan assets by asset category

The fair values of Dominion Energy and Dominion Energy Gas’ (for employees represented by collective bargaining units) pension plan assets by asset category are as follows:


At December 31,	2018								2017
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
(millions)
Dominion Energy
Cash and cash equivalents	$	17	$	1		$—	$	18	$	18	$	—		$—	$	18
Common and preferred stocks:
U.S.		1,645		—		—		1,645		1,902		—		—		1,902
International		1,061		—		—		1,061		1,151		—		—		1,151
Insurance contracts		—		318		—		318		—		352		—		352
Corporate debt instruments		23		729		—		752		41		729		—		770
Government securities		25		605		—		630		9		676		—		685
Total recorded at fair value	$	2,771	$	1,653		$—	$	4,424	$	3,121	$	1,757		$—	$	4,878
Assets recorded at NAV⁽¹⁾:
Common/collective trust funds								1,849								2,272
Alternative investments:
Real estate funds								108								111
Private equity funds								633								606
Debt funds								155								161
Hedge funds								17								19
Total recorded at NAV							$	2,762							$	3,169
Total investments⁽²⁾							$	7,186							$	8,047
Dominion Energy Gas
Cash and cash equivalents	$	4	$	—		$—	$	4	$	4	$	—		$—	$	4
Common and preferred stocks:
U.S.		378		—		—		378		425		—		—		425
International		244		—		—		244		257		—		—		257
Insurance contracts		—		73		—		73		—		79		—		79
Corporate debt instruments		5		168		—		173		9		163		—		172
Government securities		6		139		—		145		2		151		—		153
Total recorded at fair value	$	637	$	380		$—	$	1,017	$	697	$	393		$—	$	1,090
Assets recorded at NAV⁽¹⁾:
Common/collective trust funds								425								509
Alternative investments:
Real estate funds								25								25
Private equity funds								146								135
Debt funds								36								36
Hedge funds								4								4
Total recorded at NAV							$	636							$	709
Total investments⁽³⁾							$	1,653							$	1,799

(1)

These investments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient which are not required to be categorized in the fair value hierarchy.

(2)

Excludes net assets related to pending sales of securities of $12 million, net accrued income of $21 million, and includes net assets related to pending purchases of securities of $22 million at December 31, 2018. Excludes net assets related to pending sales of securities of $11 million, net accrued income of $19 million, and includes net assets related to pending purchases of securities of $15 million at December 31, 2017.

(3)

Excludes net assets related to pending sales of securities of $3 million, net accrued income of $5 million, and includes net assets related to pending purchases of securities of $5 million at December 31, 2018. Excludes net assets related to pending sales of securities of $3 million, net accrued income of $4 million, and includes net assets related to pending purchases of securities of $3 million at December 31, 2017.

The fair values of Dominion Energy and Dominion Energy Gas’ (for employees represented by collective bargaining units) other postretirement plan assets by asset category are as follows:


At December 31,	2018								2017
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
(millions)
Dominion Energy
Cash and cash equivalents		$1		$1		$—	$	2		$1		$2		$—		$3
Common and preferred stocks:
U.S.		554		—		—		554		636		—		—		636
International		170		—		—		170		196		—		—		196
Insurance contracts		—		19		—		19		—		21		—		21
Corporate debt instruments		1		44		—		45		2		44		—		46
Government securities		2		37		—		39		1		41		—		42
Total recorded at fair value		$728		$101		$—	$	829		$836		$108		$—		$944
Assets recorded at NAV⁽¹⁾:
Common/collective trust funds								650								689
Alternative investments:
Real estate funds								10								9
Private equity funds								80								73
Debt funds								10								11
Hedge funds								1								1
Total recorded at NAV							$	751								$783
Total investments⁽²⁾							$	1,580								$1,727
Dominion Energy Gas
Common and preferred stocks:
U.S.		$113		$—		$—	$	113		$130		$—		$—		$130
International		30		—		—		30		33		—		—		33
Total recorded at fair value		$143		$—		$—	$	143		$163		$—		$—		$163
Assets recorded at NAV⁽¹⁾:
Common/collective trust funds								148								154
Alternative investments:
Real estate funds								2								1
Private equity funds								18								15
Debt funds								—								—
Total recorded at NAV							$	168								$170
Total investments							$	311								$333

(1)

These investments that are measured at fair value using the NAV per share (or its equivalent) as a practical expedient which are not required to be categorized in the fair value hierarchy.

(2)

Excludes net assets related to pending sales of securities of $1 million, net accrued income of $2 million, and includes net assets related to pending purchases of securities of $2 million at December 31, 2018. Excludes net assets related to pending sales of securities of $1 million, net accrued income of $2 million, and includes net assets related to pending purchases of securities of $1 million at December 31, 2017.

Net periodic benefit (credit) cost and amounts recognized in other comprehensive income and regulatory assets and liabilities

The components of the provision for net periodic benefit (credit) cost and amounts recognized in other comprehensive income and regulatory assets and liabilities for Dominion Energy and Dominion Energy Gas’ (for employees represented by collective bargaining units) plans are as follows:


	Pension Benefits									Other Postretirement Benefits
Year Ended December 31,	2018			2017			2016			2018			2017			2016
(millions, except percentages)
Dominion Energy
Service cost	$	157		$	138		$	118		$	27		$	26		$	31
Interest cost		337			345			317			56			60			65
Expected return on plan assets		(663	)		(639	)		(573	)		(143	)		(128	)		(118	)
Amortization of prior service (credit) cost		1			1			1			(52	)		(51	)		(35	)
Amortization of net actuarial loss		193			162			111			11			13			8
Settlements and curtailments		—			—			1			—			—			—
Net periodic benefit (credit) cost	$	25		$	7		$	(25	)	$	(101	)	$	(80	)	$	(49	)
Changes in plan assets and benefit obligations recognized in other comprehensive income and regulatory assets and liabilities:
Current year net actuarial (gain) loss	$	490		$	142		$	931		$	78		$	12		$	178
Prior service (credit) cost		—			5			—			(4	)		(73	)		(216	)
Settlements and curtailments		—			1			(1	)		—			2			—
Less amounts included in net periodic benefit cost:
Amortization of net actuarial loss		(193	)		(162	)		(111	)		(11	)		(13	)		(8	)
Amortization of prior service credit (cost)		(1	)		(1	)		(1	)		52			51			35
Total recognized in other comprehensive income and regulatory assets and liabilities	$	296		$	(15	)	$	818		$	115		$	(21	)	$	(11	)
Significant assumptions used to determine periodic cost:
Discount rate		3.80%-3.8	1%		3.31%-4.5	0%		2.87%-4.9	9%		3.76%			3.92%-4.4	7%		3.56%-4.9	4%
Expected long-term rate of return on plan assets		8.75	%		8.75	%		8.75	%		8.50	%		8.50	%		8.50	%
Weighted average rate of increase for compensation		4.09	%		4.09	%		4.22	%		3.95%-4.1	1%		3.29	%		4.22	%
Healthcare cost trend rate⁽¹⁾											7.00	%		7.00	%		7.00	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)⁽¹⁾											5.00	%		5.00	%		5.00	%
Year that the rate reaches the ultimate trend rate⁽¹⁾⁽²⁾											2022			2021			2020
Dominion Energy Gas
Service cost	$	18		$	15		$	13		$	4		$	4		$	5
Interest cost		29			30			30			11			12			14
Expected return on plan assets		(150	)		(141	)		(134	)		(28	)		(24	)		(23	)
Amortization of prior service (credit) cost		—			—			—			(4	)		(3	)		1
Amortization of net actuarial loss		19			16			13			3			2			1
Net periodic benefit (credit) cost	$	(84	)	$	(80	)	$	(78	)	$	(14	)	$	(9	)	$	(2	)
Changes in plan assets and benefit obligations recognized in other comprehensive income and regulatory assets and liabilities:
Current year net actuarial (gain) loss	$	207		$	(75	)	$	91		$	16		$	18		$	28
Prior service cost		—			—			—			(4	)		(61	)		—
Less amounts included in net periodic benefit cost:
Amortization of net actuarial loss		(19	)		(16	)		(13	)		(3	)		(2	)		(1	)
Amortization of prior service credit (cost)		—			—			—			4			3			(1	)
Total recognized in other comprehensive income and regulatory assets and liabilities	$	188		$	(91	)	$	78		$	13		$	(42	)	$	26
Significant assumptions used to determine periodic cost:
Discount rate		3.81	%		4.50	%		4.99	%		3.81	%		4.47	%		4.93	%
Expected long-term rate of return on plan assets		8.75	%		8.75	%		8.75	%		8.50	%		8.50	%		8.50	%
Weighted average rate of increase for compensation		4.11	%		4.11	%		3.93	%		4.55	%		4.11	%		3.93	%
Healthcare cost trend rate⁽¹⁾											7.00	%		7.00	%		7.00	%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)⁽¹⁾											5.00	%		5.00	%		5.00	%
Year that the rate reaches the ultimate trend rate⁽¹⁾											2022			2021			2020

(1)

Assumptions used to determine net periodic cost for the following year.

(2)

The Society of Actuaries model used to determine healthcare cost trend rates was updated in 2014. The new model converges to the ultimate trend rate much more quickly than previous models.

Components of AOCI and regulatory assets and liabilities that have not been recognized as components of periodic benefit (credit) cost

The components of AOCI and regulatory assets and liabilities for Dominion Energy and Dominion Energy Gas’ (for employees represented by collective bargaining units) plans that have not been recognized as components of net periodic benefit (credit) cost are as follows:


	Pension Benefits				Other Postretirement Benefits
At December 31,	2018		2017		2018			2017
(millions)
Dominion Energy
Net actuarial loss	$	3,477	$	3,181	$	350		$	283
Prior service (credit) cost		7		8		(393	)		(440	)
Total⁽¹⁾	$	3,484	$	3,189	$	(43	)	$	(157	)
Dominion Energy Gas
Net actuarial loss	$	555	$	367	$	89		$	76
Prior service (credit) cost		—		—		(52	)		(52	)
Total⁽²⁾	$	555	$	367	$	37		$	24

(1)

As of December 31, 2018, of the $3.5 billion and $(43) million related to pension benefits and other postretirement benefits, $2.0 billion and $(41) million, respectively, are included in AOCI, with the remainder included in regulatory assets and liabilities. As of December 31, 2017, of the $3.2 billion and $(157) million related to pension benefits and other postretirement benefits, $1.9 billion and $(87) million, respectively, are included in AOCI, with the remainder included in regulatory assets and liabilities.

(2)

As of December 31, 2018, of the $555 million related to pension benefits, $200 million is included in AOCI, with the remainder included in regulatory assets and liabilities; the $37 million related to other postretirement benefits is included entirely in regulatory assets and liabilities. As of December 31, 2017, of the $367 million related to pension benefits, $134 million is included in AOCI, with the remainder included in regulatory assets and liabilities; the $24 million related to other postretirement benefits is included entirely in regulatory assets and liabilities.

Components of AOCI and regulatory assets and liabilities that are expected to be amortized as components of periodic benefit cost in 2019

The following table provides the components of AOCI and regulatory assets and liabilities for Dominion Energy and Dominion Energy Gas’ (for employees represented by collective bargaining units) plans as of December 31, 2018 that are expected to be amortized as components of net periodic benefit (credit) cost in 2019:


	Pension Benefits		Other Postretirement Benefits
(millions)
Dominion Energy
Net actuarial loss		$155	$	18
Prior service (credit) cost		1		(52)
Dominion Energy Gas
Net actuarial loss		$ 19	$	4
Prior service (credit) cost		—		(4	)

Effect of one percentage point change on benefit plans

A one percentage point change in assumed healthcare cost trend rates would have had the following effects for Dominion Energy and Dominion Energy Gas’ (for employees represented by collective bargaining units) other postretirement benefit plans:


	Other Postretirement Benefits
	One percentage point increase		One percentage point decrease
(millions)
Dominion Energy
Effect on net periodic cost for 2019		$ 20		$ (16)
Effect on other postretirement benefit obligation at December 31, 2018		130		(110)
Dominion Energy Gas
Effect on net periodic cost for 2019		$ 4		$ (3)
Effect on other postretirement benefit obligation at December 31, 2018		25		(22)