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Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2018

The following schedule summarizes the assets of the Chesapeake Pension Plan and the FPU Pension Plan, by investment type, at December 31, 2018, 2017 and 2016:



	Chesapeake Pension Plan						FPU Pension Plan
At December 31,	2018		2017		2016		2018		2017		2016
Asset Category
Equity securities	49.02	%	52.70	%	52.93	%	50.04	%	55.17	%	53.18	%
Debt securities	40.98	%	37.79	%	37.64	%	41.06	%	36.56	%	37.74	%
Other	10.00	%	9.51	%	9.43	%	8.90	%	8.27	%	9.08	%
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, 2018 and 2017, the assets of the Chesapeake Pension Plan and the FPU Pension Plan were comprised of the following investments:



	Fair Value Measurement Hierarchy

	At December 31, 2018								At December 31, 2017
Asset Category	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
(in thousands)
Mutual Funds - Equity securities
U.S. Large Cap ⁽¹⁾	$	3,399	$	—	$	—	$	3,399	$	4,245	$	—	$	—	$	4,245
U.S. Mid Cap ⁽¹⁾	1,478		—		—		1,478		1,775		—		—		1,775
U.S. Small Cap ⁽¹⁾	670		—		—		670		918		—		—		918
International ⁽²⁾	9,226		—		—		9,226		11,916		—		—		11,916
Alternative Strategies ⁽³⁾	5,726		—		—		5,726		5,528		—		—		5,528
	20,499		—		—		20,499		24,382		—		—		24,382
Mutual Funds - Debt securities
Fixed income ⁽⁴⁾	18,630		—		—		18,630		18,454		—		—		18,454
High Yield ⁽⁴⁾	2,818		—		—		2,818		2,772		—		—		2,772
	21,448		—		—		21,448		21,226		—		—		21,226
Mutual Funds - Other
Commodities ⁽⁵⁾	1,902		—		—		1,902		2,154		—		—		2,154
Real Estate ⁽⁶⁾	2,216		—		—		2,216		2,300		—		—		2,300
Guaranteed deposit ⁽⁷⁾	—		—		627		627		—		—		436		436
	4,118		—		627		4,745		4,454		—		436		4,890
Total Pension Plan Assets in fair value hierarchy	$	46,065	$	—	$	627	46,692		$	50,062	$	—	$	436	50,498
Investments measured at net asset value ⁽⁸⁾							5,558								7,248
Total Pension Plan Assets							$	52,250							$	57,746

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, 2018 and 2017:



	For the Year Ended December 31,
	2018			2017
(in thousands)
Balance, beginning of year	$	436		$	498
Purchases	1,674			2,271
Transfers in	2,375			1,743
Disbursements	(3,872		)	(4,101		)
Investment income	14			25
Balance, end of year	$	627		$	436

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 loss or as a regulatory asset as of December 31, 2018:



(in thousands)	Chesapeake Pension Plan		FPU Pension Plan		Chesapeake SERP		Chesapeake Postretirement Plan			FPU Medical Plan			Total
Prior service cost (credit)	$	—	$	—	$	—	$	(524	)	$	—		$	(524	)
Net loss (gain)	3,865		18,544		559		578			(79		)	23,467
Total	$	3,865	$	18,544	$	559	$	54		$	(79	)	$	22,943

Accumulated other comprehensive loss (gain) pre-tax⁽¹⁾	$	3,865	$	3,523	$	559	$	54		$	(15	)	$	7,986
Post-merger regulatory asset	—		15,021		—		—			(64		)	14,957
Subtotal	3,865		18,544		559		54			(79		)	22,943
Pre-merger regulatory asset	—		543		—		—			14			557
Total unrecognized cost	$	3,865	$	19,087	$	559	$	54		$	(65	)	$	23,500

⁽¹⁾The total amount of accumulated other comprehensive loss recorded on our consolidated balance sheet as of December 31, 2018 is net of income tax benefits of $2.1 million.

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)
2019	$	528	$	3,091	$	383	$	96	$	94
2020	$	529	$	3,221	$	150	$	85	$	87
2021	$	736	$	3,299	$	148	$	82	$	91
2022	$	595	$	3,485	$	147	$	81	$	93
2023	$	1,244	$	3,558	$	145	$	64	$	80
Years 2024 through 2028	$	3,866	$	18,570	$	744	$	275	$	402

⁽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									Chesapeake SERP
For the Years Ended December 31,	2018			2017			2016			2018			2017			2016			2018			2017			2016
(in thousands)
Components of net periodic pension cost:
Interest cost	$	384		$	402		$	421		$	2,339		$	2,482		$	2,525		$	83		$	89		$	91
Expected return on assets	(542		)	(495		)	(501		)	(3,091		)	(2,779		)	(2,702		)	—			—
Amortization of actuarial loss	343			399			459			404			513			519			101			87			87
Settlement expense	—			—			161			—			—			—
Net periodic pension cost⁽¹⁾	185			306			540			(348		)	216			342			184			176			178
Amortization of pre-merger regulatory asset	—			—			—			761			761			761			—			—			—
Total periodic cost	$	185		$	306		$	540		$	413		$	977		$	1,103		$	184		$	176		$	178
Assumptions:
Discount rate	3.50		%	3.75		%	3.75		%	3.75		%	4.00		%	4.00		%	3.50		%	3.75		%	3.75		%
Expected return on plan assets	6.00		%	6.00		%	6.00		%	6.50		%	6.50		%	6.50		%	—		%	—		%	—		%

Schedule of Funded Status of Benefit Obligation and Plan Assets

The following schedule sets forth the funded status at December 31, 2018 and 2017 and the net periodic cost for the years ended December 31, 2018, 2017 and 2016 for the Chesapeake and FPU Pension Plans as well as the Chesapeake SERP:



	Chesapeake Pension Plan						FPU Pension Plan						Chesapeake SERP
At December 31,	2018			2017			2018			2017			2018			2017
(in thousands)
Change in benefit obligation:
Benefit obligation — beginning of year	$	11,443		$	11,355		$	64,664		$	63,832		$	2,428		$	2,428
Interest cost	384			402			2,339			2,482			83			89
Actuarial loss (gain)	(610		)	454			(4,739		)	1,199			(74		)	63
Benefits paid	(505		)	(768		)	(2,887		)	(2,849		)	(152		)	(152		)
Benefit obligation — end of year	10,712			11,443			59,377			64,664			2,285			2,428
Change in plan assets:
Fair value of plan assets — beginning of year	9,350			8,668			48,396			43,272			—			—
Actual return on plan assets	(647		)	1,144			(3,113		)	6,025			—			—
Employer contributions	451			306			1,205			1,948			152			152
Benefits paid	(505		)	(768		)	(2,887		)	(2,849		)	(152		)	(152		)
Fair value of plan assets — end of year	8,649			9,350			43,601			48,396			—			—
Reconciliation:
Funded status	(2,063		)	(2,093		)	(15,776		)	(16,268		)	(2,285		)	(2,428		)
Accrued pension cost	$	(2,063	)	$	(2,093	)	$	(15,776	)	$	(16,268	)	$	(2,285	)	$	(2,428	)
Assumptions:
Discount rate	4.00		%	3.50		%	4.25		%	3.75		%	4.00		%	3.50		%
Expected return on plan assets	6.00		%	6.00		%	6.50		%	6.50		%	—		%	—		%

Other Postretirement Benefit Plans

Component of Net Periodic Pension Cost (Benefit)

Net periodic postretirement benefit costs for 2018, 2017, and 2016 include the following components:



	Chesapeake Postretirement Plan									FPU Medical Plan
For the Years Ended December 31,	2018			2017			2016			2018			2017			2016
(in thousands)
Components of net periodic postretirement cost:
Interest cost	$	38		$	41		$	43		$	47		$	50		$	55
Amortization of actuarial loss	58			53			64			—			—			—
Amortization of prior service cost (credit)	(77		)	(77		)	(77		)	—			—			—
Net periodic cost	19			17			30			47			50			55
Amortization of pre-merger regulatory asset	—			—			—			8			8			8
Total periodic cost⁽¹⁾	$	19		$	17		$	30		$	55		$	58		$	63
Assumptions
Discount rate	3.50		%	3.75		%	3.75		%	3.75		%	4.00		%	4.00		%

Schedule of Funded Status of Benefit Obligation and Plan Assets

The following table sets forth the funded status at December 31, 2018 and 2017 and the net periodic cost for the years ended December 31, 2018, 2017, and 2016:



	Chesapeake Postretirement Plan						FPU Medical Plan
At December 31,	2018			2017			2018			2017
(in thousands)
Change in benefit obligation:
Benefit obligation — beginning of year	$	1,128		$	1,132		$	1,287		$	1,349
Interest cost	38			41			47			50
Plan participants contributions	136			118			41			48
Actuarial loss (gain)	(131		)	72			(89		)	(48		)
Benefits paid	(169		)	(235		)	(99		)	(112		)
Benefit obligation — end of year	1,002			1,128			1,187			1,287
Change in plan assets:
Fair value of plan assets — beginning of year	—			—			—			—
Employer contributions⁽¹⁾	33			117			58			64
Plan participants contributions	136			118			41			48
Benefits paid	(169		)	(235		)	(99		)	(112		)
Fair value of plan assets — end of year	—			—			—			—
Reconciliation:
Funded status	(1,002		)	(1,128		)	(1,187		)	(1,287		)
Accrued postretirement cost	$	(1,002	)	$	(1,128	)	$	(1,187	)	$	(1,287	)
Assumptions:
Discount rate	4.00		%	3.50		%	4.25		%	3.75		%

⁽¹⁾ The Chesapeake 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.