PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
THRIFT AND TAX-DEFERRED SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2008 AND 2007 AND FOR THE YEAR ENDED DECEMBER 31, 2008
1. DESCRIPTION OF THE PLAN
General
The following description of the Public Service Enterprise Group Incorporated Thrift and Tax-Deferred Savings Plan (Plan) is provided for general information purposes only. Participants should refer to the Plan Document for
more complete information.
The Plan is a defined contribution plan covering substantially all non-bargaining unit employees of Public Service Enterprise Group Incorporated (Company) and its Participating Affiliates (each, an Employer). The
Companys Employee Benefits Committee (Benefits Committee) is the Named Fiduciary of the Plan and controls and manages its operation and administration. The trustee of the Plan, The Bank of New York Mellon (Trustee), is responsible for the
custody and management of the Plans assets. Hewitt Associates is the record keeper of the Plan. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (ERISA).
Substantially all of the Plans assets are held in a trust account by the Trustee and consist of a divided interest in an investment account of the Master Employee Benefit Plan Trust (Master Trust), a master trust
established by the Company and administered by the Trustee.
Contributions, Deposits and Investment Options
Generally, Participants may contribute from 1% to 8% of their annual compensation each year as basic deposits, as defined in the Plan (Basic Deposits), subject to certain Internal Revenue Code (IRC) limitations. The
Participants Employer contributes an amount equal to 50% of this Basic Deposit as its matching contribution to the Plan (Employer Contributions). Employer Contributions begin when that Participant has completed one Year of Service, as defined
in the Plan, with his/her Employer. Employer Contributions are made in cash. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans.
Participants have the ability to make Roth Elective Deferrals within the Plan.
In addition, a Participant may elect to make supplemental deposits to the Plan
in increments of 1% of compensation up to an additional 42% of compensation (Supplemental Deposits), subject to certain IRC limitations, without any corresponding matching Employer Contribution. Participants may designate such Basic and/or
Supplemental Deposits as post-income tax contributions or Roth Elective Deferrals (together Nondeferred Deposits), or pre-income tax contributions (Deferred Deposits).
Each Participant may, within any Plan Year, make one or more additional lump sum deposits on a nondeferred basis in minimum amounts of $250 and in such total amounts which, when aggregated with such Participant's Basic
Deposits and Supplemental Deposits, do not exceed 50% of his or her compensation for that Plan Year and subject to IRC limitations.
4
NOTES TO FINANCIAL STATEMENTS
Participants direct the investment of their accounts into various investment options offered by the Plan. The Plan offers investment options in Guaranteed Investment Contracts (GICs), the Common Stock of the Company via the
Enterprise Common Stock Fund and the Employee Stock Ownership Plan Fund (ESOP Fund), the Schwab Personal Choice Retirement Account (PCRA) Fund, ten lifestyle funds, five mutual funds and three pre-mix portfolios, each of which are invested in
specific percentages of the mutual funds.
The ESOP Fund is only available to Participants who were hired prior to August 1, 1986 and qualified for participation. Contributions to or transfers into the ESOP Fund are no longer permitted. ESOP Fund Participants
receive quarterly payments directly from the Trustee equal to the dividends paid to the Trustee on the shares of the Company Common Stock held for their account in the ESOP Fund.
Participant Accounts
Individual accounts are maintained for each Participant. Each Participants account is credited with the Participants contributions and allocations of (a) the Employers contributions and (b) Plan earnings,
and charged with an allocation of (c) Plan losses and (d) certain administrative expenses. Allocations are based on Participant earnings or account balances, as defined. The benefit to which a Participant or beneficiary is entitled upon death,
disability, retirement or termination of service, as applicable, is the benefit that can be provided from the Participants vested account.
Participants who have elected to participate in the Enterprise Common Stock Fund may elect to have the dividends on the shares of the Common Stock paid directly to the Participant (or beneficiary) in cash or paid to the
Participants account, which will then be reinvested in the Enterprise Common Stock Fund. This provision is not applicable with respect to Enterprise Common Stock held in a Participants ESOP Account.
Participant Loans
Except as discussed in the following paragraph, Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance at the time
the loan is originated. The loans are secured by the balance in the Participants account and existing loans bear interest at rates that range from 4.00% to 8.25%, which are commensurate with local prevailing rates at the time that the loan was
originated, as determined by the Benefits Committee. Principal and interest is paid ratably through payroll deductions.
No amounts may be loaned directly from any ESOP Fund, from any portion of a Participants account attributable to transfers from the Cash Balance Pension Plan of Public Service Enterprise Group Incorporated (Cash
Balance Plan) or from assets held in the Schwab PCRA Fund. No Participant may have more than two loans outstanding at any time.
Payment of Benefits
On termination of service due to retirement, a Participant may elect to receive an amount equal to the value of the vested interest in his or her account in either a lump-sum payment, or in quarterly or annual installments
over a period not to exceed ten years. If a Participant is no longer working for the Company and has a balance in the Plan, he or she must begin to receive distributions from his or her account no later than April 1
following the calendar year in which he or she reaches age 70½. If a Participants account balance is less than $1,000 at the time of termination, the Participant will receive an automatic lump-sum
payment for the entire account balance. For termination due to death, the Participants beneficiary will
5
NOTES TO FINANCIAL STATEMENTS
receive a lump-sum distribution equal to the value of the Participants vested interest in his or her account. For termination of service for reasons other than those described above, the Participant may elect to receive an automatic lump-sum distribution equal to the value of the Participants vested interest in his or her account, or leave
their account balance in the Plan and elect distributions at a later date.
If a Participant withdraws Basic and/or Supplemental Deposits and/or vested Employer Contributions before they have been in the Plan for twenty-four months, such Participant will not be eligible to receive the matching
Employer Contributions during the subsequent three months. Distributions to Participants electing to withdraw Nondeferred Deposits and Employer Contributions are made as soon as practicable after such elections are received by the Plans record
keeper. Nondeferred Deposits may be withdrawn at any time, but certain penalties may apply. Deferred Deposits may not be withdrawn during employment prior to age 59½ except for reasons of extraordinary financial hardship and to the extent
permitted by the IRC (hardship withdrawals). Distributions to Participants of approved hardship withdrawals are made as soon as practicable after such approval.
Vesting
Except for amounts transferred from the Cash Balance Plan into the Plan, Employer Contributions to a Participants account and earnings therein are fully vested. Amounts transferred from the Cash Balance Plan follow
the Cash Balance Plan vesting regulations and vest if they are credited with 1 Hour of Service. All amounts credited to a Participants ESOP Fund are fully vested.
Forfeitures
Any nonvested portion (amounts transferred from the Cash Balance Plan) of the Participants account, determined as of the date of severance from employment, will be forfeited and will be applied thereafter to reduce a
subsequent contribution or contributions of the Employer as provided in the Plan. If such former Participant is rehired and remains employed by an Employer at the end of the fifth Plan Year after the Plan Year in which such severance occurred, then
such nonvested portion of the Participants Account will be reinstated by the Employer and the Participants right thereto will be determined as if the Participant had not terminated employment, provided that the Participant repays to the
Plan the amount of any distribution paid to him or her resulting from the severance from employment. For the year ended December 31, 2008, forfeitures amounted to $14,036. For the year ended December 31, 2007, forfeitures amounted $68,942.
There were no reinstatements for the years ended December 31, 2008 and 2007.
6
NOTES TO FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements of the Plan have been prepared on an accrual basis in accordance with accounting principles generally accepted in the U.S. (GAAP). As described in Financial Accounting Standards Board Staff
Position, FSP AAG INV-1 and SOP 94-4-1,
Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution Health
and Welfare and Pension Plans
(the FSP), investment contracts held by a defined contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attribute for that
portion of the net assets available for benefits of a defined contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount Participants would receive if they were to initiate permitted
transactions under the terms of the Plan. As required by the FSP, the Statements of Net Assets Available for Benefits present the fair value of the investment contracts as well as the adjustment of the fully benefit-responsive investment contracts
from fair value to contract value. The Statement of Changes in Net Assets Available for Benefits is prepared on a contract value basis.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires Plan management to make estimates and assumptions that affect the reported amounts of net assets available for benefits and changes therein and
disclosure of contingent assets and liabilities. Actual results could differ from those estimates.
Risks and Uncertainties
The Plan utilizes various investment options. Investment securities, in general, are exposed to various risks, such as interest rate, credit and overall market volatility. Due to the level of risk associated with certain
investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near-term and that such changes could materially affect Participants account balances and the amounts reported in the
financial statements.
Investment Valuation and Income Recognition
The Plans investments consist of the Master Trust and Participant Loans. The investments in the Master Trust are stated at fair value, as determined by quoted market prices, except for its contracts within the Stable Value
Fund and certain Short-Term Investments and Cash Equivalents. The Plans investments in the guaranteed annuity contracts of the Stable Value Fund are with various insurance companies and other financial institutions. Non-participating synthetic
guaranteed annuity contract fair values were determined using a discounted cash method. Based on its duration, the estimated cash flow of each contract was discounted using a yield curve interpolated from swap rates and adjusted for liquidity and
credit quality. For those contracts with no stated payment dates, the projected value at the end of the required days notice period was assumed to pay in full and this payment was then discounted following the process described above.
Certain Short-Term Investments and Cash Equivalents are stated at cost, which approximates fair market value. The Participant Loans are valued at outstanding principal balance plus accrued interest, which approximate fair
value. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis.
7
NOTES TO FINANCIAL STATEMENTS
Payment of Benefits
Benefit payments to Participants are recorded upon distribution. Amounts allocated to accounts of persons who have elected to withdraw from the Plan, but have not yet been paid were $574,762 and $106,260 as of
December 31, 2008 and 2007, respectively.
Administrative Expenses of the Plan
Certain expenses incurred with the general administration of the Plan, including taxes and brokerage costs, are recorded in the accompanying Statement of Changes in Net Assets Available for Benefits. Certain administrative
functions performed by the officers and employees of the Company are paid by Employers (Note 6).
Transfers of the ESOP Fund
Participants are permitted to transfer all, but not less than all, of the shares of the Companys Common Stock from their ESOP Fund to other investment options in the Plan. To effect such transfers, the Trustee will
sell the shares of the Companys Common Stock held in the ESOP Fund and invest the proceeds in the other investment funds designated by the Participant. The cash value of each share of the Companys Common Stock transferred will be equal
to the price per share of the Companys Common Stock actually received by the Trustee.
8
NOTES TO FINANCIAL STATEMENTS
3. INVESTMENT OF THE PLAN AND THE PUBLIC SERVICE
ENTERPRISE GROUP
INCORPORATED EMPLOYEE
SAVINGS PLAN (SAVINGS PLAN) IN THE MASTER TRUST
Use of the Master Trust permits the commingling of trust assets with the assets of the Savings Plan for investment and administrative purposes. Although assets of both plans are commingled in the Master Trust, the Trustee
maintains supporting records for the purpose of allocating the net gain or loss of the investment account to the respective participating plans. The net investment loss of the investment assets is allocated by the Trustee to each participating plan
based on the relationship of the interest of each plan to the total of the interests of the participating plans. As of December 31, 2008 and 2007, the Plans interests in such assets of the Master Trust were approximately 57% and 56%,
respectively.
|
|
As of December 31,
|
|
|
|
2008
|
|
|
|
2007
|
|
|
|
(Thousands)
|
|
Investments in Master Trust at Fair Value:
|
|
|
|
|
|
|
|
|
Cash Equivalents
|
|
$
|
51,496
|
|
|
$
|
26,191
|
|
Common Stock of
|
|
|
|
|
|
|
|
|
Public Service Enterprise Group Incorporated*
|
|
|
184,675
|
|
|
|
243,926
|
|
Mutual Funds
|
|
|
580,572
|
|
|
|
984,942
|
|
GICs
|
|
|
686,813
|
|
|
|
632,756
|
|
Schwab PCRA Fund (a)
|
|
|
37,091
|
|
|
|
56,558
|
|
Total Investments
|
|
$
|
1,540,647
|
|
|
$
|
1,944,373
|
|
|
|
|
|
|
|
|
|
For the
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
|
|
|
|
|
December 31, 2008
|
|
|
|
|
|
|
|
|
(Thousands)
|
|
Investment Income (Loss):
|
|
|
|
|
|
|
|
|
Net Depreciation in Fair Value of Mutual Funds
|
|
|
|
|
|
$
|
(320,714
|
)
|
Net Depreciation in Fair Value of Common Stock
|
|
|
|
|
|
|
|
|
of Public Service Enterprise Group Incorporated*
|
|
|
|
|
|
|
(114,451
|
)
|
Net Depreciation in Fair Value of Schwab PCRA Fund (a)
|
|
|
|
|
|
|
(21,155
|
)
|
Interest from GICs
|
|
|
|
|
|
|
27,996
|
|
Dividends from Common Stock of Public Service Enterprise Group Incorporated*
|
|
|
|
7,599
|
|
Total Investment Loss, Net
|
|
|
|
|
|
$
|
(420,725
|
)
|
|
|
|
|
(a)
|
|
Amounts primarily relate to equity investments in stocks and in mutual funds. The net depreciation in
fair value is primarily comprised of realized/unrealized gains or losses and dividends earned on these
equity investments.
|
|
*
|
|
Permitted party-in-interest.
|
9
NOTES TO FINANCIAL STATEMENTS
Assets of the Stable Value Fund
The assets of the Stable Value Fund, included in the Master Trust, are primarily invested in GICs with additional investments in the Trustees Short-Term Investment Fund. As of December 31, 2008, the Stable Value Fund
was comprised of the following:
Issuer
|
|
Type
|
|
Expiration
|
|
Effective Rate
|
|
Fair Value
|
|
|
|
|
|
|
|
|
(Thousands)
|
Bank of America (A)
|
|
Synthetic
|
|
Open-Ended
|
|
4.63%
|
|
$83,266
|
ING Life Insurance & Annuity Co. (A)
|
|
Synthetic
|
|
Open-Ended
|
|
4.63%
|
|
89,054
|
JP Morgan Chase (A)
|
|
Synthetic
|
|
Open-Ended
|
|
4.63%
|
|
119,908
|
Monumental Life (A)
|
|
Synthetic
|
|
Open-Ended
|
|
3.26%
|
|
127,567
|
Pacific Life Insurance (A)
|
|
Synthetic
|
|
Open-Ended
|
|
3.23%
|
|
122,683
|
Pacific Life Insurance (A)
|
|
Synthetic
|
|
Open-Ended
|
|
4.62%
|
|
44,025
|
Rabobank Nederland (A)
|
|
Synthetic
|
|
Open-Ended
|
|
4.84%
|
|
100,310
|
Total GICs
|
|
|
|
|
|
|
|
686,813
|
Investment in Mellon trust Short-Term Investment Fund
|
|
|
|
1.53%
|
|
38,648
|
Total Stable Value Fund
|
|
|
|
|
|
|
|
|
725,461
|
(A) Managed by INVESCO Institutional, Inc.
|
|
|
|
|
|
|
As of December 31, 2007, the Stable Value Fund was comprised of the following:
Issuer
|
|
Type
|
|
Expiration
|
|
Effective Rate
|
|
Fair Value
|
|
|
|
|
|
|
|
|
(Thousands)
|
Bank of America (A)
|
|
Synthetic
|
|
Open-Ended
|
|
4.66%
|
|
$71,882
|
ING Life Insurance & Annuity Co. (A)
|
|
Synthetic
|
|
Open-Ended
|
|
4.37%
|
|
76,571
|
JP Morgan Chase (A)
|
|
Synthetic
|
|
Open-Ended
|
|
4.73%
|
|
78,747
|
Monumental Life (A)
|
|
Synthetic
|
|
Open-Ended
|
|
4.90%
|
|
114,460
|
Pacific Life Insurance (A)
|
|
Synthetic
|
|
Open-Ended
|
|
4.92%
|
|
115,576
|
Rabobank Nederland (A)
|
|
Synthetic
|
|
Open-Ended
|
|
5.29%
|
|
97,419
|
UBS AG (A)
|
|
Synthetic
|
|
Open-Ended
|
|
4.66%
|
|
78,101
|
Total GICs
|
|
|
|
|
|
|
|
632,756
|
Investment in Bank of New York Short-Term Investment Fund
|
|
4.57%
|
|
17,937
|
Total Stable Value Fund
|
|
|
|
|
|
|
|
|
650,693
|
(A) Managed by INVESCO Institutional, Inc.
|
|
|
|
|
|
|
The Plan has entered into Stable Value Funds, most of whose investments are in benefit-responsive investment contracts. Contributions to these contracts are maintained in general accounts. The accounts are credited with
earnings on the underlying investments and charged for participant withdrawals and administrative expenses. The guaranteed investment contract issuer is contractually obligated to repay the principal and a specified interest rate that is guaranteed
to the Plan.
As described in Note 2, because the guaranteed annuity contracts are fully benefit-responsive, contract value is the relevant measurement attribute for that portion of the net assets available for benefits attributable to
the guaranteed investment contracts. Contract value, as reported to the Plan by the Stable Value Fund managers, represents contributions made under the contracts, plus earnings, less participant withdrawals and
10
NOTES TO FINANCIAL STATEMENTS
administrative expenses. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value.
There are no reserves against contract value for credit risk of the contract issuers or otherwise. The crediting interest rate is based on a formula agreed upon with the issuers, but may not be less than zero. Such rates
are reviewed on a quarterly basis for resetting.
Certain events limit the ability of the Plan to transact at contract value with the issuers. Such events include the following: (1) amendments to the Plan documents (including complete or partial plan termination or merger
with another plan), (2) changes to the Plans prohibition on competing investment options or deletion of equity wash provisions, (3) bankruptcy of the Plan Sponsor or other events (for example, divestitures or spin-offs of a subsidiary) that
cause a significant withdrawal from the Plan, or (4) the failure of the trust to qualify for exemption from federal income taxes or any required prohibited transaction exemption under ERISA. The Plan administrator does not believe that the
occurrence of any such value event, which would limit the Plans ability to transact at contract value with Participants, is probable.
The average yield based on actual earnings was approximately 4.02% and 4.81% for 2008 and 2007, respectively. The average yield based on interest rate credited to Participants was approximately 4.16% and 4.82% for 2008 and
2007, respectively.
The fair market value of the wrapper contract in the Stable Value Fund as of December 31, 2008 and 2007 was $20,537,167 and $(4,514,537) respectively.
Assets of the Enterprise Common Stock Fund
The assets of the Enterprise Common Stock Fund are invested in the Companys Common Stock.
Schwab PCRA Fund
The Schwab PCRA Fund is a self-directed brokerage account in which Participants can select and manage a wide selection of investments including mutual funds and stocks. Deposits into the Schwab PCRA Fund must come from
balances transferred from the other options in the Plan. Participants may transfer up to 100% of their account balance, less $500 to pay for certain fees, to the Schwab PCRA Fund.
4. FAIR VALUE MEASUREMENTS
Effective January 1, 2008, the Plan adopted SFAS No. 157, Fair Value Measurements (SFAS 157) and related FASB Staff Positions issued by the FASB. SFAS 157 defines fair value, establishes a framework for
measuring fair value and expands disclosures about fair value measurements. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. SFAS 157 emphasizes that fair value is a market-based measurement, not an entity-specific measurement, and establishes a fair value hierarchy that distinguishes between assumptions based on market data obtained from independent sources and
those based on an entitys own assumptions. The hierarchy prioritizes the inputs to fair value measurement into three levels:
|
Level 1measurements utilize
quoted prices (unadjusted) in active markets for identical assets or liabilities.
|
11
NOTES TO FINANCIAL STATEMENTS
|
Level 2measurements include
quoted prices for similar assets and liabilities in active markets, quoted
prices
for identical or similar assets or liabilities in markets that are not
active, and other observable
inputs
such as interest rates and yield curves that are observable at commonly
quoted intervals.
|
|
Level 3measurements use unobservable
inputs for assets or liabilities, based on the best information
available
and might include an entitys own data and assumptions. In some
valuations, the inputs used
may fall
into different levels of the hierarchy. In these cases, the financial
instruments level within the
fair
value hierarchy is based on the lowest level of input that is significant
to the fair value measurement.
|
The following table presents information about the investments measured at fair value on a recurring basis at December 31, 2008, including the fair value measurements and the levels of inputs used in determining those fair
values.
|
|
Recurring Fair Value Measurements as of December 31, 2008
|
|
|
|
|
|
|
|
|
Quoted Market
|
|
|
Significant
Other
|
|
|
Significant
|
|
|
|
|
|
|
Prices for
|
|
|
Observable
|
|
|
Unobservable
|
|
|
|
|
|
|
Identical Assets
|
|
|
Inputs
|
|
|
Inputs
|
Description
|
|
|
Total
|
|
|
(Level 1)
|
|
|
(Level 2)
|
|
|
(Level
3)
|
|
|
(Thousands)
|
Cash Equivalents
|
|
$
|
51,496
|
|
$
|
38,649
|
|
$
|
-
|
|
$
|
12,847
|
Common Stock of Public Service
|
|
|
184,675
|
|
|
184,675
|
|
|
-
|
|
|
-
|
Enterprise Group Incorporated
|
|
|
|
|
|
|
|
|
|
|
|
|
Mutual Funds
|
|
|
580,572
|
|
|
477,002
|
|
|
103,509
|
|
|
61
|
GICs
|
|
|
686,813
|
|
|
-
|
|
|
686,813
|
|
|
-
|
Schwab PCRA Fund
|
|
|
37,091
|
|
|
37,091
|
|
|
-
|
|
|
-
|
|
|
$
|
1,540,647
|
|
$
|
737,417
|
|
$
|
790,322
|
|
$
|
12,908
|
|
Participant Loans
|
|
$
|
13,033
|
|
|
-
|
|
|
-
|
|
$
|
13,033
|
Wherever possible, fair values of equity investments in stocks and in mutual funds, including the Schwab PCRA Fund are derived from quoted market prices as substantially all of these instruments have active markets (level
1). The Schwab PCRA Fund is a self-directed brokerage account in which Participants can select and manage a wide selection of investments including mutual funds and stocks.
Assets in the stable value fund are primarily invested in synthetic GICs and are valued using a discounted cash flow method (level 2). Based on its duration, the estimated cash flow of each contract is discounted using a
yield curve interpolated from swap rates and adjusted for liquidity and credit quality. For those contracts with no stated payment dates, the projected value at the end of the required days notice period was assumed to pay in full and this payment
is then discounted following the process described above.
Certain commingled cash equivalents included in temporary investment funds, as well as certain mutual funds, are measured with significant unobservable inputs and internal assumptions. The participant loans are included at
their carrying value which approximates their fair values at December 31, 2008. They are measured with significant unobservable inputs and assumptions (level 3).
12
NOTES TO FINANCIAL STATEMENTS
A reconciliation of the beginning and ending balances of the Plans Level 3 assets for the year ended December 31, 2008 follows:
|
|
|
|
|
|
Purchases/
|
|
|
|
|
|
|
|
Balance
|
|
|
|
Balance as of
|
|
|
Transfer-in/
|
|
|
|
Unrealized
|
|
|
|
as of
|
|
|
|
January 1,
|
|
|
(Sales)/
|
|
|
|
Gains /
|
|
|
|
December 31,
|
|
|
|
2008
|
|
|
(Transfer-Out)
|
|
|
|
(Losses)
|
|
|
|
2008
|
|
|
(Thousands)
|
Cash Equivalants
|
|
$
|
26,064
|
|
$
|
(13,217
|
)
|
|
$
|
-
|
|
|
$
|
12,847
|
Mutual Funds
|
|
$
|
14
|
|
$
|
946
|
|
|
$
|
(899
|
)
|
|
$
|
61
|
Participant Loans
|
|
$
|
12,176
|
|
$
|
857
|
|
|
$
|
-
|
|
|
$
|
13,033
|
5. FEDERAL INCOME TAX STATUS
The Internal Revenue Service ruled, in a determination letter dated May 25, 2004, that the Plan qualifies under Section 401(a) of the IRC and, therefore, the underlying trust is not subject to tax under IRC Section 501(a).
Once qualified, the Plan is required to operate in conformity with the IRC to maintain its qualification. While subsequent amendments have been made to the Plan, the Company believes that the Plan is currently being operated in compliance with the
applicable requirements of the IRC and the Plan and related trust continue to be tax-exempt. Therefore, no provision for income taxes has been included in the Plans financial statements.
6. RELATED-PARTY TRANSACTIONS
Certain Plan investments are in the Companys Common Stock. Since the Company is the Plan Sponsor, these transactions qualify as party-in-interest transactions. Certain administrative functions are performed by the
officers and employees of the Company (who may also be Participants in the Plan) at no cost to the Plan.
On January 15, 2008, the Companys Board of Directors approved a two-for-one stock split of the Companys outstanding shares of common stock. The stock split entitled each stockholder of record at the close of
business on January 25, 2008 to receive one additional share for every outstanding share of common stock held. The additional shares resulting from the stock split were distributed on February 4, 2008. All Company share and per share amounts
included in this Form 11-K retroactively reflect the effect of the stock split. As of December 31, 2008 and 2007, the Master Trust held 6,331,007 and 4,965,912 shares, respectively, of the Companys Common Stock, in the ESOP Fund and the
Enterprise Common Stock Fund, with a market value per share of $29.17 and $49.12, respectively.
For the year ended December 31, 2008, the Master Trust recorded dividend income of approximately $8 million from the Companys Common Stock.
These transactions are not deemed prohibited party-in-interest transactions, because they are covered by statutory or administrative exemptions from ERISAs rules on prohibited transactions.
13
NOTES TO FINANCIAL STATEMENTS
7. PLAN TERMINATION
Although it has not expressed any intention to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions set forth in ERISA. In the
event that the Plan is terminated, all Participants would become 100% vested in their accounts.
8. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits per the financial statements to Form 5500:
|
|
|
2008
|
|
|
|
2007
|
|
Net assets available for benefits per the financial statements
|
|
$
|
905,633,331
|
|
|
$
|
1,113,485,544
|
Adjustment from fair value to contract value for fully benefit-
responsive investment contracts
|
|
|
(11,611,714
|
)
|
|
|
-
|
Net assets available for benefits per Form 5500
|
|
$
|
894,021,617
|
|
|
$
|
1,113,485,544
|
The $241,659,787
Net Investment Loss from Master Trust Investments presented in the Form 5500 for the year ended December 31, 2008 includes
$240,055,918 of Investment Losses (comprised of the $228,444,204 of the Plans interest in losses of Master Employee Benefit Plan Trust excluding the $11,611,714 adjustment from fair value to contract value for fully
benefit-responsive investment contracts) and $1,603,869 of administrative expenses.
14
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
THRIFT AND TAX-DEFERRED SAVINGS PLAN
PLAN No. 004, EIN No. 22-2625848
SCHEDULE H, PART IV LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR) DECEMBER 31, 2008
Identity of Issue, Borrower
|
|
|
|
|
|
|
|
|
or Similar Party
|
|
|
Description of Investment
|
|
|
Cost
|
|
|
Current Value
|
|
|
Various Participants*
|
|
998 Participant Loans (maturing 2009
|
|
|
|
|
|
|
|
|
to 2014 at interest rates of 4.00% to
|
|
|
|
|
|
|
|
|
8.25%), secured by participant
|
|
|
|
|
|
|
|
|
accounts
|
|
$
|
-
|
|
$
|
13,032,870
|
|
* Permitted party-in-interest.
|
|
|
|
|
|
|
|
|
15
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the Plan) have duly caused this Annual Report to be signed by the undersigned thereunto duly authorized.
Public Service Enterprise Group Incorporated
Thrift and Tax-Deferred Savings Plan
(Name of Plan)
By:
|
/s/ Margaret M. Pego
|
|
Margaret M. Pego
|
|
Chairperson of Employee
|
|
Benefits Committee
|
Date: June 26, 2009
16
EXHIBIT INDEX
Exhibit Number
|
|
|
99
|
|
Consent of Independent Registered Public Accounting Firm
|
17
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