XML 105 R45.htm IDEA: XBRL DOCUMENT v2.4.1.9
Pension, OPEB and Savings Plans (Tables)
 12 Months Ended
Dec. 31, 2014
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]  
Schedule of Defined Benefit Plans Disclosures
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.
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.
Components Of Net Periodic Benefit Cost
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

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Schedule Of Pension And OPEB Costs
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

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Schedule of Amounts Recognized in Other Comprehensive Income (Loss)
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
)
 
 
 
 
 
 
 
 
 
 
 
 
Schedule of Amounts in Accumulated Other Comprehensive Income (Loss) to be Recognized over Next Fiscal Year
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
)
 
 
 
 
 
 
 
 
Schedule of Assumptions Used
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
)
 
 
 
 
 
 
 
 
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
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Schedule of Allocation of Plan Assets
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).
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

 
$
—

 
 
 
 
 
 
 
 
 
 
 
 
Schedule of Effect of Significant Unobservable Inputs, Changes in Plan Assets
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

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Schedule Of Percentage Of Fair Value Of Total Plan Assets
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
%
 
 
 
 
 
 
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
%
 
 
 
 
 
 
 
 
Schedule of Expected Benefit Payments
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

 
 
 
 
 
 
 
 
 
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

 
 
 
 
 
 
 
 
 
Schedule Of Amount Paid For Employer Matching Contributions
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