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Employee Benefit Plans (Tables)
 12 Months Ended
Dec. 31, 2013
Schedule of Assets by Investment Type
The following schedule summarizes the assets of the Chesapeake Pension Plan and the FPU Pension Plan, by investment type, at December 31, 2013, 2012 and 2011:
 
Chesapeake
Pension Plan
 
FPU
Pension Plan
At December 31,
2013
 
2012
 
2011
 
2013
 
2012
 
2011
Asset Category
 
 
 
 
 
 
 
 
 
 
 
Equity securities
54.40
%
 
52.07
%
 
51.75
%
 
55.02
%
 
52.81
%
 
51.98
%
Debt securities
36.54
%
 
38.00
%
 
37.88
%
 
36.54
%
 
38.04
%
 
38.05
%
Other
9.06
%
 
9.93
%
 
10.37
%
 
8.44
%
 
9.15
%
 
9.97
%
Total
100.00
%
 
100.00
%
 
100.00
%
 
100.00
%
 
100.00
%
 
100.00
%
Schedule of Asset Allocation Strategy
The following allocation range of asset classes is intended to produce a rate of return sufficient to meet the Plans’ goals and objectives:
Asset Allocation Strategy
Asset Class
Minimum
Allocation
Percentage
 
Maximum
Allocation
Percentage
Domestic Equities (Large Cap, Mid Cap and Small Cap)
14
%
 
32
%
Foreign Equities (Developed and Emerging Markets)
13
%
 
25
%
Fixed Income (Inflation Bond and Taxable Fixed)
26
%
 
40
%
Alternative Strategies (Long/Short Equity and Hedge Fund of Funds)
6
%
 
14
%
Diversifying Assets (High Yield Fixed Income, Commodities, and Real Estate)
7
%
 
19
%
Cash
0
%
 
5
%
Summary of Pension Plan Assets
At December 31, 2013, the assets of the Chesapeake Pension Plan and the FPU Pension Plan were comprised of the following investments:
 
Fair Value Measurement Hierarchy
 
 
Asset Category
Level 1
 
Level 2
 
Level 3
 
Total
(in thousands)
 
 
 
 
 
 
 
Equity securities
 
 
 
 
 
 
 
U.S. Large Cap (1)
$
3,964

 
$
4,118

 
$
—

 
$
8,082

U.S. Mid Cap (1)
—

 
3,412

 
—

 
3,412

U.S. Small Cap (1)
—

 
1,736

 
—

 
1,736

International (2)
10,687

 
—

 
—

 
10,687

Alternative Strategies (3)
5,235

 
—

 
—

 
5,235

 
19,886

 
9,266

 
—

 
29,152

Debt securities
 
 
 
 
 
 
 
Inflation Protected (4)
2,462

 
—

 
—

 
2,462

Fixed income (5)
—

 
14,305

 
—

 
14,305

High Yield (5)
—

 
2,629

 
—

 
2,629

 
2,462

 
16,934

 
—

 
19,396

Other
 
 
 
 
 
 
 
Commodities (6)
1,939

 
—

 
—

 
1,939

Real Estate (7)
1,991

 
—

 
—

 
1,991

Guaranteed deposit (8)
—

 
—

 
602

 
602

 
3,930

 
—

 
602

 
4,532

Total Pension Plan Assets
$
26,278

 
$
26,200

 
$
602

 
$
53,080

(1) 
Includes funds that invest primarily in United States common stocks.
(2) 
Includes funds that invest primarily in foreign equities and emerging markets equities.
(3) 
Includes funds that actively invest in both equity and debt securities, funds that sell short securities and funds that provide long-term capital appreciation. The funds may invest in debt securities below investment grade.
(4) 
Includes funds that invest primarily in inflation-indexed bonds issued by the U.S. government.
(5) 
Includes funds that invest in investment grade and fixed income securities.
(6) 
Includes funds that invest primarily in commodity-linked derivative instruments and fixed income securities.
(7) 
Includes funds that invest primarily in real estate.
(8) 
Includes investment in a group annuity product issued by an insurance company.
At December 31, 2012, the assets of the Chesapeake Pension Plan and the FPU Pension Plan were comprised of the following investments:

 
Fair Value Measurement Hierarchy
 
 
Asset Category
Level 1
 
Level 2
 
Level 3
 
Total
(in thousands)
 
 
 
 
 
 
 
Equity securities
 
 
 
 
 
 
 
U.S. Large Cap (1)
$
3,504

 
$
3,443

 
$
—

 
$
6,947

U.S. Mid Cap (1)
—

 
3,078

 
—

 
3,078

U.S. Small Cap (1)
—

 
1,523

 
—

 
1,523

International (2)
10,019

 
—

 
—

 
10,019

Alternative Strategies (3)
4,978

 
—

 
—

 
4,978

 
18,501

 
8,044

 
—

 
26,545

Debt securities
 
 
 
 
 
 
 
Inflation Protected (4)
2,507

 
—

 
—

 
2,507

Fixed income (5)
—

 
14,109

 
—

 
14,109

High Yield (5)
—

 
2,547

 
—

 
2,547

 
2,507

 
16,656

 
—

 
19,163

Other
 
 
 
 
 
 
 
Commodities (6)
1,918

 
—

 
—

 
1,918

Real Estate (7)
2,048

 
—

 
—

 
2,048

Guaranteed deposit (8)
—

 
—

 
710

 
710

 
3,966

 
—

 
710

 
4,676

Total Pension Plan Assets
$
24,974

 
$
24,700

 
$
710

 
$
50,384

(1) 
Includes funds that invest primarily in United States common stocks.
(2) 
Includes funds that invest primarily in foreign equities and emerging markets equities.
(3) 
Includes funds that actively invest in both equity and debt securities, funds that sell short securities and funds that provide long-term capital appreciation. The funds may invest in debt securities below investment grade.
(4) 
Includes funds that invest primarily in inflation-indexed bonds issued by the U.S. government.
(5) 
Includes funds that invest in investment grade and fixed income securities.
(6) 
Includes funds that invest primarily in commodity-linked derivative instruments and fixed income securities.
(7) 
Includes funds that invest primarily in real estate.
(8) 
Includes investment in a group annuity product issued by an insurance company.
Schedule of Level Three Defined Benefit Plan Assets Roll Forward
The following table sets forth the summary of the changes in the fair value of Level 3 investments for the years ended December 31, 2013 and 2012:

 
For the Year Ended December 31,
 
2013
 
2012
(in thousands)
 
 
 
Balance, beginning of year
$
710

 
$
897

Purchases
618

 
79

Transfers in
3,175

 
3,620

Disbursements
(3,966
)
 
(3,902
)
Investment income
65

 
16

Balance, end of year
$
602

 
$
710
Schedule of Amounts Not Yet Reflected in Net Periodic Benefit Cost and Included in Accumulated Other Comprehensive Income Loss or Regulatory Assets
The following table presents the amounts not yet reflected in net periodic benefit cost and included in accumulated other comprehensive income/loss or as a regulatory asset as of December 31, 2013:
(in thousands)
Chesapeake
Pension
Plan
 
FPU
Pension
Plan
 
Chesapeake
SERP
 
Chesapeake
Postretirement
Plan
 
FPU
Medical
Plan
 
Total
Prior service cost (credit)
$
—

 
$
—

 
$
28

 
$
(909
)
 
$
—

 
$
(881
)
Net loss
2,483

 
5,298

 
659

 
972

 
(142
)
 
9,270

Total
$
2,483

 
$
5,298

 
$
687

 
$
63

 
$
(142
)
 
$
8,389

Accumulated other comprehensive loss pre-tax(1)
$
2,483

 
$
1,007

 
$
687

 
$
63

 
$
(27
)
 
$
4,213

Post-merger regulatory asset
—

 
4,291

 
—

 
—

 
(115
)
 
4,176

Subtotal
2,483

 
5,298

 
687

 
63

 
(142
)
 
8,389

Pre-merger regulatory asset
—

 
4,348

 
—

 
—

 
54

 
4,402

Total unrecognized cost
$
2,483

 
$
9,646

 
$
687

 
$
63

 
$
(88
)
 
$
12,791

(1) 
The total amount of accumulated other comprehensive loss recorded on our consolidated balance sheet as of December 31, 2013 is net of income tax benefits of $1.7 million.
Amounts in Accumulated Other Comprehensive Income/Loss and Regulatory Asset
The amounts in accumulated other comprehensive income/loss and recorded as a regulatory asset for our pension and postretirement benefits plans that are expected to be recognized as a component of net benefit cost in 2014 are set forth in the following table:
(in thousands)
Chesapeake
Pension
Plan
 
FPU
Pension
Plan
 
Chesapeake
SERP
 
Chesapeake
Postretirement
Plan
 
FPU
Medical
Plan
 
Total
Prior service cost (credit)
$
—

 
$
—

 
$
19

 
$
(77
)
 
$
—

 
$
(58
)
Net loss
$
149

 
$
—

 
$
48

 
$
67

 
$
—

 
$
264

Amortization of pre-merger regulatory asset
$
—

 
$
761

 
$
—

 
$
—

 
$
8

 
$
769
Schedule of Estimated Future Benefit Payments
The schedule below shows the estimated future benefit payments for each of the plans previously described:
 
Chesapeake
Pension
Plan(1)
 
FPU
Pension
Plan(1)
 
Chesapeake
SERP(2)
 
Chesapeake
Postretirement
Plan(2)
 
FPU
Medical
Plan(2)
(in thousands)
 
 
 
 
 
 
 
 
 
2014
$
494

 
$
2,814

 
$
88

 
$
95

 
$
245

2015
$
622

 
$
2,886

 
$
138

 
$
97

 
$
223

2016
$
572

 
$
2,946

 
$
146

 
$
98

 
$
203

2017
$
1,071

 
$
2,988

 
$
143

 
$
96

 
$
166

2018
$
634

 
$
3,048

 
$
140

 
$
95

 
$
133

Years 2019 through 2023
$
3,984

 
$
16,362

 
$
890

 
$
436

 
$
393

(1) 
The pension plan is funded; therefore, benefit payments are expected to be paid out of the plan assets.
(2) 
Benefit payments are expected to be paid out of our general funds.
Pension Plans, Defined Benefit
  
Component of Net Periodic Pension Cost (Benefit)
 
Chesapeake
Pension Plan
 
FPU
Pension Plan
For the Years Ended December 31,
2013
 
2012
 
2011
 
2013
 
2012
 
2011
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
Components of net periodic pension cost:
 
 
 
 
 
 
 
 
 
 
 
Interest cost
$
405

 
$
458

 
$
520

 
$
2,367

 
$
2,577

 
$
2,695

Expected return on assets
(486
)
 
(418
)
 
(424
)
 
(2,866
)
 
(2,627
)
 
(2,783
)
Amortization of prior service cost
(1
)
 
(5
)
 
(5
)
 
—

 
—

 
—

Amortization of actuarial loss
322

 
255

 
156

 
330

 
196

 
—

Net periodic pension cost
240

 
290

 
247

 
(169
)
 
146

 
(88
)
Settlement expense
—

 
—

 
217

 
—

 
—

 
—

Amortization of pre-merger regulatory asset
—

 
—

 
—

 
761

 
761

 
761

Total periodic cost
$
240

 
$
290

 
$
464

 
$
592

 
$
907

 
$
673

Assumptions:
 
 
 
 
 
 
 
 
 
 
 
Discount rate
3.50
%
 
4.25
%
 
5.00
%
 
3.75
%
 
4.50
%
 
5.25
%
Expected return on plan assets
6.00
%
 
6.00
%
 
6.00
%
 
7.00
%
 
7.00
%
 
7.00
%
Schedule of Funded Status of Benefit Obligation and Plan Assets
The following schedule sets forth the funded status at December 31, 2013 and 2012 and the net periodic cost for the years ended December 31, 2013, 2012 and 2011 for the Chesapeake and FPU Pension Plans:

 
Chesapeake
Pension Plan
 
FPU
Pension Plan
At December 31,
2013
 
2012
 
2013
 
2012
(in thousands)
 
 
 
 
 
 
 
Change in benefit obligation:
 
 
 
 
 
 
 
Benefit obligation — beginning of year
$
11,933

 
$
11,672

 
$
64,512

 
$
57,999

Interest cost
405

 
458

 
2,367

 
2,577

Actuarial loss (gain)
(1,092
)
 
726

 
(8,007
)
 
6,915

Benefits paid
(978
)
 
(923
)
 
(2,996
)
 
(2,979
)
Benefit obligation — end of year
10,268

 
11,933

 
55,876

 
64,512

Change in plan assets:
 
 
 
 
 
 
 
Fair value of plan assets — beginning of year
8,430

 
7,162

 
41,954

 
37,836

Actual return on plan assets
967

 
849

 
4,747

 
4,526

Employer contributions
324

 
1,342

 
632

 
2,571

Benefits paid
(978
)
 
(923
)
 
(2,996
)
 
(2,979
)
Fair value of plan assets — end of year
8,743

 
8,430

 
44,337

 
41,954

Reconciliation:
 
 
 
 
 
 
 
Funded status
(1,525
)
 
(3,503
)
 
(11,539
)
 
(22,558
)
Accrued pension cost
$
(1,525
)
 
$
(3,503
)
 
$
(11,539
)
 
$
(22,558
)
Assumptions:
 
 
 
 
 
 
 
Discount rate
4.25
%
 
3.50
%
 
4.75
%
 
3.75
%
Expected return on plan assets
6.00
%
 
6.00
%
 
7.00
%
 
7.00
%
Rabbi trust (associated with Supplemental Executive Retirement Savings Plan)
  
Component of Net Periodic Pension Cost (Benefit)
For the Years Ended December 31,
2013
 
2012
 
2011
(in thousands)
 
 
 
 
 
Components of net periodic pension cost:
 
 
 
 
 
Interest cost
$
81

 
$
90

 
$
107

Amortization of prior service cost
19

 
19

 
19

Amortization of actuarial loss
64

 
46

 
38

Net periodic pension cost
164

 
155

 
164

Settlement expense
—

 
—

 
219

Total periodic cost
$
164

 
$
155

 
$
383

Assumptions:
 
 
 
 
 
Discount rate
3.50
%
 
4.25
%
 
5.00
%
Schedule of Funded Status of Benefit Obligation and Plan Assets
The following sets forth the funded status at December 31, 2013 and 2012 and the net periodic cost for the years ended December 31, 2013, 2012 and 2011 for the Chesapeake SERP:
At December 31,
2013
 
2012
(in thousands)
 
 
 
Change in benefit obligation:
 
 
 
Benefit obligation — beginning of year
$
2,352

 
$
2,160

Interest cost
81

 
90

Actuarial loss (gain)
(134
)
 
191

Benefits paid
(89
)
 
(89
)
Benefit obligation — end of year
2,210

 
2,352

Change in plan assets:
 
 
 
Fair value of plan assets — beginning of year
 
 
 
Employer contributions
89

 
89

Benefits paid
(89
)
 
(89
)
Fair value of plan assets — end of year
—

 
—

Reconciliation:
 
 
 
Funded status
(2,210
)
 
(2,352
)
Accrued pension cost
$
(2,210
)
 
$
(2,352
)
Assumptions:
 
 
 
Discount rate
4.25
%
 
3.50
%
Other Postretirement Benefit Plans
  
Component of Net Periodic Pension Cost (Benefit)
Net periodic postretirement benefit costs for 2013, 2012, and 2011 include the following components:
 
Chesapeake
Postretirement Plan
 
FPU
Medical Plan
For the Years Ended December 31,
2013
 
2012
 
2011
 
2013
 
2012
 
2011
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
Components of net periodic postretirement cost:
 
 
 
 
 
 
 
 
 
 
 
Service cost
$
—

 
$
—

 
$
—

 
$
—

 
$
1

 
$
125

Interest cost
47

 
55

 
64

 
63

 
79

 
176

Amortization of:
 
 
 
 
 
 
 
 
 
 
 
Actuarial loss
74

 
73

 
67

 
—

 
—

 
55

Prior service cost
(77
)
 
(77
)
 
(77
)
 
—

 
—

 
—

Net periodic cost
$
44

 
$
51

 
$
54

 
$
63

 
$
80

 
$
356

Curtailment gain
—

 
—

 
—

 
—

 
(892
)
 
—

Amortization of pre-merger regulatory asset
—

 
—

 
—

 
8

 
8

 
8

Net periodic cost
$
44

 
$
51

 
$
54

 
$
71

 
$
(804
)
 
$
364

Assumptions
 
 
 
 
 
 
 
 
 
 
 
Discount rate
3.50
%
 
4.25
%
 
5.00
%
 
3.75
%
 
4.50
%
 
5.25
%
Schedule of Funded Status of Benefit Obligation and Plan Assets
The following sets forth the funded status at December 31, 2013 and 2012 and the net periodic cost for the years ended December 31, 2013, 2012, and 2011:
 
Chesapeake
Postretirement Plan
 
FPU
Medical Plan
At December 31,
2013
 
2012
 
2013
 
2012
(in thousands)
 
 
 
 
 
 
 
Change in benefit obligation:
 
 
 
 
 
 
 
Benefit obligation — beginning of year
$
1,415

 
$
1,396

 
$
1,774

 
$
4,081

Service cost
—

 
—

 
—

 
1

Interest cost
47

 
55

 
63

 
79

Plan participants contributions
92

 
111

 
104

 
92

Curtailment gain
—

 
—

 
—

 
(2,651
)
Actuarial loss (gain)
(108
)
 
39

 
(165
)
 
500

Benefits paid
(184
)
 
(186
)
 
(257
)
 
(328
)
Benefit obligation — end of year
1,262

 
1,415

 
1,519

 
1,774

Change in plan assets:
 
 
 
 
 
 
 
Fair value of plan assets — beginning of year
—

 
—

 
—

 
—

Employer contributions(1)
92

 
75

 
153

 
236

Plan participants contributions
92

 
111

 
104

 
92

Benefits paid
(184
)
 
(186
)
 
(257
)
 
(328
)
Fair value of plan assets — end of year
—

 
—

 
—

 
—

Reconciliation:
 
 
 
 
 
 
 
Funded status
(1,262
)
 
(1,415
)
 
(1,519
)
 
(1,774
)
Accrued postretirement cost
$
(1,262
)
 
$
(1,415
)
 
$
(1,519
)
 
$
(1,774
)
Assumptions:
 
 
 
 
 
 
 
Discount rate
4.25
%
 
3.50
%
 
4.75
%
 
3.75
%
(1) 
Chesapeake’s Postretirement Plan does not receive a Medicare Part-D subsidy. The FPU Medical Plan did not receive a significant subsidy for the post-merger period.