Pension, OPEB and Savings Plans

12 Months Ended

Dec. 31, 2014

Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]

Pension, OPEB and Savings Plans

Pension, Other Postretirement Benefits (OPEB) and Savings Plans

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. Eligible employees participate in non-contributory pension and OPEB plans sponsored by PSEG and administered by Services. In addition, represented and nonrepresented employees are eligible for participation in PSEG’s two defined contribution plans described below.

PSEG, PSE&G and Power are required to record the under or over funded positions of their defined benefit pension and OPEB plans on their respective balance sheets. Such funding positions of each PSEG company are required to be measured as of the date of its respective year-end Consolidated Balance Sheets. For under funded plans, the liability is equal to the difference between the plan’s benefit obligation and the fair value of plan assets. For defined benefit pension plans, the benefit obligation is the projected benefit obligation. For OPEB plans, the benefit obligation is the accumulated postretirement benefit obligation. In addition, GAAP requires that the total unrecognized costs for defined benefit pension and OPEB plans be recorded as an after-tax charge to Accumulated Other Comprehensive Income (Loss), a separate component of Stockholders’ Equity. However, for PSE&G, because the amortization of the unrecognized costs is being collected from customers, the accumulated unrecognized costs are recorded as a Regulatory Asset. The unrecognized costs represent actuarial gains or losses, prior service costs and transition obligations arising from the adoption of the revised accounting guidance for pensions and OPEB, which had not been expensed.

For PSE&G, the Regulatory Asset is amortized and recorded as net periodic pension cost in the Consolidated Statements of Operations. For Power, the charge to Accumulated Other Comprehensive Income (Loss) is amortized and recorded as net periodic pension cost in the Consolidated Statements of Operations.

Amounts for Servco are not included in any of the following pension and OPEB benefit information for PSEG and its affiliates but rather are separately disclosed later in this note.

The following table provides a roll-forward of the changes in the benefit obligation and the fair value of plan assets during each of the two years in the periods ended December 31, 2014 and 2013. It also provides the funded status of the plans and the amounts recognized and amounts not recognized on the Consolidated Balance Sheets at the end of both years.

	Pension Benefits						Other Benefits
	2014			2013			2014			2013
	Millions
Change in Benefit Obligation
Benefit Obligation at Beginning of Year (A)	$	4,812		$	5,235		$	1,414		$	1,538
Service Cost	104			116			18			21
Interest Cost	234			215			69			63
Actuarial (Gain) Loss (B)	838			(501		)	210			(144		)
Gross Benefits Paid	(266		)	(253		)	(73		)	(64		)
Benefit Obligation at End of Year (A) (B)	$	5,722		$	4,812		$	1,638		$	1,414
Change in Plan Assets
Fair Value of Assets at Beginning of Year	$	5,116		$	4,357		$	319		$	253
Actual Return on Plan Assets	433			857			28			52
Employer Contributions	10			155			87			78
Gross Benefits Paid	(266		)	(253		)	(73		)	(64		)
Fair Value of Assets at End of Year	$	5,293		$	5,116		$	361		$	319
Funded Status
Funded Status (Plan Assets less Benefit Obligation)	$	(429	)	$	304		$	(1,277	)	$	(1,095	)
Additional Amounts Recognized in the Consolidated Balance Sheets
Noncurrent Assets (included in Other Special Funds)	$	21		$	434		$	—		$	—
Current Accrued Benefit Cost	(10		)	(9		)	—			—
Noncurrent Accrued Benefit Cost	(440		)	(121		)	(1,277		)	(1,095		)
Amounts Recognized	$	(429	)	$	304		$	(1,277	)	$	(1,095	)
Additional Amounts Recognized in Accumulated Other Comprehensive Income (Loss), Regulated Assets and Deferred Assets (C)
Prior Service Cost	$	(102	)	$	(120	)	$	(39	)	$	(53	)
Net Actuarial Loss	1,724			977			495			310
Total	$	1,622		$	857		$	456		$	257

(A) Represents projected benefit obligation for pension benefits and the accumulated postretirement benefit obligation for other benefits.

(B) In October 2014, the Society of Actuaries’ Retirement Plans Experience Committee issued its final report on mortality tables (RP-2014 Mortality Tables Report). As of December 31, 2014, PSEG updated its mortality assumptions based on the information contained in this report. The impact of this change is reflected in Actuarial (Gain) Loss in 2014 and added $314 million and $79 million to the Benefit Obligations for Pension and OPEB, respectively, since December 31, 2013.

(C) Includes $702 million ($411 million, after-tax) and $408 million ($238 million, after-tax) in Accumulated Other Comprehensive Loss related to Pension and OPEB as of December 31, 2014 and 2013, respectively.

The pension benefits table above provides information relating to the funded status of all qualified and nonqualified pension plans and OPEB plans on an aggregate basis. As of December 31, 2014, PSEG had funded approximately 93% of its projected benefit obligation. This percentage does not include $191 million of assets in the Rabbi Trust as of December 31, 2014 which were used partially to fund the nonqualified pension plans. As of December 31, 2014, the nonqualified pension plans included in the benefit obligation in the above table and in the projected benefit obligation were $161 million. The fair values of the Rabbi Trust assets are included in Other Special Funds on the Consolidated Balance Sheets.

Accumulated Benefit Obligation

The accumulated benefit obligation for all PSEG’s defined benefit pension plans was $5.5 billion as of December 31, 2014 and $4.5 billion as of December 31, 2013.

The following table provides the components of net periodic benefit cost for the years ended December 31, 2014, 2013 and 2012.

	Pension Benefits Years Ended December 31,									Other Benefits Years Ended December 31,
	2014			2013			2012			2014			2013			2012
	Millions
Components of Net Periodic Benefit Cost (Credit)
Service Cost	$	104		$	116		$	101		$	18		$	21		$	17
Interest Cost	234			215			223			69			63			65
Expected Return on Plan Assets	(399		)	(348		)	(306		)	(26		)	(21		)	(17		)
Amortization of Net
Transition Obligation	—			—			—			—			—			2
Prior Service Cost	(18		)	(19		)	(18		)	(14		)	(14		)	(14		)
Actuarial Loss	56			188			167			23			42			31
Net Periodic Benefit Cost (Credit)	$	(23	)	$	152		$	167		$	70		$	91		$	84
Special Termination Benefits	—			—			1			—			—			—
Effect of Regulatory Asset	—			—			—			—			—			19
Total Benefit Costs (Credit), Including Effect of Regulatory Asset	$	(23	)	$	152		$	168		$	70		$	91		$	103

Pension costs and OPEB costs for PSEG, PSE&G and Power are detailed as follows:

	Pension Benefits Years Ended December 31,							Other Benefits Years Ended December 31,
	2014			2013		2012		2014		2013		2012
	Millions
PSE&G	$	(19	)	$	91	$	97	$	46	$	65	$	82
Power	(7		)	43		52		20		23		18
Other	3			18		19		4		3		3
Total Benefit Costs (Credit)	$	(23	)	$	152	$	168	$	70	$	91	$	103

The following table provides the pre-tax changes recognized in Accumulated Other Comprehensive Income (Loss), Regulatory Assets and Deferred Assets:

	Pension						OPEB
	2014			2013			2014			2013
	Millions
Net Actuarial (Gain) Loss in Current Period	$	803		$	(1,009	)	$	208		$	(175	)
Amortization of Net Actuarial Gain (Loss)	(56		)	(188		)	(23		)	(42		)
Amortization of Prior Service Credit	18			19			14			14
Total	$	765		$	(1,178	)	$	199		$	(203	)

Amounts that are expected to be amortized from Accumulated Other Comprehensive Loss, Regulatory Assets and Deferred Assets into Net Periodic Benefit Cost in 2015 are as follows:

	Pension Benefits			Other Benefits
	2015			2015
	Millions
Actuarial (Gain) Loss	$	150		$	43
Prior Service Cost	$	(19	)	$	(14	)

The following assumptions were used to determine the benefit obligations and net periodic benefit costs:

	Pension Benefits						Other Benefits
	2014		2013		2012		2014			2013			2012
Weighted-Average Assumptions Used to Determine Benefit Obligations as of December 31
Discount Rate	4.20	%	5.00	%	4.20	%	4.21		%	5.01		%	4.20		%
Rate of Compensation Increase	3.61	%	4.61	%	4.61	%	3.61		%	4.61		%	4.61		%
Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost for Years Ended December 31
Discount Rate	5.00	%	4.20	%	5.00	%	5.01		%	4.20		%	5.00		%
Expected Return on Plan Assets	8.00	%	8.00	%	8.00	%	8.00		%	8.00		%	8.00		%
Rate of Compensation Increase	4.61	%	4.61	%	4.61	%	4.61		%	4.61		%	4.61		%
Assumed Health Care Cost Trend Rates as of December 31
Administrative Expense							3.00		%	3.00		%	3.00		%
Dental Costs
Immediate Rate							5.25		%	5.50		%	6.00		%
Ultimate Rate							5.00		%	5.00		%	6.00		%
Year Ultimate Rate Reached							2016			2016			2013
Pre-65 Medical Costs
Immediate Rate							7.50		%	8.00		%	8.88		%
Ultimate Rate							5.00		%	5.00		%	5.00		%
Year Ultimate Rate Reached							2022			2021			2023
Post-65 Medical Costs
Immediate Rate							7.25		%	7.88		%	7.98		%
Ultimate Rate							5.00		%	5.00		%	5.00		%
Year Ultimate Rate Reached							2022			2021			2019
							Millions
Effect of a 1% Increase in the Assumed Rate of Increase in Health Care Benefit Costs
Total of Service Cost and Interest Cost							$	13		$	12		$	12
Postretirement Benefit Obligation							$	201		$	161		$	180
Effect of a 1% Decrease in the Assumed Rate of Increase in Health Care Benefit Costs
Total of Service Cost and Interest Cost							$	(10	)	$	(9	)	$	(9	)
Postretirement Benefit Obligation							$	(165	)	$	(134	)	$	(149	)

Plan Assets

All the investments of pension plans and OPEB plans are held in a trust account by the Trustee and consist of an undivided interest in an investment account of the Master Trust. The investments in the pension and OPEB plans are measured at fair value within a hierarchy that prioritizes the inputs to fair value measurements into three levels. See Note 16. Fair Value Measurements for more information on fair value guidance. Use of the Master Trust permits the commingling of pension plan assets and OPEB plan assets for investment and administrative purposes. Although assets of the plans are commingled in the Master Trust, the Trustee maintains supporting records for the purpose of allocating the net gain or loss of the investment account to the respective participating plans. The net investment income of the investment assets is allocated by the Trustee to each participating plan based on the relationship of the interest of each plan to the total of the interests of the participating plans. As of December 31, 2014, the pension plan interest and OPEB plan interest in such assets of the Master Trust were approximately 94% and 6%, respectively.

The following tables present information about the investments measured at fair value on a recurring basis as of December 31, 2014 and 2013, including the fair value measurements and the levels of inputs used in determining those fair values.

	Recurring Fair Value Measurements as of December 31, 2014
			Quoted Market Prices for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	Total		(Level 1)		(Level 2)		(Level 3)
	Millions
Temporary Investment Funds (A)	$	153	$	92	$	61	$	—
Common Stocks (B)
Commingled—United States	2,292		2,292		—		—
Commingled—International	1,005		1,005		—		—
Other	727		727		—		—
Bonds (C)
Government (United States & Foreign)	509		—		509		—
Other	943		—		943		—
Private Equity (D)	25		—		—		25
Total	$	5,654	$	4,116	$	1,513	$	25

	Recurring Fair Value Measurements as of December 31, 2013
			Quoted Market Prices for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	Total		(Level 1)		(Level 2)		(Level 3)
	Millions
Temporary Investment Funds (A)	$	93	$	52	$	41	$	—
Common Stocks (B)
Commingled—United States	2,264		2,264		—		—
Commingled—International	1,016		1,016		—		—
Other	704		704		—		—
Bonds (C)
Government (United States & Foreign)	596		—		596		—
Other	737		—		737		—
Private Equity (D)	25		—		—		25
Total	$	5,435	$	4,036	$	1,374	$	25

(A) Certain open-ended mutual funds with mainly short-term investments are valued based on unadjusted quoted prices in active market (Level 1). Certain temporary investments are valued using inputs such as time-to-maturity, coupon rate, quality rating and current yield (Level 2).

(B) Wherever possible, fair values of equity investments in stocks and in commingled funds are derived from quoted market prices as substantially all of these instruments have active markets (primarily Level 1). Most investments in stocks are priced utilizing the principal market close price or in some cases midpoint, bid or ask price.

(C) Investments in fixed income securities including bond funds are priced using an evaluated pricing approach or the most recent exchange or quoted bid (primarily Level 2).

(D) Limited partnership interests in private equity funds are valued using significant unobservable inputs as there is little, if any, market activity. In addition, there may be transfer restrictions on private equity securities. The process for determining the fair value of such securities relied on commonly accepted valuation techniques, including the use of earnings multiples based on comparable public securities, industry-specific non-earnings-based multiples and discounted cash flow models. These inputs require significant management judgment or estimation (primarily Level 3).

Reconciliations of the beginning and ending balances of the Pension and OPEB Plans’ Level 3 assets for the years ended December 31, 2014 and 2013 are as follows:

	Balance as of January 1, 2014		Purchases/ (Sales)			Transfer In/ (Out)		Actual Return on Asset Sales		Actual Return on Assets Still Held		Balance as of December 31, 2014
	Millions
Private Equity	$	25	$	(5	)	$	—	$	3	$	2	$	25

	Balance as of January 1, 2013		Purchases/ (Sales)			Transfer In/ (Out)		Actual Return on Asset Sales		Actual Return on Assets Still Held			Balance as of December 31, 2013
	Millions
Private Equity	$	31	$	(11	)	$	—	$	11	$	(6	)	$	25

The following table provides the percentage of fair value of total plan assets for each major category of plan assets held for the qualified pension and OPEB plans as of the measurement date, December 31:

	As of December 31,
Investments	2014		2013
Equity Securities	71	%	73	%
Fixed Income Securities	26		25
Other Investments	3		2
Total Percentage	100	%	100	%

PSEG utilizes forecasted returns, risk, and correlation of all asset classes in order to develop a portfolio designed to produce the maximum return opportunity per unit of risk. PSEG's latest asset/liability study indicates that a long-term target asset allocation of 70% equities and 30% fixed income is consistent with the funds’ financial objectives. Derivative financial instruments are used by the plans’ investment managers primarily to adjust the fixed income duration of the portfolio and hedge the currency risk component of foreign investments. The expected long-term rate of return on plan assets was 8.00% as of December 31, 2014 and will remain unchanged for 2015. This expected return was determined based on the study discussed above, including a premium for active management and considered the plans’ historical annualized rate of return since inception, which was 9.5%.

Plan Contributions

PSEG may contribute up to $25 million into its pension plans and up to $14 million into its OPEB plan, respectively, during 2015.

Estimated Future Benefit Payments

The following pension benefit and postretirement benefit payments are expected to be paid to plan participants.

Year	Pension Benefits		Other Benefits
	Millions
2015	$	282	$	79
2016	283		82
2017	294		84
2018	305		87
2019	318		90
2020-2024	1,770		495
Total	$	3,252	$	917

401(k) Plans

PSEG sponsors two 401(k) plans, which are Employee Retirement Income Security Act (ERISA) defined contribution retirement plans. Eligible represented employees of PSEG's subsidiaries participate in the PSEG Employee Savings Plan (Savings Plan), while eligible non-represented employees of PSEG's subsidiaries participate in the PSEG Thrift and Tax-Deferred Savings Plan (Thrift Plan). Eligible employees may contribute up to 50% of their compensation to these plans. PSEG matches 50% of such employee contributions up to 7% of pay for Savings Plan participants and up to 8% of pay for Thrift Plan participants.

The amount paid for employer matching contributions to the plans for PSEG, PSE&G and Power are detailed as follows:

	Thrift Plan and Savings Plan
	Years Ended December 31,
	2014		2013		2012
	Millions
PSE&G	$	20	$	19	$	18
Power	11		$	10	10
Other	5		4		4
Total Employer Matching Contributions	$	36	$	33	$	32

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. These obligations, as well as the offsetting long-term receivable, are separately presented on the Consolidated Balance Sheet of PSEG.

The following table provides a roll-forward of the changes in Servco's benefit obligation and the fair value of its plan assets during the year ended December 31, 2014. It also provides the funded status of the plans and the amounts recognized and amounts not recognized on the Consolidated Balance Sheets at the end of 2014.

	Pension Benefits			Other Benefits
	2014			2014
	Millions
Change in Benefit Obligation
Benefit Obligation at Beginning of Year	$	—		$	—
Service	20			13
Interest	7			17
Differences in Actuarial Assumptions versus Actual Experience	42			107
Plan Amendments	126			315
Benefit Obligation at End of Year (A)	$	195		$	452
Change in Plan Assets
Fair Value of Assets at Beginning of Year	$	—		$	—
Actual Return on Plan Assets	2			—
Employer Contributions	67			—
Fair Value of Assets at End of Year	$	69		$	—
Funded Status
Funded Status (Plan Assets less Benefit Obligation)	$	(126	)	$	(452	)
Additional Amounts Recognized in the Consolidated Balance Sheets
Accrued Pension Costs of Servco	$	(126	)	$	—
OPEB Costs of Servco	—			(452		)
Amounts Recognized (B)	$	(126	)	$	(452	)

(A) Represents projected benefit obligation for pension benefits and the accumulated postretirement benefit obligation for other benefits.

(B) Amounts equal to the accrued pension and OPEB costs of Servco are offset in Long-Term Receivable of VIE on PSEG's Consolidated Balance Sheet.

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 2014 were $67 million. Servco has contributed its entire planned contribution amount to its pension plan trusts during 2014. The OPEB-related revenues earned or costs incurred in 2014 were immaterial.

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

	Pension Benefits		Other Benefits
	December 31, 2014
Weighted-Average Assumptions Used to Determine Benefit Obligations as of December 31, 2014
Discount Rate	4.50	%	4.60		%
Rate of Compensation Increase	3.25	%	3.25		%
Assumed Health Care Cost Trend Rates as of December 31, 2014
Administrative Expense			5.00		%
Dental Costs
Immediate Rate			8.00		%
Ultimate Rate			5.00		%
Year Ultimate Rate Reached			2018
Pre-65 Medical Costs
Immediate Rate			7.50		%
Ultimate Rate			5.00		%
Year Ultimate Rate Reached			2022
Post-65 Medical Costs
Immediate Rate			7.44		%
Ultimate Rate			5.00		%
Year Ultimate Rate Reached			2022
			Millions
Effect of a 1% Increase in the Assumed Rate of Increase in Health Care Benefit Costs
Postretirement Benefit Obligation			$	160
Effect of a 1% Decrease in the Assumed Rate of Increase in Health Care Benefit Costs
Postretirement Benefit Obligation			$	(106	)

Plan Assets

All the investments of Servco's pension plans are held in a trust account by the Trustee and consist of an undivided interest in an investment account of the Master Trust. The investments in the pension are measured at fair value within a hierarchy that prioritizes the inputs to fair value measurements into three levels. See Note 16. Fair Value Measurements for more information on fair value guidance. The Actuary maintains supporting records for the purpose of allocating the net gain or loss of the investment account to the respective participating plans. The net investment income of the investment assets is allocated by the Actuary to each participating plan based on the relationship of the interest of each plan to the total of the interests of the participating plans.

The following table presents information about Servco's investments measured at fair value on a recurring basis as of December 31, 2014, including the fair value measurements and the levels of inputs used in determining those fair values.

	Recurring Fair Value Measurements as of December 31, 2014
			Quoted Market Prices for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	Total		(Level 1)		(Level 2)		(Level 3)
	Millions
Temporary Investment Funds (A)	$	1	$	—	$	1	$	—
Common Stocks (B)
Commingled—United States	48		48		—		—
Bonds (C)
Other	20		—		20		—
Total	$	69	$	48	$	21	$	—

(A) Certain temporary investments are valued using inputs such as time-to-maturity, coupon rate, quality rating and current yield (Level 2).

(B) Wherever possible, fair values of equity investments in commingled stock funds are derived from quoted market prices as substantially all of these instruments have active markets (primarily Level 1). Most investments in stocks are priced utilizing the principal market close price or in some cases midpoint, bid or ask price.

(C)  Investments in fixed income securities including bond funds are priced using an evaluated pricing approach or the most recent exchange or quoted bid (primarily Level 2).

The following table provides the percentage of fair value of total plan assets for each major category of plan assets held for the qualified pension and OPEB plans of Servco as of the measurement date, December 31:

Investments	As of December 31, 2014
Equity Securities	70	%
Fixed Income Securities	29
Other Investments	1
Total Percentage	100	%

Servco utilizes forecasted returns, risk, and correlation of all asset classes in order to develop a portfolio designed to produce the maximum return opportunity per unit of risk. The results from Servco's latest asset/liability study indicated that a long-term target asset allocation of 70% equities and 30% fixed income is consistent with the funds’ financial objectives. The expected long-term rate of return on plan assets was 7.70% as of December 31, 2014 and will remain unchanged for 2015. This expected return was determined based on the study discussed above, including a premium for active management and considered the plans’ 2014 rate of return, which was 6.3%.

Plan Contributions

Servco may contribute up to $30 million into its pension plan during 2015.

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
2015	$	—	$	2
2016	1		4
2017	2		6
2018	3		7
2019	4		9
2020-2024	49		74
Total	$	59	$	102

Servco 401(k) Plans

Servco sponsors two 401(k) plans, which are defined contribution retirement plans subject to the ERISA. Eligible non-represented employees of Servco participate in the Servco Incentive Thrift Plan I (Thrift Plan I), and eligible represented employees of Servco participate in the Servco Incentive Thrift Plan II. Eligible employees may contribute up to 50% of their compensation to these plans. For employees in Thrift Plan I, Servco matches 50% of such employee contributions up to 8% and provides core contributions (based on years of service and age) to employees who do not participate in Servco's pension plan.

PSE&G [Member]

Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]

Pension, OPEB and Savings Plans

Pension, Other Postretirement Benefits (OPEB) and Savings Plans

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. Eligible employees participate in non-contributory pension and OPEB plans sponsored by PSEG and administered by Services. In addition, represented and nonrepresented employees are eligible for participation in PSEG’s two defined contribution plans described below.

PSEG, PSE&G and Power are required to record the under or over funded positions of their defined benefit pension and OPEB plans on their respective balance sheets. Such funding positions of each PSEG company are required to be measured as of the date of its respective year-end Consolidated Balance Sheets. For under funded plans, the liability is equal to the difference between the plan’s benefit obligation and the fair value of plan assets. For defined benefit pension plans, the benefit obligation is the projected benefit obligation. For OPEB plans, the benefit obligation is the accumulated postretirement benefit obligation. In addition, GAAP requires that the total unrecognized costs for defined benefit pension and OPEB plans be recorded as an after-tax charge to Accumulated Other Comprehensive Income (Loss), a separate component of Stockholders’ Equity. However, for PSE&G, because the amortization of the unrecognized costs is being collected from customers, the accumulated unrecognized costs are recorded as a Regulatory Asset. The unrecognized costs represent actuarial gains or losses, prior service costs and transition obligations arising from the adoption of the revised accounting guidance for pensions and OPEB, which had not been expensed.

For PSE&G, the Regulatory Asset is amortized and recorded as net periodic pension cost in the Consolidated Statements of Operations. For Power, the charge to Accumulated Other Comprehensive Income (Loss) is amortized and recorded as net periodic pension cost in the Consolidated Statements of Operations.

Amounts for Servco are not included in any of the following pension and OPEB benefit information for PSEG and its affiliates but rather are separately disclosed later in this note.

The following table provides a roll-forward of the changes in the benefit obligation and the fair value of plan assets during each of the two years in the periods ended December 31, 2014 and 2013. It also provides the funded status of the plans and the amounts recognized and amounts not recognized on the Consolidated Balance Sheets at the end of both years.

	Pension Benefits						Other Benefits
	2014			2013			2014			2013
	Millions
Change in Benefit Obligation
Benefit Obligation at Beginning of Year (A)	$	4,812		$	5,235		$	1,414		$	1,538
Service Cost	104			116			18			21
Interest Cost	234			215			69			63
Actuarial (Gain) Loss (B)	838			(501		)	210			(144		)
Gross Benefits Paid	(266		)	(253		)	(73		)	(64		)
Benefit Obligation at End of Year (A) (B)	$	5,722		$	4,812		$	1,638		$	1,414
Change in Plan Assets
Fair Value of Assets at Beginning of Year	$	5,116		$	4,357		$	319		$	253
Actual Return on Plan Assets	433			857			28			52
Employer Contributions	10			155			87			78
Gross Benefits Paid	(266		)	(253		)	(73		)	(64		)
Fair Value of Assets at End of Year	$	5,293		$	5,116		$	361		$	319
Funded Status
Funded Status (Plan Assets less Benefit Obligation)	$	(429	)	$	304		$	(1,277	)	$	(1,095	)
Additional Amounts Recognized in the Consolidated Balance Sheets
Noncurrent Assets (included in Other Special Funds)	$	21		$	434		$	—		$	—
Current Accrued Benefit Cost	(10		)	(9		)	—			—
Noncurrent Accrued Benefit Cost	(440		)	(121		)	(1,277		)	(1,095		)
Amounts Recognized	$	(429	)	$	304		$	(1,277	)	$	(1,095	)
Additional Amounts Recognized in Accumulated Other Comprehensive Income (Loss), Regulated Assets and Deferred Assets (C)
Prior Service Cost	$	(102	)	$	(120	)	$	(39	)	$	(53	)
Net Actuarial Loss	1,724			977			495			310
Total	$	1,622		$	857		$	456		$	257

(A) Represents projected benefit obligation for pension benefits and the accumulated postretirement benefit obligation for other benefits.

(B) In October 2014, the Society of Actuaries’ Retirement Plans Experience Committee issued its final report on mortality tables (RP-2014 Mortality Tables Report). As of December 31, 2014, PSEG updated its mortality assumptions based on the information contained in this report. The impact of this change is reflected in Actuarial (Gain) Loss in 2014 and added $314 million and $79 million to the Benefit Obligations for Pension and OPEB, respectively, since December 31, 2013.

(C) Includes $702 million ($411 million, after-tax) and $408 million ($238 million, after-tax) in Accumulated Other Comprehensive Loss related to Pension and OPEB as of December 31, 2014 and 2013, respectively.

The pension benefits table above provides information relating to the funded status of all qualified and nonqualified pension plans and OPEB plans on an aggregate basis. As of December 31, 2014, PSEG had funded approximately 93% of its projected benefit obligation. This percentage does not include $191 million of assets in the Rabbi Trust as of December 31, 2014 which were used partially to fund the nonqualified pension plans. As of December 31, 2014, the nonqualified pension plans included in the benefit obligation in the above table and in the projected benefit obligation were $161 million. The fair values of the Rabbi Trust assets are included in Other Special Funds on the Consolidated Balance Sheets.

Accumulated Benefit Obligation

The accumulated benefit obligation for all PSEG’s defined benefit pension plans was $5.5 billion as of December 31, 2014 and $4.5 billion as of December 31, 2013.

The following table provides the components of net periodic benefit cost for the years ended December 31, 2014, 2013 and 2012.

	Pension Benefits Years Ended December 31,									Other Benefits Years Ended December 31,
	2014			2013			2012			2014			2013			2012
	Millions
Components of Net Periodic Benefit Cost (Credit)
Service Cost	$	104		$	116		$	101		$	18		$	21		$	17
Interest Cost	234			215			223			69			63			65
Expected Return on Plan Assets	(399		)	(348		)	(306		)	(26		)	(21		)	(17		)
Amortization of Net
Transition Obligation	—			—			—			—			—			2
Prior Service Cost	(18		)	(19		)	(18		)	(14		)	(14		)	(14		)
Actuarial Loss	56			188			167			23			42			31
Net Periodic Benefit Cost (Credit)	$	(23	)	$	152		$	167		$	70		$	91		$	84
Special Termination Benefits	—			—			1			—			—			—
Effect of Regulatory Asset	—			—			—			—			—			19
Total Benefit Costs (Credit), Including Effect of Regulatory Asset	$	(23	)	$	152		$	168		$	70		$	91		$	103

Pension costs and OPEB costs for PSEG, PSE&G and Power are detailed as follows:

	Pension Benefits Years Ended December 31,							Other Benefits Years Ended December 31,
	2014			2013		2012		2014		2013		2012
	Millions
PSE&G	$	(19	)	$	91	$	97	$	46	$	65	$	82
Power	(7		)	43		52		20		23		18
Other	3			18		19		4		3		3
Total Benefit Costs (Credit)	$	(23	)	$	152	$	168	$	70	$	91	$	103

The following table provides the pre-tax changes recognized in Accumulated Other Comprehensive Income (Loss), Regulatory Assets and Deferred Assets:

	Pension						OPEB
	2014			2013			2014			2013
	Millions
Net Actuarial (Gain) Loss in Current Period	$	803		$	(1,009	)	$	208		$	(175	)
Amortization of Net Actuarial Gain (Loss)	(56		)	(188		)	(23		)	(42		)
Amortization of Prior Service Credit	18			19			14			14
Total	$	765		$	(1,178	)	$	199		$	(203	)

Amounts that are expected to be amortized from Accumulated Other Comprehensive Loss, Regulatory Assets and Deferred Assets into Net Periodic Benefit Cost in 2015 are as follows:

	Pension Benefits			Other Benefits
	2015			2015
	Millions
Actuarial (Gain) Loss	$	150		$	43
Prior Service Cost	$	(19	)	$	(14	)

The following assumptions were used to determine the benefit obligations and net periodic benefit costs:

	Pension Benefits						Other Benefits
	2014		2013		2012		2014			2013			2012
Weighted-Average Assumptions Used to Determine Benefit Obligations as of December 31
Discount Rate	4.20	%	5.00	%	4.20	%	4.21		%	5.01		%	4.20		%
Rate of Compensation Increase	3.61	%	4.61	%	4.61	%	3.61		%	4.61		%	4.61		%
Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost for Years Ended December 31
Discount Rate	5.00	%	4.20	%	5.00	%	5.01		%	4.20		%	5.00		%
Expected Return on Plan Assets	8.00	%	8.00	%	8.00	%	8.00		%	8.00		%	8.00		%
Rate of Compensation Increase	4.61	%	4.61	%	4.61	%	4.61		%	4.61		%	4.61		%
Assumed Health Care Cost Trend Rates as of December 31
Administrative Expense							3.00		%	3.00		%	3.00		%
Dental Costs
Immediate Rate							5.25		%	5.50		%	6.00		%
Ultimate Rate							5.00		%	5.00		%	6.00		%
Year Ultimate Rate Reached							2016			2016			2013
Pre-65 Medical Costs
Immediate Rate							7.50		%	8.00		%	8.88		%
Ultimate Rate							5.00		%	5.00		%	5.00		%
Year Ultimate Rate Reached							2022			2021			2023
Post-65 Medical Costs
Immediate Rate							7.25		%	7.88		%	7.98		%
Ultimate Rate							5.00		%	5.00		%	5.00		%
Year Ultimate Rate Reached							2022			2021			2019
							Millions
Effect of a 1% Increase in the Assumed Rate of Increase in Health Care Benefit Costs
Total of Service Cost and Interest Cost							$	13		$	12		$	12
Postretirement Benefit Obligation							$	201		$	161		$	180
Effect of a 1% Decrease in the Assumed Rate of Increase in Health Care Benefit Costs
Total of Service Cost and Interest Cost							$	(10	)	$	(9	)	$	(9	)
Postretirement Benefit Obligation							$	(165	)	$	(134	)	$	(149	)

Plan Assets

All the investments of pension plans and OPEB plans are held in a trust account by the Trustee and consist of an undivided interest in an investment account of the Master Trust. The investments in the pension and OPEB plans are measured at fair value within a hierarchy that prioritizes the inputs to fair value measurements into three levels. See Note 16. Fair Value Measurements for more information on fair value guidance. Use of the Master Trust permits the commingling of pension plan assets and OPEB plan assets for investment and administrative purposes. Although assets of the plans are commingled in the Master Trust, the Trustee maintains supporting records for the purpose of allocating the net gain or loss of the investment account to the respective participating plans. The net investment income of the investment assets is allocated by the Trustee to each participating plan based on the relationship of the interest of each plan to the total of the interests of the participating plans. As of December 31, 2014, the pension plan interest and OPEB plan interest in such assets of the Master Trust were approximately 94% and 6%, respectively.

The following tables present information about the investments measured at fair value on a recurring basis as of December 31, 2014 and 2013, including the fair value measurements and the levels of inputs used in determining those fair values.

	Recurring Fair Value Measurements as of December 31, 2014
			Quoted Market Prices for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	Total		(Level 1)		(Level 2)		(Level 3)
	Millions
Temporary Investment Funds (A)	$	153	$	92	$	61	$	—
Common Stocks (B)
Commingled—United States	2,292		2,292		—		—
Commingled—International	1,005		1,005		—		—
Other	727		727		—		—
Bonds (C)
Government (United States & Foreign)	509		—		509		—
Other	943		—		943		—
Private Equity (D)	25		—		—		25
Total	$	5,654	$	4,116	$	1,513	$	25

	Recurring Fair Value Measurements as of December 31, 2013
			Quoted Market Prices for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	Total		(Level 1)		(Level 2)		(Level 3)
	Millions
Temporary Investment Funds (A)	$	93	$	52	$	41	$	—
Common Stocks (B)
Commingled—United States	2,264		2,264		—		—
Commingled—International	1,016		1,016		—		—
Other	704		704		—		—
Bonds (C)
Government (United States & Foreign)	596		—		596		—
Other	737		—		737		—
Private Equity (D)	25		—		—		25
Total	$	5,435	$	4,036	$	1,374	$	25

(A) Certain open-ended mutual funds with mainly short-term investments are valued based on unadjusted quoted prices in active market (Level 1). Certain temporary investments are valued using inputs such as time-to-maturity, coupon rate, quality rating and current yield (Level 2).

(B) Wherever possible, fair values of equity investments in stocks and in commingled funds are derived from quoted market prices as substantially all of these instruments have active markets (primarily Level 1). Most investments in stocks are priced utilizing the principal market close price or in some cases midpoint, bid or ask price.

(C) Investments in fixed income securities including bond funds are priced using an evaluated pricing approach or the most recent exchange or quoted bid (primarily Level 2).

(D) Limited partnership interests in private equity funds are valued using significant unobservable inputs as there is little, if any, market activity. In addition, there may be transfer restrictions on private equity securities. The process for determining the fair value of such securities relied on commonly accepted valuation techniques, including the use of earnings multiples based on comparable public securities, industry-specific non-earnings-based multiples and discounted cash flow models. These inputs require significant management judgment or estimation (primarily Level 3).

Reconciliations of the beginning and ending balances of the Pension and OPEB Plans’ Level 3 assets for the years ended December 31, 2014 and 2013 are as follows:

	Balance as of January 1, 2014		Purchases/ (Sales)			Transfer In/ (Out)		Actual Return on Asset Sales		Actual Return on Assets Still Held		Balance as of December 31, 2014
	Millions
Private Equity	$	25	$	(5	)	$	—	$	3	$	2	$	25

	Balance as of January 1, 2013		Purchases/ (Sales)			Transfer In/ (Out)		Actual Return on Asset Sales		Actual Return on Assets Still Held			Balance as of December 31, 2013
	Millions
Private Equity	$	31	$	(11	)	$	—	$	11	$	(6	)	$	25

The following table provides the percentage of fair value of total plan assets for each major category of plan assets held for the qualified pension and OPEB plans as of the measurement date, December 31:

	As of December 31,
Investments	2014		2013
Equity Securities	71	%	73	%
Fixed Income Securities	26		25
Other Investments	3		2
Total Percentage	100	%	100	%

PSEG utilizes forecasted returns, risk, and correlation of all asset classes in order to develop a portfolio designed to produce the maximum return opportunity per unit of risk. PSEG's latest asset/liability study indicates that a long-term target asset allocation of 70% equities and 30% fixed income is consistent with the funds’ financial objectives. Derivative financial instruments are used by the plans’ investment managers primarily to adjust the fixed income duration of the portfolio and hedge the currency risk component of foreign investments. The expected long-term rate of return on plan assets was 8.00% as of December 31, 2014 and will remain unchanged for 2015. This expected return was determined based on the study discussed above, including a premium for active management and considered the plans’ historical annualized rate of return since inception, which was 9.5%.

Plan Contributions

PSEG may contribute up to $25 million into its pension plans and up to $14 million into its OPEB plan, respectively, during 2015.

Estimated Future Benefit Payments

The following pension benefit and postretirement benefit payments are expected to be paid to plan participants.

Year	Pension Benefits		Other Benefits
	Millions
2015	$	282	$	79
2016	283		82
2017	294		84
2018	305		87
2019	318		90
2020-2024	1,770		495
Total	$	3,252	$	917

401(k) Plans

PSEG sponsors two 401(k) plans, which are Employee Retirement Income Security Act (ERISA) defined contribution retirement plans. Eligible represented employees of PSEG's subsidiaries participate in the PSEG Employee Savings Plan (Savings Plan), while eligible non-represented employees of PSEG's subsidiaries participate in the PSEG Thrift and Tax-Deferred Savings Plan (Thrift Plan). Eligible employees may contribute up to 50% of their compensation to these plans. PSEG matches 50% of such employee contributions up to 7% of pay for Savings Plan participants and up to 8% of pay for Thrift Plan participants.

The amount paid for employer matching contributions to the plans for PSEG, PSE&G and Power are detailed as follows:

	Thrift Plan and Savings Plan
	Years Ended December 31,
	2014		2013		2012
	Millions
PSE&G	$	20	$	19	$	18
Power	11		$	10	10
Other	5		4		4
Total Employer Matching Contributions	$	36	$	33	$	32

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. These obligations, as well as the offsetting long-term receivable, are separately presented on the Consolidated Balance Sheet of PSEG.

The following table provides a roll-forward of the changes in Servco's benefit obligation and the fair value of its plan assets during the year ended December 31, 2014. It also provides the funded status of the plans and the amounts recognized and amounts not recognized on the Consolidated Balance Sheets at the end of 2014.

	Pension Benefits			Other Benefits
	2014			2014
	Millions
Change in Benefit Obligation
Benefit Obligation at Beginning of Year	$	—		$	—
Service	20			13
Interest	7			17
Differences in Actuarial Assumptions versus Actual Experience	42			107
Plan Amendments	126			315
Benefit Obligation at End of Year (A)	$	195		$	452
Change in Plan Assets
Fair Value of Assets at Beginning of Year	$	—		$	—
Actual Return on Plan Assets	2			—
Employer Contributions	67			—
Fair Value of Assets at End of Year	$	69		$	—
Funded Status
Funded Status (Plan Assets less Benefit Obligation)	$	(126	)	$	(452	)
Additional Amounts Recognized in the Consolidated Balance Sheets
Accrued Pension Costs of Servco	$	(126	)	$	—
OPEB Costs of Servco	—			(452		)
Amounts Recognized (B)	$	(126	)	$	(452	)

(A) Represents projected benefit obligation for pension benefits and the accumulated postretirement benefit obligation for other benefits.

(B) Amounts equal to the accrued pension and OPEB costs of Servco are offset in Long-Term Receivable of VIE on PSEG's Consolidated Balance Sheet.

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 2014 were $67 million. Servco has contributed its entire planned contribution amount to its pension plan trusts during 2014. The OPEB-related revenues earned or costs incurred in 2014 were immaterial.

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

	Pension Benefits		Other Benefits
	December 31, 2014
Weighted-Average Assumptions Used to Determine Benefit Obligations as of December 31, 2014
Discount Rate	4.50	%	4.60		%
Rate of Compensation Increase	3.25	%	3.25		%
Assumed Health Care Cost Trend Rates as of December 31, 2014
Administrative Expense			5.00		%
Dental Costs
Immediate Rate			8.00		%
Ultimate Rate			5.00		%
Year Ultimate Rate Reached			2018
Pre-65 Medical Costs
Immediate Rate			7.50		%
Ultimate Rate			5.00		%
Year Ultimate Rate Reached			2022
Post-65 Medical Costs
Immediate Rate			7.44		%
Ultimate Rate			5.00		%
Year Ultimate Rate Reached			2022
			Millions
Effect of a 1% Increase in the Assumed Rate of Increase in Health Care Benefit Costs
Postretirement Benefit Obligation			$	160
Effect of a 1% Decrease in the Assumed Rate of Increase in Health Care Benefit Costs
Postretirement Benefit Obligation			$	(106	)

Plan Assets

All the investments of Servco's pension plans are held in a trust account by the Trustee and consist of an undivided interest in an investment account of the Master Trust. The investments in the pension are measured at fair value within a hierarchy that prioritizes the inputs to fair value measurements into three levels. See Note 16. Fair Value Measurements for more information on fair value guidance. The Actuary maintains supporting records for the purpose of allocating the net gain or loss of the investment account to the respective participating plans. The net investment income of the investment assets is allocated by the Actuary to each participating plan based on the relationship of the interest of each plan to the total of the interests of the participating plans.

The following table presents information about Servco's investments measured at fair value on a recurring basis as of December 31, 2014, including the fair value measurements and the levels of inputs used in determining those fair values.

	Recurring Fair Value Measurements as of December 31, 2014
			Quoted Market Prices for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	Total		(Level 1)		(Level 2)		(Level 3)
	Millions
Temporary Investment Funds (A)	$	1	$	—	$	1	$	—
Common Stocks (B)
Commingled—United States	48		48		—		—
Bonds (C)
Other	20		—		20		—
Total	$	69	$	48	$	21	$	—

(A) Certain temporary investments are valued using inputs such as time-to-maturity, coupon rate, quality rating and current yield (Level 2).

(B) Wherever possible, fair values of equity investments in commingled stock funds are derived from quoted market prices as substantially all of these instruments have active markets (primarily Level 1). Most investments in stocks are priced utilizing the principal market close price or in some cases midpoint, bid or ask price.

(C)  Investments in fixed income securities including bond funds are priced using an evaluated pricing approach or the most recent exchange or quoted bid (primarily Level 2).

The following table provides the percentage of fair value of total plan assets for each major category of plan assets held for the qualified pension and OPEB plans of Servco as of the measurement date, December 31:

Investments	As of December 31, 2014
Equity Securities	70	%
Fixed Income Securities	29
Other Investments	1
Total Percentage	100	%

Servco utilizes forecasted returns, risk, and correlation of all asset classes in order to develop a portfolio designed to produce the maximum return opportunity per unit of risk. The results from Servco's latest asset/liability study indicated that a long-term target asset allocation of 70% equities and 30% fixed income is consistent with the funds’ financial objectives. The expected long-term rate of return on plan assets was 7.70% as of December 31, 2014 and will remain unchanged for 2015. This expected return was determined based on the study discussed above, including a premium for active management and considered the plans’ 2014 rate of return, which was 6.3%.

Plan Contributions

Servco may contribute up to $30 million into its pension plan during 2015.

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
2015	$	—	$	2
2016	1		4
2017	2		6
2018	3		7
2019	4		9
2020-2024	49		74
Total	$	59	$	102

Servco 401(k) Plans

Servco sponsors two 401(k) plans, which are defined contribution retirement plans subject to the ERISA. Eligible non-represented employees of Servco participate in the Servco Incentive Thrift Plan I (Thrift Plan I), and eligible represented employees of Servco participate in the Servco Incentive Thrift Plan II. Eligible employees may contribute up to 50% of their compensation to these plans. For employees in Thrift Plan I, Servco matches 50% of such employee contributions up to 8% and provides core contributions (based on years of service and age) to employees who do not participate in Servco's pension plan.

Power [Member]

Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]

Pension, OPEB and Savings Plans

Note 11. Pension, Other Postretirement Benefits (OPEB) and Savings Plans

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. Eligible employees participate in non-contributory pension and OPEB plans sponsored by PSEG and administered by Services. In addition, represented and nonrepresented employees are eligible for participation in PSEG’s two defined contribution plans described below.

PSEG, PSE&G and Power are required to record the under or over funded positions of their defined benefit pension and OPEB plans on their respective balance sheets. Such funding positions of each PSEG company are required to be measured as of the date of its respective year-end Consolidated Balance Sheets. For under funded plans, the liability is equal to the difference between the plan’s benefit obligation and the fair value of plan assets. For defined benefit pension plans, the benefit obligation is the projected benefit obligation. For OPEB plans, the benefit obligation is the accumulated postretirement benefit obligation. In addition, GAAP requires that the total unrecognized costs for defined benefit pension and OPEB plans be recorded as an after-tax charge to Accumulated Other Comprehensive Income (Loss), a separate component of Stockholders’ Equity. However, for PSE&G, because the amortization of the unrecognized costs is being collected from customers, the accumulated unrecognized costs are recorded as a Regulatory Asset. The unrecognized costs represent actuarial gains or losses, prior service costs and transition obligations arising from the adoption of the revised accounting guidance for pensions and OPEB, which had not been expensed.

For PSE&G, the Regulatory Asset is amortized and recorded as net periodic pension cost in the Consolidated Statements of Operations. For Power, the charge to Accumulated Other Comprehensive Income (Loss) is amortized and recorded as net periodic pension cost in the Consolidated Statements of Operations.

Amounts for Servco are not included in any of the following pension and OPEB benefit information for PSEG and its affiliates but rather are separately disclosed later in this note.

The following table provides a roll-forward of the changes in the benefit obligation and the fair value of plan assets during each of the two years in the periods ended December 31, 2014 and 2013. It also provides the funded status of the plans and the amounts recognized and amounts not recognized on the Consolidated Balance Sheets at the end of both years.

	Pension Benefits						Other Benefits
	2014			2013			2014			2013
	Millions
Change in Benefit Obligation
Benefit Obligation at Beginning of Year (A)	$	4,812		$	5,235		$	1,414		$	1,538
Service Cost	104			116			18			21
Interest Cost	234			215			69			63
Actuarial (Gain) Loss (B)	838			(501		)	210			(144		)
Gross Benefits Paid	(266		)	(253		)	(73		)	(64		)
Benefit Obligation at End of Year (A) (B)	$	5,722		$	4,812		$	1,638		$	1,414
Change in Plan Assets
Fair Value of Assets at Beginning of Year	$	5,116		$	4,357		$	319		$	253
Actual Return on Plan Assets	433			857			28			52
Employer Contributions	10			155			87			78
Gross Benefits Paid	(266		)	(253		)	(73		)	(64		)
Fair Value of Assets at End of Year	$	5,293		$	5,116		$	361		$	319
Funded Status
Funded Status (Plan Assets less Benefit Obligation)	$	(429	)	$	304		$	(1,277	)	$	(1,095	)
Additional Amounts Recognized in the Consolidated Balance Sheets
Noncurrent Assets (included in Other Special Funds)	$	21		$	434		$	—		$	—
Current Accrued Benefit Cost	(10		)	(9		)	—			—
Noncurrent Accrued Benefit Cost	(440		)	(121		)	(1,277		)	(1,095		)
Amounts Recognized	$	(429	)	$	304		$	(1,277	)	$	(1,095	)
Additional Amounts Recognized in Accumulated Other Comprehensive Income (Loss), Regulated Assets and Deferred Assets (C)
Prior Service Cost	$	(102	)	$	(120	)	$	(39	)	$	(53	)
Net Actuarial Loss	1,724			977			495			310
Total	$	1,622		$	857		$	456		$	257

(A) Represents projected benefit obligation for pension benefits and the accumulated postretirement benefit obligation for other benefits.

(B) In October 2014, the Society of Actuaries’ Retirement Plans Experience Committee issued its final report on mortality tables (RP-2014 Mortality Tables Report). As of December 31, 2014, PSEG updated its mortality assumptions based on the information contained in this report. The impact of this change is reflected in Actuarial (Gain) Loss in 2014 and added $314 million and $79 million to the Benefit Obligations for Pension and OPEB, respectively, since December 31, 2013.

(C) Includes $702 million ($411 million, after-tax) and $408 million ($238 million, after-tax) in Accumulated Other Comprehensive Loss related to Pension and OPEB as of December 31, 2014 and 2013, respectively.

The pension benefits table above provides information relating to the funded status of all qualified and nonqualified pension plans and OPEB plans on an aggregate basis. As of December 31, 2014, PSEG had funded approximately 93% of its projected benefit obligation. This percentage does not include $191 million of assets in the Rabbi Trust as of December 31, 2014 which were used partially to fund the nonqualified pension plans. As of December 31, 2014, the nonqualified pension plans included in the benefit obligation in the above table and in the projected benefit obligation were $161 million. The fair values of the Rabbi Trust assets are included in Other Special Funds on the Consolidated Balance Sheets.

Accumulated Benefit Obligation

The accumulated benefit obligation for all PSEG’s defined benefit pension plans was $5.5 billion as of December 31, 2014 and $4.5 billion as of December 31, 2013.

The following table provides the components of net periodic benefit cost for the years ended December 31, 2014, 2013 and 2012.

	Pension Benefits Years Ended December 31,									Other Benefits Years Ended December 31,
	2014			2013			2012			2014			2013			2012
	Millions
Components of Net Periodic Benefit Cost (Credit)
Service Cost	$	104		$	116		$	101		$	18		$	21		$	17
Interest Cost	234			215			223			69			63			65
Expected Return on Plan Assets	(399		)	(348		)	(306		)	(26		)	(21		)	(17		)
Amortization of Net
Transition Obligation	—			—			—			—			—			2
Prior Service Cost	(18		)	(19		)	(18		)	(14		)	(14		)	(14		)
Actuarial Loss	56			188			167			23			42			31
Net Periodic Benefit Cost (Credit)	$	(23	)	$	152		$	167		$	70		$	91		$	84
Special Termination Benefits	—			—			1			—			—			—
Effect of Regulatory Asset	—			—			—			—			—			19
Total Benefit Costs (Credit), Including Effect of Regulatory Asset	$	(23	)	$	152		$	168		$	70		$	91		$	103

Pension costs and OPEB costs for PSEG, PSE&G and Power are detailed as follows:

	Pension Benefits Years Ended December 31,							Other Benefits Years Ended December 31,
	2014			2013		2012		2014		2013		2012
	Millions
PSE&G	$	(19	)	$	91	$	97	$	46	$	65	$	82
Power	(7		)	43		52		20		23		18
Other	3			18		19		4		3		3
Total Benefit Costs (Credit)	$	(23	)	$	152	$	168	$	70	$	91	$	103

The following table provides the pre-tax changes recognized in Accumulated Other Comprehensive Income (Loss), Regulatory Assets and Deferred Assets:

	Pension						OPEB
	2014			2013			2014			2013
	Millions
Net Actuarial (Gain) Loss in Current Period	$	803		$	(1,009	)	$	208		$	(175	)
Amortization of Net Actuarial Gain (Loss)	(56		)	(188		)	(23		)	(42		)
Amortization of Prior Service Credit	18			19			14			14
Total	$	765		$	(1,178	)	$	199		$	(203	)

Amounts that are expected to be amortized from Accumulated Other Comprehensive Loss, Regulatory Assets and Deferred Assets into Net Periodic Benefit Cost in 2015 are as follows:

	Pension Benefits			Other Benefits
	2015			2015
	Millions
Actuarial (Gain) Loss	$	150		$	43
Prior Service Cost	$	(19	)	$	(14	)

The following assumptions were used to determine the benefit obligations and net periodic benefit costs:

	Pension Benefits						Other Benefits
	2014		2013		2012		2014			2013			2012
Weighted-Average Assumptions Used to Determine Benefit Obligations as of December 31
Discount Rate	4.20	%	5.00	%	4.20	%	4.21		%	5.01		%	4.20		%
Rate of Compensation Increase	3.61	%	4.61	%	4.61	%	3.61		%	4.61		%	4.61		%
Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost for Years Ended December 31
Discount Rate	5.00	%	4.20	%	5.00	%	5.01		%	4.20		%	5.00		%
Expected Return on Plan Assets	8.00	%	8.00	%	8.00	%	8.00		%	8.00		%	8.00		%
Rate of Compensation Increase	4.61	%	4.61	%	4.61	%	4.61		%	4.61		%	4.61		%
Assumed Health Care Cost Trend Rates as of December 31
Administrative Expense							3.00		%	3.00		%	3.00		%
Dental Costs
Immediate Rate							5.25		%	5.50		%	6.00		%
Ultimate Rate							5.00		%	5.00		%	6.00		%
Year Ultimate Rate Reached							2016			2016			2013
Pre-65 Medical Costs
Immediate Rate							7.50		%	8.00		%	8.88		%
Ultimate Rate							5.00		%	5.00		%	5.00		%
Year Ultimate Rate Reached							2022			2021			2023
Post-65 Medical Costs
Immediate Rate							7.25		%	7.88		%	7.98		%
Ultimate Rate							5.00		%	5.00		%	5.00		%
Year Ultimate Rate Reached							2022			2021			2019
							Millions
Effect of a 1% Increase in the Assumed Rate of Increase in Health Care Benefit Costs
Total of Service Cost and Interest Cost							$	13		$	12		$	12
Postretirement Benefit Obligation							$	201		$	161		$	180
Effect of a 1% Decrease in the Assumed Rate of Increase in Health Care Benefit Costs
Total of Service Cost and Interest Cost							$	(10	)	$	(9	)	$	(9	)
Postretirement Benefit Obligation							$	(165	)	$	(134	)	$	(149	)

Plan Assets

All the investments of pension plans and OPEB plans are held in a trust account by the Trustee and consist of an undivided interest in an investment account of the Master Trust. The investments in the pension and OPEB plans are measured at fair value within a hierarchy that prioritizes the inputs to fair value measurements into three levels. See Note 16. Fair Value Measurements for more information on fair value guidance. Use of the Master Trust permits the commingling of pension plan assets and OPEB plan assets for investment and administrative purposes. Although assets of the plans are commingled in the Master Trust, the Trustee maintains supporting records for the purpose of allocating the net gain or loss of the investment account to the respective participating plans. The net investment income of the investment assets is allocated by the Trustee to each participating plan based on the relationship of the interest of each plan to the total of the interests of the participating plans. As of December 31, 2014, the pension plan interest and OPEB plan interest in such assets of the Master Trust were approximately 94% and 6%, respectively.

The following tables present information about the investments measured at fair value on a recurring basis as of December 31, 2014 and 2013, including the fair value measurements and the levels of inputs used in determining those fair values.

	Recurring Fair Value Measurements as of December 31, 2014
			Quoted Market Prices for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	Total		(Level 1)		(Level 2)		(Level 3)
	Millions
Temporary Investment Funds (A)	$	153	$	92	$	61	$	—
Common Stocks (B)
Commingled—United States	2,292		2,292		—		—
Commingled—International	1,005		1,005		—		—
Other	727		727		—		—
Bonds (C)
Government (United States & Foreign)	509		—		509		—
Other	943		—		943		—
Private Equity (D)	25		—		—		25
Total	$	5,654	$	4,116	$	1,513	$	25

	Recurring Fair Value Measurements as of December 31, 2013
			Quoted Market Prices for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	Total		(Level 1)		(Level 2)		(Level 3)
	Millions
Temporary Investment Funds (A)	$	93	$	52	$	41	$	—
Common Stocks (B)
Commingled—United States	2,264		2,264		—		—
Commingled—International	1,016		1,016		—		—
Other	704		704		—		—
Bonds (C)
Government (United States & Foreign)	596		—		596		—
Other	737		—		737		—
Private Equity (D)	25		—		—		25
Total	$	5,435	$	4,036	$	1,374	$	25

(A) Certain open-ended mutual funds with mainly short-term investments are valued based on unadjusted quoted prices in active market (Level 1). Certain temporary investments are valued using inputs such as time-to-maturity, coupon rate, quality rating and current yield (Level 2).

(B) Wherever possible, fair values of equity investments in stocks and in commingled funds are derived from quoted market prices as substantially all of these instruments have active markets (primarily Level 1). Most investments in stocks are priced utilizing the principal market close price or in some cases midpoint, bid or ask price.

(C) Investments in fixed income securities including bond funds are priced using an evaluated pricing approach or the most recent exchange or quoted bid (primarily Level 2).

(D) Limited partnership interests in private equity funds are valued using significant unobservable inputs as there is little, if any, market activity. In addition, there may be transfer restrictions on private equity securities. The process for determining the fair value of such securities relied on commonly accepted valuation techniques, including the use of earnings multiples based on comparable public securities, industry-specific non-earnings-based multiples and discounted cash flow models. These inputs require significant management judgment or estimation (primarily Level 3).

Reconciliations of the beginning and ending balances of the Pension and OPEB Plans’ Level 3 assets for the years ended December 31, 2014 and 2013 are as follows:

	Balance as of January 1, 2014		Purchases/ (Sales)			Transfer In/ (Out)		Actual Return on Asset Sales		Actual Return on Assets Still Held		Balance as of December 31, 2014
	Millions
Private Equity	$	25	$	(5	)	$	—	$	3	$	2	$	25

	Balance as of January 1, 2013		Purchases/ (Sales)			Transfer In/ (Out)		Actual Return on Asset Sales		Actual Return on Assets Still Held			Balance as of December 31, 2013
	Millions
Private Equity	$	31	$	(11	)	$	—	$	11	$	(6	)	$	25

The following table provides the percentage of fair value of total plan assets for each major category of plan assets held for the qualified pension and OPEB plans as of the measurement date, December 31:

	As of December 31,
Investments	2014		2013
Equity Securities	71	%	73	%
Fixed Income Securities	26		25
Other Investments	3		2
Total Percentage	100	%	100	%

PSEG utilizes forecasted returns, risk, and correlation of all asset classes in order to develop a portfolio designed to produce the maximum return opportunity per unit of risk. PSEG's latest asset/liability study indicates that a long-term target asset allocation of 70% equities and 30% fixed income is consistent with the funds’ financial objectives. Derivative financial instruments are used by the plans’ investment managers primarily to adjust the fixed income duration of the portfolio and hedge the currency risk component of foreign investments. The expected long-term rate of return on plan assets was 8.00% as of December 31, 2014 and will remain unchanged for 2015. This expected return was determined based on the study discussed above, including a premium for active management and considered the plans’ historical annualized rate of return since inception, which was 9.5%.

Plan Contributions

PSEG may contribute up to $25 million into its pension plans and up to $14 million into its OPEB plan, respectively, during 2015.

Estimated Future Benefit Payments

The following pension benefit and postretirement benefit payments are expected to be paid to plan participants.

Year	Pension Benefits		Other Benefits
	Millions
2015	$	282	$	79
2016	283		82
2017	294		84
2018	305		87
2019	318		90
2020-2024	1,770		495
Total	$	3,252	$	917

401(k) Plans

PSEG sponsors two 401(k) plans, which are Employee Retirement Income Security Act (ERISA) defined contribution retirement plans. Eligible represented employees of PSEG's subsidiaries participate in the PSEG Employee Savings Plan (Savings Plan), while eligible non-represented employees of PSEG's subsidiaries participate in the PSEG Thrift and Tax-Deferred Savings Plan (Thrift Plan). Eligible employees may contribute up to 50% of their compensation to these plans. PSEG matches 50% of such employee contributions up to 7% of pay for Savings Plan participants and up to 8% of pay for Thrift Plan participants.

The amount paid for employer matching contributions to the plans for PSEG, PSE&G and Power are detailed as follows:

	Thrift Plan and Savings Plan
	Years Ended December 31,
	2014		2013		2012
	Millions
PSE&G	$	20	$	19	$	18
Power	11		$	10	10
Other	5		4		4
Total Employer Matching Contributions	$	36	$	33	$	32

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. These obligations, as well as the offsetting long-term receivable, are separately presented on the Consolidated Balance Sheet of PSEG.

The following table provides a roll-forward of the changes in Servco's benefit obligation and the fair value of its plan assets during the year ended December 31, 2014. It also provides the funded status of the plans and the amounts recognized and amounts not recognized on the Consolidated Balance Sheets at the end of 2014.

	Pension Benefits			Other Benefits
	2014			2014
	Millions
Change in Benefit Obligation
Benefit Obligation at Beginning of Year	$	—		$	—
Service	20			13
Interest	7			17
Differences in Actuarial Assumptions versus Actual Experience	42			107
Plan Amendments	126			315
Benefit Obligation at End of Year (A)	$	195		$	452
Change in Plan Assets
Fair Value of Assets at Beginning of Year	$	—		$	—
Actual Return on Plan Assets	2			—
Employer Contributions	67			—
Fair Value of Assets at End of Year	$	69		$	—
Funded Status
Funded Status (Plan Assets less Benefit Obligation)	$	(126	)	$	(452	)
Additional Amounts Recognized in the Consolidated Balance Sheets
Accrued Pension Costs of Servco	$	(126	)	$	—
OPEB Costs of Servco	—			(452		)
Amounts Recognized (B)	$	(126	)	$	(452	)

(A) Represents projected benefit obligation for pension benefits and the accumulated postretirement benefit obligation for other benefits.

(B) Amounts equal to the accrued pension and OPEB costs of Servco are offset in Long-Term Receivable of VIE on PSEG's Consolidated Balance Sheet.

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 2014 were $67 million. Servco has contributed its entire planned contribution amount to its pension plan trusts during 2014. The OPEB-related revenues earned or costs incurred in 2014 were immaterial.

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

	Pension Benefits		Other Benefits
	December 31, 2014
Weighted-Average Assumptions Used to Determine Benefit Obligations as of December 31, 2014
Discount Rate	4.50	%	4.60		%
Rate of Compensation Increase	3.25	%	3.25		%
Assumed Health Care Cost Trend Rates as of December 31, 2014
Administrative Expense			5.00		%
Dental Costs
Immediate Rate			8.00		%
Ultimate Rate			5.00		%
Year Ultimate Rate Reached			2018
Pre-65 Medical Costs
Immediate Rate			7.50		%
Ultimate Rate			5.00		%
Year Ultimate Rate Reached			2022
Post-65 Medical Costs
Immediate Rate			7.44		%
Ultimate Rate			5.00		%
Year Ultimate Rate Reached			2022
			Millions
Effect of a 1% Increase in the Assumed Rate of Increase in Health Care Benefit Costs
Postretirement Benefit Obligation			$	160
Effect of a 1% Decrease in the Assumed Rate of Increase in Health Care Benefit Costs
Postretirement Benefit Obligation			$	(106	)

Plan Assets

All the investments of Servco's pension plans are held in a trust account by the Trustee and consist of an undivided interest in an investment account of the Master Trust. The investments in the pension are measured at fair value within a hierarchy that prioritizes the inputs to fair value measurements into three levels. See Note 16. Fair Value Measurements for more information on fair value guidance. The Actuary maintains supporting records for the purpose of allocating the net gain or loss of the investment account to the respective participating plans. The net investment income of the investment assets is allocated by the Actuary to each participating plan based on the relationship of the interest of each plan to the total of the interests of the participating plans.

The following table presents information about Servco's investments measured at fair value on a recurring basis as of December 31, 2014, including the fair value measurements and the levels of inputs used in determining those fair values.

	Recurring Fair Value Measurements as of December 31, 2014
			Quoted Market Prices for Identical Assets		Significant Other Observable Inputs		Significant Unobservable Inputs
Description	Total		(Level 1)		(Level 2)		(Level 3)
	Millions
Temporary Investment Funds (A)	$	1	$	—	$	1	$	—
Common Stocks (B)
Commingled—United States	48		48		—		—
Bonds (C)
Other	20		—		20		—
Total	$	69	$	48	$	21	$	—

(A) Certain temporary investments are valued using inputs such as time-to-maturity, coupon rate, quality rating and current yield (Level 2).

(B) Wherever possible, fair values of equity investments in commingled stock funds are derived from quoted market prices as substantially all of these instruments have active markets (primarily Level 1). Most investments in stocks are priced utilizing the principal market close price or in some cases midpoint, bid or ask price.

(C)  Investments in fixed income securities including bond funds are priced using an evaluated pricing approach or the most recent exchange or quoted bid (primarily Level 2).

The following table provides the percentage of fair value of total plan assets for each major category of plan assets held for the qualified pension and OPEB plans of Servco as of the measurement date, December 31:

Investments	As of December 31, 2014
Equity Securities	70	%
Fixed Income Securities	29
Other Investments	1
Total Percentage	100	%

Servco utilizes forecasted returns, risk, and correlation of all asset classes in order to develop a portfolio designed to produce the maximum return opportunity per unit of risk. The results from Servco's latest asset/liability study indicated that a long-term target asset allocation of 70% equities and 30% fixed income is consistent with the funds’ financial objectives. The expected long-term rate of return on plan assets was 7.70% as of December 31, 2014 and will remain unchanged for 2015. This expected return was determined based on the study discussed above, including a premium for active management and considered the plans’ 2014 rate of return, which was 6.3%.

Plan Contributions

Servco may contribute up to $30 million into its pension plan during 2015.

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
2015	$	—	$	2
2016	1		4
2017	2		6
2018	3		7
2019	4		9
2020-2024	49		74
Total	$	59	$	102

Servco 401(k) Plans

Servco sponsors two 401(k) plans, which are defined contribution retirement plans subject to the ERISA. Eligible non-represented employees of Servco participate in the Servco Incentive Thrift Plan I (Thrift Plan I), and eligible represented employees of Servco participate in the Servco Incentive Thrift Plan II. Eligible employees may contribute up to 50% of their compensation to these plans. For employees in Thrift Plan I, Servco matches 50% of such employee contributions up to 8% and provides core contributions (based on years of service and age) to employees who do not participate in Servco's pension plan.