XML 91 R20.htm IDEA: XBRL DOCUMENT
v3.20.1

EMPLOYEE BENEFIT PLANS | 6 Months Ended
--- | ---
Mar. 31, 2020
Retirement Benefits [Abstract] |
EMPLOYEE BENEFIT PLANS | 10. EMPLOYEE BENEFIT PLANS Pension and Other Postemployment Benefit Plans The Company has two trusteed, noncontributory defined benefit retirement plans covering eligible regular represented and non-represented employees with more than one year of service. Defined benefit plan benefits are based on years of service and average compensation during the highest 60 consecutive months of employment. The Company also provides postemployment medical and life insurance benefits to employees who meet certain eligibility requirements. All represented employees of NJRHS hired on or after October 1, 2000, non-represented employees hired on or after October 1, 2009 and NJNG represented employees hired on or after January 1, 2012, are covered by an enhanced defined contribution plan instead of the defined benefit plan. Participation in the postemployment medical and life insurance plan was also frozen to new employees as of the same dates, with the exception of new NJRHS represented employees, for which benefits were frozen beginning April 3, 2012. The Company maintains an unfunded nonqualified PEP that was established to provide employees with the full level of benefits as stated in the qualified plan without reductions due to various limitations imposed by the provisions of federal income tax laws and regulations. There were no plan assets in the nonqualified plan due to the nature of the plan. The Affordable Care Act was enacted in March 2010 and created an excise tax applicable to high-cost health plans, commonly known as the Cadillac Tax. Employers who sponsor health plans that have an annual cost that exceeded an amount defined by the law would pay a 40 percent tax on the excess plan costs beginning in 2022. The 2020 federal spending package permanently eliminated the Affordable Care Act-mandated Cadillac tax on high-cost employer-sponsored health coverage. Due to the repeal, the Company's OPEB liability was revalued for these changes. The Company applied a practical expedient to remeasure the plan assets and obligations as of December 31, 2019, which was the nearest calendar month-end date. The impact of the revaluation of the OPEB liability was recorded as of January 1, 2020. The following summarizes the changes in the funded status of the plan and the related liabilities recognized on the Consolidated Balance Sheets:
| OPEB
(Thousands) | March 31, 2020 | September 30, 2019
Change in Benefit Obligation |  |
Benefit obligation at beginning of period | $ | 260,003 |  | $ | 196,785 |
Service cost | 1,354 |  | 4,404 |
Interest cost | 2,004 |  | 8,324 |
Plan participants’ contributions (1) | 58 |  | 210 |
Actuarial loss (gain) | (44,017 | ) | 54,700 |
Benefits paid, net of retiree subsidies received | (2,342 | ) | (4,420 | )
Benefit obligation at end of period | $ | 217,060 |  | $ | 260,003 |
Change in plan assets |  |
Fair value of plan assets at beginning of period | $ | 83,925 |  | $ | 77,980 |
Actual return on plan assets | 4,676 |  | 2,499 |
Employer contributions | 2,106 |  | 7,926 |
Benefits paid, net of plan participants’ contributions (1) | (2,284 | ) | (4,479 | )
Fair value of plan assets at end of period | $ | 88,423 |  | $ | 83,926 |
Funded status | $ | (128,637 | ) | $ | (176,077 | )
Amounts recognized on Consolidated Balance Sheets |  |
Postemployment employee (liability) |  |
Current | $ | (800 | ) | $ | (800 | )
Noncurrent | (127,837 | ) | (175,277 | )
Total | $ | (128,637 | ) | $ | (176,077 | )
(1) | Prior to July 1, 1998, employees were eligible to elect an additional participant contribution to enhance their benefits and contributions made during the periods were insignificant.
The following table summarizes the amounts recognized in regulatory assets and accumulated other comprehensive income:
| Regulatory Assets |  | Accumulated Other Comprehensive Income (Loss)
| OPEB |  | OPEB
Balance at September 30, 2018 | $ | 68,685 |  |  | $ | 7,659 |
Amounts arising during the period: |  |  |
Net actuarial loss | 48,452 |  |  | 9,264 |
Amounts amortized to net periodic costs: |  |  |
Net actuarial (loss) | (5,820 | ) |  | (648 | )
Prior service credit | 312 |  |  | 53 |
Balance at September 30, 2019 | $ | 111,629 |  |  | $ | 16,328 |
Amounts arising during the period: |  |  |
Net actuarial (gain) | (40,074 | ) |  | (7,059 | )
Amounts amortized to net periodic costs: |  |  |
Net actuarial (loss) | (2,441 | ) |  | (350 | )
Prior service credit | 45 |  |  | 4 |
Balance at March 31, 2020 | $ | 69,159 |  |  | $ | 8,923 |
The amounts in regulatory assets and accumulated other comprehensive income not yet recognized as components of net periodic benefit cost were as follows:
| Regulatory Assets | Accumulated Other Comprehensive Income (Loss)
| OPEB | OPEB
(Thousands) | March 31, 2020 | September 30, 2019 | March 31, 2020 | September 30, 2019
Net actuarial loss | $ | 69,594 |  | $ | 112,109 |  | $ | 8,958 |  | $ | 16,367 |
Prior service cost (credit) | (435 | ) | (480 | ) | (35 | ) | (39 | )
Total | $ | 69,159 |  | $ | 111,629 |  | $ | 8,923 |  | $ | 16,328 |
The components of the net periodic cost for pension benefits, including the Company's Pension Equalization Plan, and OPEB costs (principally health care and life insurance) for employees and covered dependents were as follows:
| Pension | OPEB
| Three Months Ended | Six Months Ended | Three Months Ended | Six Months Ended
| March 31, | March 31, | March 31, | March 31,
(Thousands) | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019
Service cost | $ | 2,055 |  | $ | 1,846 |  | $ | 4,111 |  | $ | 3,691 |  | $ | 1,072 |  | $ | 1,101 |  | $ | 2,427 |  | $ | 2,202 |
Interest cost | 2,646 |  | 3,043 |  | 5,293 |  | 6,086 |  | 1,509 |  | 2,081 |  | 3,513 |  | 4,162 |
Expected return on plan assets | (5,232 | ) | (4,764 | ) | (10,289 | ) | (9,527 | ) | (1,695 | ) | (1,379 | ) | (3,255 | ) | (2,758 | )
Recognized actuarial loss | 2,466 |  | 1,441 |  | 5,212 |  | 2,882 |  | 930 |  | 1,616 |  | 3,721 |  | 3,233 |
Prior service cost amortization | 26 |  | 26 |  | 51 |  | 51 |  | (50 | ) | (91 | ) | (99 | ) | (182 | )
Net periodic benefit cost | $ | 1,961 |  | $ | 1,592 |  | $ | 4,378 |  | $ | 3,183 |  | $ | 1,766 |  | $ | 3,328 |  | $ | 6,307 |  | $ | 6,657 |
The Company does not expect to be required to make additional contributions to fund the pension plans during fiscal 2020 or 2021 based on current actuarial assumptions; however, funding requirements are uncertain and can depend significantly on changes in actuarial assumptions, returns on plan assets and changes in the demographics of eligible employees and covered dependents. In addition, as in the past, the Company may elect to make contributions in excess of the minimum required amount to the plans. There were no discretionary contributions made during the six months ended March 31, 2020 and 2019. There are no federal requirements to pre-fund OPEB benefits. However, the Company is required to fund certain amounts due to regulatory agreements with the BPU and estimates that it will contribute between $5 million and $10 million over each of the next five years. Additional contributions may be required based on market conditions and changes to assumptions. Assumptions The weighted average assumptions used to determine the Company’s obligations are as follows:
| OPEB
| March 31, 2020 |  | September 30, 2019 |
Obligations: |  |  |  |
Discount rate | 3.50/3.46% | (1) | 3.48/3.44% | (1)
Compensation increase | 3.25/3.50% | (1) | 3.00/3.50% | (1)
(1) | Percentages for represented and nonrepresented plans, respectively.
When measuring its projected benefit obligations, the Company uses an aggregate discount rate at which its obligation could be effectively settled. The Company determines a single weighted average discount rate based on a yield curve comprised of rates of return on a population of high quality debt issuances (AA- or better) whose cash flows (via coupons or maturities) match the timing and amount of its expected future benefit payments. The Company measures its service and interest costs using a disaggregated, or spot rate, approach. The Company applies the duration-specific spot rates from the full yield curve, as of the measurement date, to each year’s future benefit payments, which aligns the timing of the plans’ separate future cash flows to the corresponding spot rates on the yield curve.

X
- References No definition available. + Details
Name: | us-gaap_CompensationAndRetirementDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for pension and other postretirement benefits. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
Name: | us-gaap_PensionAndOtherPostretirementBenefitsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration