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Employee Benefit Plans (Tables)
 12 Months Ended
Dec. 31, 2014
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, 2014, 2013 and 2012:
 
Chesapeake
Pension Plan
 
FPU
Pension Plan
At December 31,
2014
 
2013
 
2012
 
2014
 
2013
 
2012
Asset Category
 
 
 
 
 
 
 
 
 
 
 
Equity securities
51.42
%
 
54.40
%
 
52.07
%
 
52.62
%
 
55.02
%
 
52.81
%
Debt securities
37.31
%
 
36.54
%
 
38.00
%
 
37.69
%
 
36.54
%
 
38.04
%
Other
11.27
%
 
9.06
%
 
9.93
%
 
9.69
%
 
8.44
%
 
9.15
%
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

At December 31, 2014, 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)
$
4,069

 
$
4,028

 
$
—

 
$
8,097

U.S. Mid Cap (1)
1,733

 
1,714

 
—

 
3,447

U.S. Small Cap (1)
873

 
821

 
—

 
1,694

International (2)
9,621

 
—

 
—

 
9,621

Alternative Strategies (3)
5,531

 
—

 
—

 
5,531

 
21,827

 
6,563

 
—

 
28,390

Debt securities
 
 
 
 
 
 
 
Fixed income (4)
17,717

 
—

 
—

 
17,717

High Yield (4)
2,658

 
—

 
—

 
2,658

 
20,375

 
—

 
—

 
20,375

Other
 
 
 
 
 
 
 
Commodities (5)
1,819

 
—

 
—

 
1,819

Real Estate (6)
2,427

 
—

 
—

 
2,427

Guaranteed deposit (7)
—

 
—

 
1,144

 
1,144

 
4,246

 
—

 
1,144

 
5,390

Total Pension Plan Assets
$
46,448

 
$
6,563

 
$
1,144

 
$
54,155

(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 in investment grade and fixed income securities.
(5) 
Includes funds that invest primarily in commodity-linked derivative instruments and fixed income securities.
(6) 
Includes funds that invest primarily in real estate.
(7) 
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, 2014 and 2013:
 
For the Year Ended December 31,
 
2014
 
2013
(in thousands)
 
 
 
Balance, beginning of year
$
602

 
$
710

Purchases
1,811

 
618

Transfers in
2,390

 
3,175

Disbursements
(3,704
)
 
(3,966
)
Investment income
45

 
65

Balance, end of year
$
1,144

 
$
602
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, 2014:
(in thousands)
Chesapeake
Pension
Plan
 
FPU
Pension
Plan
 
Chesapeake
SERP
 
Chesapeake
Postretirement
Plan
 
FPU
Medical
Plan
 
Total
Prior service cost (credit)
$
—

 
$
—

 
$
9

 
$
(832
)
 
$
—

 
$
(823
)
Net loss
4,410

 
19,679

 
1,050

 
924

 
233

 
26,296

Total
$
4,410

 
$
19,679

 
$
1,059

 
$
92

 
$
233

 
$
25,473

Accumulated other comprehensive loss pre-tax(1)
$
4,410

 
$
3,739

 
$
1,059

 
$
92

 
$
44

 
$
9,344

Post-merger regulatory asset
—

 
15,940

 
—

 
—

 
189

 
16,129

Subtotal
4,410

 
19,679

 
1,059

 
92

 
233

 
25,473

Pre-merger regulatory asset
—

 
3,587

 
—

 
—

 
46

 
3,633

Total unrecognized cost
$
4,410

 
$
23,266

 
$
1,059

 
$
92

 
$
279

 
$
29,106

(1) 
The total amount of accumulated other comprehensive loss recorded on our consolidated balance sheet as of December 31, 2014 is net of income tax benefits of $3.7 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 2015 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)
$
—

 
$
—

 
$
9

 
$
(77
)
 
$
—

 
$
(68
)
Net loss
$
364

 
$
454

 
$
99

 
$
70

 
$
6

 
$
993

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)
 
 
 
 
 
 
 
 
 
2015
$
642

 
$
2,957

 
$
151

 
$
79

 
$
207

2016
$
594

 
$
3,008

 
$
151

 
$
78

 
$
179

2017
$
715

 
$
3,022

 
$
150

 
$
75

 
$
151

2018
$
637

 
$
3,090

 
$
149

 
$
76

 
$
111

2019
$
706

 
$
3,178

 
$
148

 
$
76

 
$
116

Years 2020 through 2024
$
3,896

 
$
17,207

 
$
938

 
$
331

 
$
474

(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 benefit  
Component of Net Periodic Pension Cost (Benefit)
 
Chesapeake
Pension Plan
 
FPU
Pension Plan
For the Years Ended December 31,
2014
 
2013
 
2012
 
2014
 
2013
 
2012
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
Components of net periodic pension cost:
 
 
 
 
 
 
 
 
 
 
 
Interest cost
$
425

 
$
405

 
$
458

 
$
2,613

 
$
2,367

 
$
2,577

Expected return on assets
(516
)
 
(486
)
 
(418
)
 
(3,089
)
 
(2,866
)
 
(2,627
)
Amortization of prior service cost
—

 
(1
)
 
(5
)
 
—

 
—

 
—

Amortization of actuarial loss
176

 
322

 
255

 
8

 
330

 
196

Net periodic pension cost
85

 
240

 
290

 
(468
)
 
(169
)
 
146

Amortization of pre-merger regulatory asset
—

 
—

 
—

 
761

 
761

 
761

Total periodic cost
$
85

 
$
240

 
$
290

 
$
293

 
$
592

 
$
907

Assumptions:
 
 
 
 
 
 
 
 
 
 
 
Discount rate
4.25
%
 
3.50
%
 
4.25
%
 
4.75
%
 
3.75
%
 
4.50
%
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, 2014 and 2013 and the net periodic cost for the years ended December 31, 2014, 2013 and 2012 for the Chesapeake and FPU Pension Plans:

 
Chesapeake
Pension Plan
 
FPU
Pension Plan
At December 31,
2014
 
2013
 
2014
 
2013
(in thousands)
 
 
 
 
 
 
 
Change in benefit obligation:
 
 
 
 
 
 
 
Benefit obligation — beginning of year
$
10,268

 
$
11,933

 
$
55,876

 
$
64,512

Interest cost
425

 
405

 
2,613

 
2,367

Actuarial loss (gain)
1,891

 
(1,092
)
 
12,785

 
(8,007
)
Benefits paid
(603
)
 
(978
)
 
(3,101
)
 
(2,996
)
Benefit obligation — end of year
11,981

 
10,268

 
68,173

 
55,876

Change in plan assets:
 
 
 
 
 
 
 
Fair value of plan assets — beginning of year
8,743

 
8,430

 
44,337

 
41,954

Actual return on plan assets
305

 
967

 
1,485

 
4,747

Employer contributions
633

 
324

 
2,356

 
632

Benefits paid
(603
)
 
(978
)
 
(3,101
)
 
(2,996
)
Fair value of plan assets — end of year
9,078

 
8,743

 
45,077

 
44,337

Reconciliation:
 
 
 
 
 
 
 
Funded status
(2,903
)
 
(1,525
)
 
(23,096
)
 
(11,539
)
Accrued pension cost
$
(2,903
)
 
$
(1,525
)
 
$
(23,096
)
 
$
(11,539
)
Assumptions:
 
 

 
 
 

Discount rate
3.50
%
 
4.25
%
 
3.75
%
 
4.75
%
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,
2014
 
2013
 
2012
(in thousands)
 
 
 
 
 
Components of net periodic pension cost:
 
 
 
 
 
Interest cost
$
92

 
$
81

 
$
90

Amortization of prior service cost
19

 
19

 
19

Amortization of actuarial loss
47

 
64

 
46

Net periodic pension cost
$
158

 
$
164

 
$
155

Assumptions:
 
 
 
 
 
Discount rate
4.25
%
 
3.50
%
 
4.25
%
Schedule of Funded Status of Benefit Obligation and Plan Assets
The following sets forth the funded status at December 31, 2014 and 2013 and the net periodic cost for the years ended December 31, 2014, 2013 and 2012 for the Chesapeake SERP:
At December 31,
2014
 
2013
(in thousands)
 
 
 
Change in benefit obligation:
 
 
 
Benefit obligation — beginning of year
$
2,210

 
$
2,352

Interest cost
92

 
81

Actuarial loss (gain)
437

 
(134
)
Benefits paid
(89
)
 
(89
)
Benefit obligation — end of year
2,650

 
2,210

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
(2,650
)
 
(2,210
)
Accrued pension cost
$
(2,650
)
 
$
(2,210
)
Assumptions:
 
 
 
Discount rate
3.50
%
 
4.25
%
Other Postretirement Benefit Plans  
Component of Net Periodic Pension Cost (Benefit)
Net periodic postretirement benefit costs for 2014, 2013, and 2012 include the following components:
 
Chesapeake
Postretirement Plan
 
FPU
Medical Plan
For the Years Ended December 31,
2014
 
2013
 
2012
 
2014
 
2013
 
2012
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
Components of net periodic postretirement cost:
 
 
 
 
 
 
 
 
 
 
 
Service cost
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
1

Interest cost
39

 
47

 
55

 
69

 
63

 
79

Amortization of:
 
 
 
 
 
 
 
 
 
 
 
Actuarial loss
55

 
74

 
73

 
—

 
—

 
—

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

 
—

 
—

Net periodic cost
17

 
44

 
51

 
69

 
63

 
80

Curtailment gain
—

 
—

 
—

 
—

 
—

 
(892
)
Amortization of pre-merger regulatory asset
—

 
—

 
—

 
8

 
8

 
8

Net periodic cost
$
17

 
$
44

 
$
51

 
$
77

 
$
71

 
$
(804
)
Assumptions
 
 
 
 
 
 
 
 
 
 
 
Discount rate
4.25
%
 
3.50
%
 
4.25
%
 
4.75
%
 
3.75
%
 
4.50
%
Schedule of Funded Status of Benefit Obligation and Plan Assets
The following sets forth the funded status at December 31, 2014 and 2013 and the net periodic cost for the years ended December 31, 2014, 2013, and 2012:
 
Chesapeake
Postretirement Plan
 
FPU
Medical Plan
At December 31,
2014
 
2013
 
2014
 
2013
(in thousands)
 
 
 
 
 
 
 
Change in benefit obligation:
 
 
 
 
 
 
 
Benefit obligation — beginning of year
$
1,262

 
$
1,415

 
$
1,519

 
$
1,774

Interest cost
39

 
47

 
69

 
63

Plan participants contributions
106

 
92

 
97

 
104

Actuarial loss (gain)
6

 
(108
)
 
375

 
(165
)
Benefits paid
(175
)
 
(184
)
 
(348
)
 
(257
)
Benefit obligation — end of year
1,238

 
1,262

 
1,712

 
1,519

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

 
—

 
—

 
—

Employer contributions(1)
69

 
92

 
251

 
153

Plan participants contributions
106

 
92

 
97

 
104

Benefits paid
(175
)
 
(184
)
 
(348
)
 
(257
)
Fair value of plan assets — end of year
—

 
—

 
—

 
—

Reconciliation:
 
 
 
 
 
 
 
Funded status
(1,238
)
 
(1,262
)
 
(1,712
)
 
(1,519
)
Accrued postretirement cost
$
(1,238
)
 
$
(1,262
)
 
$
(1,712
)
 
$
(1,519
)
Assumptions:
 
 
 
 
 
 
 
Discount rate
3.50
%
 
4.25
%
 
3.75
%
 
4.75
%
(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.