XML 43 R32.htm IDEA: XBRL DOCUMENT v3.22.0.1
EMPLOYEE BENEFITS PLANS (Tables)
 12 Months Ended
Dec. 31, 2021
Retirement Benefits [Abstract]  
Schedule of pension and other postretirement benefit amounts The following table presents pension and other postretirement benefit amounts (excluding tax balances) included on the balance sheet:
Pension BenefitsOther Postretirement Benefits
December 31,
(in millions)2021202020212020
Regulatory Assets$126 $150 $2 $16 
Accrued Employee Expenses(1)(1)(3)(3)
Pension and Other Postretirement Benefits(61)(91)(59)(72)
Accumulated Other Comprehensive Loss, SERP13 14 — — 
Net Amount Recognized$77 $72 $(60)$(59)
Schedule of changes in funded status
All plans had projected benefit obligations in excess of the fair value of plan assets for each period presented:
Pension BenefitsOther Postretirement Benefits
Years Ended December 31,
(in millions)2021202020212020
Change in Benefit Obligation
Beginning of Period$606 $525 $99 $79 
Actuarial (Gain) Loss(6)76 (12)18 
Interest Cost14 16 2 3 
Service Cost20 16 6 4 
Benefits Paid(34)(27)(5)(5)
End of Period600 606 90 99 
Change in Fair Value of Plan Assets
Beginning of Period514 446 24 21 
Actual Return on Plan Assets43 78 3 3 
Benefits Paid(32)(26)(2)(5)
Employer Contributions (1)
13 16 3 5 
End of Period (2)
538 514 28 24 
Funded Status at End of Period$(62)$(92)$(62)$(75)
(1)TEP expects to contribute $11 million to the pension plans and less than $1 million to the VEBA trust in 2022.
(2)The increase in pension benefit plan assets was primarily due to positive equity returns.
Schedule of net periodic benefit cost not yet recognized The following table provides the components of TEP’s regulatory assets and accumulated other comprehensive loss that have not been recognized as components of net periodic benefit cost as of the dates presented:
Pension BenefitsOther Postretirement Benefits
Years Ended December 31,
(in millions)2021202020212020
Net Loss $139 $164 $4 $18 
Prior Service Cost (Benefit)— 1 (2)(2)
Schedule of information for the pension plans with accumulated benefit obligations in excess of pension plan The following table includes information for the pension plans with accumulated benefit obligations in excess of pension plan assets:
December 31,
(in millions)20212020
Accumulated Benefit Obligation $26 $545 
Fair Value of Plan Assets — 514 
Components of net periodic benefit plan cost Net periodic benefit plan cost includes the following components:
Pension BenefitsOther Postretirement Benefits
Years Ended December 31,
(in millions)202120202019202120202019
Service Cost$20 $16 $13 $6 $4 $4 
Non-Service Cost
Interest Cost14 16 18 2 3 3 
Expected Return on Plan Assets(34)(30)(26)(2)(2)(2)
Amortization of Net (Gain) Loss 9 8 8 1 — — 
Net Periodic Benefit Cost$9 $10 $13 $7 $5 $5 
Schedule of the changes in plan assets and benefit obligations recognized as regulatory assets or in AOCI The changes in plan assets and benefit obligations recognized as regulatory assets or in AOCI were as follows:
Pension BenefitsOther Postretirement Benefits
Regulatory AssetAOCIRegulatory Asset
(in millions)202120202019202120202019202120202019
Current Year Actuarial (Gain) Loss$(16)$23 $16 $— $5 $4 $(13)$17 $1 
Amortization of Net Loss(8)(8)(8)(1)(1)(1)(1)— — 
Prior Service (Credit) Cost— — — — — 1 — — — 
Total Recognized (Gain) Loss$(24)$15 $8 $(1)$4 $4 $(14)$17 $1 
Schedule of weighted average assumptions used to determine benefit obligations The following table includes the weighted average assumptions used to determine benefit obligations:
Pension BenefitsOther Postretirement Benefits
2021202020212020
Discount Rate3.2%2.9%3.0%2.6%
Rate of Compensation Increase2.8%2.8%N/AN/A
Schedule of weighted average assumptions used to determine net periodic benefit costs The following table includes the weighted average assumptions used to determine net periodic benefit costs:
Pension BenefitsOther Postretirement Benefits
202120202019202120202019
Discount Rate, Service Cost3.3%3.8%4.7%2.9%3.5%4.5%
Discount Rate, Interest Cost2.3%3.1%4.2%1.9%2.9%4.0%
Rate of Compensation Increase2.8%2.8%2.8%N/AN/AN/A
Expected Return on Plan Assets6.8%6.8%7.0%7.0%7.0%7.0%
Schedule of healthcare cost trend rates Healthcare cost trend rates are assumed to decrease gradually from Next Year to the year the ultimate rate is reached:
December 31,
20212020
Next Year (Pre-65)6.5%6.1%
Next Year (Post-65)5.5%7.1%
Ultimate Rate Assumed (Pre-65 and Post-65)4.5%4.5%
Year Ultimate Rate is Reached (Pre-65)20312037
Year Ultimate Rate is Reached (Post-65)20272037
Schedule of asset allocations, by asset category, on the measurement date Asset allocations, by asset category, on the measurement date were as follows:
PensionOther Postretirement Benefits
2021202020212020
Asset Category
Equity Securities54 %47 %63 %63 %
Fixed Income Securities40 %45 %35 %35 %
Real Estate5 %7 %— %— %
Other1 %1 %2 %2 %
Total100 %100 %100 %100 %
Schedule of fair value measurements of pension plan assets by level The following tables present the fair value measurements of pension plan assets by level within the fair value hierarchy:
Level 1Level 2Level 3Total
(in millions)December 31, 2021
Asset Category
Cash Equivalents$2 $— $— $2 
Equity Securities:
United States Large Cap— 77 — 77 
United States Small Cap— 28 — 28 
Non-United States— 105 — 105 
Global— 83 — 83 
Fixed Income— 213 — 213 
Real Estate— — 26 26 
Private Equity— — 4 4 
Total$2 $506 $30 $538 
(in millions)December 31, 2020
Asset Category
Equity Securities:
United States Large Cap$— $65 $— $65 
United States Small Cap— 25 — 25 
Non-United States— 95 — 95 
Global— 59 — 59 
Fixed Income— 231 — 231 
Real Estate— 12 23 35 
Private Equity— — 4 4 
Total$— $487 $27 $514 
•Level 1 cash equivalents are based on observable market prices and are comprised of the fair value of commercial paper, money market funds, and certificates of deposit.
•Level 2 investments comprise amounts held in commingled equity funds, United States bond funds, and real estate funds. Valuations are based on active market quoted prices for assets held by each respective fund.
•Level 3 real estate investments values are generally determined by appraisals conducted in accordance with accepted appraisal guidelines, including consideration of projected income and expenses of the property as well as recent sales of similar properties.
•Level 3 private equity funds are classified as funds-of-funds. They are valued based on individual fund manager valuation models.
Schedule of reconciliation of changes in the fair value of pension plan assets classified as Level 3 in the fair value hierarchy The following table presents a reconciliation of changes in the fair value of pension plan assets classified as Level 3 in the fair value hierarchy. There were no transfers in or out of Level 3.
(in millions)Private EquityReal EstateTotal
Balance as of December 31, 2019$5 $23 $28 
Actual Return on Plan Assets:
Assets Held at Reporting Date— — — 
Purchases, Sales, and Settlements(1)— (1)
Balance as of December 31, 20204 23 27 
Actual Return on Plan Assets:
Assets Held at Reporting Date2 3 5 
Purchases, Sales, and Settlements(2)— (2)
Balance as of December 31, 2021$4 $26 $30 
Schedule of target allocation percentages for the major asset categories of the plan The current target allocation percentages for the major asset categories of the plan follow. Each plan allows a variance of +/- 2% from targets before funds are automatically rebalanced:
PensionOther Postretirement Benefits
December 31, 2021
Cash/Treasury Bills—%2%
Equity Securities:
United States Large Cap13%39%
United States Small Cap5%5%
Non-United States Developed—%7%
Non-United States Emerging—%9%
Global Equity32%—%
Global Infrastructure3%—%
Fixed Income40%38%
Real Estate6%—%
Private Equity1%—%
Total100%100%
Schedule of expected benefit payments TEP expects the following benefit payments to be made by the plans, which reflect future service, as appropriate:
(in millions)202220232024202520262027-2031
Pension Benefits$28 $29 $29 $29 $30 $158 
Other Postretirement Benefits5 5 5 6 5 26