Retirement Benefits (Tables)

12 Months Ended

Dec. 31, 2014

Defined Benefit Plan and Other Postretirement Benefit Plans Table Text Block [Line Items]

Schedule of Changes in Projected Benefit Obligations

The following tables summarize the Company’s change in benefit obligation, change in plan assets and amounts recognized in the Statements of Financial Position for the years ended December 31, 2014 and 2013:



Puget Energy and Puget Sound Energy	Qualified Pension Benefits						SERP Pension Benefits						Other Benefits
(Dollars in Thousands)	2014			2013			2014			2013			2014			2013
Change in benefit obligation:
Benefit obligation at beginning of period	$	573,317		$	616,290		$	47,279		$	51,795		$	14,939		$	17,672
Service cost	17,437			19,285			1,042			1,498			112			134
Interest cost	28,039			24,754			2,310			2,045			684			664
Amendment	—			—			—			478			—			—
Actuarial loss (gain)	104,618			(48,559		)	7,162			(1,687		)	1,108			(2,240		)
Benefits paid	(33,217		)	(38,453		)	(1,938		)	(6,850		)	(1,424		)	(1,536		)
Medicare part D subsidy received	—			—			—			—			269			245
Benefit obligation at end of period	$	690,194		$	573,317		$	55,855		$	47,279		$	15,688		$	14,939

Schedule of Changes in Fair Value of Plan Assets



Puget Energy and Puget Sound Energy	Qualified Pension Benefits						SERP Pension Benefits						Other Benefits
(Dollars in Thousands)	2014			2013			2014			2013			2014			2013
Change in plan assets:
Fair value of plan assets at beginning of period	$	615,721		$	531,183		$	—		$	—		$	8,774		$	7,541
Actual return on plan assets	25,669			102,591			—			—			522			1,861
Employer contribution	18,000			20,400			1,938			6,850			488			908
Benefits paid	(33,217		)	(38,453		)	(1,938		)	(6,850		)	(1,424		)	(1,536		)
Fair value of plan assets at end of period	$	626,173		$	615,721		$	—		$	—		$	8,360		$	8,774
Funded status at end of period	$	(64,021	)	$	42,404		$	(55,855	)	$	(47,279	)	$	(7,328	)	$	(6,165	)

Schedule of Amounts Recognized in Balance Sheet and Accumulated Other Comprehensive Income



Puget Energy and Puget Sound Energy	Qualified Pension Benefits					SERP Pension Benefits						Other Benefits
(Dollars in Thousands)	2014			2013		2014			2013			2014			2013
Amounts recognized in Statement of Financial Position consist of:
Noncurrent assets	$	—		$	42,404	$	—		$	—		$	—		$	—
Current liabilities	—			—		(4,386		)	(3,981		)	(355		)	(421		)
Noncurrent liabilities	(64,021		)	—		(51,469		)	(43,298		)	(6,973		)	(5,744		)
Net assets (liabilities)	$	(64,021	)	$	42,404	$	(55,855	)	$	(47,279	)	$	(7,328	)	$	(6,165	)

Schedule of Net Benefit Costs



Puget Energy	Qualified Pension Benefits									SERP Pension Benefits							Other Benefits
(Dollars in Thousands)	2014			2013			2012			2014		2013			2012		2014			2013			2012
Components of net periodic benefit cost:
Service cost	$	17,437		$	19,285		$	16,926		$	1,042	$	1,498		$	1,073	$	112		$	134		$	139
Interest cost	28,039			24,754			25,986			2,310		2,045			2,152		684			664			751
Expected return on plan assets	(42,464		)	(39,095		)	(36,203		)	—		—			—		(535		)	(436		)	(435		)
Amortization of prior service cost (credit)	(1,980		)	(1,980		)	(1,980		)	42		(17		)	—		—			—			—
Amortization of net loss	—			2,889			768			913		1,461			702		(393		)	69			53
Net periodic benefit cost	$	1,032		$	5,853		$	5,497		$	4,307	$	4,987		$	3,927	$	(132	)	$	431		$	508

Schedule of Amounts Recognized in Other Comprehensive Income (Loss)



Puget Energy	Qualified Pension Benefits					SERP Pension Benefits						Other Benefits
(Dollars in Thousands)	2014		2013			2014			2013			2014		2013
Other changes (pre-tax) in plan assets and benefit obligations recognized in other comprehensive income:
Net loss (gain)	$	121,413	$	(112,055	)	$	7,162		$	(1,687	)	$	1,121	$	(3,665	)
Amortization of net loss (gain)	—		(2,889		)	(913		)	(1,461		)	394		(70		)
Prior service credit	—		—			—			478			—		—
Amortization of prior service credit	1,980		1,980			(42		)	17			—		—
Total change in other comprehensive income for year	$	123,393	$	(112,964	)	$	6,207		$	(2,653	)	$	1,515	$	(3,735	)

Schedule of Assumptions Used

In accounting for pension and other benefit obligations and costs under the plans, the following weighted-average actuarial assumptions were used by the Company:



	Qualified Pension Benefits						SERP Pension Benefits						Other Benefits
Benefit Obligation Assumptions	2014		2013		2012		2014		2013		2012		2014		2013		2012
Discount rate ¹	4.25	%	5.10	%	4.15	%	4.25	%	5.10	%	4.15	%	4.25	%	5.10	%	4.15	%
Rate of compensation increase	4.50	%	4.50	%	4.50	%	4.50	%	4.50	%	4.50	%	4.50	%	4.50	%	4.50	%
Medical trend rate	—		—		—		—		—		—		5.70	%	6.80	%	7.50	%
Benefit Cost Assumptions
Discount rate	5.10	%	4.15	%	4.75	%	5.10	%	4.15	%	4.75	%	5.10	%	4.15	%	4.75	%
Rate of plan assets	7.75	%	7.75	%	7.75	%	—		—		—		7.00	%	6.90	%	7.50	%
Rate of compensation increase	4.50	%	4.50	%	4.50	%	4.50	%	4.50	%	4.50	%	4.50	%	4.50	%	4.50	%
Medical trend rate	—		—		—		—		—		—		6.70	%	8.20	%	7.50	%

_______________


¹	The Company calculates the present value of the pension liability using a discount rate of 4.25% which represents the single-rate equivalent of the AA rated corporate bond yield curve.

Schedule of Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rates

A 1.0% change in the assumed medical inflation rate would have the following effects:



	2014					2013
(Dollars in Thousands)	1% Increase		1% Decrease			1% Increase		1% Decrease
Effect on post-retirement benefit obligation	$	47	$	(47	)	$	66	$	(66	)
Effect on service and interest cost components	2		(2		)	3		(3		)

Schedule of Expected Benefit Payments

The expected total benefits to be paid under the next five years and the aggregate total to be paid for the five years thereafter are as follows:



(Dollars in Thousands)	2015		2016		2017		2018		2019		2020-2024
Qualified Pension total benefits	$	41,100	$	41,400	$	42,100	$	43,300	$	43,900	$	237,300
SERP Pension total benefits	$	4,386	$	2,595	1,940		5,346		5,811		18,759
Other Benefits total with Medicare Part D subsidy	$	1,080	$	1,136	$	1,113	$	1,085	$	1,062	$	5,935
Other Benefits total without Medicare Part D subsidy	$	1,429	$	1,414	$	1,398	$	1,380	$	1,362	$	6,340

Schedule of Allocation of Plan Assets

The following table sets forth by level, within the fair value hierarchy, the qualified pension plan as of December 31, 2014 and 2013:



	Recurring Fair Value Measures								Recurring Fair Value Measures
	As of December 31, 2014								As of December 31, 2013
(Dollars in Thousands)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Equities:
Non-US equity ¹	$	71,026	$	74,131	$	—	$	145,157	$	76,188	$	78,816	$	—	$	155,004
Domestic large cap equity ²	134,765		68,336		—		203,101		157,874		35,851		—		193,725
Domestic small cap equity ³	59,657		—		—		59,657		62,867		—		—		62,867
Total equities	265,448		142,467		—		407,915		296,929		114,667		—		411,596
Tactical asset allocation ⁴	—		—		—		—		—		—		—		—
Fixed income securities ⁵	72,331		67,182		—		139,513		135,007		—		—		135,007
Absolute return ⁶	—		—		65,251		65,251		—		—		62,278		62,278
Cash and cash equivalents ⁷	12,650		—		—		12,650		—		7,054		—		7,054
Subtotal	$	350,429	$	209,649	$	65,251	$	625,329	$	431,936	$	121,721	$	62,278	$	615,935
Net (payable) receivable	—		—		—		844		—		—		—		(417		)
Accrued income	—		—		—		—		—		—		—		203
Total assets							$	626,173							$	615,721

_________________


¹	Non – US Equity investments are comprised of a (1) mutual fund; and a (2) commingled fund. The investment in the mutual fund is valued using quoted market prices multiplied by the number of shares owned as of December 31, 2014. The investment in the commingled fund is valued at the net asset value per share multiplied by the number of shares held as of December 31, 2014.


2	Domestic large cap equity investments are comprised of (1) common stock, and a (2) commingled fund. Investments in common stock are valued using quoted market prices multiplied by the number of shares owned as of December 31, 2014. The investment in the commingled fund is valued at the net asset value per share multiplied by the number of shares held as of December 31, 2014.


3	Domestic small cap equity investments are comprised of (1) common stock and a (2) mutual fund. The investments in common stock are valued using quoted market prices multiplied by the number of shares owned as of December 31, 2014. The investment in the mutual fund is valued using quoted market prices multiplied by the number of shares owned as of December 31, 2014.


4	The tactical asset allocation investment is comprised of a commingled fund, which is valued at the net asset value per share multiplied by the number of shares held as of the measurement date.


5	Fixed income securities consist of a mutual fund. The investment in the mutual fund is valued using quoted market prices multiplied by the number of shares owned as of December 31, 2014.


6	As of December 31, 2014 absolute return investments consist of two partnerships. The partnerships are valued using the financial reports as of December 31, 2014. These investments are a Level 3 under ASC 820 because the significant valuation inputs are primarily internal to the partnerships with little third party involvement.


7	The investment consists of a money market fund, which is valued at the net asset value per share of $1.00 per unit as of December 31, 2014. The money market fund invests primarily in commercial paper, notes, repurchase agreements, and other evidences of indebtedness which are payable on demand or short-term in nature.

The following table sets forth by level, within the fair value hierarchy, the Other Benefits plan assets which consist of insurance benefits for retired employees, at fair value:



	Recurring Fair Value Measures						Recurring Fair Value Measures
	As of December 31, 2014						As of December 31, 2013
(Dollars in Thousands)	Level 1		Level 2		Total		Level 1		Level 2		Total
Assets:
Mutual fund ¹	$	8,301	$	—	$	8,301	$	8,703	$	—	$	8,703
Cash equivalents ²	59		—		59		—		71		71
Total assets	$	8,360	$	—	$	8,360	$	8,703	$	71	$	8,774

_______________


¹	This is a publicly traded balanced mutual fund. The fund seeks regular income, conservation of principal, and an opportunity for long-term growth of principal and income. The fair value is determined by taking the number of shares owned by the plan, and multiplying by the market price as of December 31, 2014.


²	This is a money market fund. The money market fund investments are valued at the net asset value per share of $1.00 per unit as of December 31, 2014. The money market fund invests primarily in commercial paper, notes, repurchase agreements, and other evidences of indebtedness which are payable on demand or short-term in nature.

To obtain the desired return needed to fund the pension benefit plans, the Retirement Plan Committee has established investment allocation percentages by asset classes as follows:



	Allocation
Asset Class	Minimum	Target	Maximum
Domestic large cap equity	25%	31%	40%
Domestic small cap equity	0%	9%	15%
Non-U.S. equity	10%	25%	30%
Fixed income	15%	25%	30%
Real estate	0%	0%	10%
Absolute return	5%	10%	15%
Cash	0%	0%	5%

Schedule of Effect of Significant Unobservable Inputs, Changes in Plan Assets

Level 3 Roll-Forward

The following table sets forth a reconciliation of changes in the fair value of the plan’s Level 3 assets:



	As of December 31, 2014						As of December 31, 2013
(Dollars in Thousands)	Partnership		Mutual Funds		Total		Partnership		Mutual Funds		Total
Balance at beginning of year	$	62,278	$	—	$	62,278	$	55,614	$	—	$	55,614
Additional investments	—		—		—		—		—		—
Distributions	—		—		—		—		—		—
Realized losses on distributions	—		—		—		—		—		—
Unrealized gains relating to instruments still held at the reporting date	2,973		—		2,973		6,664		—		6,664
Transferred out of level 3 ¹	—		—		—		—		—		—
Balance at end of year	$	65,251	$	—	$	65,251	$	62,278	$	—	$	62,278

_________________


¹	The plan had no transfers between level 2 and level 1 during the years ended December 31, 2014 or 2013.

PUGET ENERGY

Defined Benefit Plan and Other Postretirement Benefit Plans Table Text Block [Line Items]

Schedule of Amounts Recognized in Balance Sheet and Accumulated Other Comprehensive Income



Puget Energy	Qualified Pension Benefits						SERP Pension Benefits				Other Benefits
(Dollars in Thousands)	2014			2013			2014		2013		2014			2013
Amounts recognized in Accumulated Other Comprehensive Income consist of:
Net loss (gain)	$	55,471		$	(65,943	)	$	15,918	$	9,670	$	(1,457	)	$	(2,972	)
Prior service cost (credit)	(13,782		)	(15,762		)	331		373		—			—
Total	$	41,689		$	(81,705	)	$	16,249	$	10,043	$	(1,457	)	$	(2,972	)

PUGET SOUND ENERGY, INC.

Defined Benefit Plan and Other Postretirement Benefit Plans Table Text Block [Line Items]

Schedule of Amounts Recognized in Balance Sheet and Accumulated Other Comprehensive Income



Puget Sound Energy	Qualified Pension Benefits						SERP Pension Benefits				Other Benefits
(Dollars in Thousands)	2014			2013			2014		2013		2014			2013
Amounts recognized in Accumulated Other Comprehensive Income consist of:
Net loss (gain)	$	247,331		$	138,324		$	19,751	$	14,050	$	(3,733	)	$	(5,556	)
Prior service cost (credit)	(10,952		)	(12,525		)	339		383		3			6
Total	$	236,379		$	125,799		$	20,090	$	14,433	$	(3,730	)	$	(5,550	)

Schedule of Net Benefit Costs



Puget Sound Energy	Qualified Pension Benefits									SERP Pension Benefits							Other Benefits
(Dollars in Thousands)	2014			2013			2012			2014		2013			2012		2014			2013			2012
Components of net periodic benefit cost:
Service cost	$	17,437		$	19,285		$	16,926		$	1,042	$	1,498		$	1,073	$	112		$	134		$	139
Interest cost	28,039			24,753			25,986			2,310		2,045			2,152		684			664			751
Expected return on plan assets	(43,252		)	(40,685		)	(41,533		)	—		—			—		(535		)	(436		)	(435		)
Amortization of prior service cost (credit)	(1,573		)	(1,573		)	(1,573		)	44		(16		)	293		3			30			35
Amortization of net loss(gain)	13,195			20,612			15,015			1,461		2,191			1,432		(702		)	(284		)	(245		)
Amortization of transition obligation	—			—			—			—		—			—		—			—			50
Net periodic benefit cost	$	13,846		$	22,392		$	14,821		$	4,857	$	5,718		$	4,950	$	(438	)	$	108		$	295

Schedule of Amounts Recognized in Other Comprehensive Income (Loss)



Puget Sound Energy	Qualified Pension Benefit						SERP Pension Benefits						Other Benefits
(Dollars in Thousands)	2014			2013			2014			2013			2014			2013
Other changes (pre-tax) in plan assets and benefit obligations recognized in other comprehensive income:
Net loss (gain)	$	122,202		$	(110,465	)	$	7,162		$	(1,687	)	$	1,121		$	(3,665	)
Amortization of net (loss) gain	(13,195		)	(20,612		)	(1,461		)	(2,191		)	702			284
Prior service cost (credit)	—			—			—			477			—			—
Amortization of prior service cost (credit)	1,573			1,573			(44		)	16			(3		)	(30		)
Amortization of transition obligation	—			—			—			—			—			—
Total change in other comprehensive income for year	$	110,580		$	(129,504	)	$	5,657		$	(3,385	)	$	1,820		$	(3,411	)