XML 165 R48.htm IDEA: XBRL DOCUMENT v3.19.3.a.u2
Retirement benefits (Tables)
 12 Months Ended
Dec. 31, 2019
Retirement Benefits [Abstract]  
Schedule of changes in the obligations and assets of the Company's retirement benefit plans and the changes in AOCI (gross) and the funded status The changes in the obligations and assets of the Company’s and Utilities’ retirement benefit plans and the changes in AOCI (gross) for 2019 and 2018 and the funded status of these plans and amounts related to these plans reflected in the Company’s and Utilities’ consolidated balance sheet as of December 31, 2019 and 2018 were as follows:
 
2019
 
2018
(in thousands)
Pension
benefits
 
Other
benefits
 
Pension
benefits
 
Other
benefits
HEI consolidated
 
 
 
 
 
 
 
Benefit obligation, January 1
$
1,991,384

 
$
188,666

 
$
2,094,356

 
$
212,601

Service cost
62,135

 
2,209

 
68,987

 
2,721

Interest cost
84,267

 
8,004

 
77,374

 
7,933

Actuarial losses (gains)
224,421

 
25,998

 
(171,226
)
 
(25,977
)
Participants contributions
—

 
2,351

 
—

 
2,505

Benefits paid and expenses
(83,924
)
 
(11,589
)
 
(78,107
)
 
(11,117
)
Benefit obligation, December 31
2,278,283

 
215,639

 
1,991,384

 
188,666

Fair value of plan assets, January 1
1,479,067

 
173,693

 
1,618,703

 
193,995

Actual return on plan assets
354,072

 
35,525

 
(101,406
)
 
(11,846
)
Employer contributions
48,629

 
—

 
38,496

 
—

Participants contributions
—

 
2,351

 
—

 
2,505

Benefits paid and expenses
(82,568
)
 
(10,738
)
 
(76,726
)
 
(10,961
)
Fair value of plan assets, December 31
1,799,200

 
200,831

 
1,479,067

 
173,693

Accrued benefit asset (liability), December 31
$
(479,083
)
 
$
(14,808
)
 
$
(512,317
)
 
$
(14,973
)
Other assets
$
19,396

 
$
—

 
$
10,930

 
$
—

Defined benefit pension and other postretirement benefit plans liability
(498,479
)
 
(14,808
)
 
(523,247
)
 
(14,973
)
Accrued benefit asset (liability), December 31
$
(479,083
)
 
$
(14,808
)
 
$
(512,317
)
 
$
(14,973
)
AOCI debit, January 1 (excluding impact of PUC D&Os)
$
536,920

 
$
1,962

 
$
527,830

 
$
1,474

Recognized during year – prior service credit
42

 
1,806

 
42

 
1,805

Recognized during year – net actuarial (losses) gains
(15,479
)
 
13

 
(30,084
)
 
(95
)
Occurring during year – net actuarial losses (gains)
(17,662
)
 
2,829

 
39,132

 
(1,222
)
AOCI debit before cumulative impact of PUC D&Os, December 31
503,821

 
6,610

 
536,920

 
1,962

Cumulative impact of PUC D&Os
(474,628
)
 
(7,458
)
 
(498,944
)
 
(4,929
)
AOCI debit/(credit), December 31
$
29,193

 
$
(848
)
 
$
37,976

 
$
(2,967
)
Net actuarial loss
$
503,813

 
$
11,707

 
$
536,954

 
$
8,865

Prior service cost (gain)
8

 
(5,097
)
 
(34
)
 
(6,903
)
AOCI debit before cumulative impact of PUC D&Os, December 31
503,821

 
6,610

 
536,920

 
1,962

Cumulative impact of PUC D&Os
(474,628
)
 
(7,458
)
 
(498,944
)
 
(4,929
)
AOCI debit/(credit), December 31
29,193

 
(848
)
 
37,976

 
(2,967
)
Income taxes (benefits)
(7,677
)
 
219

 
(10,023
)
 
765

AOCI debit/(credit), net of taxes (benefits), December 31
$
21,516

 
$
(629
)
 
$
27,953

 
$
(2,202
)
As of December 31, 2019 and 2018, the other postretirement benefit plans shown in the table above had ABOs in excess of plan assets.

 
2019
 
2018
(in thousands)
Pension
benefits
 
Other
benefits
 
Pension
benefits
 
Other
benefits
Hawaiian Electric consolidated
 
 
 
 
 
 
 
Benefit obligation, January 1
$
1,837,653

 
$
181,162

 
$
1,928,648

 
$
204,644

Service cost
60,461

 
2,191

 
67,359

 
2,704

Interest cost
77,851

 
7,673

 
71,294

 
7,628

Actuarial losses (gains)
212,310

 
25,123

 
(158,258
)
 
(25,330
)
Participants contributions
—

 
2,311

 
—

 
2,472

Benefits paid and expenses
(77,060
)
 
(11,382
)
 
(71,535
)
 
(10,958
)
Transfers
(311
)
 
(5
)
 
145

 
2

Benefit obligation, December 31
2,110,904

 
207,073

 
1,837,653

 
181,162

Fair value of plan assets, January 1
1,343,113

 
170,862

 
1,468,403

 
190,814

Actual return on plan assets
326,204

 
34,928

 
(91,836
)
 
(11,625
)
Employer contributions
47,808

 
—

 
37,550

 
—

Participants contributions
—

 
2,311

 
—

 
2,472

Benefits paid and expenses
(76,581
)
 
(10,532
)
 
(71,060
)
 
(10,801
)
Other
(127
)
 
(5
)
 
56

 
2

Fair value of plan assets, December 31
1,640,417

 
197,564

 
1,343,113

 
170,862

Accrued benefit liability, December 31
$
(470,487
)
 
$
(9,509
)
 
$
(494,540
)
 
$
(10,300
)
Other liabilities (short-term)
(518
)
 
(715
)
 
(512
)
 
(669
)
Defined benefit pension and other postretirement benefit plans liability
(469,969
)
 
(8,794
)
 
(494,028
)
 
(9,631
)
Accrued benefit liability, December 31
$
(470,487
)
 
$
(9,509
)
 
$
(494,540
)
 
$
(10,300
)
AOCI debit, January 1 (excluding impact of PUC D&Os)
$
502,189

 
$
1,551

 
$
493,464

 
$
839

Recognized during year – prior service credit (cost)
(7
)
 
1,803

 
(8
)
 
1,803

Recognized during year – net actuarial losses
(14,658
)
 
—

 
(27,302
)
 
(98
)
Occurring during year – net actuarial losses (gains)
(9,446
)
 
2,376

 
36,035

 
(993
)
AOCI debit before cumulative impact of PUC D&Os, December 31
478,078

 
5,730

 
502,189

 
1,551

Cumulative impact of PUC D&Os
(474,628
)
 
(7,458
)
 
(498,944
)
 
(4,929
)
AOCI debit/(credit), December 31
$
3,450

 
$
(1,728
)
 
$
3,245

 
$
(3,378
)
Net actuarial loss
$
478,069

 
$
10,815

 
$
502,173

 
$
8,439

Prior service cost (gain)
9

 
(5,085
)
 
16

 
(6,888
)
AOCI debit before cumulative impact of PUC D&Os, December 31
478,078

 
5,730

 
502,189

 
1,551

Cumulative impact of PUC D&Os
(474,628
)
 
(7,458
)
 
(498,944
)
 
(4,929
)
AOCI debit/(credit), December 31
3,450

 
(1,728
)
 
3,245

 
(3,378
)
Income taxes (benefits)
(888
)
 
445

 
(836
)
 
870

AOCI debit/(credit), net of taxes (benefits), December 31
$
2,562

 
$
(1,283
)
 
$
2,409

 
$
(2,508
)
Schedule of asset allocation of plan assets
The asset allocation of defined benefit retirement plans to equity and fixed income securities (excluding cash) and related investment policy targets and ranges were as follows:
 
Pension benefits1
 
Other benefits2
 
 
 
 
 
Investment policy
 
 
 
 
 
Investment policy
December 31
2019

 
2018

 
Target

 
Range
 
2019

 
2018

 
Target

 
Range
Assets held by category
 

 
 

 
 

 
 
 
 

 
 

 
 

 
 
Equity securities
71
%
 
69
%
 
70
%
 
65-75
 
71
%
 
70
%
 
70
%
 
65-75
Fixed income securities
29

 
31

 
30

 
25-35
 
29

 
30

 
30

 
25-35
 
100
%
 
100
%
 
100
%
 
 
 
100
%
 
100
%
 
100
%
 
 

1  
Asset allocation (excluding cash) is applicable to only HEI and the Utilities. As of December 31, 2019 and 2018, nearly all of ASB’s pension assets were invested in fixed income securities.
2 
Asset allocation (excluding cash) is applicable to only HEI and the Utilities. ASB does not fund its other benefits.
Assets held in various trusts for the retirement benefit plans are measured at fair value on a recurring basis and were as follows:
 
Pension benefits
 
Other benefits
 
 
 
Fair value measurements using
 
 
 
Fair value measurements using
(in millions)
December 31
 
Quoted prices in active markets for identical assets
(Level 1)
 
Significant other observable inputs
(Level 2)
 
Significant unobservable inputs
(Level 3)
 
December 31
 
Level 1
 
Level 2
 
Level 3
2019
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Equity securities
$
470

 
$
470

 
$
—

 
$
—

 
$
61

 
$
61

 
$
—

 
$
—

Equity index and exchange-traded funds
610

 
610

 
—

 
—

 
69

 
69

 
—

 
—

Equity investments at net asset value (NAV)
78

 
—

 
—

 
—

 
11

 
—

 
—

 
—

   Total equity investments
1,158

 
1,080

 
—

 
—

 
141

 
130

 
—

 
—

Fixed income securities and public mutual funds
353

 
123

 
230

 
—

 
52

 
49

 
2

 
—

Fixed income investments at NAV
245

 
—

 
—

 
—

 
4

 
—

 
—

 
—

   Total fixed income investments
598

 
123

 
230

 
—

 
56

 
49

 
2

 
—

Cash equivalents at NAV
39

 
—

 
—

 
—

 
4

 
—

 
—

 
—

Total
1,795

 
$
1,203

 
$
230

 
$
—

 
201

 
$
179

 
$
2

 
$
—

Cash, receivables and payables, net
4

 
 

 
 

 
 

 
—

 
 

 
 

 
 

Fair value of plan assets
$
1,799

 
 

 
 

 
 

 
$
201

 
 

 
 

 
 

2018
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Equity securities
$
507

 
$
507

 
$
—

 
$
—

 
$
65

 
$
65

 
$
—

 
$
—

Equity index and exchange-traded funds
348

 
348

 
—

 
—

 
42

 
42

 
—

 
—

Equity investments at NAV
65

 
—

 
—

 
—

 
10

 
—

 
—

 
—

   Total equity investments
920

 
855

 
—

 
—

 
117

 
107

 
—

 
—

Fixed income securities and public mutual funds
310

 
123

 
187

 
—

 
47

 
45

 
2

 
—

Fixed income investments at NAV
208

 
—

 
—

 
—

 
4

 
—

 
—

 
—

   Total fixed income investments
518

 
123

 
187

 
—

 
51

 
45

 
2

 
—

Cash equivalents at NAV
36

 
—

 
—

 
—

 
5

 
—

 
—

 
—

Total
1,474

 
$
978

 
$
187

 
$
—

 
173

 
$
152

 
$
2

 
$
—

Cash, receivables and payables, net
5

 
 

 
 

 
 

 
1

 
 

 
 

 
 

Fair value of plan assets
$
1,479

 
 

 
 

 
 

 
$
174

 
 

 
 

 
 


 
Pension benefits
 
Other benefits
Measured at net asset value
December 31

 
Redemption frequency
 
Redemption notice period
 
December 31

 
Redemption frequency
 
Redemption notice period
(in millions)
 
 
 
 
 
 
 
 
 
 
 
2019
 
 
 
 
 
 
 
 
 
 
 
Non U.S. equity funds (a)
$
78

 
Daily-Monthly
 
5-30 days
 
$
11

 
Daily-Monthly
 
5-30 days
Fixed income investments (b)
245

 
Monthly
 
15 days
 
4

 
Monthly
 
15 days
Cash equivalents (c)
39

 
Daily
 
0-1 day
 
4

 
Daily
 
0-1 day
 
$
362

 
 
 
 
 
$
19

 
 
 
 
2018
 
 
 
 
 
 
 
 
 
 
 
Non U.S. equity funds (a)
$
65

 
Daily-Monthly
 
5-30 days
 
$
10

 
Daily-Monthly
 
5-30 days
Fixed income investments (b)
208

 
Monthly
 
15 days
 
4

 
Monthly
 
15 days
Cash equivalents (c)
36

 
Daily
 
0-1 day
 
5

 
Daily
 
0-1 day
 
$
309

 
 
 
 
 
$
19

 
 
 
 
None of the investments presented in the tables above have unfunded commitments.
(a)
Represents investments in funds that primarily invest in non-U.S., emerging markets equities. Redemption frequency for pension benefits assets as of December 31, 2019 were: daily, 60% and monthly, 40%, and as of December 31, 2018 were daily, 32% and monthly, 68%. Redemption frequency for other benefits assets as of December 31, 2019 were: daily, 59% and monthly, 41% and as of December 31, 2018 were: daily, 27% and monthly, 73%.
(b)
Represents investments in fixed income securities invested in a US-dollar denominated fund that seeks to exceed the Barclays Capital Long Corporate A or better Index through investments in US-dollar denominated fixed income securities and commingled vehicles.
(c)
Represents investments in cash equivalent funds. This class includes funds that invest primarily in securities issued or guaranteed by the U.S. government or its agencies or instrumentalities. For pension benefits, the fund may also invest in fixed income securities of investment grade issuers.
Schedule of weighted-average assumptions used in accounting for plans
The following weighted-average assumptions were used in the accounting for the plans:
 
Pension benefits
 
Other benefits
December 31
2019
 
2018
 
2017
 
2019
 
2018
 
2017
Benefit obligation
 
 
 
 
 
 
 
 
 
 
 
Discount rate
3.61
%
 
4.31
%
 
3.74
%
 
3.52
%
 
4.34
%
 
3.72
%
Rate of compensation increase
3.5

 
3.5

 
3.5

 
NA   

 
NA   

 
NA   

Net periodic pension/benefit cost (years ended)
 
 
 
 
 
 
 
 
 
 
 
Discount rate
4.31

 
3.74

 
4.26

 
4.34

 
3.72

 
4.22

Expected return on plan assets1
7.25

 
7.50

 
7.50

 
7.25

 
7.50

 
7.50

Rate of compensation increase2
3.5

 
3.5

 
3.5

 
NA   

 
NA   

 
NA   

NA  Not applicable
1 HEI’s and Utilities’ plan assets only. For 2019, 2018 and 2017, ASB’s expected return on plan assets was 4.51%, 3.94% and 4.46%, respectively.
2 The Company and the Utilities use a graded rate of compensation increase assumption based on age. The rate provided above is an average across all future years of service for the current population.
Schedule of components of net periodic benefit cost for consolidated HEI
The components of NPPC and NPBC were as follows:
 
Pension benefits
 
Other benefits
(in thousands)
2019
 
2018
 
2017
 
2019
 
2018
 
2017
HEI consolidated
 
 
 
 
 
 
 
 
 
 
 
Service cost
$
62,135

 
$
68,987

 
$
64,906

 
$
2,209

 
$
2,721

 
$
3,374

Interest cost
84,267

 
77,374

 
81,185

 
8,004

 
7,933

 
9,453

Expected return on plan assets
(111,989
)
 
(108,953
)
 
(102,745
)
 
(12,356
)
 
(12,908
)
 
(12,326
)
Amortization of net prior service gain
(42
)
 
(42
)
 
(55
)
 
(1,806
)
 
(1,805
)
 
(1,793
)
Amortization of net actuarial losses
15,479

 
30,084

 
26,496

 
(13
)
 
95

 
1,130

Net periodic pension/benefit cost
49,850

 
67,450

 
69,787

 
(3,962
)
 
(3,964
)
 
(162
)
Impact of PUC D&Os
48,143

 
25,828

 
(18,004
)
 
3,258

 
3,842

 
1,211

Net periodic pension/benefit cost (adjusted for impact of PUC D&Os)
$
97,993

 
$
93,278

 
$
51,783

 
$
(704
)
 
$
(122
)
 
$
1,049

Hawaiian Electric consolidated
 
 
 
 
 
 
 
 
 
 
 
Service cost
$
60,461

 
$
67,359

 
$
63,059

 
$
2,191

 
$
2,704

 
$
3,353

Interest cost
77,851

 
71,294

 
74,632

 
7,673

 
7,628

 
9,115

Expected return on plan assets
(104,632
)
 
(102,368
)
 
(95,892
)
 
(12,180
)
 
(12,713
)
 
(12,147
)
Amortization of net prior service (gain) cost
7

 
8

 
8

 
(1,803
)
 
(1,803
)
 
(1,804
)
Amortization of net actuarial losses
14,658

 
27,302

 
24,392

 
—

 
98

 
1,102

Net periodic pension/benefit cost
48,345

 
63,595

 
66,199

 
(4,119
)
 
(4,086
)
 
(381
)
Impact of PUC D&Os
48,143

 
25,828

 
(18,004
)
 
3,258

 
3,842

 
1,211

Net periodic pension/benefit cost (adjusted for impact of PUC D&Os)
$
96,488

 
$
89,423

 
$
48,195

 
$
(861
)
 
$
(244
)
 
$
830
Schedule of projected benefit obligations and assets
Additional information on the defined benefit pension plans’ accumulated benefit obligations (ABOs), which do not consider projected pay increases (unlike the PBOs shown in the table above), and pension plans with ABOs and PBOs in excess of plan assets were as follows:
 
HEI consolidated
 
Hawaiian Electric consolidated
December 31
2019
 
2018
 
2019
 
2018
(in billions)
 
 
 
 
 
 
 
Defined benefit plans - ABOs
$
2.0

 
$
1.7

 
$
1.8

 
$
1.6

Defined benefit plans with ABO in excess of plan assets
 
 
 
 
 
 
 
     ABOs
1.9

 
1.6

 
1.8

 
1.6

     Fair value of plan assets
1.7

 
1.4

 
1.6

 
1.3

Defined benefit plans with PBOs in excess of plan assets
 
 
 
 
 
 
 
     PBOs
2.2

 
1.9

 
2.1

 
1.8

     Fair value of plan assets
1.7

 
1.4

 
1.6

 
1.3