SDG&E Still Offers a Pension to New Hires. Most People In It Do Not Know What It Is Worth.

The SDG&E Cash Balance Plan, first established in 1941, is open to new hires in 2026. SDG&E's own careers material still lists a cash balance plan alongside the 401(k), and the accounting confirms it: SDG&E reported $38 million of pension service cost in 2025 against $39 million in 2024. Service cost is the value of benefits employees earned during the year, so a closed or frozen plan would not report it at that level.

That is worth stating plainly because the assumption runs the other way. Almost every comparable employer covered on this site has closed its pension: Northrop Grumman stopped admitting people in 2008, Southern California Edison at the end of 2017. If you joined SDG&E last year, you are accruing a pension benefit that a colleague who joined a comparable utility would not be.

It also means the group facing a real lump-sum-versus-annuity decision here is not shrinking. This is a durable population rather than a runoff one, and the decisions on this page will still matter to people hired this year.

For a grandfathered participant, the benefit is the greater of two things: the cash balance account balance, or the frozen traditional benefit plus something the plan calls the Frozen Benefit Plus+ Account. Sempra's own proxy states the same thing independently, amounts are based on the greater of what the plan pays or the sum of the present value of the frozen predecessor benefit plus future cash balance accruals.

The consequence is direct. If you are grandfathered, the account balance shown on your statement is one of two candidates for your benefit, not necessarily the benefit itself. It may be the smaller one.

And which side wins moves. The frozen traditional benefit is an annuity, so its present value is interest-rate sensitive in a way an account balance is not. Falling rates raise the value of the traditional side; rising rates lower it. Two people with identical service can find the comparison resolving differently, and the same person can find it resolving differently in two different years.

The Frozen Benefit Plus+ Account is a named component of the plan and its position in that formula is confirmed. How it accrues is not public, so we are not going to describe it. What matters is knowing it is in the calculation at all, because a comparison that leaves it out understates the traditional side.

Participants receive retirement credits equal to 7.5% of eligible earnings, plus interest on the balance until distribution. Note that it is flat, unlike several comparable plans, there is no grading by age, by service, or by points. Someone in their first year and someone in their twenty-fifth receive the same percentage credit.

Interest is credited at the 30-year Treasury rate, reset annually each January from the November average of the preceding year. For 2026 that rate is 4.70%, set by the November 2025 average. For 2025 it was 4.54%. Both figures reconcile to the basis point against two independent sources: the IRS weighted average interest rate table and Sempra's own FY2025 annual report.

Because the mechanism is public and the input is published every November, this is one of the few plan values you can work out for yourself before the plan announces it. The 2027 rate is already determined by the November 2026 average, whatever that turns out to be.

Vesting is a three-year cliff, effective January 2008 for non-represented employees and March 2007 for represented ones.

One live gap for anyone whose pay is not just salary: what counts as eligible earnings. For executives the proxy defines it as base salary plus performance bonus, excluding equity. Whether overtime, shift differentials and standby pay count for a field employee is not public, and for IBEW members that can be a large share of a W-2, which makes it a material question rather than a technicality.

The San Diego Gas & Electric Company Savings Plan matches 50% of your contributions up to the first 6% of eligible pay, a conventional formula that most people recognise and stop at. It does not stop there. Above 6%, the plan adds a further 0.2% of pay for every additional 1% you defer, all the way to 11%.

So at a 6% deferral the company contributes 3.0% of your pay. At 11% it contributes 4.0%. Defer anything above 11% and the company adds nothing more.

SDG&E describes the second part in its regulatory filings as a stretch match of one-fifth of the next five percent, which is a good way to remember it. The extra five points of your own money earn a 20% match rather than 50%, worth having, but worth understanding rather than assuming it matches the headline rate.

The practical point is that 6% feels like a natural stopping place and is not one. If you set your deferral at 6% years ago because that is where the match appeared to end, there is an additional 1.0% of pay a year sitting unclaimed. Over a long utility career that is not a rounding error.

Match vesting is the earliest of one year of vesting service, normal retirement age, or death while employed, which is quicker than the pension's three-year cliff. The two are different schedules and it is easy to assume they are the same.

The plan allows a self-directed brokerage account, a Schwab Personal Choice Retirement Account. Inside it you can hold any listed fund or security, with two constraints that are both worth knowing before you consider it.

The first is a hard ceiling: you may invest a maximum of 50% of your total plan account through the brokerage window. Half your balance stays in the core menu whatever you decide.

The second is that Sempra common stock is specifically excluded from the window. You cannot use the brokerage account to concentrate further in your own employer, which is a sensible restriction and occasionally a surprise.

Worth separating two roles that get conflated: T. Rowe Price is the plan's recordkeeper and trustee, while Schwab provides the brokerage window. Seeing T. Rowe Price on your statements does not mean the window is theirs, and the combination is entirely ordinary.

As with any brokerage window, the honest framing is that opening one because it exists is not a strategy. The core menu is genuinely adequate for a great many people. But it is a decision worth making deliberately rather than by never having heard of it.

Retiring employees may take the present value of their vested benefit as a single lump sum, or elect an annuity that is the actuarial equivalent. SDG&E's own regulatory testimony says most participants elect the lump sum, and the plan's payments bear that out, Sempra recorded $290 million of pension settlements in 2025 against $87 million in 2024, with SDG&E's share rising from $23 million to $86 million.

Here is the part worth planning around. Federal law sets a minimum lump sum using published interest rates and a mortality table, but every plan chooses two things and writes them into its plan document: a stability period, which is how long a given rate set stays in effect, and a lookback month, which can be anywhere from one to five months before that period starts.

Those two choices decide when a market rate move reaches your check. With a calendar-year stability period, everyone retiring in a given year is priced off the same rate set from months earlier, which means someone retiring in December and someone retiring the following January can receive materially different amounts for an identical benefit, and there is a hard, knowable deadline sitting in the calendar.

SDG&E's stability period and lookback month are not in any public filing. We are not going to guess at them, and you should be wary of anyone who does. But they are in your plan document, and finding out which side of the date you are on is the single highest-value hour available to anyone within five years of retiring here.

Two related things we also cannot tell you from public sources: the full menu of annuity forms the plan offers, and whether the election can be revoked once made. On the first, only the 50% joint and survivor form is documented, whether options like Social Security leveling exist here is simply not addressed anywhere public, and we will not assert either way. On the second, the general rule under federal law is that an election may be changed during the election period and is locked once payments begin; whether the plan adds its own constraint is unknown.

One point that is statutory rather than plan-specific, and that surprises people: taking a lump sum is legally a waiver of the joint and survivor annuity. If you are married, that requires your spouse's written consent, witnessed by a notary or plan representative.

The frozen traditional formula. Its accrual percentage, how final average earnings were defined, and whether any offset applied are all outside the public record. There is material in circulation describing a traditional SDG&E formula in more detail, and we are deliberately not repeating it: the source appendix describes the SoCalGas plan in an adjacent passage, and the risk of attributing one company's terms to the other is real. If you are grandfathered, your own benefit statement is worth more than any page on the internet.

The lump sum stability period and lookback month, as above. The highest-value unknown here.

The Frozen Benefit Plus+ Account's credit formula.

What counts as eligible earnings for the 7.5% credit, specifically whether overtime and differentials are included.

The pension plan's employer identification number and plan number. Two plan names circulate in public databases and the filings do not resolve which one covers SDG&E participants. Your Annual Funding Notice, which arrives each spring, carries the exact plan name, EIN and plan number. It is the cheapest document to lay hands on and it settles several of these at once.

Bring that notice and your benefit statement to a first conversation and most of this list stops being general and starts being about you.