Company: SREA
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001032208-25-000012
Chunk: 445

Company: SEMPRA
Filing Date: 2025-02-25
Form: 10-K
Item: Item 1
Chunk 445
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 plan assets are positioned to meet plan obligations. When evaluating strategic asset allocations, the Committees consider many variables, including:▪long-term cost▪variability and level of contributions▪funded status▪a range of expected outcomes over varying confidence levelsIn accordance with the Sempra pension investment guidelines, derivative financial instruments may be used by the pension master trust’s equity and fixed income portfolio investment managers to equitize cash, hedge certain exposures, and as substitutes for certain types of fixed income securities.Rate of Return AssumptionThe expected return on plan assets in our pension and PBOP plans is based on the weighted average of the plans’ target investment allocations to specific asset classes as of the measurement date. We expect a return of between 4% and 12% on return-seeking assets and between 2% and 6% for risk-mitigating assets. Certain trusts that hold assets for SDG&E’s and SoCalGas’ PBOP plans are subject to taxation, which impacts the expected after-tax return on plan assets.

2024 Form 10-K  |  F-90

Concentration of RiskPlan assets are diversified across global equity and bond markets, and concentration of risk in any one economic, industry, maturity or geographic sector is limited.Investment Strategy for Sempra’s, SDG&E’s and SoCalGas’ PBOP PlansSempra’s PBOP plan is funded by cash contributions from Sempra. SDG&E’s and SoCalGas’ PBOP plans are funded by cash contributions from SDG&E and SoCalGas and their current retirees. The assets of these plans are placed into the pension master trust and other Voluntary Employee Beneficiary Association trusts. Specific target asset allocations are periodically reviewed to help ensure that plan assets are positioned to meet plan obligations. The target asset allocations for the PBOP plans are between return-seeking assets and risk-mitigating assets as follows:TARGET ASSET ALLOCATIONS FOR PBOP PLANS(Dollars in millions)SempraSDG&E and SoCalGasAssets held in pension master trustAssets held in pension master trust Assets held in Voluntary Employee Beneficiary Association trustsReturn-seeking assets74 %38 %30 %Risk-mitigating assets26 %62 %70 %

Fair Value of Pension and PBOP Plan AssetsWe classify the investments in Sempra’s pension master trust and the trusts for SDG&E’s and SoCalGas’ PBOP plans based on the fair value hierarchy, except for certain investments measured using NAV as