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Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2020

Employee benefit plans

Schedule of Pension Plan's funded status and amounts recognized in balance sheets and the components of net pension cost and accrued post-retirement liability

The following table sets forth the Pension Plan’s and post-retirement medical plan’s funded status and amounts recognized in Registrant’s balance sheets and the components of net pension cost and accrued liability at December 31, 2020 and 2019:

						Pension Benefits												Post-Retirement Medical Benefits
(dollars in thousands)						2020						2019						2020						2019
Change in Projected Benefit Obligation:
Projected benefit obligation at beginning of year						$	231,852					$	196,082					$	7,395					$	7,886
Service cost						5,558						4,441						171						186
Interest cost						7,880						8,527						208						285
Actuarial (gain) loss						35,453						29,784						(1,604)						(538)
Benefits/expenses paid						(7,957)						(6,982)						(264)						(424)
Projected benefit obligation at end of year						$	272,786					$	231,852					$	5,906					$	7,395
Changes in Plan Assets:
Fair value of plan assets at beginning of year						$	192,477					$	162,529					$	11,271					$	10,010
Actual return on plan assets						24,909						33,018						1,307						1,685
Employer contributions						3,718						3,913						269						170
Benefits/expenses paid						(7,957)						(6,983)						(534)						(594)
Fair value of plan assets at end of year						$	213,147					$	192,477					$	12,313					$	11,271
Funded Status:
Net amount recognized as accrued pension cost						$	(59,639)					$	(39,375)					$	6,407					$	3,876

The increase in the underfunded status of the pension was due primarily to a decrease in the discount rate, which decreased from 3.43% as of December 31, 2019 to 2.55% as of December 31, 2020 as noted in the following tables.

						Pension Benefits												Post-Retirement Medical Benefits
(dollars in thousands)						2020						2019						2020						2019
Amounts recognized on the balance sheets:
Non-current assets						$	—					$	—					$	6,407					$	3,876
Current liabilities						—						—						—						—
Non-current liabilities						(59,639)						(39,375)						—						—
Net amount recognized						$	(59,639)					$	(39,375)					$	6,407					$	3,876
Amounts recognized in regulatory assets consist of:
Prior service cost (credit)						$	2,757					$	3,191					$	—					$	—
Net (gain) loss						57,716						37,309						(6,855)						(5,432)
Regulatory assets (liabilities)						60,473						40,500						(6,855)						(5,432)
Unfunded accrued pension cost						(834)						(1,125)						448						1,556
Net liability (asset) recognized						$	59,639					$	39,375					$	(6,407)					$	(3,876)
Changes in plan assets and benefit obligations recognized in regulatory assets:
Regulatory asset at beginning of year						$	40,500					$	35,213					$	(5,432)					$	(4,459)
Net loss (gain)						22,343						7,140						(2,400)						(1,775)
New prior service cost						—						—						—						—
Amortization of prior service (cost) credit						(435)						(434)						—						—
Amortization of net gain (loss)						(1,935)						(1,419)						977						802
Total change in regulatory asset						19,973						5,287						(1,423)						(973)
Regulatory asset (liability) at end of year						$	60,473					$	40,500					$	(6,855)					$	(5,432)
Net periodic pension costs						$	4,010					$	4,447					$	(1,108)					$	(779)
Change in regulatory asset						19,973						5,287						(1,423)						(973)
Total recognized in net periodic pension cost and regulatory asset (liability)						$	23,983					$	9,734					$	(2,531)					$	(1,752)
Additional year-end information for plans with an accumulated benefit obligation in excess of plan assets:
Projected benefit obligation						$	272,786					$	231,852					$	5,906					$	7,395
Accumulated benefit obligation						$	253,108					$	215,996					N/A						N/A
Fair value of plan assets						$	213,147					$	192,477					$	12,313					$	11,271
Weighted-average assumptions used to determine benefit obligations at December 31:
Discount rate						2.55		%				3.43		%				2.20		%				3.12		%
Rate of compensation increase						*						*						N/A						N/A

•Age-graded ranging from 3.0% to 8.0%.

Schedule of components of net periodic pension and post-retirement benefits cost, before allocation to the overhead pool

The components of net periodic pension and post-retirement benefits cost, before allocation to the overhead pool, for 2020, 2019 and 2018 are as follows:

						Pension Benefits																		Post-Retirement  Medical Benefits
(dollars in thousands, except percent)						2020						2019						2018						2020						2019						2018
Components of Net Periodic Benefits Cost:
Service cost						$	5,558					$	4,441					$	5,342					$	171					$	186					$	218
Interest cost						7,880						8,527						7,646						208						285						292
Expected return on plan assets						(11,798)						(10,374)						(11,172)						(510)						(449)						(493)
Amortization of prior service cost (credit)						435						434						—												—						—
Amortization of actuarial (gain) loss						1,935						1,419						1,254						(977)						(801)						(769)
Net periodic pension cost under accounting standards						$	4,010					$	4,447					$	3,070					$	(1,108)					$	(779)					$	(752)
Regulatory adjustment						(483)						(593)						—						—						—						—
Total expense recognized, before surcharges and allocation to overhead pool						$	3,527					$	3,854					$	3,070					$	(1,108)					$	(779)					$	(752)
Weighted-average assumptions used to determine net periodic cost:
Discount rate						3.43		%				4.43		%				3.76		%				3.12		%				4.20		%				3.52		%
Expected long-term return on plan assets						6.25		%				6.50		%				6.50		%				*						*						*
Rate of compensation increase						**						**						**						N/A						N/A						N/A

*6.0% for union plan and 4.2% for non-union (net of income taxes) in 2020, 2019 and 2018.

 ** Age-graded ranging from 3.0% to 8.0%.

Schedule of actual allocation of plan assets

The Committee approves the target asset allocations.  Registrant’s pension and post-retirement plan weighted-average asset allocations at December 31, 2020 and 2019, by asset category are as follows:

						Pension Benefits												Post-Retirement Medical Benefits
Asset Category						2020						2019						2020						2019
Actual Asset Allocations:
Equity securities						59		%				56		%				63		%				61		%
Debt securities						36		%				39		%				36		%				38		%
Real Estate Funds						5		%				5		%				—		%				—		%
Cash equivalents						—		%				—		%				1		%				1		%
Total						100		%				100		%				100		%				100		%

Schedule of pension and post-retirement plan target asset allocations

Equity securities did not include AWR’s Common Shares as of December 31, 2020 and 2019.

Target Asset Allocations:						Pension Benefits						Post-retirement Medical Benefits
Equity securities						60		%				60		%
Debt securities						40		%				40		%
Total						100		%				100		%

Summary of fair value, measured by net asset value, of the pension investment assets

The following tables set forth the fair value, measured by net asset value, of the pension investment assets as of December 31, 2020 and 2019:

						Net Asset Value as of December 31, 2020
(dollars in thousands)						Fair Value						Unfunded Commitments						Redemption Frequency						Redemption Notice Period
Cash equivalents						$	589					—						N/A						N/A
Fixed income fund						$	76,221					—						Daily						Daily
Equity securities:
U.S. small/mid cap funds						21,837						—						Daily						Daily
U.S. large cap funds						53,677						—						Daily						Daily
International funds						50,488						—						Daily						Daily
Total equity funds						126,002						—
Real estate funds						10,335						—						Daily						Daily
Total						$	213,147					—

Net Asset Value as of December 31, 2019

(dollars in thousands)

Fair Value

Unfunded Commitments

Redemption Frequency

Redemption Notice Period

Cash equivalents

$

600

—

N/A

N/A

Fixed income fund

74,123

—

Daily

Daily

Equity securities:

U.S. small/mid cap funds

17,865

—

Daily

Daily

U.S. large cap funds

47,132

—

Daily

Daily

International funds

43,778

—

Daily

Daily

Total equity funds

108,775

Real estate funds

8,979

—

Daily

Daily

Total

$

192,477

—

Schedule of pension and post-retirement plans' investment assets measured at fair value

The following tables set forth by level, within the fair value hierarchy, the post-retirement plan's investment assets measured at fair value as of December 31, 2020 and 2019:

						Fair Value as of December 31, 2020
(dollars in thousands)						Level 1						Level 2						Level 3						Total
Fair Value of Post-Retirement Plan Assets:
Cash equivalents						$	169					—						—						$	169
Fixed income						4,436						—						—						4,436
U.S. equity securities						7,707						—						—						7,707
Total investments measured at fair value						$	12,312					—						—						$	12,312

						Fair Value as of December 31, 2019
(dollars in thousands)						Level 1						Level 2						Level 3						Total
Fair Value of Post-Retirement Plan Assets:
Cash equivalents						$	69					—						—						$	69
Fixed income						4,279						—						—						4,279
U.S. equity securities						6,923						—						—						6,923
Total investments measured at fair value						$	11,271					—						—						$	11,271

Schedule of estimated future benefit payments

Estimated future benefit payments at December 31, 2020 for the next five years and thereafter are as follows (in thousands):

			Pension Benefits						Post-Retirement  Medical Benefits
2021			$	8,572					$	486
2022			9,262						503
2023			9,880						516
2024			10,494						489
2025			11,142						476
Thereafter			63,680						1,813
Total			$	113,030					$	4,283

SERP

Employee benefit plans

Schedule of Pension Plan's funded status and amounts recognized in balance sheets and the components of net pension cost and accrued post-retirement liability

The following provides a reconciliation of benefit obligations, funded status of the SERP, as well as a summary of significant estimates at December 31, 2020 and 2019:

(dollars in thousands)						2020						2019
Change in Benefit Obligation:
Benefit obligation at beginning of year						$	29,703					$	24,517
Service cost						1,029						1,193
Interest cost						988						1,069
Actuarial (gain) loss						5,479						3,419
Benefits paid						(597)						(495)
Benefit obligation at end of year						$	36,602					$	29,703
Changes in Plan Assets:
Fair value of plan assets at beginning and end of year						—						—
Funded Status:
Net amount recognized as accrued cost						$	(36,602)					$	(29,703)

(in thousands)						2020						2019
Amounts recognized on the balance sheets:
Current liabilities						$	(602)					$	(609)
Non-current liabilities						(36,000)						(29,094)
Net amount recognized						$	(36,602)					$	(29,703)
Amounts recognized in regulatory assets consist of:
Prior service cost						$	—					$	—
Net loss						12,988						8,352
Regulatory assets						12,988						8,352
Unfunded accrued cost						23,614						21,351
Net liability recognized						$	36,602					$	29,703
Changes in plan assets and benefit obligations recognized in regulatory assets consist of:
Regulatory asset at beginning of year						$	8,352					$	5,403
Net (gain) loss						5,479						3,419
Amortization of prior service credit						—						—
Amortization of net loss						(843)						(470)
Total change in regulatory asset						4,636						2,949
Regulatory asset at end of year						$	12,988					$	8,352
Net periodic pension cost						$	2,860					$	2,733
Change in regulatory asset						4,636						2,949
Total recognized in net periodic pension and regulatory asset						$	7,496					$	5,682
Additional year-end information for plans with an accumulated benefit obligation in excess of plan assets:
Projected benefit obligation						$	36,602					$	29,703
Accumulated benefit obligation						30,428						26,251
Fair value of plan assets						—						—
Weighted-average assumptions used to determine benefit obligations:
Discount rate						2.52		%				3.36		%
Rate of compensation increase						4.00		%				4.00		%

Schedule of components of net periodic pension and post-retirement benefits cost, before allocation to the overhead pool

The components of SERP expense, before allocation to the overhead pool, for 2020, 2019 and 2018 are as follows:

(dollars in thousands, except percent)						2020						2019						2018
Components of Net Periodic Benefits Cost:
Service cost						$	1,029					$	1,193					$	1,096
Interest cost						988						1,069						888
Amortization of prior service cost						—						—						—
Amortization of net loss						843						471						1,049
Net periodic pension cost						$	2,860					$	2,733					$	3,033
Weighted-average assumptions used to determine net periodic cost:
Discount rate						3.36		%				4.40		%				3.72		%
Rate of compensation increase						4.00		%				4.00		%				4.00		%

Schedule of pension and post-retirement plans' investment assets measured at fair value

The following tables set forth by level, within the fair value hierarchy, the Rabbi Trust investment assets measured at fair value as of December 31, 2020 and 2019:

						Fair Value as of December 31, 2020
(dollars in thousands)						Level 1						Level 2						Level 3						Total
Fair Value of Assets held in Rabbi Trust:
Cash equivalents						$	8					—						—						$	8
Fixed income securities						10,201						—						—						10,201
Equity securities						15,703						—						—						15,703
Total investments measured at fair value						$	25,912					—						—						$	25,912

						Fair Value as of December 31, 2019
(dollars in thousands)						Level 1						Level 2						Level 3						Total
Fair Value of Assets held in Rabbi Trust:
Cash equivalents						$	72					—						—						$	72
Fixed income securities						8,427						—						—						8,427
Equity securities						13,054						—						—						13,054
Total investments measured at fair value						$	21,553					—						—						$	21,553

Schedule of estimated future benefit payments

Estimated future benefit payments for the SERP at December 31, 2020 for the next five years and thereafter are as follows (in thousands):

2021			$	602
2022			792
2023			787
2024			1,039
2025			1,029
Thereafter			11,937
Total			$	16,186

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