SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996 Commission File Number 1-973
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
PUBLIC SERVICE ELECTRIC AND GAS COMPANY EMPLOYEE SAVINGS PLAN
80 PARK PLAZA
NEWARK, NEW JERSEY 07101
MAILING ADDRESS: P.O. Box 570
NEWARK, NEW JERSEY 07101-0570
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
See page 2.
Equities Growth Fund A NEW YORK LIFE INSURANCE COMPANY
TWENTIETH CENTURY INVESTORS, INC. 501 MADISON AVENUE
4500 MAIN STREET NEW YORK, NEW YORK 10010
P.O. BOX 419200
KANSAS CITY, MISSOURI 64141-6200
AIG LIFE INSURANCE COMPANY
Balanced Fund B ONE ALICO PLAZA
PHOENIX SERIES FUND P.O. BOX 667
101 MUNSON STREET WILMINGTON, DELAWARE 19899
GREENFIELD, MASSACHUSETTS 01301
Stable Value Fund C Enterprise Common Stock Fund D
THE PRUDENTIAL LIFE INSURANCE and ESOP Fund
COMPANY OF AMERICA PUBLIC SERVICE ENTERPRISE GROUP
PRUDENTIAL PLAZA INCORPORATED
NEWARK, NEW JERSEY 07101 80 PARK PLAZA
NEWARK, NEW JERSEY 07101-1171
METROPOLITAN LIFE INSURANCE COMPANY Large Company Stock Index Fund E
ONE MADISON AVENUE BANKERS TRUST COMPANY
NEW YORK, NEW YORK 10010-3690 280 PARK AVENUE
NEW YORK, NEW YORK 10017
PRINCIPAL MUTUAL LIFE INSURANCE Utilities Equities Fund F
COMPANY FIDELITY PORTFOLIOS
THE PRINCIPAL FINANCIAL GROUP 82 DEVONSHIRE STREET
DES MOINES, IOWA 50392-0001 BOSTON, MASSACHUSETTS 02109
JOHN HANCOCK MUTUAL LIFE COMPANY Intermediate Government Securities Fund G
JOHN HANCOCK PLACE VOYAGEUR FUND MANAGERS INC.
P.O. BOX 111 90 SOUTH SEVENTH STREET
BOSTON, MASSACHUSETTS 02117 SUITE 4400
MINNEAPOLIS, MINNESOTA 55402
ALLSTATE LIFE INSURANCE COMPANY International Stock Fund H
ALLSTATE PLAZA WEST T. ROWE PRICE INC.
3100 SANDERS ROAD 100 EAST PRATT STREET
NORTHBROOK, ILLINOIS 60062 BALTIMORE, MARYLAND 21202
PROVIDENT NATIONAL ASSURANCE Mid/Small Company Stock Fund
COMPANY PUTNAM INVESTMENTS
FOUNTAIN SQUARE P.O. BOX 41203
CHATTANOOGA, TENNESSEE 37402 PROVIDENCE, RHODE ISLAND 02940
J.P.MORGAN
60 WALL STREET
NEW YORK, NEW YORK 10260
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
INDEX
PAGE
----
INDEPENDENT AUDITORS' REPORT............................................ 4
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 1996 AND 1995...................................... 5-10
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 1996 and 1995........................ 11-16
NOTES TO FINANCIAL STATEMENTS........................................... 17-26
SIGNATURES.............................................................. 27
EXHIBIT INDEX........................................................... 28
INDEPENDENT AUDITORS' REPORT
Employee Benefits Committee of
Public Service Electric and Gas Company:
We have audited the accompanying statements of net assets available for benefits
of the Public Service Electric and Gas Company Employee Savings Plan (the
"Plan") as of December 31, 1996 and 1995, and the related statements of changes
in net assets available for benefits for the years then ended. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31, 1996
and 1995, and the changes in net assets available for benefits for the years
then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental information by fund is
presented for the purpose of additional analysis of the basic financial
statements rather than to present information regarding the net assets available
for benefits and changes in net assets available for benefits of the individual
funds, and is not a required part of the basic financial statements. This
information is the responsibility of the Plan's management. Such information has
been subjected to the auditing procedures applied in our audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects when considered in relation to the basic financial statements taken as
a whole.
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
June 25, 1997
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
As of December 31, 1996
(Supplemental Information by Fund)
Equities Enterprise
Growth Balanced Stable Value Common Stock
Total Fund A Fund B Fund C Fund D
--------------------------------------------------------------------------
ASSETS
Investments, at fair value
Plan interest in PSE&G Company
Master Employee Benefit Plan Trust $ 216,734,220 $ - $ - $ 100,834,108 $ 25,100,017
Receivables-Interest
and Dividends 523,198 - - 514,629 8,236
--------------------------------------------------------------------------
Total Assets $ 217,257,418 $ - $ - $ 101,348,737 $ 25,108,253
==========================================================================
LIABILITIES
Accounts Payable $ 193,558 $ - $ - $ 319,521 $ 22,896
Transfer to/from PSE&G Company
Thrift & Tax-Deferred Savings Plan (181,176) - - (168,771) -
Forfeitures 4,830 - - 2,447 355
--------------------------------------------------------------------------
Total Liabilities 17,212 - - 153,197 23,251
--------------------------------------------------------------------------
Net Assets Available for Benefits $ 217,240,206 $ - $ - $ 101,195,540 $ 25,085,002
==========================================================================
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</FN>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
As of December 31, 1996
(Supplemental Information by Fund (Continued))
Intermediate
Large Company Utilities Government International Mid/Small
Stock Index Equities Securities Stock Company
Fund E Fund F Fund G Fund H Stock Fund
--------------------------------------------------------------------------
ASSETS
Investments, at fair value
Plan interest in PSE&G Company
Master Employee Benefit Plan Trust $ 36,476,571 $ - $2,172,925 $ 7,989,413 $ 6,686,242
Receivables-Interest
and Dividends - - - - -
--------------------------------------------------------------------------
Total Assets $ 36,476,571 $ - $2,172,925 $ 7,989,413 $ 6,686,242
==========================================================================
LIABILITIES
Accounts Payable $ 43,629 $ - $ (773) $ (5,186) $ (66,571)
Transfer to/from PSE&G Company
Thrift & Tax-Deferred Savings Plan - - - - -
Forfeitures 911 - 8 123 479
--------------------------------------------------------------------------
Total Liabilities 44,540 - (765) (5,063) (66,092)
--------------------------------------------------------------------------
Net Assets Available for Benefits $ 36,432,031 $ - $2,173,690 $ 7,994,476 $ 6,752,334
==========================================================================
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</FN>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
As of December 31, 1996
(Supplemental Information by Fund (Concluded))
Conservative Moderate Aggressive
Pre-Mix Pre-Mix Pre-Mix Holding Trust
Portfolio Portfolio Portfolio ESOP Account Loan Fund
-------------------------------------------------------------------------------
ASSETS
Investments, at fair value
Plan interest in PSE&G Company
Master Employee Benefit Plan Trust $2,704,371 $6,801,302 $8,960,644 $8,349,458 $48,053 $10,611,116
Receivables-Interest
and Dividends - - - 146 187 -
-------------------------------------------------------------------------------
Total Assets $2,704,371 $6,801,302 $8,960,644 $8,349,604 $48,240 $10,611,116
===============================================================================
LIABILITIES
Accounts Payable $ 3,906 $ (111,156) $ (10,358) $ 15,147 $26,071 $ (43,568)
Transfer to/from PSE&G Company
Thrift & Tax-Deferred Savings Plan (6,190) (6,215) - - - -
Forfeitures 138 196 173 - - -
-------------------------------------------------------------------------------
Total Liabilities (2,146) (117,175) (10,185) 15,147 26,071 (43,568)
-------------------------------------------------------------------------------
Net Assets Available for Benefits $2,706,517 $6,918,477 $8,970,829 $8,334,457 $22,169 $10,654,684
===============================================================================
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</FN>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
As of December 31, 1995
(Supplemental Information by Fund)
Equities Fixed Enterprise
Growth Balanced Income Common Stock
Total Fund A Fund B Fund C Fund D
-------------------------------------------------------------------------
ASSETS
Investments
Enterprise Common Stock $ 40,166,821 $ - $ - $ - $ 29,530,922
Equities Growth Fund 10,338,793 10,338,793 - - -
Balanced Fund 4,417,994 - 4,417,994 - -
Insurance Annuity Contracts (GICs) 86,241,687 - - 86,241,687 -
Stock Index Equities Fund 21,714,701 - - - -
Utilities Equities Fund 5,059,521 - - - -
Government Securities Fund 1,808,476 - - - -
International Stock Fund 3,505,134 - - - -
-------------------------------------------------------------------------
Total Investments 173,253,127 10,338,793 4,417,994 86,241,687 29,530,922
-------------------------------------------------------------------------
Participant Loans Receivable 9,025,054 - - - -
Receivables-Interest
and Dividends 1,201,963 6,040 1 463,492 524,388
Cash and Temporary Cash
Investments 652,059 - - 318,902 297,917
-------------------------------------------------------------------------
Total Assets $184,132,203 $10,344,833 $4,417,995 $87,024,081 $ 30,353,227
=========================================================================
LIABILITIES
Accounts Payable $ 171,011 $ 42,531 $ (1,002) $ (18,803) $ (3,219)
Purchases of Securities 510,936 - - - 510,936
Forfeitures 6,856 - - - -
-------------------------------------------------------------------------
Total Liabilities 688,803 42,531 (1,002) (18,803) 507,717
-------------------------------------------------------------------------
Net Assets Available for Benefits $183,443,400 $10,302,302 $4,418,997 $87,042,884 $ 29,845,510
=========================================================================
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</FN>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
As of December 31, 1995
(Supplemental Information by Fund (Continued))
Stock Index Utilities Government
Equities Equities Securities International
Fund E Fund F Fund G Fund H ESOP Fund
----------------------------------------------------------------------------
ASSETS
Investments
Enterprise Common Stock $ - $ - $ - $ - $ 10,635,899
Equities Growth Fund - - - - -
Balanced Fund - - - - -
Insurance Annuity Contracts (GICs) - - - - -
Stock Index Equities Fund 21,714,701 - - - -
Utilities Equities Fund - 5,059,521 - - -
Government Securities Fund - - 1,808,476 - -
International Stock Fund - - - 3,505,134 -
----------------------------------------------------------------------------
Total Investments 21,714,701 5,059,521 1,808,476 3,505,134 10,635,899
----------------------------------------------------------------------------
Participant Loans Receivable - - - - -
Receivables-Interest
and Dividends 219,503 2,881 10,758 (80) (25,020)
Cash and Temporary Cash
Investments - - - - 129
----------------------------------------------------------------------------
Total Assets $21,934,204 $5,062,402 $ 1,819,234 $ 3,505,054 $ 10,611,008
============================================================================
LIABILITIES
Accounts Payable $ 212,984 $ (2,191) $ 7,348 $ (77) $ (57,829)
Purchases of Securities - - - - -
Forfeitures - - - - -
----------------------------------------------------------------------------
Total Liabilities 212,984 (2,191) 7,348 (77) (57,829)
----------------------------------------------------------------------------
Net Assets Available for Benefits $21,721,220 $5,064,593 $ 1,811,886 $ 3,505,131 $ 10,668,837
============================================================================
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</FN>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
As of December 31, 1995
(Supplemental Information by Fund (Concluded))
Holding Trust
Account Loan Fund
--------------------------------
ASSETS
Investments
Enterprise Common Stock $ - $ -
Equities Growth Fund - -
Balanced Fund - -
Insurance Annuity Contracts (GICs) - -
Stock Index Equities Fund - -
Utilities Equities Fund - -
Government Securities Fund - -
International Stock Fund - -
----------------------------
Total Investments - -
----------------------------
Participant Loans Receivable - 9,025,054
Receivables-Interest
and Dividends - -
Cash and Temporary Cash
Investments 35,111 -
----------------------------
Total Assets $ 35,111 $9,025,054
============================
LIABILITIES
Accounts Payable $ 17,769 $ (26,500)
Purchases of Securities - -
Forfeitures 6,856 -
----------------------------
Total Liabilities 24,625 (26,500)
----------------------------
Net Assets Available for Benefits $ 10,486 $9,051,554
============================
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</FN>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
For the Year Ended December 31, 1996
(Supplemental Information by Fund)
Equities Enterprise
Growth Balanced Stable Value Common Stock
Total Fund A Fund B Fund C Fund D
--------------------------------------------------------------------------------------
ADDITIONS
Participant Deposits $ 25,446,411 $ 2,124,415 $ 911,782 $ 12,099,306 $ 2,601,655
Employers Contributions 6,832,948 533,038 231,973 3,384,696 723,595
Interfund Transfers - net - (14,049,337) (5,650,428) (1,021,676) (5,400,095)
--------------------------------------------------------------------------------------
Total Deposits and Contributions 32,279,359 (11,391,884) (4,506,673) 14,462,326 (2,074,845)
--------------------------------------------------------------------------------------
Income
Plan Interest in Master Trust
Investment Income 14,157,526 1,552,689 320,176 6,327,021 (1,174,986)
--------------------------------------------------------------------------------------
Total Additions 46,436,885 (9,839,195) (4,186,497) 20,789,347 (3,249,831)
--------------------------------------------------------------------------------------
DEDUCTIONS
Withdrawals 11,907,962 390,739 210,594 6,978,593 1,538,490
Dividends Paid 702,350 - - - -
Forfeitures 19,081 2,319 264 8,381 2,128
Transfer to/(from) PSE&G Company
Thrift & Tax-Deferred Savings Plan 10,686 70,049 21,642 (350,283) (29,941)
--------------------------------------------------------------------------------------
Total Deductions 12,640,079 463,107 232,500 6,636,691 1,510,677
--------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS 33,796,806 (10,302,302) (4,418,997) 14,152,656 (4,760,508)
NET ASSETS AVAILABLE FOR
BENEFITS - BEGINNING OF YEAR 183,443,400 10,302,302 4,418,997 87,042,884 29,845,510
--------------------------------------------------------------------------------------
NET ASSETS AVAILABLE
FOR BENEFITS - END OF YEAR $ 217,240,206 $ - $ - $ 101,195,540 $ 25,085,002
======================================================================================
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</FN>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
For the Year Ended December 31, 1996
(Supplemental Information by Fund (Continued))
Large Company Utilities Interm. Gov't. International Mid/Small
Stock Index Equities Securities Stock Company
Fund E Fund F Fund G Fund H Stock Fund
-------------------------------------------------------------------------------------
ADDITIONS
Participant Deposits $ 4,305,948 $ 908,928 $ 418,981 $ 1,147,174 $ 264,750
Employers Contributions 1,091,139 236,244 109,485 275,435 66,725
Interfund Transfers - net 4,795,229 (6,265,669) (127,450) 2,483,959 6,479,440
-------------------------------------------------------------------------------------
Total Deposits and Contributions 10,192,316 (5,120,497) 401,016 3,906,568 6,810,915
-------------------------------------------------------------------------------------
Income
Plan Interest in Master Trust
Investment Income 6,062,703 281,058 55,842 852,322 9,624
-------------------------------------------------------------------------------------
Total Additions 16,255,019 (4,839,439) 456,858 4,758,890 6,820,539
-------------------------------------------------------------------------------------
DEDUCTIONS
Withdrawals 1,355,392 199,146 93,157 245,548 67,929
Dividends Paid - - - - -
Forfeitures 2,848 239 18 1,884 276
Transfer to/(from) PSE&G Company
Thrift & Tax-Deferred Savings Plan 185,968 25,769 1,879 22,113 -
-------------------------------------------------------------------------------------
Total Deductions 1,544,208 225,154 95,054 269,545 68,205
-------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS 14,710,811 (5,064,593) 361,804 4,489,345 6,752,334
NET ASSETS AVAILABLE FOR
BENEFITS - BEGINNING OF YEAR 21,721,220 5,064,593 1,811,886 3,505,131 -
-------------------------------------------------------------------------------------
NET ASSETS AVAILABLE
FOR BENEFITS - END OF YEAR $ 36,432,031 $ - $2,173,690 $ 7,994,476 $ 6,752,334
=====================================================================================
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</FN>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
For the Year Ended December 31, 1996
(Supplemental Information by Fund (Concluded))
Conservative Moderate Aggressive
Pre-Mix Pre-Mix Pre-Mix Holding Trust
Portfolio Portfolio Portfolio ESOP Account Loan Fund
-------------------------------------------------------------------------------
ADDITIONS
Participant Deposits $ 82,986 $ 218,743 $ 361,743 $ - $ - $ -
Employers Contributions 19,434 62,437 98,747 - - -
Interfund Transfers - net 2,591,459 6,555,161 8,294,731 (498,329) - 1,813,005
-------------------------------------------------------------------------------
Total Deposits and Contributions 2,693,879 6,836,341 8,755,221 (498,329) - 1,813,005
-------------------------------------------------------------------------------
Income
Plan Interest in Master Trust
Investment Income 67,943 167,343 272,023 (636,417) 11,683 (11,498)
-------------------------------------------------------------------------------
Total Additions 2,761,822 7,003,684 9,027,244 (1,134,746) 11,683 1,801,507
-------------------------------------------------------------------------------
DEDUCTIONS
Withdrawals 55,167 85,011 56,025 492,326 - 139,845
Dividends Paid - - - 702,350 - -
Forfeitures 138 196 390 - - -
Transfer to/(from) PSE&G Company
Thrift & Tax-Deferred Savings Plan - - - 4,958 - 58,532
-------------------------------------------------------------------------------
Total Deductions 55,305 85,207 56,415 1,199,634 - 198,377
-------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS 2,706,517 6,918,477 8,970,829 (2,334,380) 11,683 1,603,130
NET ASSETS AVAILABLE FOR
BENEFITS - BEGINNING OF YEAR - - - 10,668,837 10,486 9,051,554
-------------------------------------------------------------------------------
NET ASSETS AVAILABLE
FOR BENEFITS - END OF YEAR $2,706,517 $6,918,477 $8,970,829 $8,334,457 $22,169 $10,654,684
===============================================================================
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</FN>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
For the Year Ended December 31, 1995
(Supplemental Information by Fund)
Equities Fixed Enterprise
Growth Balanced Income Common Stock
Total Fund A Fund B Fund C Fund D
-------------------------------------------------------------------------
ADDITIONS
Participant Deposits $ 21,842,876 $ 1,835,808 $ 754,556 $11,989,600 $ 2,620,828
Employers Contributions 6,797,565 550,096 241,944 3,777,018 849,664
Interfund Transfers - net - 2,519,830 782,361 (5,058,146) (2,479,248)
-------------------------------------------------------------------------
Total Deposits and Contributions 28,640,441 4,905,734 1,778,861 10,708,472 991,244
-------------------------------------------------------------------------
Income
Interest 5,286,936 - - 5,271,061 15,351
Dividends 5,398,669 1,414,599 304,086 - 2,004,014
Loan Interest Income - 37,488 14,506 271,639 66,069
-------------------------------------------------------------------------
Total Income 10,685,605 1,452,087 318,592 5,542,700 2,085,434
-------------------------------------------------------------------------
Appreciation (Depreciation) of Investments 10,735,738 (503,624) 324,213 - 3,833,515
-------------------------------------------------------------------------
Total Additions 50,061,784 5,854,197 2,421,666 16,251,172 6,910,193
-------------------------------------------------------------------------
DEDUCTIONS
Withdrawals 7,421,656 318,174 142,031 4,503,151 1,288,475
Dividends Paid 771,047 - - - -
Forfeitures 6,856 496 342 4,810 762
Transfer to/(from) PSE&G Company
Thrift & Tax-Deferred Savings Plan (469,847) (4,661) 41,453 (269,130) (243,817)
-------------------------------------------------------------------------
Total Deductions 7,729,712 314,009 183,826 4,238,831 1,045,420
-------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS 42,332,072 5,540,188 2,237,840 12,012,341 5,864,773
NET ASSETS AVAILABLE FOR
BENEFITS - BEGINNING OF YEAR 141,111,328 4,762,114 2,181,157 75,030,543 23,980,737
-------------------------------------------------------------------------
NET ASSETS AVAILABLE
FOR BENEFITS - END OF YEAR $183,443,400 $10,302,302 $4,418,997 $87,042,884 $29,845,510
=========================================================================
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</FN>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
For the Year Ended December 31, 1995
(Supplemental Information by Fund (Continued))
Stock Index Utilities Government
Equities Equities Securities International
Fund E Fund F Fund G Fund H ESOP Fund
-------------------------------------------------------------------------
ADDITIONS
Participant Deposits $ 2,697,700 $ 781,957 $ 358,931 $ 803,496 $ -
Employers Contributions 798,405 239,897 112,777 227,764 -
Interfund Transfers - net 2,413,700 510,292 (166,111) (890,648) (205,743)
-------------------------------------------------------------------------
Total Deposits and Contributions 5,909,805 1,532,146 305,597 140,612 (205,743)
-------------------------------------------------------------------------
Income
Interest - - - - 524
Dividends 496,577 213,284 91,639 103,423 771,047
Loan Interest Income 74,403 15,894 6,348 15,765 -
-------------------------------------------------------------------------
Total Income 570,980 229,178 97,987 119,188 771,571
-------------------------------------------------------------------------
Appreciation (Depreciation) of Investments 4,474,967 714,133 179,458 219,939 1,470,331
-------------------------------------------------------------------------
Total Additions 10,955,752 2,475,457 583,042 479,739 2,036,159
-------------------------------------------------------------------------
DEDUCTIONS
Withdrawals 683,921 153,603 34,550 139,113 526,967
Dividends Paid - - - - 771,047
Forfeitures 27 - 311 108 -
Transfer to/(from) PSE&G Company
Thrift & Tax-Deferred Savings Plan 27,346 7,698 16,339 16,048 173
-------------------------------------------------------------------------
Total Deductions 711,294 161,301 51,200 155,269 1,298,187
-------------------------------------------------------------------------
INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS 10,244,458 2,314,156 531,842 324,470 737,972
NET ASSETS AVAILABLE FOR
BENEFITS - BEGINNING OF YEAR 11,476,762 2,750,437 1,280,044 3,180,661 9,930,865
-------------------------------------------------------------------------
NET ASSETS AVAILABLE
FOR BENEFITS - END OF YEAR $ 21,721,220 $ 5,064,593 $1,811,886 $ 3,505,131 $10,668,837
=========================================================================
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</FN>
PUBLIC SERVICE ELECTRIC AND GAS COMPANY
EMPLOYEE SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
For the Year Ended December 31, 1995
(Supplemental Information by Fund (Concluded))
Holding Trust
Account Loan Fund
-----------------------------
ADDITIONS
Participant Deposits $ - $ -
Employers Contributions - -
Interfund Transfers - net - 2,573,713
----------------------------
Total Deposits and Contributions - 2,573,713
----------------------------
Income
Interest - -
Dividends - -
Loan Interest Income - (502,112)
----------------------------
Total Income - (502,112)
----------------------------
Appreciation (Depreciation) of Investments 3,138 19,668
----------------------------
Total Additions 3,138 2,091,269
----------------------------
DEDUCTIONS
Withdrawals (368,329)
Dividends Paid - -
Forfeitures - -
Transfer to/(from) PSE&G Company
Thrift & Tax-Deferred Savings Plan (61,296)
----------------------------
Total Deductions - (429,625)
----------------------------
INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS 3,138 2,520,894
NET ASSETS AVAILABLE FOR
BENEFITS - BEGINNING OF YEAR 7,348 6,530,660
----------------------------
NET ASSETS AVAILABLE
FOR BENEFITS - END OF YEAR $ 10,486 $9,051,554
============================
<FN>
SEE NOTES TO FINANCIAL STATEMENTS
</FN>
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF THE PLAN
The Board of Directors of Public Service Electric and Gas Company (PSE&G or the
Company) adopted the Public Service Electric and Gas Company Employee Savings
Plan (Plan) to encourage thrift and savings by eligible bargaining unit
employees of PSE&G (Eligible Employees). It was first offered to Eligible
Employees in November 1987 as a result of collective bargaining, and
contributions began in January 1988. Effective January 1, 1996, the Trust that
held the Plan's assets became the PSE&G Master Employee Benefit Plan Trust,
(Master Trust), a Master Trust covering this Plan and the PSE&G Thrift and
Tax-Deferred Savings Plan (Thrift Plan). (See Note 4. Investment in Master
Trust.) The Plan was last amended September 3, 1996, effective October 1, 1996,
except for changes listed below, which are effective as of January 1, 1997. The
Plan amendments made during 1996 provide the following, effective October 1,
1996: Equities Growth Fund A, Balanced Fund B, and Utilities Equities Fund F
were discontinued; Mid/Small Company Stock Fund, Conservative Pre-Mix Portfolio,
Moderate Pre-Mix Portfolio, and Aggressive Pre-Mix Portfolio were added; Fund C
was renamed Stable Value Fund rather than Fixed Income Fund, Fund E was renamed
Large Company Stock Index Fund rather than Stock Index Equities Fund, and Fund G
was renamed Intermediate Government Securities Fund rather than Government
Securities Fund. The Plan permits, among other things, participation in the Plan
by Affiliates of PSE&G and their bargaining unit employees (each such
participating Affiliate with PSE&G, an "Employer"). Participation in the Plan is
entirely voluntary, except with respect to those employees who participate in
the Employee Stock Ownership Plan (ESOP) Fund as a result of their participation
in the PSE&G Tax Reduction Act Employee Stock Ownership Plan (TRASOP) and/or the
PSE&G Payroll-Based Employee Stock Ownership Plan (PAYSOP), which plans were
merged into this Plan in 1988. An employee may participate in the Plan from the
date of hire. Matching Company Contributions begin when an employee has
completed one Year of Service. Any Employee who, at the time he/she becomes
employed by the Company, is a participant in the Thrift Plan, shall
automatically be enrolled in the Plan and all balances in the Thrift Plan shall
be transferred to the Plan and all contribution and investment elections in
effect for the Thrift Plan shall remain in effect. Certain Eligible Employees
may also elect to have a distribution from another qualified corporate plan
contributed as a rollover contribution with the approval of PSE&G's Employee
Benefits Committee (Committee), the Plan Administrator.
The following changes were effective January 1, 1997:
1. to allow Basic Deposits in any integral multiple of 1% of Compensation to a
total of 7%, rather than 5%;
2. to allow Supplemental Deposits in any integral multiple of 1% of Compensation
to a total of 18%, rather than 20%;
3. all administrative expenses as well as taxes and brokerage costs will be
deducted from the Trust Fund, rather than paid directly by the Company and
its Participating Affiliates.
Under the Plan, each participating employee (Participant) may elect to make
basic deposits to Investment Funds of such Participant's choosing within the
Savings Account Fund of 1% - 7% of his/her compensation (Basic Deposits), and
his/her Employer will contribute an amount equal to 50% thereof, subject to
certain exceptions and limitations (Employer Contributions). Employer
Contributions with respect to Basic Deposits in excess of 5% of Compensation for
Participants who are employed by the Company are made in shares of the Common
Stock of Public Service Enterprise Group Incorporated (Enterprise), the parent
of the Company, and are not available for transfer to any other Fund or
withdrawal from the Plan prior to the Participant's termination of employment.
In addition, a Participant may elect to make supplemental deposits to his/her
Savings Account Fund in increments of 1% of Compensation up to an additional 18%
of Compensation (Supplemental Deposits), subject to certain limitations, without
any corresponding matching Employer Contribution. Participants may designate
such Basic and/or Supplemental Deposits as Nondeferred (post-income tax
contributions) or Deferred (pre-income tax contributions).
Participants employed by CEA Newark Bay Services, Inc., an affiliate of PSE&G,
may elect to make basic deposits to Investment Funds of such Participant's
choosing within the Savings Account Fund of 1% - 6% of their Basic Deposits, and
the Employer will contribute an amount equal to 50% thereof, subject to certain
exceptions and
NOTES TO FINANCIAL STATEMENTS -(Continued)
limitations (Employer Contributions). In addition, CEA Newark Bay Services, Inc.
Participants may elect to make supplemental deposits to their Savings Account
Fund in increments of 1% of Compensation up to an additional 19% of Compensation
(Supplemental Deposits), subject to certain limitations, without any
corresponding matching Employer Contribution. Participants may designate such
Basic and/or Supplemental Deposits as Nondeferred (post-income tax
contributions) or Deferred (pre-income tax contributions).
Each Participant may also, within any Plan Year, make one or more Additional
Lump Sum Deposits on a Nondeferred basis in the minimum amount of $250 and in
such total amounts which, when aggregated with such Participant's Basic Deposits
and Supplemental Deposits, do not exceed 25% of his or her Compensation for that
Plan Year.
The maximum amount of Deferred Deposits to a Participant's Savings Account may
have to be limited to less than 25% of Compensation to meet requirements of the
Internal Revenue Code of 1986, as amended (IRC). The extent of any such
limitation will be determined from time to time by the Committee based on the
actual pattern of Deferred Deposits by all Participants. If the maximum
permitted percentage of Compensation for Savings Account Deferred Deposits is
reduced, then all Deferred Deposits in excess of such percentage will
automatically be treated as Nondeferred Deposits. This will result in taxable
income to the affected Participants for Deferred Deposits in excess of any limit
so established. The Committee will attempt to assure that any such limitation
will apply only to future contributions, but it is possible that, in order to
meet requirements of the IRC, the limitation will, in some circumstances, have
to be applied retroactively. Deferred Deposits may not generally be withdrawn
until age 59-1/2. Nondeferred Deposits, on the other hand, may be withdrawn at
any time subject to certain penalties and restrictions.
Savings Account Deposits are made through payroll deductions by the Employer,
rollover contributions from other qualified plans and Additional Lump Sum
Deposits. Deposits by Participants and Employer Contributions are transferred to
a Trustee and separately held in the Plan's Savings Account Fund of the Trust
Fund for investment and other transactions, as directed by Participants.
Participants are entitled to choose which funds to invest Deposits and Employer
Contributions in from among the Investment Funds offered under the Plan.
Bankers Trust Company is the Trustee of the Master Trust established pursuant to
the Plan.
Loan Provisions
The Trustee may, subject to the approval of PSE&G's Director Performance and
Rewards, lend a Participant an amount up to 50% of the value of the vested
portion of such Participant's Savings Account and ESOP Fund, but no more than
the aggregate value of such Participant's Savings Account or $50,000, whichever
is less. Any Participant loan must be for a principal amount of $1,000 or more
and no Participant may have more than two loans outstanding at any time. All
loans, including interest thereon, must be repaid by payroll deductions in equal
monthly installments of 12 to 60 months as selected by the Participant. However,
a Participant may prepay any such loan in full or in part in a lump sum in
accordance with such rules as may be prescribed by the Committee. A Participant
may not apply for more than one loan in any calendar year. A loan to a
Participant is considered an investment of such Participant's Savings Account
and repayments of principal of any loan, together with interest thereon, are
invested in the Savings Account Investment Funds of the Plan in accordance with
the Participant's then-current investment direction for Deposits and Employer
Contributions.
Each loan bears interest at a rate fixed from time to time by the Committee
taking into consideration the then-current interest rates being charged. The
rate of interest applicable to any loan at its inception remains in effect for
the duration of such loan. During 1996, the rate of interest on loans granted to
Participants, by quarter and starting with the first quarter, was 8-1/2%,
8-1/4%, 8-1/4%, 8-1/4%. (See Note 2. SIGNIFICANT ACCOUNTING POLICIES - Loans.)
NOTES TO FINANCIAL STATEMENTS -(Continued)
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements of the Plan have been prepared in accordance with
generally accepted accounting principles.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Dividends and Interest
Dividends, interest, and other income attributable to each Investment Fund of
the Plan are reinvested in that Investment Fund to the extent not used to pay
direct expenses of that Fund. (See Expenses of Plan, below.) All Deposits and
Employer Contributions in the Stable Value Fund C are invested in either
traditional Guaranteed Investment Contracts (Traditional GICs) issued by
insurance companies, or Benefit Responsive Agreements (Synthetic GICs) which are
similar to traditional GICs in terms of their ability to preserve principal and
provide a stable rate of return. Synthetic GICs are different in that they are
backed or secured by a separate portfolio of high-quality fixed income
securities that are directly owned by the Fund. The portfolio is wrapped by a
"book value wrapper", usually a financial institution other than the manager of
the Synthetic GIC, which provides a crediting rate and which guarantees that
benefit repayments will be made at book value. Deposits and Employer
Contributions earn interest at the composite rate of all GICs in which the
assets of such fund are then invested. Such rate varies as such Traditional and
Synthetic GICs mature or are entered into, and as Deposits and Employer
Contributions are made to and withdrawn from such contracts. Under the contracts
in effect during 1996, the composite rate of interest earned by such assets so
invested was not less than 6.74%. ESOP Fund Participants receive quarterly
payments directly from the Trustee equal to the dividends paid to the Trustee on
the shares of Enterprise Common Stock held for their ESOP Fund.
Valuation of Investments
Investments of Equities Growth Fund A, Balanced Fund B, Enterprise Common Stock
Fund D, Large Company Stock Index Fund E, Utilities Equities Fund F,
Intermediate Government Securities Fund G, International Stock Fund H, and the
shares of Enterprise Common Stock held by the ESOP Fund are based upon quoted
market values. The value of Stable Value Fund C is based on the contract value
of all GICs in which the assets of the fund are invested. Temporary investments
are valued at cost which approximates fair market value. Securities transactions
are accounted for on the trade date. The Plan's financial statements have been
prepared in accordance with financial reporting requirements of the Employee
Retirement Income Security Act of 1974, as amended, (ERISA) as permitted by the
applicable rules. Under such requirements, realized gains and losses from
securities transactions are computed using an adjusted cost basis as prescribed
by the Department of Labor's (DOL) Rules and Regulations for Reporting and
Disclosure. The adjusted cost is the fair value of the security at the beginning
of the Plan year, or cost if acquired since that date. Unrealized gains and
losses on securities held for investment are computed on the basis of the change
in fair value between the beginning and end of the Plan year.
Reclassifications
Certain reclassifications of prior year data have been made to conform with the
current presentation.
NOTES TO FINANCIAL STATEMENTS -(Continued)
Expenses of Plan
Effective January 1, 1997, all expenses incurred with the administration of the
Plan, including taxes and brokerage costs, will be deducted from the Trust Fund.
However, in 1996 and 1995, all expenses incurred in connection with the
administration of the Plan, including expenses of the Trustee, but excluding
brokerage commissions and taxes relating to the sale of shares of Enterprise
Common Stock at the direction of Participants, were paid directly by PSE&G and
its Participating Affiliates.
The assets of Common Stock Fund D and the ESOP Fund are invested in shares of
Enterprise Common Stock. Shares of Enterprise Common Stock required for Fund D
are purchased by the Trustee either directly from Enterprise at its sole
discretion, on the open market through a broker or from the ESOP Fund. In
situations where the ESOP is in a "sell" position and Fund D is in a "buy"
position, Fund D will buy from the ESOP at the closing price on the N.Y. Stock
Exchange. In such case, no brokerage commissions will be charged on the
transaction. Otherwise, all shares sold for Common Stock Fund D and the ESOP
Fund are sold by the Trustee on the open market through a broker. Brokerage
commissions and transfer taxes are paid by the Trust Fund.
Loans
A loan to a Participant is considered an investment of such Participant's
Savings Account and the principal amount of the loan is treated as a separate
investment within the various sub-accounts of the Participant's Savings Account.
Repayments of the principal amount of the loan are credited to each such
sub-account, and repayments of principal along with any accrued interest thereon
are invested in the Plan's Investment Funds in the same manner as the
Participant's then current-investment direction for Deposits and Employer
Contributions.
Loan amounts are taken from sub-accounts of a Participant's Savings Account in
the following order:
(a) Deferred Deposits
(b) Unmatured vested Employer Contributions
(c) Matured vested Employer Contributions
(d) Rollover Contributions
(e) Unmatured post-1986 Nondeferred Deposits
(f) Matured post-1986 Nondeferred Deposits
(g) Pre-1987 Nondeferred Deposits
Each loan is secured by an assignment of the Participant's entire right, title
and interest in and to the Trust Fund to the extent of the loan and accrued
interest thereon (See Note 1. SUMMARY OF THE PLAN - Loan Provisions).
Interfund Transfers - ESOP Fund to Savings Account
Participants are permitted to transfer all, but not less than all, shares from
their ESOP Funds to their Savings Accounts. To effect such transfers, the
Trustee will sell the shares of Enterprise Common Stock held in the ESOP Fund
and invest the proceeds in the Savings Account Funds designated by the
Participant. The cash value of each share of Enterprise Common Stock transferred
will be equal to the price per share of Enterprise Common Stock actually
received by the Trustee. Any such transfer is treated as a rollover
contribution.
Holding Account
The Holding Account is a vehicle to record the transactions from either one fund
to another fund or to an outside source. Daily balances which remain in the
NOTES TO FINANCIAL STATEMENTS -(Continued)
account are invested in temporary cash accounts until disbursement. Activity
within the Holding Account includes inflows and outflows of cash related to fund
transfers, employee and employer contributions, withdrawals, receipts of
dividends and interest, benefit payments and loan transactions.
Vesting
Employer Contributions to a Participant's Savings Account are immediately
vested upon a Participant's completion of five years of service with an
Employer, or when a Participant is eligible for retirement, is disabled, laid
off or dies. All amounts credited to a Participant's ESOP Fund are fully vested.
Penalties Upon Withdrawal
If a Participant withdraws vested Employer Contributions and/or Deposits before
they have been in the Plan for twenty-four months, such Participant loses the
matching Employer Contributions on Deposits made 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 Plan's 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 59-1/2 except for reasons of
extraordinary financial hardship and to the extent permitted by the IRC.
Distributions to Participants of approved hardship withdrawals are made as soon
as practicable after such approval.
Benefits Payable
As of December 31, 1996, and 1995, the net assets available for benefits
included benefits due to Participants who have elected to withdraw from the Plan
in the amounts of $337,562 and $70,644, respectively. Such amounts are not
reflected as liabilities in the financial statements of the Plan.
3. INVESTMENTS
The financial statements of the Plan include the following:
a. Savings Account Investment Funds
(1) Effective October, 1996, the Equities Growth Fund A
was discontinued. Prior to that date, the assets of
Equities Growth Fund A were invested in the capital
stock of the Twentieth Century Investors Inc. Growth
Fund (the "Twentieth Century Growth Fund") a no-load,
open-ended mutual fund. The prospectus for the
Twentieth Century Growth Fund indicated that such
fund invests primarily in the common stock of
companies considered by its investment manager to
have above average potential for capital
appreciation.
(2) Effective October 1996, the Balanced Fund B was
discontinued. Prior to that date, the assets of
Balanced Fund B were invested in the capital stock of
Phoenix Balanced Fund a no-load, open-ended mutual
fund. The prospectus for the Phoenix Balanced Fund
indicated that such fund invests primarily in a
combination of equity and fixed income debt
securities that its investment manager expects to
provide current income along with long-term capital
growth and conservation of capital.
(3) The assets of Stable Value Fund C are invested in
GICs and similar investment instruments issued by
insurance companies or other financial institutions
which contractually provide for a guarantee of
principal and interest for the respective contract
periods. All contract values approximate fair value.
NOTES TO FINANCIAL STATEMENTS -(Continued)
The following GICs are continuing:
(i) A four and one-half year contract
expiring June 30, 1997, with
Provident National Assurance
Company, effective interest rate of
6.80%, contract value of
$11,668,348;
(ii) A four-year and four and one-half
year contract expiring December 31,
1997 and December 31, 1999,
respectively, with Metropolitan Life
Insurance Company, effective
interest rates of 5.72% and 8.12%,
contract values of $5,881,080 and
$5,842,467, respectively;
(iii) A five-year contract expiring
January 1, 1997, with Principal
Mutual Life Insurance Company,
effective interest rate of 6.80%,
contract value of $8,363,527;
(iv) A five-year contract expiring
January 4, 1999, with Allstate Life
Insurance Company, effective
interest rate of 5.65%, contract
value of $14,118,795;
(v) A five-year contract expiring June
30, 1999, with New York Life
Insurance Company, effective
interest rate of 7.07%, contract
value of $8,274,200;
(vi) A five-year contract expiring
December 31, 1999, with Prudential
Life Insurance Company, effective
interest rate of 8.01%, contract
value of $13,398,532; and
(vii) A five-year contract expiring June
30, 2000, with AIG Life Insurance
Company, effective interest rate of
6.14%, contract value of $7,970,698.
The following Synthetic GIC is continuing in effect:
An open-ended contract with J.P. Morgan as the book
value wrapper and Pacific Investment Management
Company managing the underlying portfolio providing
an effective credit rate, as of December 31, 1996,
of 7.26% and contract value of $11,614,911. The
credit rate for the Synthetic GIC effective January
1, 1997 through March 31, 1997 was 7.22%.
(4) The assets of Enterprise Common Stock Fund D are
invested by the Trustee in Enterprise Common Stock.
(5) The assets of Large Company Stock Index Fund E are
invested by the Trustee in Bankers Trust
Institutional Equity 500 Index Fund ("Stock Index
Equities Fund"), a no-load mutual fund managed by
Bankers Trust Company so as to achieve the
approximate return of the Standard and Poor's 500
Composite Stock Price Index.
(6) Effective October, 1996, the Utilities Equities Fund
F was discontinued. Prior to that date, the assets of
Utilities Equities Fund F were invested in the
capital stock of Fidelity Income Fund Utilities (the
"Fidelity Utilities Fund"), a no-load, open-ended
mutual fund. The prospectus for the Fidelity
Utilities Fund indicated that such fund invests
primarily in equity securities of gas and electric
utility companies and companies engaged in the
communications field. The Fidelity Utilities Fund
may, from time to time, include shares of Enterprise
Common Stock or PSE&G Preferred Stock.
NOTES TO FINANCIAL STATEMENTS -(Continued)
(7) The assets of Intermediate Government Securities Fund
G are invested in the capital stock of Voyageur U.S.
Government Securities Fund (the "Voyageur U.S.
Government Securities Fund"), an open-ended mutual
fund. The prospectus of the Voyageur U.S. Government
Securities Fund indicates that such fund invests
primarily in U.S. Treasury bills, notes, bonds and
other obligations issued or unconditionally
guaranteed by the U.S. Government, or otherwise
backed by the full faith and credit of the U.S.
Government, and repurchase agreements fully secured
by such obligations.
(8) The assets of International Stock Fund H are invested
in the capital stock of T. Rowe Price International
Funds Inc. (the "T. Rowe Price International Stock
Fund"), a no-load, open-ended investment company or
mutual fund. The prospectus for T. Rowe Price
International Stock Fund indicates that such fund
invests primarily in common stocks of established,
non-U.S. companies.
(9) The assets of Mid/Small Company Stock Fund, a new
investment option in 1996, are invested in the Putnam
Vista Fund, an open-ended, diversified management
investment company. The prospectus for the Putnam
Vista Fund indicates that such fund invests in a
diversified portfolio of common stocks which may
include widely-traded common stocks of larger
companies as well as common stocks of smaller, less
well-known companies.
(10) The assets of the Conservative Pre-Mix Portfolio, a
new investment option in 1996, are invested in
specific percentages within a mix of five existing
funds: 40% Stable Value, 20% Intermediate Government
Securities, 20% Large Company Stock Index, 10%
International Stock, and 10% Mid/Small Company Stock.
Every quarter the Trustee re-aligns this portfolio to
match its conservative (risk and return) investment
strategy of 60% in bonds and 40% in stocks.
(11) The assets of the Moderate Pre-Mix Portfolio, a new
investment option in 1996, are invested in specific
percentages within a mix of five existing funds: 25%
Large Company Stock Index, 20% Stable Value, 20%
International Stock, 20% Intermediate Government
Securities, and 15% Mid/Small Company Stock. Every
quarter the Trustee re-aligns this portfolio to match
its moderate (risk and return) investment strategy of
60% in stocks and 40% in bonds.
(12) The assets of the Aggressive Pre-Mix Portfolio, a new
investment option in 1996, are invested in specific
percentages within a mix of four existing funds: 30%
Large Company Stock Index, 25% International Stock,
25% Mid/Small Company Stock, and 20% Intermediate
Government Securities. Every quarter the Trustee
re-aligns this portfolio to match its aggressive (risk
and return) investment strategy of 80% in stocks and
20% in bonds.
b. ESOP FUND
Shares of Enterprise Common Stock held as assets of the Plan's
ESOP Fund were transferred to the Plan in 1988 as a result of
the spin-off and merger with the Plan of the bargaining unit
portions of PSE&G's former TRASOP and PAYSOP. No additional
contributions in or transfers into the ESOP Fund are presently
permitted or were allowed during 1996.
NOTES TO FINANCIAL STATEMENTS -(Continued)
c. PARTICIPANTS
Participants
As of December 31,
------------------
1996 1995
Total Plan Participants 7,704 7,585
- ----------------------- ----- -----
Participants by Fund
--------------------
Equities Growth Fund A (1) --- 1,700
Balanced Fund B (1) --- 921
Stable Value Fund C 1,968 4,740
Enterprise Common Stock Fund 1,812 2,659
Large Company Stock Index Fund E 1,251 2,243
Utilities Equities Fund F (1) --- 1,014
Interm. Government Securities Fund G 245 493
International Stock Fund H 630 688
Mid/Small Company Stock Fund (2) 454 ---
Conservative Pre-Mix Portfolio (2) 144 ---
Moderate Pre-Mix Portfolio (2) 326 ---
Aggressive Pre-Mix Portfolio (2) 446 ---
ESOP Fund 1,176 1,328
- ---------------------------------------------
(1) Fund discontinued in 1996
(2) New Investment Fund in 1996
4. INVESTMENT IN MASTER TRUST
Effective January 1, 1996, the Plan's investments are included in the Master
Trust which was established for the investment of assets of the Plan and the
Thrift Plan. Accordingly, a ratio is used to separate the Thrift Plan balances
from the Savings Plan balances based on the Statement of Net Assets Available
for Plan Benefits. The ratio is calculated by dividing individual fund totals
from one Plan by the Master Trust totals. Each percentage has been carried out
to the eighth decimal. As of December 31, 1996, the Plan's interest in the net
assets of the Master Trust was approximately 33%. The following table presents
the fair values of investments for the Master Trust.
December 31, 1996
Investments at fair value:
Participant Loans $ 22,451,539
Cash and Cash equivalents 41,413,758
Common Stock of Public Service Enterprise Group 75,274,227
Mutual Funds 218,696,575
Guaranteed Insurance Contracts 308,079,794
------------
$665,915,893
============
Investment income for the Master Trust is as follows:
Net appreciation in fair value of Mutual Funds $ 30,374,351
Net depreciation in fair value of Common Stock
of Enterprise (11,569,069)
Interest from Mutual Funds 45,265
Interest from Common Stock of Enterprise Funds 154,745
Interest from Guaranteed Insurance Contracts 20,845,795
Dividends from Mutual Funds 2,148,761
Dividends from Common Stock of Enterprise 6,676,501
------------
$ 48,676,349
============
NOTES TO FINANCIAL STATEMENTS -(Continued)
5. UNIT VALUE INFORMATION - SAVINGS ACCOUNT INVESTMENT FUNDS
Unit values of the Investment Funds are determined at the end of each business
day (Valuation Day) by dividing the market value of net assets available for
benefits by the number of units allocated to all Participants as of the
respective Valuation Date.
New units are allocated to each Participant's Savings Account at the end of each
business day by dividing Deposits made by, or on behalf of, such Participant for
such business day and the related Employer Contributions, if any, together with
repayment of the principal amount of any loan to the Participant's Savings
Account including interest earned thereon by the unit value determined as of the
end of the Valuation Date. If a Participant makes a transfer between Investment
Funds, makes a withdrawal, receives a distribution or a loan, or makes a
rollover contribution, the amount so transferred, withdrawn, distributed,
loaned, or rolled over is also determined by the unit value of each Investment
Fund as of the applicable Valuation Date for such transaction.
The unit information of investments by Investment Fund as of the last business
day of each year is as follows:
Unit Value
Investment Fund Year (Dollars) Number of Units
- ---------------- ---- ----------- ---------------
Equities Growth Fund A (1) 1996 10.000000 ---
1995 19.390000 533,202.321
Equities Fund B (1) 1996 10.000000 ---
1995 16.800000 262,975.833
Stable Value Fund C 1996 12.098876 8,350,095.525
1995 11.335599 7,608,039.681
Enterprise Common Stock Fund D 1996 9.916231 2,526,215.433
1995 11.755127 2,512,173.794
Large Company Stock Index Fund E 1996 11.659470 3,124,673.082
1995 13.970000 1,554,380.888
Utilities Equities Fund F (1) 1996 10.000000 ---
1995 16.160000 313,089.171
Intermediate Government Securities
Fund G 1996 10.507339 206,692.815
1995 10.783011 167,715.307
International Stock Fund H 1996 10.966759 728,973.380
1995 12.230000 286,601.308
Mid/Small Company Stock Fund (2) 1996 9.984863 676,256.863
Conservative Pre-Mix Portfolio (2) 1996 10.316356 261,752.007
Moderate Pre-Mix Portfolio (2) 1996 10.370244 666,547.701
Aggressive Pre-Mix Portfolio (2) 1996 10.399420 861,443.643
- -----------------------------------
(1) Fund discontinued in 1996
(2) New Investment Fund in 1996
NOTES TO FINANCIAL STATEMENTS -(Concluded)
ESOP FUND VALUATION
Enterprise Common Stock share value is determined by using the closing market
price on the New York Stock Exchange as reported in the Wall Street Journal as
Composite Transactions. If a Participant withdraws shares, the shares are, at
the Participant's election, either distributed to such Participant or sold by
the Trustee and the proceeds, net of commissions and taxes, are distributed to
the Participant. The ESOP Fund information as of the last business day of each
year is as follows:
Year Price per share Number of Shares
---- --------------- ----------------
ESOP Fund 1996 $27.250 306,402
1995 $30.625 347,295
5. FEDERAL INCOME TAXES
The Company believes that the Plan and its related Trust, including the portions
of the former TRASOP and PAYSOP applicable to bargaining unit Participants,
which portions were spun-off and merged with the Plan effective January 1, 1988,
are qualified under Sections 401(a) and 501(a) of the IRC and, as such, the Plan
is exempt from taxation on its earnings. A determination letter to such effect,
dated December 29, 1995, was obtained from the Internal Revenue Service.
Participants are not taxed on Company Contributions, Deferred Deposits, or on
the earnings credited to their Savings Account, until distribution of such
Savings Account.
6. COMPLIANCE WITH ERISA
The Plan is generally subject to the provisions of Titles I and II of ERISA,
including the provisions with respect to reporting, disclosure, participation,
vesting and fiduciary responsibility. However it is not subject to the funding
requirements of Title I, and benefits under the Plan are not guaranteed by the
Pension Benefit Guarantee Corporation under Title IV of ERISA.
SIGNATURES
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 Electric and Gas Company
Employee Savings Plan
---------------------------------------------------
(Name of Plan)
By M. PETER MELLETT
---------------------------------
M. PETER MELLETT
Chairman of the Employee
Benefits Committee
Date: June 30, 1997
EXHIBIT INDEX
Exhibit Number
- --------------
1 Public Service Electric and Gas Company Employee
Savings Plan, as amended as of September 3, 1996, and
effective October 1, 1996.
2 Independent Auditors' Consent.