PENSION AND OTHER POSTRETIREMENT BENEFITS

9 Months Ended

Sep. 30, 2020

Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]

PENSION AND OTHER POSTRETIREMENT BENEFITS

PENSION AND OTHER POSTRETIREMENT BENEFITS:

For the three and nine months ended September 30, 2020 and 2019, net periodic benefit cost related to the SJI employee and officer pension and other postretirement benefit plans consisted of the following components (in thousands):

	Pension Benefits
	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Service Cost	$	974	$	1,387	$	4,349	$	4,187
Interest Cost	3,862		4,307		11,388		12,971
Expected Return on Plan Assets	(5,569)		(5,077)		(16,473)		(15,213)
Amortizations:
Prior Service Cost	26		26		79		79
Actuarial Loss	2,647		2,398		8,077		7,195
Net Periodic Benefit Cost	1,940		3,041		7,420		9,219
Capitalized Benefit Cost	(410)		(454)		(1,470)		(1,423)
Deferred Benefit Cost	(377)		(516)		(1,193)		(1,710)
Total Net Periodic Benefit Expense	$	1,153	$	2,071	$	4,757	$	6,086

	Other Postretirement Benefits
	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Service Cost	$	182	$	129	$	511	$	400
Interest Cost	560		729		1,775		2,163
Expected Return on Plan Assets	(1,345)		(1,147)		(4,036)		(3,428)
Amortizations:
Prior Service Cost	(180)		(144)		(468)		(432)
Actuarial Loss	255		292		640		876
Net Periodic Benefit Cost	(528)		(141)		(1,578)		(421)
Capitalized Benefit Cost	57		(115)		(157)		(270)
Deferred Benefit Cost	(90)		118		701		352
Total Net Periodic Benefit Expense	$	(561)	$	(138)	$	(1,034)	$	(339)

The Pension Benefits Net Periodic Benefit Cost incurred by SJG was approximately $1.6 million and $1.9 million of the totals presented in the table above for the three months ended September 30, 2020 and 2019, respectively, and $5.4 million and $6.3 million of the totals presented in the table above for the nine months ended September 30, 2020 and 2019, respectively. The weighted average expected long term rate of return on plan assets used to determine the net benefit cost was 7.25%.

The Other Postretirement Benefits Net Periodic Benefit Cost incurred by SJG was approximately $(0.1) million and $(0.1) million of the totals presented in the table above for the three months ended September 30, 2020 and 2019, respectively, and $(1.5) million and $(0.3) million of the totals presented in the table above for the nine months ended September 30, 2020 and 2019, respectively. The weighted average expected long term rate of return on plan assets used to determine the net benefit cost was 6.75%.

Capitalized benefit costs reflected in the table above relate to the Utilities' construction programs.

Companies with publicly traded equity securities that sponsor a postretirement benefit plan are required to fully recognize, as an asset or liability, the overfunded or underfunded status of its benefit plans and recognize changes in the funded status in the year in which the changes occur. Changes in funded status are generally reported in AOCL; however, since the Utilities recover all prudently incurred pension and postretirement benefit costs from their ratepayers, a significant portion of the changes resulting from the recording of additional liabilities under this requirement are reported as regulatory assets.

No contributions were made to the pension plans by either SJI or SJG during the nine months ended September 30, 2020 or 2019. SJI and SJG do not expect to make any contributions to the pension plans during the remainder of 2020; however, changes in future investment performance and discount rates may ultimately result in a contribution. Payments related to the unfunded SERP are expected to be approximately $3.7 million in 2020.

The plans include a qualified defined benefit, trusteed, pension plan covering most eligible employees.  The qualified pension plan is funded in accordance with requirements of the ERISA.  The Company also provides certain non-qualified defined benefit and defined contribution pension plans for a selected group of the Company's management and highly compensated employees. Benefits under these non-qualified pension plans are funded on a cash basis.  In addition, the entities have a postretirement benefit plan, which provides certain medical care and life insurance benefits for eligible retired employees through a postretirement benefit plan.

See Note 12 to the Consolidated Financial Statements in Item 8 of SJI’s and SJG's Annual Report on Form 10-K for the year ended December 31, 2019 for additional information related to SJI’s and SJG's pension and other postretirement benefits.