Pension and Other Postretirement Benefits (OPEB)

PSEG sponsors several qualified and nonqualified pension plans and OPEB plans covering PSEG’s and its participating affiliates’ current and former employees who meet certain eligibility criteria. The following table provides the components of net periodic benefit costs relating to all qualified and nonqualified pension and OPEB plans on an aggregate basis.

Pension and OPEB costs for PSEG, except for Servco, are detailed as follows:




	Pension Benefits						OPEB
	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2014			2013			2014			2013
	Millions
Components of Net Periodic Benefit Cost
Service Cost	$	26		$	29		$	5		$	5
Interest Cost	59			54			17			16
Expected Return on Plan Assets	(100		)	(87		)	(7		)	(5		)
Amortization of Net
Prior Service Cost (Credit)	(5		)	(5		)	(4		)	(4		)
Actuarial Loss	14			47			6			11
Total Benefit Costs	$	(6	)	$	38		$	17		$	23

Pension and OPEB costs for Power, PSE&G and PSEG’s other subsidiaries, except for Servco, are detailed as follows:




	Pension Benefits					OPEB
	Three Months Ended					Three Months Ended
	March 31,					March 31,
	2014			2013		2014		2013
	Millions
Power	$	(2	)	$	11	$	5	$	6
PSE&G	(5		)	23		11		16
Other	1			4		1		1
Total Benefit Costs	$	(6	)	$	38	$	17	$	23

PSEG does not anticipate making contributions into its pension plan during 2014. However, during the three months ended March 31, 2014, PSEG contributed its entire planned contribution for the year 2014 of $14 million into its postretirement healthcare plan.

Servco Pension and OPEB

At the direction of LIPA, effective January 1, 2014, Servco established benefit plans that provide substantially the same benefits to its employees as those previously provided by National Grid Electric Services LLC (NGES), the predecessor T&D system manager for LIPA. Since the vast majority of Servco's employees had worked under NGES' T&D operations services arrangement with LIPA, Servco's plans provide certain of those employees with pension and OPEB vested credit for prior years' services earned while working for NGES. The benefit plans cover all employees of Servco for current service. Under the OSA, all of these and any future employee benefit costs are to be funded by LIPA. See Note 3. Variable Interest Entities (VIEs). These obligations, as well as the offsetting long-term receivable, are separately presented on the Condensed Consolidated Balance Sheet of PSEG.

Servco amounts are not included in any of the preceding pension and OPEB benefit cost disclosures. Pension and OPEB costs of Servco are accounted for according to the OSA. Servco recognizes expenses for contributions to its pension plan trusts and for OPEB payments made to retirees. Operating Revenues are recognized for the reimbursement of these costs. The pension-related revenues and costs for the three months ended March 31, 2014 were $23 million. As of March 31, 2014, Servco had funded 17% of its projected pension benefit obligation. Servco plans to contribute an additional $44 million to its pension plan trusts during 2014. There were no OPEB-related revenues earned or costs incurred for the three months ended March 31, 2014.

The following assumptions were used to determine the benefit obligations of Servco:




	Pension Benefits		Other Benefits
	January 1, 2014
Weighted-Average Assumptions Used to Determine Benefit Obligations as of January 1, 2014
Discount Rate	5.50	%	5.40		%
Rate of Compensation Increase	2.50	%	2.50		%
Assumed Health Care Cost Trend Rates as of January 1, 2014
Administrative Expense			5.00		%
Dental Costs			5.00		%
Pre-65 Medical Costs
Immediate Rate			7.50		%
Ultimate Rate			5.00		%
Year Ultimate Rate Reached			2019
Post-65 Medical Costs
Immediate Rate			7.50		%
Ultimate Rate			5.00		%
Year Ultimate Rate Reached			2019
			Millions
Effect of a 1% Increase in the Assumed Rate of Increase in Health Care Benefit Costs
Postretirement Benefit Obligation			$	62
Effect of a 1% Decrease in the Assumed Rate of Increase in Health Care Benefit Costs
Postretirement Benefit Obligation			$	(49	)

Estimated Future Benefit Payments

The following pension benefit and postretirement benefit payments are expected to be paid to Servco's plan participants:




Year	Pension Benefits		Other Benefits
	Millions
2014	$	—	$	1
2015	—		3
2016	1		4
2017	2		6
2018	3		8
2019-2023	37		65
Total	$	43	$	87

Pension and OPEB

Pension and Other Postretirement Benefits (OPEB)

PSEG sponsors several qualified and nonqualified pension plans and OPEB plans covering PSEG’s and its participating affiliates’ current and former employees who meet certain eligibility criteria. The following table provides the components of net periodic benefit costs relating to all qualified and nonqualified pension and OPEB plans on an aggregate basis.

Pension and OPEB costs for PSEG, except for Servco, are detailed as follows:




	Pension Benefits						OPEB
	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2014			2013			2014			2013
	Millions
Components of Net Periodic Benefit Cost
Service Cost	$	26		$	29		$	5		$	5
Interest Cost	59			54			17			16
Expected Return on Plan Assets	(100		)	(87		)	(7		)	(5		)
Amortization of Net
Prior Service Cost (Credit)	(5		)	(5		)	(4		)	(4		)
Actuarial Loss	14			47			6			11
Total Benefit Costs	$	(6	)	$	38		$	17		$	23

Pension and OPEB costs for Power, PSE&G and PSEG’s other subsidiaries, except for Servco, are detailed as follows:




	Pension Benefits					OPEB
	Three Months Ended					Three Months Ended
	March 31,					March 31,
	2014			2013		2014		2013
	Millions
Power	$	(2	)	$	11	$	5	$	6
PSE&G	(5		)	23		11		16
Other	1			4		1		1
Total Benefit Costs	$	(6	)	$	38	$	17	$	23

PSEG does not anticipate making contributions into its pension plan during 2014. However, during the three months ended March 31, 2014, PSEG contributed its entire planned contribution for the year 2014 of $14 million into its postretirement healthcare plan.

Servco Pension and OPEB

At the direction of LIPA, effective January 1, 2014, Servco established benefit plans that provide substantially the same benefits to its employees as those previously provided by National Grid Electric Services LLC (NGES), the predecessor T&D system manager for LIPA. Since the vast majority of Servco's employees had worked under NGES' T&D operations services arrangement with LIPA, Servco's plans provide certain of those employees with pension and OPEB vested credit for prior years' services earned while working for NGES. The benefit plans cover all employees of Servco for current service. Under the OSA, all of these and any future employee benefit costs are to be funded by LIPA. See Note 3. Variable Interest Entities (VIEs). These obligations, as well as the offsetting long-term receivable, are separately presented on the Condensed Consolidated Balance Sheet of PSEG.

Servco amounts are not included in any of the preceding pension and OPEB benefit cost disclosures. Pension and OPEB costs of Servco are accounted for according to the OSA. Servco recognizes expenses for contributions to its pension plan trusts and for OPEB payments made to retirees. Operating Revenues are recognized for the reimbursement of these costs. The pension-related revenues and costs for the three months ended March 31, 2014 were $23 million. As of March 31, 2014, Servco had funded 17% of its projected pension benefit obligation. Servco plans to contribute an additional $44 million to its pension plan trusts during 2014. There were no OPEB-related revenues earned or costs incurred for the three months ended March 31, 2014.

The following assumptions were used to determine the benefit obligations of Servco:




	Pension Benefits		Other Benefits
	January 1, 2014
Weighted-Average Assumptions Used to Determine Benefit Obligations as of January 1, 2014
Discount Rate	5.50	%	5.40		%
Rate of Compensation Increase	2.50	%	2.50		%
Assumed Health Care Cost Trend Rates as of January 1, 2014
Administrative Expense			5.00		%
Dental Costs			5.00		%
Pre-65 Medical Costs
Immediate Rate			7.50		%
Ultimate Rate			5.00		%
Year Ultimate Rate Reached			2019
Post-65 Medical Costs
Immediate Rate			7.50		%
Ultimate Rate			5.00		%
Year Ultimate Rate Reached			2019
			Millions
Effect of a 1% Increase in the Assumed Rate of Increase in Health Care Benefit Costs
Postretirement Benefit Obligation			$	62
Effect of a 1% Decrease in the Assumed Rate of Increase in Health Care Benefit Costs
Postretirement Benefit Obligation			$	(49	)

Estimated Future Benefit Payments

The following pension benefit and postretirement benefit payments are expected to be paid to Servco's plan participants:




Year	Pension Benefits		Other Benefits
	Millions
2014	$	—	$	1
2015	—		3
2016	1		4
2017	2		6
2018	3		8
2019-2023	37		65
Total	$	43	$	87

Pension and OPEB

Pension and Other Postretirement Benefits (OPEB)

PSEG sponsors several qualified and nonqualified pension plans and OPEB plans covering PSEG’s and its participating affiliates’ current and former employees who meet certain eligibility criteria. The following table provides the components of net periodic benefit costs relating to all qualified and nonqualified pension and OPEB plans on an aggregate basis.

Pension and OPEB costs for PSEG, except for Servco, are detailed as follows:




	Pension Benefits						OPEB
	Three Months Ended						Three Months Ended
	March 31,						March 31,
	2014			2013			2014			2013
	Millions
Components of Net Periodic Benefit Cost
Service Cost	$	26		$	29		$	5		$	5
Interest Cost	59			54			17			16
Expected Return on Plan Assets	(100		)	(87		)	(7		)	(5		)
Amortization of Net
Prior Service Cost (Credit)	(5		)	(5		)	(4		)	(4		)
Actuarial Loss	14			47			6			11
Total Benefit Costs	$	(6	)	$	38		$	17		$	23

Pension and OPEB costs for Power, PSE&G and PSEG’s other subsidiaries, except for Servco, are detailed as follows:




	Pension Benefits					OPEB
	Three Months Ended					Three Months Ended
	March 31,					March 31,
	2014			2013		2014		2013
	Millions
Power	$	(2	)	$	11	$	5	$	6
PSE&G	(5		)	23		11		16
Other	1			4		1		1
Total Benefit Costs	$	(6	)	$	38	$	17	$	23

PSEG does not anticipate making contributions into its pension plan during 2014. However, during the three months ended March 31, 2014, PSEG contributed its entire planned contribution for the year 2014 of $14 million into its postretirement healthcare plan.

Servco Pension and OPEB

At the direction of LIPA, effective January 1, 2014, Servco established benefit plans that provide substantially the same benefits to its employees as those previously provided by National Grid Electric Services LLC (NGES), the predecessor T&D system manager for LIPA. Since the vast majority of Servco's employees had worked under NGES' T&D operations services arrangement with LIPA, Servco's plans provide certain of those employees with pension and OPEB vested credit for prior years' services earned while working for NGES. The benefit plans cover all employees of Servco for current service. Under the OSA, all of these and any future employee benefit costs are to be funded by LIPA. See Note 3. Variable Interest Entities (VIEs). These obligations, as well as the offsetting long-term receivable, are separately presented on the Condensed Consolidated Balance Sheet of PSEG.

Servco amounts are not included in any of the preceding pension and OPEB benefit cost disclosures. Pension and OPEB costs of Servco are accounted for according to the OSA. Servco recognizes expenses for contributions to its pension plan trusts and for OPEB payments made to retirees. Operating Revenues are recognized for the reimbursement of these costs. The pension-related revenues and costs for the three months ended March 31, 2014 were $23 million. As of March 31, 2014, Servco had funded 17% of its projected pension benefit obligation. Servco plans to contribute an additional $44 million to its pension plan trusts during 2014. There were no OPEB-related revenues earned or costs incurred for the three months ended March 31, 2014.

The following assumptions were used to determine the benefit obligations of Servco:




	Pension Benefits		Other Benefits
	January 1, 2014
Weighted-Average Assumptions Used to Determine Benefit Obligations as of January 1, 2014
Discount Rate	5.50	%	5.40		%
Rate of Compensation Increase	2.50	%	2.50		%
Assumed Health Care Cost Trend Rates as of January 1, 2014
Administrative Expense			5.00		%
Dental Costs			5.00		%
Pre-65 Medical Costs
Immediate Rate			7.50		%
Ultimate Rate			5.00		%
Year Ultimate Rate Reached			2019
Post-65 Medical Costs
Immediate Rate			7.50		%
Ultimate Rate			5.00		%
Year Ultimate Rate Reached			2019
			Millions
Effect of a 1% Increase in the Assumed Rate of Increase in Health Care Benefit Costs
Postretirement Benefit Obligation			$	62
Effect of a 1% Decrease in the Assumed Rate of Increase in Health Care Benefit Costs
Postretirement Benefit Obligation			$	(49	)

Estimated Future Benefit Payments

The following pension benefit and postretirement benefit payments are expected to be paid to Servco's plan participants:




Year	Pension Benefits		Other Benefits
	Millions
2014	$	—	$	1
2015	—		3
2016	1		4
2017	2		6
2018	3		8
2019-2023	37		65
Total	$	43	$	87