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EMPLOYEE BENEFIT PLANS
 12 Months Ended
Dec. 31, 2021
Employee Benefit and Share-based Payment Arrangement, Noncash Expense [Abstract]  
EMPLOYEE BENEFIT PLANS EMPLOYEE BENEFIT PLANS
Pension Plan and Postretirement Benefits Other than Pensions (“PBOP”)

PG&E Corporation and the Utility sponsor a non-contributory defined benefit pension plan for eligible employees hired before December 31, 2012 and a cash balance plan for those eligible employees hired after this date or who made a one-time election to participate (“Pension Plan”).  Certain trusts underlying these plans are qualified trusts under the IRC.  If certain conditions are met, PG&E Corporation and the Utility can deduct payments made to the qualified trusts, subject to certain limitations.  PG&E Corporation’s and the Utility’s funding policy is to contribute tax-deductible amounts, consistent with applicable regulatory decisions and federal minimum funding requirements.  On an annual basis, the Utility funds the pension plan up to the amount it is authorized to recover through rates.

PG&E Corporation and the Utility also sponsor contributory postretirement medical plans for retirees and their eligible dependents, and non-contributory postretirement life insurance plans for eligible employees and retirees.  PG&E Corporation and the Utility use a fiscal year-end measurement date for all plans.
Change in Plan Assets, Benefit Obligations, and Funded Status

The following tables show the reconciliation of changes in plan assets, benefit obligations, and the plans’ aggregate funded status for pension benefits and other benefits for PG&E Corporation during 2021 and 2020:

Pension Plan
(in millions)20212020
Change in plan assets:
Fair value of plan assets at beginning of year$20,759 $18,547 
Actual return on plan assets1,693 2,736 
Company contributions335 343 
Benefits and expenses paid(892)(867)
Fair value of plan assets at end of year$21,895 $20,759 
Change in benefit obligation:
Benefit obligation at beginning of year$23,172 $20,525 
Service cost for benefits earned587 530 
Interest cost645 713 
Actuarial (gain) loss (1)
(752)2,271 
Plan amendments— — 
Benefits and expenses paid(893)(867)
Benefit obligation at end of year (2)
$22,759 $23,172 
Funded Status:
Current liability$(9)$(3)
Noncurrent liability(856)(2,410)
Net liability at end of year
$(865)$(2,413)
(1) The actuarial gain for the year ended December 31, 2021 was due to an increase in the discount rate used to measure the projected benefit obligation, offset by unfavorable changes in the demographic assumptions. The actuarial loss for the year ended December 31, 2020 was due to a decrease in the discount rate used to measure the projected benefit obligation.
(2) PG&E Corporation’s accumulated benefit obligation was $20.4 billion and $20.7 billion at December 31, 2021 and 2020, respectively.
Postretirement Benefits Other than Pensions
(in millions)20212020
Change in plan assets:
Fair value of plan assets at beginning of year$2,995 $2,678 
Actual return on plan assets193 379 
Company contributions10 26 
Plan participant contribution80 81 
Benefits and expenses paid(176)(169)
Fair value of plan assets at end of year$3,102 $2,995 
Change in benefit obligation:
Benefit obligation at beginning of year$1,876 $1,832 
Service cost for benefits earned63 61 
Interest cost51 63 
Actuarial gain (1)
(152)(14)
Benefits and expenses paid(156)(149)
Federal subsidy on benefits paid4 3 
Plan participant contributions80 80 
Benefit obligation at end of year$1,766 $1,876 
Funded Status: (2)
Noncurrent asset$1,340 $1,153 
Noncurrent liability(4)(34)
Net asset at end of year$1,336 $1,119 
(1) The actuarial gain for the year ended December 31, 2021 was primarily due to an increase in the discount rate used to measure the accumulated benefit obligations and favorable claims cost changes. The actuarial gain for the year ended December 31, 2020 was primarily due to favorable changes in the demographic and medical cost assumptions, offset by a decrease in the discount rate used to measure the projected benefit obligation.
(2) At December 31, 2021 and 2020, the postretirement medical plan was in an overfunded position and the postretirement life insurance plan was in an underfunded position. The projected benefit obligation and the fair value of plan assets for the postretirement life insurance plan were $363 million and $359 million as of December 31, 2021, and $377 million and $343 million as of December 31, 2020, respectively.

There was no material difference between PG&E Corporation and the Utility for the information disclosed above.

Components of Net Periodic Benefit Cost

PG&E Corporation and the Utility sponsor a non-contributory defined benefit pension plan and cash balance plan.  Both plans are included in “Pension Benefits” below.  Post-retirement medical and life insurance plans are included in “Other Benefits” below.
Net periodic benefit cost as reflected in PG&E Corporation’s Consolidated Statements of Income was as follows:

Pension Plan
(in millions)202120202019
Service cost for benefits earned (1)
$587 $530 $443 
Interest cost645 713 758 
Expected return on plan assets(1,046)(1,044)(906)
Amortization of prior service cost(6)(6)(6)
Amortization of net actuarial loss6 3 3 
Net periodic benefit cost186 196 292 
Less: transfer to regulatory account (2)
147 136 42 
Total expense recognized$333 $332 $334 
(1) A portion of service costs are capitalized pursuant to ASU 2017-07.
(2) The Utility recorded these amounts to a regulatory account as they are probable of recovery through future rates.

Postretirement Benefits Other than Pensions
(in millions)202120202019
Service cost for benefits earned (1)
$63 $61 $56 
Interest cost51 63 76 
Expected return on plan assets(137)(138)(123)
Amortization of prior service cost14 14 14 
Amortization of net actuarial loss(33)(21)(3)
Net periodic benefit cost$(42)$(21)$20 
(1) A portion of service costs are capitalized pursuant to ASU 2017-07.

Non-service costs are reflected in Other income, net on the Consolidated Statements of Income. Service costs are reflected in Operating and maintenance on the Consolidated Statements of Income.

There was no material difference between PG&E Corporation and the Utility for the information disclosed above. 

Components of Accumulated Other Comprehensive Income

PG&E Corporation and the Utility record unrecognized prior service costs and unrecognized gains and losses related to pension and post-retirement benefits other than pension as components of accumulated other comprehensive income, net of tax.  In addition, regulatory adjustments are recorded in the Consolidated Statements of Income and Consolidated Balance Sheets to reflect the difference between expense or income calculated in accordance with GAAP for accounting purposes and expense or income for ratemaking purposes, which is based on authorized plan contributions.  For pension benefits, a regulatory asset or liability is recorded for amounts that would otherwise be recorded to accumulated other comprehensive income.  For post-retirement benefits other than pension, the Utility generally records a regulatory liability for amounts that would otherwise be recorded to accumulated other comprehensive income.  As the Utility is unable to record a regulatory asset for these other benefits, the charge remains in accumulated other comprehensive income (loss).
Valuation Assumptions

The following weighted average year-end actuarial assumptions were used in determining the plans’ projected benefit obligations and net benefit costs.
 Pension PlanPBOP Plans
 December 31,December 31,
 202120202019202120202019
Discount rate3.03 %2.77 %3.46 %
2.97 - 3.04%
2.67 - 2.80 %
3.37 - 3.47%
Rate of future compensation increases3.80 %3.80 %3.90 %N/AN/AN/A
Expected return on plan assets5.50 %5.10 %5.70 %
3.30 - 6.40%
3.10 - 6.10 %
3.50 - 6.60%
Interest crediting rate for cash balance plan1.95 %1.95 %2.11 %N/AN/AN/A

The assumed health care cost trend rate as of December 31, 2021 was 6.0%, gradually decreasing to the ultimate trend rate of approximately 4.5% in 2028 and beyond. 

Expected rates of return on plan assets were developed by estimating future stock and bond returns and then applying these returns to the target asset allocations of the employee benefit plan trusts, resulting in a weighted average rate of return on plan assets.  Returns on fixed-income debt investments were projected based on real maturity and credit spreads added to a long-term inflation rate.  Returns on equity investments were projected based on estimates of dividend yield and real earnings growth added to a long-term inflation rate.  For the pension plan, the assumed return of 5.5% compares to a ten-year actual return of 9.6%.  The rate used to discount pension benefits and other benefits was based on a yield curve developed from market data of over approximately 817 Aa-grade non-callable bonds at December 31, 2021.  This yield curve has discount rates that vary based on the duration of the obligations.  The estimated future cash flows for the pension benefits and other benefit obligations were matched to the corresponding rates on the yield curve to derive a weighted average discount rate.

Investment Policies and Strategies

The financial position of PG&E Corporation’s and the Utility’s funded status is the difference between the fair value of plan assets and projected benefit obligations.  Volatility in funded status occurs when asset values change differently from liability values and can result in fluctuations in costs in financial reporting, as well as the amount of minimum contributions required under the Employee Retirement Income Security Act of 1974, as amended.  PG&E Corporation’s and the Utility’s investment policies and strategies are designed to increase the ratio of trust assets to plan liabilities at an acceptable level of funded status volatility. 

The trusts’ asset allocations are meant to manage volatility, reduce costs, and diversify its holdings.  Interest rate, credit, and equity risk are the key determinants of PG&E Corporation’s and the Utility’s funded status volatility.  In addition to affecting the trusts’ fixed income portfolio market values, interest rate changes also influence liability valuations as discount rates move with current bond yields.  To manage volatility, PG&E Corporation’s and the Utility’s trusts hold significant allocations in long maturity fixed-income investments. Although they contribute to funded status volatility, equity investments are held to reduce long-term funding costs due to their higher expected return.  Real assets and absolute return investments are held to diversify the trust’s holdings in equity and fixed-income investments by exhibiting returns with low correlation to the direction of these markets. Real assets include global real estate investment trusts (“REITS”), global listed infrastructure equities, and private real estate funds.  Absolute return investments include hedge fund portfolios. 

Derivative instruments such as equity index futures are used to meet target equity exposure. Derivative instruments, such as equity index futures and U.S. treasury futures, are also used to rebalance the fixed income/equity allocation of the pension’s portfolio. Foreign currency exchange contracts are used to hedge a portion of the non U.S. dollar exposure of global equity investments.
The target asset allocation percentages for major categories of trust assets for pension and other benefit plans are as follows:
 Pension PlanPBOP Plans
 202220212020202220212020
Global equity securities30 %30 %30 %26 %36 %28 %
Absolute return2 %2 %2 %1 %1 %2 %
Real assets8 %8 %8 %3 %5 %8 %
Fixed-income securities60 %60 %60 %70 %58 %62 %
Total100 %100 %100 %100 %100 %100 %

PG&E Corporation and the Utility apply a risk management framework for managing the risks associated with employee benefit plan trust assets.  The guiding principles of this risk management framework are the clear articulation of roles and responsibilities, appropriate delegation of authority, and proper accountability and documentation.  Trust investment policies and investment manager guidelines include provisions designed to ensure prudent diversification, manage risk through appropriate use of physical direct asset holdings and derivative securities, and identify permitted and prohibited investments.

Fair Value Measurements

The following tables present the fair value of plan assets for pension and other benefits plans by major asset category at December 31, 2021 and 2020. 
 Fair Value Measurements
 At December 31,
 20212020
(in millions)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Pension Plan:        
Short-term investments$552 $255 $— $807 $334 $408 $— $742 
Global equity securities2,074 424 — 2,498 1,875 — — 1,875 
Absolute Return— 1 — 1 1 1 — 2 
Real assets632 — — 632 517 — — 517 
Fixed-income securities2,729 7,388 27 10,144 2,467 7,154 12 9,633 
Assets measured at NAV— — — 7,972 — — — 8,224 
Total$5,987 $8,068 $27 $22,054 $5,194 $7,563 $12 $20,993 
PBOP Plans:        
Short-term investments$31 $— $— $31 $37 $— $— $37 
Global equity securities105 — — 105 173 — — 173 
Real assets34 — — 34 54 — — 54 
Fixed-income securities776 875 1 1,652 481 715 1 1,197 
Assets measured at NAV— — — 1,296 — — — 1,549 
Total$946 $875 $1 $3,118 $745 $715 $1 $3,010 
Total plan assets at fair value   $25,172    $24,003 

In addition to the total plan assets disclosed at fair value in the table above, the trusts had other net liabilities of $175 million and $249 million at December 31, 2021 and 2020, respectively, comprised primarily of cash, accounts receivable, deferred taxes, and accounts payable. 

Valuation Techniques

The following describes the valuation techniques used to measure the fair value of the assets and liabilities shown in the table above.  All investments that are valued using a NAV per share can be redeemed quarterly with a notice not to exceed 90 days.
Short-Term Investments

Short-term investments consist primarily of commingled funds across government, credit, and asset-backed sectors. These securities are categorized as Level 1 and Level 2 assets.

Global Equity Securities

The global equity category includes investments in common stock and equity-index futures.  Equity investments in common stock are actively traded on public exchanges and are therefore considered Level 1 assets.  These equity investments are generally valued based on unadjusted prices in active markets for identical securities.  Equity-index futures are valued based on unadjusted prices in active markets and are Level 1 assets.

Real Assets

The real asset category includes portfolios of commodity futures, global REITS, global listed infrastructure equities, and private real estate funds.  The commodity futures, global REITS, and global listed infrastructure equities are actively traded on a public exchange and are therefore considered Level 1 assets. 

Fixed-Income Securities

Fixed-income securities are primarily composed of U.S. government and agency securities, municipal securities, and other fixed-income securities, including corporate debt securities.  U.S. government and agency securities primarily consist of U.S. Treasury securities that are classified as Level 1 because the fair value is determined by observable market prices in active markets.  A market approach is generally used to estimate the fair value of debt securities classified as Level 2 using evaluated pricing data such as broker quotes, for similar securities adjusted for observable differences.  Significant inputs used in the valuation model generally include benchmark yield curves and issuer spreads.  The external credit ratings, coupon rate, and maturity of each security are considered in the valuation model, as applicable.

Assets Measured at NAV Using Practical Expedient

Investments in the trusts that are measured at fair value using the NAV per share practical expedient have not been classified in the fair value hierarchy tables above. The fair value amounts are included in the tables above in order to reconcile to the amounts presented in the Consolidated Balance Sheets. These investments include commingled funds that are composed of equity securities traded publicly on exchanges, fixed-income securities that are composed primarily of U.S. government securities, credit securities and asset-backed securities, and real assets and absolute return investments that are held to diversify the trust’s holdings in equity and fixed-income securities.

Transfers Between Levels

No material transfers between levels occurred in the years ended December 31, 2021 and 2020.
Level 3 Reconciliation

The following table is a reconciliation of changes in the fair value of instruments for the pension plan that have been classified as Level 3 for the years ended December 31, 2021 and 2020:
(in millions)
For the year ended December 31, 2021
Fixed-Income
Balance at beginning of year$12 
Actual return on plan assets:
Relating to assets still held at the reporting date6 
Relating to assets sold during the period(7)
Purchases, issuances, sales, and settlements:
Purchases22 
Settlements(6)
Balance at end of year$27 
  
(in millions)
For the year ended December 31, 2020
Fixed-Income
Balance at beginning of year$15 
Actual return on plan assets:
  Relating to assets still held at the reporting date2 
Relating to assets sold during the period(3)
Purchases, issuances, sales, and settlements:
Purchases11 
Settlements(13)
Balance at end of year$12 

There were no material transfers out of Level 3 in 2021 and 2020.

Cash Flow Information

Employer Contributions

PG&E Corporation and the Utility contributed $335 million to the pension benefit plans and $10 million to the other benefit plans in 2021.  These contributions are consistent with PG&E Corporation’s and the Utility’s funding policy, which is to contribute amounts that are tax-deductible and consistent with applicable regulatory decisions and federal minimum funding requirements.  None of these pension or other benefits were subject to a minimum funding requirement requiring a cash contribution in 2021.  The Utility’s pension benefits met all the funding requirements under Employee Retirement Income Security Act.  PG&E Corporation and the Utility expect to make total contributions of approximately $327 million and $15 million to the pension plan and other postretirement benefit plans, respectively, for 2022. 

Benefits Payments and Receipts

As of December 31, 2021, the estimated benefits expected to be paid and the estimated federal subsidies expected to be received in each of the next five fiscal years, and in aggregate for the five fiscal years thereafter, are as follows:
(in millions)Pension
Plan		PBOP
Plans		Federal
Subsidy
2022869 81 (3)
2023954 85 (3)
2024988 89 (3)
20251018 88 (3)
20261,046 91 (3)
Thereafter in the succeeding five years5,533 466 (3)
There were no material differences between the estimated benefits expected to be paid by PG&E Corporation and paid by the Utility for the years presented above.  There were also no material differences between the estimated subsidies expected to be received by PG&E Corporation and received by the Utility for the years presented above.

Retirement Savings Plan

PG&E Corporation sponsors a retirement savings plan, which qualifies as a 401(k) defined contribution benefit plan under the Internal Revenue Code 1986, as amended.  This plan permits eligible employees to make pre-tax and after-tax contributions into the plan, and provide for employer contributions to be made to eligible participants.  Total expenses recognized for defined contribution benefit plans reflected in PG&E Corporation’s Consolidated Statements of Income were $133 million, $119 million, and $109 million in 2021, 2020, and 2019, respectively. Beginning January 1, 2019 PG&E Corporation changed its default matching contributions under its 401(k) plan from PG&E Corporation common stock to cash. Beginning in March 2019, at PG&E Corporation’s directive, the 401(k) plan trustee began purchasing new shares in the PG&E Corporation common stock fund on the open market rather than directly from PG&E Corporation.

There were no material differences between the employer contribution expense for PG&E Corporation and the Utility for the years presented above.