Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2018

Net periodic cost for the defined benefit plans and other postretirement benefits was calculated using the following weighted-average assumptions:



	Pension Benefits			Other Benefits
	2018	2017	2016	2018	2017	2016
	%	%	%	%	%	%
Discount rate	3.52	4.04	4.24	3.45	3.93	4.10
Expected return on plan assets	7.00	7.00	7.00	7.00	7.00	7.00
Rate of compensation increase	4.00	4.00	4.00	N/A	N/A	N/A

Benefit obligations for the defined benefit plans and other postretirement benefits were calculated using the following weighted-average assumptions as of December 31:



	Pension Benefits		Other Benefits
	2018	2017	2018	2017
	%	%	%	%
Discount rate	4.16	3.52	4.09	3.45
Rate of compensation increase	4.00	4.00	N/A	N/A

Schedule of Net Benefit Costs

Net periodic costs for the defined benefit plans and other postretirement benefits for the years ended December 31 was as follows:



	Pension Benefits							Other Benefits
	2018			2017		2016		2018			2017		2016
Components of net periodic benefit cost
Service cost	$	5,790		4,699		4,447		$	616		529		527
Interest cost	6,879			6,993		6,830		627			634		655
Expected return on assets	(9,255		)	(7,888	)	(7,288	)	(450		)	(376	)	(292	)
Amortization of prior service cost	51			94		376		197			198		197
Recognized actuarial loss	3,986			3,844		3,527		321			273		316
Net periodic benefit cost	$	7,451		7,742		7,892		$	1,311		1,258		1,403

The components of net periodic benefit cost have been recorded in the consolidated statements of comprehensive income as follows:



	Pension Benefits				Other Benefits
	2018		2017	2016	2018		2017	2016
Net periodic benefit cost recorded on income statement
Other production expenses	1,534		1,231	1,165	163		139	138
Administrative and general expense	3,249		2,632	2,490	346		296	295
Maintenance expense	1,007		836	792	107		94	94
Pension non-service costs	1,661		3,043	3,445	695		729	876
	$	7,451	7,742	7,892	$	1,311	1,258	1,403

Schedule of Net Funded Status

The projected benefit obligations and the funded status of San Jose Water Company’s defined benefit pension and other postretirement plans as of December 31 were as follows:



	Pension Benefits					Other Benefits
	2018			2017		2018			2017
Change in benefit obligation
Benefit obligation at beginning of year	$	196,207		174,097		$	18,003		16,461
Service cost	5,790			4,699		616			529
Interest cost	6,879			6,993		627			634
Actuarial (gain)/loss	(14,447		)	16,552		(988		)	1,124
Implicit rate subsidy	—			—		(207		)	(196	)
Benefits paid	(6,552		)	(6,134	)	(562		)	(549	)
Benefit obligation at end of year	$	187,877		196,207		$	17,489		18,003
Change in plan assets
Fair value of assets at beginning of year	$	133,360		113,895		$	6,804		5,366
Actual return on plan assets	(7,700		)	17,298		(262		)	736
Employer contributions	8,502			8,301		629			702
Benefits paid	(6,552		)	(6,134	)	(1,322		)	—
Fair value of plan assets at end of year	127,610			133,360		5,849			6,804
Funded status at end of year	$	(60,267	)	(62,847	)	$	(11,640	)	(11,199	)

Schedule of Amounts Recognized in Balance Sheet

The amounts recognized on the balance sheet as of December 31 were as follows:



	Pension Benefits			Other Benefits
	2018		2017	2018		2017
Current liabilities	$	1,323	1,099	$	94	86
Noncurrent liabilities	58,944		61,748	11,546		11,113
	$	60,267	62,847	$	11,640	11,199

Schedule of Regulatory Asset Recorded on the Projected Benefit Obligation of the Postretirement Benefit Plans

San Jose Water Company recorded a regulatory asset on the projected benefit obligation of the postretirement benefit plans as follows:



	2018			2017
Funded status of obligation	$	71,907		74,046
Accrued benefit cost	(5,674		)	(5,490	)
Regulatory asset, amount to be recovered in future rates	$	66,233		68,556

Schedule of Allocation of Plan Assets

Plan assets as of December 31 were as follows:



	Pension Benefits					Other Benefits
	2018			2017		2018			2017
Fair value of assets at end of year:
Debt securities	$	42,654		42,784		$	2,200		1,710
	33		%	32	%	38		%	25	%
Equity securities	77,053			83,352		3,416			4,111
	60		%	63	%	58		%	60	%
Cash and equivalents	7,903			7,224		233			983
	6		%	5	%	4		%	14	%
Total	$	127,610		133,360		$	5,849		6,804

The following tables summarize the fair values of plan assets by major categories as of December 31, 2018 and 2017:



				Fair Value Measurements at December 31, 2018
Asset Category	Benchmark	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and cash equivalents		$	8,136	$	8,136	$	—	$	—
Actively Managed (a):
All Cap Equity	Russell 3000 Value	5,670		5,632		38		—
U.S. Large Cap Equity	Russell 1000, Russell 1000 Growth, Russell 1000 Value	47,040		47,040		—		—
U.S. Mid Cap Equity	Russell Mid Cap, Russell Mid Cap Growth, Russell Mid Cap Value	8,372		8,372		—		—
U.S. Small Cap Equity	Russell 2000, Russell 2000 Growth, Russell 2000 Value, Russell 2500	8,528		8,528		—		—
Non-U.S. Large Cap Equity	MSCI EAFE	4,969		4,969		—		—
REIT	NAREIT—Equity REIT’s	5,889		—		5,889		—
Fixed Income (b)	(b)	44,855		—		44,855		—
Total		$	133,459	$	82,677	$	50,782	$	—

___________________________________

The Plan has a current target allocation of 55% invested in a diversified array of equity securities to provide long-term capital appreciation and 45% invested in a diversified array of fixed income securities to provide preservation of capital plus generation of income.


(a)	Actively managed portfolio of securities with the goal to exceed the stated benchmark performance.


(b)	Actively managed portfolio of fixed income securities with the goal to exceed the Barclays 1-5 Year Government/Credit, Barclays Intermediate Government/Credit, and Merrill Lynch Preferred Stock Fixed Rate.



				Fair Value Measurements at December 31, 2017
Asset Category	Benchmark	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and cash equivalents		$	8,207	$	8,207	$	—	$	—
Actively Managed (a):
All Cap Equity	Russell 3000 Value	6,413		6,376		37		—
U.S. Large Cap Equity	Russell 1000, Russell 1000 Growth, Russell 1000 Value	50,351		50,351		—		—
U.S. Mid Cap Equity	Russell Mid Cap, Russell Mid Cap Growth, Russell Mid Cap Value	9,358		9,358		—		—
U.S. Small Cap Equity	Russell 2000, Russell 2000 Growth, Russell 2000 Value	8,725		8,725		—		—
Non-U.S. Large Cap Equity	MSCI EAFE	5,973		5,973		—		—
REIT	NAREIT—Equity REIT’s	6,143		—		6,143		—
Fixed Income (b)	(b)	44,994		—		44,994		—
Total		$	140,164	$	88,990	$	51,174	$	—

___________________________________


(a)	Actively managed portfolio of securities with the goal to exceed the stated benchmark performance.


(b)	Actively managed portfolio of fixed income securities with the goal to exceed the Barclays 1-5 Year Government/Credit, Barclays Intermediate Government/Credit, and Merrill Lynch Preferred Stock Fixed Rate.

Schedule of Expected Benefit Payments

Benefits expected to be paid in the next five years and in the aggregate for the five years thereafter are:



	Pension Plan		Other Postretirement Benefit Plan
2019	$	7,235	$	851
2020	7,550		852
2021	8,013		903
2022	8,419		951
2023	8,886		992
2024 - 2027	50,695		5,366