Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2017

Net periodic cost for the defined benefit plans and other postretirement benefits was calculated using the following weighted-average assumptions:



	Pension Benefits			Other Benefits
	2017	2016	2015	2017	2016	2015
	%	%	%	%	%	%
Discount rate	4.04	4.24	3.88	3.93	4.10	3.80
Expected return on plan assets	7.00	7.00	7.00	7.00	7.00	7.00
Rate of compensation increase	4.00	4.00	4.00	N/A	N/A	N/A

Benefit obligations for the defined benefit plans and other postretirement benefits were calculated using the following weighted-average assumptions as of December 31:



	Pension Benefits		Other Benefits
	2017	2016	2017	2016
	%	%	%	%
Discount rate	3.52	4.04	3.45	3.93
Rate of compensation increase	4.00	4.00	N/A	N/A

Schedule of Net Benefit Costs

Net periodic costs for the defined benefit plans and other postretirement benefits for the years ended December 31 was as follows:



	Pension Benefits							Other Benefits
	2017			2016		2015		2017			2016		2015
Components of net periodic benefit cost
Service cost	$	4,699		4,447		5,072		$	529		527		379
Interest cost	6,993			6,830		6,342		634			655		504
Expected return on assets	(7,888		)	(7,288	)	(6,984	)	(376		)	(292	)	(283	)
Amortization of prior service cost	94			376		376		198			197		197
Recognized actuarial loss	3,844			3,527		4,005		273			316		188
Net periodic benefit cost	$	7,742		7,892		8,811		$	1,258		1,403		985

Schedule of Net Funded Status

The projected benefit obligations and the funded status of San Jose Water Company’s defined benefit pension and other postretirement plans as of December 31 were as follows:



	Pension Benefits					Other Benefits
	2017			2016		2017			2016
Change in benefit obligation
Benefit obligation at beginning of year	$	174,097		164,268		$	16,461		16,420
Service cost	4,699			4,447		529			527
Interest cost	6,993			6,830		634			655
Actuarial (gain)/loss	16,552			3,967		1,124			(528	)
Implicit rate subsidy	—			—		(196		)	(179	)
Benefits paid	(6,134		)	(5,415	)	(549		)	(434	)
Benefit obligation at end of year	$	196,207		174,097		$	18,003		16,461
Change in plan assets
Fair value of assets at beginning of year	$	113,895		104,953		$	5,366		4,462
Actual return on plan assets	17,298			5,936		736			295
Employer contributions	8,301			8,421		702			793
Benefits paid	(6,134		)	(5,415	)	—			(184	)
Fair value of plan assets at end of year	133,360			113,895		6,804			5,366
Funded status at end of year	$	(62,847	)	(60,202	)	$	(11,199	)	(11,095	)

Schedule of Amounts Recognized in Balance Sheet

The amounts recognized on the balance sheet as of December 31 were as follows:



	Pension Benefits			Other Benefits
	2017		2016	2017		2016
Current liabilities	$	1,099	1,032	$	86	87
Noncurrent liabilities	61,748		59,170	11,113		11,008
	$	62,847	60,202	$	11,199	11,095

Schedule of Regulatory Asset Recorded on the Projected Benefit Obligation of the Postretirement Benefit Plans

San Jose Water Company recorded a regulatory asset, including a gross-up for taxes, on the projected benefit obligation of the postretirement benefit plans as follows:



	2017			2016
Funded status of obligation	$	74,046		71,297
Accrued benefit cost	(5,490		)	(6,239	)
Amount to be recovered in future rates	68,556			65,058
Tax gross-up	—			44,737
Regulatory asset	$	68,556		109,795

Schedule of Estimated Amortization

The estimated amortization for the year ended December 31, 2018 is as follows:

Schedule of Allocation of Plan Assets

Plan assets for the years ended December 31 were as follows:



	Pension Benefits					Other Benefits
	2017			2016		2017			2016
Fair value of assets at end of year:
Debt securities	$	42,784		38,887		$	1,710		1,627
	32		%	34	%	25		%	30	%
Equity securities	83,352			66,022		4,111			2,675
	63		%	58	%	60		%	50	%
Cash and equivalents	7,224			8,986		983			1,064
	5		%	8	%	14		%	20	%
Total	$	133,360		113,895		$	6,804		5,366

The following tables summarize the fair values of plan assets by major categories as of December 31, 2017 and 2016:



				Fair Value Measurements at December 31, 2017
Asset Category	Benchmark	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and cash equivalents		$	8,207	$	8,207	$	—	$	—
Actively Managed (a):
All Cap Equity	Russell 3000 Value	6,413		6,376		37		—
U.S. Large Cap Equity	Russell 1000, Russell 1000 Growth, Russell 1000 Value	50,351		50,351		—		—
U.S. Mid Cap Equity	Russell Mid Cap, Russell Mid Cap Growth, Russell Mid Cap Value	9,358		9,358		—		—
U.S. Small Cap Equity	Russell 2000, Russell 2000 Growth, Russell 2000 Value, Russell 2500	8,725		8,725		—		—
Non-U.S. Large Cap Equity	MSCI EAFE	5,973		5,973		—		—
REIT	NAREIT—Equity REIT’s	6,143		—		6,143		—
Fixed Income (b)	(b)	44,994		—		44,994		—
Total		$	140,164	$	88,990	$	51,174	$	—

___________________________________

The Plan has a current target allocation of 55% invested in a diversified array of equity securities to provide long-term capital appreciation and 45% invested in a diversified array of fixed income securities to provide preservation of capital plus generation of income.


(a)	Actively managed portfolio of securities with the goal to exceed the stated benchmark performance.


(b)	Actively managed portfolio of fixed income securities with the goal to exceed the Barclays 1-5 Year Government/Credit, Barclays Intermediate Government/Credit, and Merrill Lynch Preferred Stock Fixed Rate.



				Fair Value Measurements at December 31, 2016
Asset Category	Benchmark	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and cash equivalents		$	10,050	$	10,050	$	—	$	—
Actively Managed (a):
All Cap Equity	Russell 3000 Value	5,290		5,266		24		—
U.S. Large Cap Equity	Russell 1000, Russell 1000 Growth, Russell 1000 Value	39,534		39,534		—		—
U.S. Mid Cap Equity	Russell Mid Cap, Russell Mid Cap Growth, Russell Mid Cap Value	7,021		7,021		—		—
U.S. Small Cap Equity	Russell 2000, Russell 2000 Growth, Russell 2000 Value	6,357		6,357		—		—
Non-U.S. Large Cap Equity	MSCI EAFE	4,832		4,832		—		—
REIT	NAREIT—Equity REIT’s	5,663		—		5,663		—
Fixed Income (b)	(b)	40,514		—		40,514		—
Total		$	119,261	$	73,060	$	46,201	$	—

___________________________________


(a)	Actively managed portfolio of securities with the goal to exceed the stated benchmark performance.


(b)	Actively managed portfolio of fixed income securities with the goal to exceed the Barclays 1-5 Year Government/Credit, Barclays Intermediate Government/Credit, and Merrill Lynch Preferred Stock Fixed Rate.

Schedule of Expected Benefit Payments

Benefits expected to be paid in the next five years and in the aggregate for the five years thereafter are:



	Pension Plan		Other Postretirement Benefit Plan
2018	$	6,941	$	795
2019	7,032		817
2020	7,392		823
2021	7,741		868
2022	8,013		916
2023 - 2027	43,828		5,032

Pension Benefits

Other Benefits

Amortization of prior service cost

Amortization of loss