Company: SREA
Filing Date: 2025-02-25
Form Type: 10-K
Source: 0001032208-25-000012
Chunk: 55

Company: SEMPRA
Filing Date: 2025-02-25
Form: 10-K
Item: Item 7
Chunk 55
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 Financial Statements.

PENSION AND PBOP PLANS

Sempra, SDG&E, SoCalGas

To measure our pension and PBOP obligations, costs and liabilities, we rely on several assumptions. We consider current market conditions, including interest rates, in making these assumptions. We review these assumptions annually and update when appropriate. 

The critical assumptions used to develop the required estimates include the following key factors: 

▪discount rates

▪expected return on plan assets

▪health care cost trend rates

▪interest crediting rate on cash balance accounts

▪mortality rate

▪rate of compensation increases

▪termination and retirement rates

2024 Form 10-K  |  102

▪utilization of postretirement welfare benefits

▪payout elections (lump sum or annuity)

▪lump sum interest rates

The actuarial assumptions we use may differ materially from actual results due to: 

▪return on plan assets

▪changing market and economic conditions

▪higher or lower withdrawal rates

▪longer or shorter participant life spans

▪more or fewer lump sum versus annuity payout elections made by plan participants

▪higher or lower retirement rates

Changes in the estimated costs or timing of pension and PBOP, or the assumptions and judgments used by management underlying these estimates (primarily the discount rate and expected return on plan assets), as well as changes in the circumstances associated with rate recovery, could have a material effect on the recorded expenses and liabilities. The following tables summarize the impact to our projected benefit obligation for pension and accumulated benefit obligation for PBOP at December 31, 2024, and 2024 net periodic benefit costs, in each case if the discount rate or expected return on plan assets were changed by 1%.

IMPACT DUE TO INCREASE/DECREASE IN DISCOUNT RATE(Dollars in millions)SempraSDG&ESoCalGasIncrease DecreaseIncreaseDecreaseIncreaseDecreasePension:(Decrease) increase to projected benefit obligation,net$(292)$(379)$(38)$59 $(241)$304 (Decrease) increase to net periodic benefit cost(1)16 2 (1)(4)17 PBOP:(Decrease) increase to accumulated benefitobligation, net(67)94 (9)22 (56)69 (Decrease) increase to net periodic benefit cost(6)7