Defined Benefit Plan

3 Months Ended

Mar. 31, 2020

Defined Benefit Plan

SJW Group maintains noncontributory defined benefit pension plans for its eligible employees. SJWC and CTWS employees hired before March 31, 2008, and January 1, 2009, respectively, are entitled to benefits under the pension plans based on the employee’s years of service and compensation. Certain employees hired before March 1, 2012, and covered by a plan merged into the CTWS plan in 2013 are also entitled to benefit based on the employee’s years of service and compensation. For SJWC employees hired on or after March 31, 2008, benefits are determined using a cash balance formula based upon compensation credits and interest credits for each employee. CTWS employees hired on or after January 1, 2009, are entitled to an additional 1.5% of eligible compensation to their company sponsored savings plan. SJW Group does not have multi-employer plans.

In addition, senior management hired before March 31, 2008, for SJWC and January 1, 2009, for CTWS are eligible to receive additional retirement benefits under the supplemental executive retirement plans and retirement contracts. SJWC’s senior management hired on or after March 31, 2008, are eligible to receive additional retirement benefits under SJWC’s Cash Balance Executive Supplemental Retirement Plan. Both of the plans are non-qualified plans in which only senior management and other designated members of management may participate. SJW Group also provides health care and life insurance benefits for retired employees under employer-sponsored postretirement benefits other than pension plans.

The components of net periodic benefit costs for the defined benefit plans and other postretirement benefits for the three months ended March 31, 2020, and 2019 are as follows:



	Three months ended March 31,
	2020			2019
Service cost	$	2,443		1,479
Interest cost	2,904			2,112
Other cost	1,499			1,118
Expected return on assets	(4,120		)	(2,309	)
	$	2,726		2,400

The following tables summarize the fair values of plan assets by major categories as of March 31, 2020, and December 31, 2019:



	Fair Value Measurements at March 31, 2020
			Quoted Prices in Active Markets for Identical Assets		Significant Observable Inputs		Significant Unobservable Inputs
Asset Category	Total		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	6,115	$	6,115	$	—	$	—
Equity securities (a)	122,326		116,326		6,000		—
Fixed income (b)	92,218		28,516		63,702		—
Total	$	220,659	$	150,957	$	69,702	$	—

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(a)	Actively managed portfolio of equity securities with the goal to exceed the benchmark performance


(b)	Actively managed portfolio of fixed income securities with the goal to exceed the benchmark performance



	Fair Value Measurements at December 31, 2019
			Quoted Prices in Active Markets for Identical Assets		Significant Observable Inputs		Significant Unobservable Inputs
Asset Category	Total		(Level 1)		(Level 2)		(Level 3)
Cash and cash equivalents	$	11,801	$	11,801	$	—	$	—
Equity securities (a)	157,050		149,265		7,785		—
Fixed income (b)	91,896		31,686		60,210		—
Total	$	260,747	$	192,752	$	67,995	$	—

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(a)	Actively managed portfolio of equity securities with the goal to exceed the benchmark performance


(b)	Actively managed portfolio of fixed income securities with the goal to exceed the benchmark performance

In 2020, SJW Group expects to make required and discretionary cash contributions of up to $9,238 to the pension plans and Social Welfare Plan. For the three months ended March 31, 2020, SJW Group has made no contributions to such plans.