PG&E 2009 Annual Report Download - page 97

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NOTE 13: EMPLOYEE
COMPENSATION PLANS
PENSION AND OTHER
POSTRETIREMENT BENEFITS
PG&E Corporation and the Utility provide a
non-contributory defined benefit pension plan for eligible
employees and retirees, referred to collectively as “pension
benefits.” PG&E Corporation and the Utility also provide
contributory postretirement medical plans for eligible
employees and retirees and their eligible dependents, and
non-contributory postretirement life insurance plans for
eligible employees and retirees (referred to collectively as
“other benefits”). PG&E Corporation and the Utility have
elected that certain of the trusts underlying these plans be
treated under the Code as qualified trusts. If certain
conditions are met, PG&E Corporation and the Utility can
deduct payments made to the qualified trusts, subject to
certain Code limitations. The following schedules aggregate
all of PG&E Corporation’s and the Utility’s plans and are
presented based on the sponsor of each plan. PG&E
Corporation and the Utility use a December 31
measurement date for all plans.
Regulatory adjustments are recorded in the Consolidated
Statements of Income and Consolidated Balance Sheets to
reflect the difference between pension expense or income for
accounting purposes and pension expense or income for
ratemaking, which is based on a funding approach. A
regulatory adjustment is also recorded for the amounts that
would otherwise be charged to accumulated other
comprehensive income for the pension benefits related to
the Utility’s qualified benefit pension plan.
The Utility would record a regulatory liability for a
portion of the credit balance in accumulated other
comprehensive income, should the other benefits be in an
overfunded position. However, this recovery mechanism
does not allow the Utility to record a regulatory asset for an
underfunded position related to other benefits. Therefore,
the charge remains in accumulated other comprehensive
income (loss) for other benefits.
BENEFIT OBLIGATIONS
The following tables reconcile changes in aggregate projected benefit obligations for pension benefits and changes in the
benefit obligation of other benefits during 2009 and 2008:
Pension Benefits
PG&E Corporation Utility
(in millions) 2009 2008 2009 2008
Projected benefit obligation at January 1 $ 9,767 $9,081 $ 9,717 $9,036
Service cost for benefits earned 227 236 223 234
Interest cost 624 581 621 578
Actuarial (gain) loss 494 258 490 255
Plan amendments 71 271 3
Transitional costs 3—3—
Benefits and expenses paid (420) (391) (417) (389)
Projected benefit obligation at December 31 $10,766 $9,767 $10,708 $9,717
Accumulated benefit obligation $ 9,527 $8,601 $ 9,479 $8,559
Other Benefits
PG&E Corporation Utility
(in millions) 2009 2008 2009 2008
Benefit obligation at January 1 $1,382 $1,311 $1,382 $1,311
Service cost for benefits earned 30 29 30 29
Interest cost 87 81 87 81
Actuarial (gain) loss 72 22 72 22
Plan amendments ————
Transitional costs 11
Gross benefits paid (106) (101) (106) (101)
Federal subsidy on benefits paid 4444
Plan participant contributions 41 36 41 36
Benefit obligation at December 31 $1,511 $1,382 $1,511 $1,382
93