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Employee Benefit Plans
9 Months Ended
Sep. 30, 2017
Compensation And Retirement Disclosure [Abstract]  
Employee Benefit Plans

Note 18. Employee Benefit Plans

In the first quarter of 2016, the Companies announced an organizational design initiative that reduced their total workforces during 2016. The goal of the organizational design initiative was to streamline leadership structure and push decision making lower while also improving efficiency.  During the nine months ended September 30, 2016, Dominion Energy recorded a $65 million ($40 million after-tax) charge, including $33 million ($20 million after-tax) at Virginia Power and $8 million ($5 million after-tax) at Dominion Energy Gas, primarily reflected in other operations and maintenance expense in their Consolidated Statements of Income due to severance pay and other costs related to the organizational design initiative.  The terms of the severance under the organizational design initiative were consistent with the Companies’ existing severance plans.

Plan Amendment and Remeasurement

In the first quarter of 2017, Dominion Energy and Dominion Energy Gas remeasured an other postretirement benefit plan as a result of an amendment that changed post-65 retiree medical coverage for certain current and future Local 69 retirees effective July 1, 2017. The remeasurement resulted in a decrease in Dominion Energy's and Dominion Energy Gas' accumulated postretirement benefit obligation of $73 million and $61 million, respectively. As a result of regulatory accounting, the remeasurement will have an immaterial impact on net income for both Dominion Energy and Dominion Energy Gas. The discount rate used for the remeasurement was 4.30%. All other assumptions used were consistent with the measurement as of December 31, 2016.

During the nine months ended September 30, 2017, Dominion Energy recorded a $7 million ($4 million after-tax) charge, including $6 million ($4 million after-tax) at Dominion Energy Gas, as a result of additional payments associated with the new collective bargaining agreement, which is reflected in other operations and maintenance expense in their Consolidated Statements of Income.

Dominion Energy

The components of Dominion Energy's provision for net periodic benefit cost (credit) were as follows:

 

 

 

Pension Benefits

 

 

Other Postretirement Benefits

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service cost

 

$

35

 

 

$

30

 

 

$

7

 

 

$

7

 

Interest cost

 

 

86

 

 

 

79

 

 

 

15

 

 

 

16

 

Expected return on plan assets

 

 

(160

)

 

 

(141

)

 

 

(32

)

 

 

(28

)

Amortization of prior service credit

 

 

 

 

 

 

 

 

(13

)

 

 

(9

)

Amortization of net actuarial loss

 

 

40

 

 

 

29

 

 

 

3

 

 

 

2

 

Settlements

 

 

1

 

 

 

 

 

 

 

 

 

 

Net periodic benefit cost (credit)

 

$

2

 

 

$

(3

)

 

$

(20

)

 

$

(12

)

Nine Months Ended September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service cost

 

$

104

 

 

$

87

 

 

$

20

 

 

$

23

 

Interest cost

 

 

259

 

 

 

234

 

 

 

45

 

 

 

50

 

Expected return on plan assets

 

 

(480

)

 

 

(419

)

 

 

(95

)

 

 

(87

)

Amortization of prior service cost (credit)

 

 

1

 

 

 

1

 

 

 

(38

)

 

 

(23

)

Amortization of net actuarial loss

 

 

121

 

 

 

84

 

 

 

9

 

 

 

5

 

Settlements

 

 

2

 

 

 

 

 

 

 

 

 

 

Net periodic benefit cost (credit)

 

$

7

 

 

$

(13

)

 

$

(59

)

 

$

(32

)

 

Employer Contributions

During the nine months ended September 30, 2017, Dominion Energy made no contributions to its defined benefit pension plans or other postretirement benefit plans, except for a $75 million contribution made in January 2017 to Dominion Energy Questar’s qualified pension plan to satisfy a regulatory condition to closing of the Dominion Energy Questar Combination. Dominion Energy expects to contribute approximately $12 million to its other postretirement benefit plans through VEBAs during the remainder of 2017.

 

 

Dominion Energy Gas

Dominion Energy Gas participates in certain Dominion Energy benefit plans as described in Note 21 to the Consolidated Financial Statements in the Companies' Annual Report on Form 10-K for the year ended December 31, 2016. See Note 17 for more information.

The components of Dominion Energy Gas' provision for net periodic benefit credit for employees represented by collective bargaining units were as follows:

 

 

 

Pension Benefits

 

 

Other Postretirement Benefits

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

(millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service cost

 

$

3

 

 

$

3

 

 

$

1

 

 

$

1

 

Interest cost

 

 

7

 

 

 

7

 

 

 

3

 

 

 

3

 

Expected return on plan assets

 

 

(34

)

 

 

(33

)

 

 

(7

)

 

 

(5

)

Amortization of prior service credit

 

 

 

 

 

 

 

 

(1

)

 

 

 

Amortization of net actuarial loss

 

 

4

 

 

 

3

 

 

 

1

 

 

 

 

Net periodic benefit credit

 

$

(20

)

 

$

(20

)

 

$

(3

)

 

$

(1

)

Nine Months Ended September 30,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service cost

 

$

11

 

 

$

10

 

 

$

3

 

 

$

4

 

Interest cost

 

 

22

 

 

 

22

 

 

 

9

 

 

 

10

 

Expected return on plan assets

 

 

(105

)

 

 

(100

)

 

 

(19

)

 

 

(17

)

Amortization of prior service credit

 

 

 

 

 

 

 

 

(2

)

 

 

 

Amortization of net actuarial loss

 

 

12

 

 

 

10

 

 

 

2

 

 

 

1

 

Net periodic benefit credit

 

$

(60

)

 

$

(58

)

 

$

(7

)

 

$

(2

)

 

Employer Contributions

During the nine months ended September 30, 2017, Dominion Energy Gas made no contributions to its defined benefit pension plans or other postretirement benefit plans. Dominion Energy Gas expects to contribute approximately $12 million to its other postretirement benefit plans through VEBAs, for both employees represented by collective bargaining units and employees not represented by collective bargaining units, during the remainder of 2017.