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Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2019

The following schedule summarizes the assets of the Chesapeake Pension Plan and the FPU Pension Plan, by investment type, at December 31, 2019, 2018 and 2017:



	Chesapeake Pension Plan						FPU Pension Plan
At December 31,	2019		2018		2017		2019		2018		2017
Asset Category
Equity securities	—	%	49	%	53	%	53	%	50	%	55	%
Debt securities	92	%	41	%	38	%	37	%	41	%	37	%
Other	8	%	10	%	9	%	10	%	9	%	8	%
Total	100	%	100	%	100	%	100	%	100	%	100	%

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 (this allocation range applied to Chesapeake Pension Plan prior to the de-risking strategy executed during the fourth quarter of 2019):



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, 2019 and 2018, 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, 2019								At December 31, 2018
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⁾	$	3,553	$	—	$	—	$	3,553	$	3,399	$	—	$	—	$	3,399
U.S. Mid Cap ⁽¹⁾	1,604		—		—		1,604		1,478		—		—		1,478
U.S. Small Cap ⁽¹⁾	726		—		—		726		670		—		—		670
International ⁽²⁾	9,855		—		—		9,855		9,226		—		—		9,226
Alternative Strategies ⁽³⁾	4,739		—		—		4,739		5,726		—		—		5,726
	20,477		—		—		20,477		20,499		—		—		20,499
Mutual Funds - Debt securities
Fixed income ⁽⁴⁾	19,220		—		—		19,220		18,630		—		—		18,630
High Yield ⁽⁴⁾	2,476		—		—		2,476		2,818		—		—		2,818
	21,696		—		—		21,696		21,448		—		—		21,448
Mutual Funds - Other
Commodities ⁽⁵⁾	1,708		—		—		1,708		1,902		—		—		1,902
Real Estate ⁽⁶⁾	2,288		—		—		2,288		2,216		—		—		2,216
Guaranteed deposit ⁽⁷⁾	—		—		1,147		1,147		—		—		627		627
	3,996		—		1,147		5,143		4,118		—		627		4,745
Total Pension Plan Assets in fair value hierarchy	$	46,169	$	—	$	1,147	47,316		$	46,065	$	—	$	627	46,692
Investments measured at net asset value ⁽⁸⁾							7,017								5,558
Total Pension Plan Assets							$	54,333							$	52,250

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, 2019 and 2018:



	For the Year Ended December 31,
	2019			2018
(in thousands)
Balance, beginning of year	$	627		$	436
Purchases	2,274			1,674
Transfers in	3,090			2,375
Disbursements	(4,907		)	(3,872		)
Investment income	63			14
Balance, end of year	$	1,147		$	627

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, 2019:



(in thousands)	Chesapeake Pension Plan		FPU Pension Plan		Chesapeake SERP		Chesapeake Postretirement Plan			FPU Medical Plan			Total
Prior service cost (credit)	$	—	$	—	$	—	$	(447	)	$	—		$	(447	)
Net loss (gain)	2,241		19,339		575		604			(32		)	22,727
Total	$	2,241	$	19,339	$	575	$	157		$	(32	)	$	22,280

Accumulated other comprehensive loss (gain) pre-tax⁽¹⁾	$	2,241	$	3,674	$	575	$	157		$	(6	)	$	6,641
Post-merger regulatory asset	—		15,665		—		—			(26		)	15,639
Subtotal	2,241		19,339		575		157			(32		)	22,280
Pre-merger regulatory asset	—		—		—		—			6			6
Total unrecognized cost	$	2,241	$	19,339	$	575	$	157		$	(26	)	$	22,286

⁽¹⁾The total amount of accumulated other comprehensive loss recorded on our consolidated balance sheet as of December 31, 2019 is net of income tax benefits of $1.7 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)
2020	$	115	$	3,281	$	151	$	90	$	86
2021	$	368	$	3,348	$	150	$	87	$	90
2022	$	106	$	3,424	$	148	$	85	$	91
2023	$	927	$	3,498	$	146	$	67	$	79
2024	$	111	$	3,549	$	144	$	64	$	80
Years 2025 through 2029	$	2,300	$	18,429	$	748	$	264	$	389

⁽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

Schedule of Funded Status of Benefit Obligation and Plan Assets

The following schedules set forth the funded status at December 31, 2019 and 2018 and the net periodic cost for the years ended December 31, 2019, 2018 and 2017 for the Chesapeake and FPU Pension Plans as well as the Chesapeake SERP:



	Chesapeake Pension Plan						FPU Pension Plan						Chesapeake SERP
At December 31,	2019			2018			2019			2018			2019			2018
(in thousands)
Change in benefit obligation:
Benefit obligation — beginning of year	$	10,712		$	11,443		$	59,377		$	64,664		$	2,285		$	2,428
Interest cost	375			384			2,452			2,339			74			83
Actuarial loss (gain)	1,443			(610		)	6,508			(4,739		)	159			(74		)
Effect of settlement	(5,833		)	—			—			—			—			—
Benefits paid	(483		)	(505		)	(3,033		)	(2,887		)	(361		)	(152		)
Benefit obligation — end of year	6,214			10,712			65,304			59,377			2,157			2,285
Change in plan assets:
Fair value of plan assets — beginning of year	8,649			9,350			43,601			48,396			—			—
Actual return on plan assets	1,180			(647		)	7,978			(3,113		)	—			—
Employer contributions	1,117			451			1,157			1,205			361			152
Effect of settlement	(5,833		)	—			—			—						—
Benefits paid	(483		)	(505		)	(3,033		)	(2,887		)	(361		)	(152		)
Fair value of plan assets — end of year	4,630			8,649			49,703			43,601			—			—
Reconciliation:
Funded status	(1,584		)	(2,063		)	(15,601		)	(15,776		)	(2,157		)	(2,285		)
Accrued pension cost	$	(1,584	)	$	(2,063	)	$	(15,601	)	$	(15,776	)	$	(2,157	)	$	(2,285	)
Assumptions:
Discount rate	3.00		%	4.00		%	3.25		%	4.25		%	3.00		%	4.00		%
Expected return on plan assets	6.00		%	6.00		%	6.50		%	6.50		%	—		%	—		%

Component of Net Periodic Pension Cost (Benefit)



	Chesapeake Pension Plan									FPU Pension Plan									Chesapeake SERP
For the Years Ended December 31,	2019 ⁽¹⁾			2018			2017			2019			2018			2017			2019			2018			2017
(in thousands)
Components of net periodic pension cost:
Interest cost	$	375		$	384		$	402		$	2,452		$	2,339		$	2,482		$	74		$	83		$	89
Expected return on assets	(487		)	(542		)	(495		)	(2,770		)	(3,091		)	(2,779		)	—			—			—
Amortization of actuarial loss	391			343			399			505			404			513			85			101			87
Settlement expense	1,982			—			—			—			—			—			58			—			—
Net periodic pension cost	2,261			185			306			187			(348		)	216			217			184			176
Amortization of pre-merger regulatory asset	—			—			—			543			761			761			—			—			—
Total periodic cost	$	2,261		$	185		$	306		$	730		$	413		$	977		$	217		$	184		$	176
Assumptions:
Discount rate	3.00		%	3.50		%	3.75		%	4.25		%	3.75		%	4.00		%	4.00		%	3.50		%	3.75		%
Expected return on plan assets	6.00		%	6.00		%	6.00		%	6.50		%	6.50		%	6.50		%	—		%	—		%	—		%

Other Postretirement Benefit Plans

Schedule of Funded Status of Benefit Obligation and Plan Assets

The following table sets forth the funded status at December 31, 2019 and 2018:



	Chesapeake Postretirement Plan						FPU Medical Plan
At December 31,	2019			2018			2019			2018
(in thousands)
Change in benefit obligation:
Benefit obligation — beginning of year	$	1,002		$	1,128		$	1,187		$	1,287
Interest cost	39			38			48			47
Plan participants contributions	149			136			38			41
Actuarial loss (gain)	73			(131		)	47			(89		)
Benefits paid	(163		)	(169		)	(96		)	(99		)
Benefit obligation — end of year	1,100			1,002			1,224			1,187
Change in plan assets:
Fair value of plan assets — beginning of year	—			—			—			—
Employer contributions⁽¹⁾	14			33			58			58
Plan participants contributions	149			136			38			41
Benefits paid	(163		)	(169		)	(96		)	(99		)
Fair value of plan assets — end of year	—			—			—			—
Reconciliation:
Funded status	(1,100		)	(1,002		)	(1,224		)	(1,187		)
Accrued postretirement cost	$	(1,100	)	$	(1,002	)	$	(1,224	)	$	(1,187	)
Assumptions:
Discount rate	3.00		%	4.00		%	3.25		%	4.25		%

⁽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.

Component of Net Periodic Pension Cost (Benefit)

Net periodic postretirement benefit costs for 2019, 2018, and 2017 include the following components:



	Chesapeake Postretirement Plan									FPU Medical Plan
For the Years Ended December 31,	2019			2018			2017			2019			2018			2017
(in thousands)
Components of net periodic postretirement cost:
Interest cost	$	39		$	38		$	41		$	48		$	47		$	50
Amortization of actuarial loss	46			58			53			—			—			—
Amortization of prior service cost (credit)	(77		)	(77		)	(77		)	—			—			—
Net periodic cost	8			19			17			48			47			50
Amortization of pre-merger regulatory asset	—			—			—			8			8			8
Total periodic cost	$	8		$	19		$	17		$	56		$	55		$	58
Assumptions
Discount rate	4.00		%	3.50		%	3.75		%	4.25		%	3.75		%	4.00		%