Pension And OPEB

9 Months Ended

Sep. 30, 2011

Pension And OPEB

Note 7. Pension and OPEB

PSEG sponsors several qualified and nonqualified pension plans and OPEB plans covering PSEG's and its participating affiliates' current and former employees who meet certain eligibility criteria. In early June 2011, PSEG amended certain provisions of its pension and OPEB plans, including revisions to the benefit formulas for certain participants of PSEG's qualified and nonqualified pension and OPEB plans. The weighted average discount rate for the pension plans decreased from 5.51% to 5.31% while the discount rate for the OPEB plans decreased from 5.50% to 5.30%. The expected long-term rate of return on plan assets remained at 8.50%. The pension benefit and OPEB obligations, as well as the asset values, were re-measured as of May 31, 2011 (the closest month-end date to the time the revisions were made). As a result, the annual net periodic pension benefit cost for 2011 will decrease by $32 million and the 2011 annual net OPEB cost will decrease by $6 million compared to costs that would have been expensed in 2011 if PSEG did not re-measure. The re-measured pension projected benefit obligations and accumulated OPEB obligation as of May 31, 2011 were $4.3 billion and $1.2 billion, respectively. The year-to-date rate of return on plan assets through the May 31 remeasurement date was 6.70%.

The following table provides the components of net periodic benefit costs relating to all qualified and nonqualified pension and OPEB plans on an aggregate basis. The costs for January through May 2011 are calculated under the prior plans' assumptions. The costs for June 2011 and subsequent months are being calculated under the revised plan provisions. OPEB costs are presented net of the federal subsidy expected for prescription drugs under the Medicare Prescription Drug Improvement and Modernization Act of 2003. New federal health care legislation enacted in March 2010 eliminates the tax deductibility of retiree health care costs beginning in 2013, to the extent of federal subsidies received by plan sponsors that provide retiree prescription drug benefits equivalent to Medicare Part D coverage. See Note 13. Income Taxes for additional information.

Pension and OPEB costs for PSEG are detailed as follows:

	Pension Benefits Three Months Ended September 30,						OPEB Three Months Ended September 30,						Pension Benefits Nine Months Ended September 30,						OPEB Nine Months Ended September 30,
	2011			2010			2011			2010			2011			2010			2011			2010
	Millions
Components of Net Periodic Benefit Cost
Service Cost	$	22		$	21		$	3		$	4		$	69		$	65		$	10		$	12
Interest Cost		56			58			15			18			172			173			45			54
Expected Return on Plan Assets		(85	)		(67	)		(5	)		(4	)		(248	)		(200	)		(13	)		(11	)
Amortization of Net
Transition Obligation		0			0			1			6			0			0			4			20
Prior Service Cost (Credit)		(4	)		0			(4	)		4			(6	)		0			(10	)		10
Actuarial Loss		29			31			4			2			89			92			11			6
Net Periodic Benefit Cost		18			43			14			30			76			130			47			91
Effect of Regulatory Asset		0			0			5			5			0			0			15			15
Total Benefit Costs, Including Effect of Regulatory Asset	$	18		$	43		$	19		$	35		$	76		$	130		$	62		$	106

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

	Pension Benefits Three Months Ended September 30,				OPEB Three Months Ended September 30,				Pension Benefits Nine Months Ended September 30,				OPEB Nine Months Ended September 30,
	2011		2010		2011		2010		2011		2010		2011		2010
	Millions
Power	$	6	$	13	$	3	$	4	$	24	$	40	$	9	$	13
PSE&G		9		24		16		30		41		72		51		90
Other		3		6		0		1		11		18		2		3
Total Benefit Costs	$	18	$	43	$	19	$	35	$	76	$	130	$	62	$	106

During the three months ended March 31, 2011, PSEG contributed its entire planned contributions for the year 2011 of $415 million and $11 million into its pension and postretirement healthcare plans, respectively.

Power [Member]

Pension And OPEB

Note 7. Pension and OPEB

PSEG sponsors several qualified and nonqualified pension plans and OPEB plans covering PSEG's and its participating affiliates' current and former employees who meet certain eligibility criteria. In early June 2011, PSEG amended certain provisions of its pension and OPEB plans, including revisions to the benefit formulas for certain participants of PSEG's qualified and nonqualified pension and OPEB plans. The weighted average discount rate for the pension plans decreased from 5.51% to 5.31% while the discount rate for the OPEB plans decreased from 5.50% to 5.30%. The expected long-term rate of return on plan assets remained at 8.50%. The pension benefit and OPEB obligations, as well as the asset values, were re-measured as of May 31, 2011 (the closest month-end date to the time the revisions were made). As a result, the annual net periodic pension benefit cost for 2011 will decrease by $32 million and the 2011 annual net OPEB cost will decrease by $6 million compared to costs that would have been expensed in 2011 if PSEG did not re-measure. The re-measured pension projected benefit obligations and accumulated OPEB obligation as of May 31, 2011 were $4.3 billion and $1.2 billion, respectively. The year-to-date rate of return on plan assets through the May 31 remeasurement date was 6.70%.

The following table provides the components of net periodic benefit costs relating to all qualified and nonqualified pension and OPEB plans on an aggregate basis. The costs for January through May 2011 are calculated under the prior plans' assumptions. The costs for June 2011 and subsequent months are being calculated under the revised plan provisions. OPEB costs are presented net of the federal subsidy expected for prescription drugs under the Medicare Prescription Drug Improvement and Modernization Act of 2003. New federal health care legislation enacted in March 2010 eliminates the tax deductibility of retiree health care costs beginning in 2013, to the extent of federal subsidies received by plan sponsors that provide retiree prescription drug benefits equivalent to Medicare Part D coverage. See Note 13. Income Taxes for additional information.

Pension and OPEB costs for PSEG are detailed as follows:

	Pension Benefits Three Months Ended September 30,						OPEB Three Months Ended September 30,						Pension Benefits Nine Months Ended September 30,						OPEB Nine Months Ended September 30,
	2011			2010			2011			2010			2011			2010			2011			2010
	Millions
Components of Net Periodic Benefit Cost
Service Cost	$	22		$	21		$	3		$	4		$	69		$	65		$	10		$	12
Interest Cost		56			58			15			18			172			173			45			54
Expected Return on Plan Assets		(85	)		(67	)		(5	)		(4	)		(248	)		(200	)		(13	)		(11	)
Amortization of Net
Transition Obligation		0			0			1			6			0			0			4			20
Prior Service Cost (Credit)		(4	)		0			(4	)		4			(6	)		0			(10	)		10
Actuarial Loss		29			31			4			2			89			92			11			6
Net Periodic Benefit Cost		18			43			14			30			76			130			47			91
Effect of Regulatory Asset		0			0			5			5			0			0			15			15
Total Benefit Costs, Including Effect of Regulatory Asset	$	18		$	43		$	19		$	35		$	76		$	130		$	62		$	106

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

	Pension Benefits Three Months Ended September 30,				OPEB Three Months Ended September 30,				Pension Benefits Nine Months Ended September 30,				OPEB Nine Months Ended September 30,
	2011		2010		2011		2010		2011		2010		2011		2010
	Millions
Power	$	6	$	13	$	3	$	4	$	24	$	40	$	9	$	13
PSE&G		9		24		16		30		41		72		51		90
Other		3		6		0		1		11		18		2		3
Total Benefit Costs	$	18	$	43	$	19	$	35	$	76	$	130	$	62	$	106

During the three months ended March 31, 2011, PSEG contributed its entire planned contributions for the year 2011 of $415 million and $11 million into its pension and postretirement healthcare plans, respectively.

PSE&G [Member]

Pension And OPEB

Note 7. Pension and OPEB

PSEG sponsors several qualified and nonqualified pension plans and OPEB plans covering PSEG's and its participating affiliates' current and former employees who meet certain eligibility criteria. In early June 2011, PSEG amended certain provisions of its pension and OPEB plans, including revisions to the benefit formulas for certain participants of PSEG's qualified and nonqualified pension and OPEB plans. The weighted average discount rate for the pension plans decreased from 5.51% to 5.31% while the discount rate for the OPEB plans decreased from 5.50% to 5.30%. The expected long-term rate of return on plan assets remained at 8.50%. The pension benefit and OPEB obligations, as well as the asset values, were re-measured as of May 31, 2011 (the closest month-end date to the time the revisions were made). As a result, the annual net periodic pension benefit cost for 2011 will decrease by $32 million and the 2011 annual net OPEB cost will decrease by $6 million compared to costs that would have been expensed in 2011 if PSEG did not re-measure. The re-measured pension projected benefit obligations and accumulated OPEB obligation as of May 31, 2011 were $4.3 billion and $1.2 billion, respectively. The year-to-date rate of return on plan assets through the May 31 remeasurement date was 6.70%.

The following table provides the components of net periodic benefit costs relating to all qualified and nonqualified pension and OPEB plans on an aggregate basis. The costs for January through May 2011 are calculated under the prior plans' assumptions. The costs for June 2011 and subsequent months are being calculated under the revised plan provisions. OPEB costs are presented net of the federal subsidy expected for prescription drugs under the Medicare Prescription Drug Improvement and Modernization Act of 2003. New federal health care legislation enacted in March 2010 eliminates the tax deductibility of retiree health care costs beginning in 2013, to the extent of federal subsidies received by plan sponsors that provide retiree prescription drug benefits equivalent to Medicare Part D coverage. See Note 13. Income Taxes for additional information.

Pension and OPEB costs for PSEG are detailed as follows:

	Pension Benefits Three Months Ended September 30,						OPEB Three Months Ended September 30,						Pension Benefits Nine Months Ended September 30,						OPEB Nine Months Ended September 30,
	2011			2010			2011			2010			2011			2010			2011			2010
	Millions
Components of Net Periodic Benefit Cost
Service Cost	$	22		$	21		$	3		$	4		$	69		$	65		$	10		$	12
Interest Cost		56			58			15			18			172			173			45			54
Expected Return on Plan Assets		(85	)		(67	)		(5	)		(4	)		(248	)		(200	)		(13	)		(11	)
Amortization of Net
Transition Obligation		0			0			1			6			0			0			4			20
Prior Service Cost (Credit)		(4	)		0			(4	)		4			(6	)		0			(10	)		10
Actuarial Loss		29			31			4			2			89			92			11			6
Net Periodic Benefit Cost		18			43			14			30			76			130			47			91
Effect of Regulatory Asset		0			0			5			5			0			0			15			15
Total Benefit Costs, Including Effect of Regulatory Asset	$	18		$	43		$	19		$	35		$	76		$	130		$	62		$	106

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

	Pension Benefits Three Months Ended September 30,				OPEB Three Months Ended September 30,				Pension Benefits Nine Months Ended September 30,				OPEB Nine Months Ended September 30,
	2011		2010		2011		2010		2011		2010		2011		2010
	Millions
Power	$	6	$	13	$	3	$	4	$	24	$	40	$	9	$	13
PSE&G		9		24		16		30		41		72		51		90
Other		3		6		0		1		11		18		2		3
Total Benefit Costs	$	18	$	43	$	19	$	35	$	76	$	130	$	62	$	106

During the three months ended March 31, 2011, PSEG contributed its entire planned contributions for the year 2011 of $415 million and $11 million into its pension and postretirement healthcare plans, respectively.