UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000 Commission File Number 001-09120
A. Full title of the plan and the address of the plan,
if different from that of the issuer named below:
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
THRIFT AND TAX-DEFERRED SAVINGS PLAN
80 PARK PLAZA
NEWARK, NEW JERSEY 07102
MAILING ADDRESS: P.O. Box 1171
NEWARK, NEW JERSEY 07101-1171
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
See page 2.
Stable Value Fund UBS AG
PRIMCO CAPITAL MANAGEMENT 677 WASHINGTON BOULEVARD, 6TH FLOOR
400 WEST MARKET STREET, SUITE 3300 STAMFORD, CT 06901
LOUISVILLE, KENTUCKY 40202
STATE STREET BANK AND TRUST COMPANY
THE CHASE MANHATTAN BANK 225 FRANKLIN STREET, M9
270 PARK AVENUE, 6TH FLOOR BOSTON, MASSACHUSSETTS 02110-2804
NEW YORK, NEW YORK 10017
PRUDENTIAL SECURITIES, INC.
J.P. MORGAN GUARANTEED PRODUCTS
60 WALL STREET 71 HANOVER ROAD
NEW YORK, NEW YORK 10260-0060 FLORHAM PARK, NJ 07932-1597
METROPOLITAN LIFE INSURANCE Enterprise Common Stock Fund and ESOP Fund
COMPANY PUBLIC SERVICE ENTERPRISE GROUP
ONE MADISON AVENUE INCORPORATED
NEW YORK, NEW YORK 10010-3690 80 PARK PLAZA
NEWARK, NEW JERSEY 07101-1171
ALLSTATE LIFE INSURANCE COMPANY
ALLSTATE PLAZA WEST Large Company Stock Index Fund
3100 SANDERS ROAD, SUITE M2 THE VANGUARD GROUP
NORTHBROOK, ILLINOIS 60062-7154 INSTITUTIONAL DIVISION
P.O. BOX 2900
NEW YORK LIFE INSURANCE COMPANY VALLEY FORGE, PENNSYLVANIA 19482
260 CHERRY HILL ROAD
PARSIPPANY, NEW JERSEY 07054-0422 Diversified Bond Fund
BLACKROCK FINANCIAL MANAGEMENT, INC.
BANK OF AMERICA 345 PARK AVENUE
P.O. BOX 37003 NEW YORK, NEW YORK 10154
MAIL CODE: CA5-701-05-31
SAN FRANCISCO, CA 94137 International Stock Fund
T. ROWE PRICE INC.
CAISSE des DEPOTS 100 EAST PRATT STREET
9 WEST 57th STREET, 36TH FLOOR BALTIMORE, MARYLAND 02120
NEW YORK, NEW YORK 10019
Mid Size Company Stock Fund
DFP, INC. PUTNAM INVESTMENTS
400 WEST MARKET STREET P.O. BOX 41203
P.O. BOX 32830 PROVIDENCE, RHODE ISLAND 02940
LOUISVILLE, KY 40232
Small Company Stock Fund
JOHN HANCOCK MUTUAL LIFE MILLER ANDERSON & SHERRERD, LLP
INSURANCE COMPANY ONE TOWER BRIDGE
JOHN HANCOCK PLACE, 27th FLOOR WEST CONSHOHOCKEN, PENNSLYVANIA 19428
P.O. BOX 111
BOSTON, MASSACHUSSETTS 02117 Schwab Personal Choice Retirement
Account Fund
Charles Schwab & Co., Inc.
4722 NORTH 24TH STREET, SUITE 300
PHOENIX, ARIZONA 85016
INDEX
PAGE
----
INDEPENDENT AUDITORS' REPORT 4
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
AS OF DECEMBER 31, 2000 AND 1999 5
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEARS ENDED DECEMBER 31, 2000 and 1999 6
NOTES TO FINANCIAL STATEMENTS 7
SIGNATURES 21
EXHIBIT INDEX 22
INDEPENDENT AUDITORS' REPORT
Employee Benefits Committee of
Public Service Enterprise Group Incorporated:
We have audited the accompanying statements of net assets available for
benefits of the Public Service Enterprise Group Incorporated Thrift and
Tax-Deferred Savings Plan (the "Plan") as of December 31, 2000 and 1999, 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 auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit 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,
2000 and 1999, and the changes in net assets available for benefits for the
years then ended in conformity with accounting principles generally accepted in
the United States of America.
DELOITTE & TOUCHE LLP
Parsippany, New Jersey
June 15, 2001
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
THRIFT AND TAX-DEFERRED SAVINGS PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
As of December 31,
-------------------------------------------
2000 1999
----------------- -----------------
ASSETS
Investments, at fair value
Plan interest in Master Employee Benefit Plan Trust $707,641,377 $675,317,704
Receivables-Interest and Dividends 11,811 239,768
----------------- -----------------
Total Assets 707,653,188 675,557,472
----------------- -----------------
LIABILITIES
Acounts Payable 403,361 412,457
------------------ -----------------
Total Liabilities 403,361 412,457
------------------ -----------------
Net Assets Available for Benefits $707,249,827 $675,145,015
================== =================
See Notes to Financial Statements.
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
THRIFT AND TAX-DEFERRED SAVINGS PLAN
STATEMENTS OF CHANGES IN NET ASSETS
AVAILABLE FOR BENEFITS
For the Year Ended December 31,
-----------------------------------------------
2000 1999
------------------ -----------------
ADDITIONS
Participant Deposits $41,368,197 $34,231,928
Employer Contributions 9,308,829 8,009,322
------------------ -----------------
Total Deposits and Contributions 50,677,026 42,241,250
Conversions 10,002,058 --
Plan Interest in Master Employee Benefit Trust
Investment Income 18,072,508 17,875,371
Net Appreciation (Depreciation) in Market Value
of Investments (7,402,384) 66,031,798
------------------ -----------------
Total Additions 71,349,208 126,148,419
------------------ -----------------
DEDUCTIONS
Withdrawals 42,860,128 38,624,120
Administrative Expenses 915,692 992,422
Transfers from Employee Savings Plan--net (4,531,424) (3,615,054)
------------------ -----------------
Total Deductions 39,244,396 36,001,488
------------------ -----------------
INCREASE IN NET ASSETS AVAILABLE FOR BENEFITS 32,104,812 90,146,931
------------------ -----------------
NET ASSETS AVAILABLE FOR BENEFITS-BEGINNING OF YEAR 675,145,015 584,998,084
NET ASSETS AVAILABLE FOR BENEFITS-END OF YEAR $707,249,827 $675,145,015
================== ================
See Notes to Financial Statements.
===============================================================================
PUBLIC SERVICE ENTERPRISE GROUP INCORPORATED
===============================================================================
THRIFT AND TAX-DEFERRED SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF THE PLAN
The Public Service Enterprise Group Incorporated Employee Thrift and
Tax-Deferred Savings Plan (the "Plan") was adopted as a tax qualified profit
sharing plan under Section 401(a) of the Internal Revenue Code of 1986, as
amended, (the "IRC") and a qualified cash or deferred arrangement under IRC
Section 401(k) to encourage thrift and savings by eligible employees (Eligible
Employees). Deutsche Bank is the Trustee of the Master Trust established
pursuant to the Plan. Hewitt Associates is the Record Keeper for the Plan. The
Plan was last amended effective December 13, 1999, at which time primary
sponsorship of the Plan was changed from Public Service Electric & Gas Company
(PSE&G) to its parent corporation, Public Service Enterprise Group Incorporated
("Company"). As a result, the Plan was renamed the Public Service Enterprise
Group Incorporated Thrift and Tax-Deferred Savings Plan and the Master Trust
was amended to become the Public Service Enterprise Group Incorporated Master
Employee Benefits Plan Trust. In addition, Plan amendments were made for
various administrative and wording changes, including changes in the
definitions of Compensation, Employee, Eligible Employee Years of Service and
Hours of Service and to add additional investment options under the plan,
including the Schwab Personal Choice Retirement Account (PCRA) Fund. The
following description of the plan provides only general information. For a
complete description of the Plan, see the Plan Agreement.
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 as
defined by the Plan. The Company also maintains an Employee Savings Plan
(Savings Plan) to provide for its represented employees. At the time any
employee who is a Participant in the Savings Plan becomes an Eligible Employee
for the Plan, that employee will automatically be enrolled in the Plan, all
balances in the Savings Plan will be transferred to the Plan and all
contributions and investment elections in effect for the Savings Plan will
remain in effect. Participation in the Plan is entirely voluntary. Eligible
Employees are those employees not covered by a collective bargaining agreement
of the Company or any affiliate of the Company (together hereafter each called
an "Employer" or collectively "Employers"). Certain Eligible Employees may also
elect to have a distribution from another qualified corporate plan contributed
as a rollover contribution with the approval of the Company's Employee Benefits
Committee (Committee), the Plan Administrator.
Deposits and Contributions
Under the Plan, each participating Employee (Participant) may elect to make
basic deposits to Investment Funds of such Participant's choosing within the
Thrift Account Fund of 1% - 8% of his/her compensation (Basic Deposits), and
his/her respective 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 6% and up to
8% of Compensation are made in shares of the Company's Common Stock, and are
not available for transfer to any other Investment 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 such Funds in increments
of 1% of Compensation up to an additional 17% 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, within any Plan Year, make 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 25% of his or her Compensation for that Plan Year and
subject to the limitations of the IRC.
The maximum amount of Deferred Deposits to a Participant's Thrift Account may
have to be limited to less than or equal to 25% of Compensation to meet
requirements of the 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. All Deferred Deposits in excess of such
percentage will automatically be treated as Nondeferred Deposits and will
result in taxable income to the affected Participants. 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.
Thrift Account Deposits are made through payroll deductions by the
Participant's Employer, rollover contributions from other qualified plans and
Additional Lump Sum Deposits. Deposits by Participants and contributions by
their respective Employers are transferred to the Trustee and separately held
in the Plan's Thrift Account Fund of the Master Trust Fund for investment and
other transactions, as directed by Participants. Each Participant is entitled
to choose the Investment Funds in which his/her Deposits and Employer
Contributions will be invested from among the Investment Funds offered under
the Plan, except for Employer Contributions with respect to Basic Deposits in
excess of 6%, which are invested in the Enterprise Common Stock Fund.
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 Investment Fund.
All Deposits and Employer Contributions in the Stable Value Fund are invested
in either traditional Guaranteed Investment Contracts issued by insurance
companies or other financial intermediaries (Traditional GICs) 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 Plan. The portfolio is wrapped by a "book value wrapper", usually
a financial institution other than the investment 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 the Stable Value 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
2000, the composite rate of interest earned by such assets so invested was not
less than 6.02%.
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.
Loan Provisions
The Trustee may, subject to the approval of the Director of Performance and
Rewards of PSEG Services Corporation, lend a Participant who is employed by an
Employer an amount up to 50% of the value of the vested portion of such
Participant's Thrift Account and ESOP Fund, but no more than the aggregate
value of such Participant's Thrift Account or $50,000, whichever is less.
However, no amounts may be loaned directly from any ESOP Account, from any
portion of the Enterprise Common Stock Fund attributable to Employer
Contributions made in shares of stock, from any portion of a Participant's
Savings Account attributable to transfers from the Cash Balance Plan or from
assets held in the Schwab PCRA Fund. 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 over a period 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
are 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 Thrift Account and repayments of principal of any loan
together with interest thereon, are invested in the Thrift 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 by
other lenders. The rate of interest applicable to any loan at its inception
remains in effect for the duration of such loan. During 2000 and 1999, the
ratio of interest on loans granted to Participants fluctuated between 8.5% to
9.5% and 7.75% to 8.25%, respectively.
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 Thrift Account 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 Thrift 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 Master Trust Fund to the extent of the loan and
accrued interest thereon.
Vesting
Prior to January 1, 2000, Employer Contributions to a Participant's Thrift
Account vested upon a Participant's completion of five years of service with
the Employer or when a Participant reaches the age of 65, is disabled, laid off
or dies. A Participant who was formerly a participant in the U.S. Energy
Partners 401 (K) Plan (which was merged into the Plan in 1996), was vested in
the value of his or her U.S. Energy Partners Employer Contribution Sub-account
according to the following schedule:
Years of Service Vested Percentage
---------------- -----------------
Less than one 0%
One 20%
Two 40%
Three 60%
Four 80%
Five or More 100%
All amounts credited to a Participant's ESOP Fund are fully vested. Effective
January 1, 2000, the Plan was amended to provide 100% immediate vesting of
Employer Contributions for all Participants.
Holding Account
The Holding Account is a vehicle to record the transactions either from one
Investment Fund to another Investment Fund or from an Investment Fund to an
outside source. Daily balances which remain in the Holding Account are
temporarily invested in short-term, liquid investments by the Trustee until
disbursement. Activity within the Holding Account includes inflows and outflows
of cash related to Investment Fund transfers, Deposits, Employer Contributions,
withdrawals, receipts of dividends and interest, expenses incurred in
connection with the administration of the Plan, benefit payments and loan
transactions.
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 will lose
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
(hardship withdrawals). Distributions to Participants of approved hardship
withdrawals are made as soon as practicable after such approval.
Rights Upon Termination
The Company expects and intends to continue the Plan indefinitely, but has
reserved the right to amend, suspend or terminate the Plan at any time. In the
event of termination of the Plan, the net assets of the Plan would be
distributed to the Participants based on the balances in their individual
accounts at the date of termination.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements of the Plan have been prepared on the accrual basis 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.
Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (SFAS 133), which was later amended by SFAS
No. 138. Among other provisions, it requires that entities, including employee
benefit plans, recognize all derivatives as either assets or liabilities in the
balance sheet and measure those instruments at fair value. Gains and losses
resulting from changes in the fair values of those derivatives would be
accounted for depending on the use of the derivative and whether it qualifies
for hedge accounting treatment. Effective January 1, 2001, the Plan adopted
this statement. Upon adoption, SFAS No. 133 had no impact on the Plan's
financial position or results of operations.
Valuation of Investments
The value of all of the Plan's Investments in the various Funds are based upon
quoted market values, except for the Stable Value Fund, which is based on the
contract value of all GICs in which the assets of the Stable Value Fund are
invested, which approximates fair value. 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 the
financial reporting requirements of the Employee Retirement Income Security Act
of 1974, as amended (ERISA), as permitted by 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.
Expenses of Plan
All expenses incurred for the administration of the Plan, including taxes and
brokerage costs, are deducted from the Master Trust Fund.
The assets of the Enterprise Common Stock Fund and the ESOP Fund are invested
in shares of the Company's Common Stock. Shares of the Company's Common Stock
required for the Enterprise Common Stock Fund are purchased by the Trustee
either directly from the Company at its sole discretion, on the open market
through a broker or from the ESOP Fund. In situations where the ESOP Fund is in
a "sell" position and the Enterprise Common Stock Fund is in a "buy" position,
the Enterprise Common Stock Fund will buy from the ESOP Fund at the closing
price on the New York Stock Exchange for that day. In such case, no brokerage
commissions are charged on the transaction. Otherwise, all shares sold for the
Enterprise Common Stock Fund and the ESOP Fund are sold by the Trustee on the
open market through a broker. The proceeds, net of brokerage commissions and
transfer taxes, are distributed to the Participant.
Interfund Transfers -- ESOP Fund to Thrift Account
Participants are permitted to transfer all, but not less than all, of the
shares of the Company's Common Stock from their ESOP Funds to their Thrift
Accounts. To effect such transfers, the Trustee will sell the shares of the
Company's Common Stock held in the ESOP Fund and invest the proceeds in the
Thrift Account Investment Funds designated by the Participant. The cash value
of each share of the Company's Common Stock transferred will be equal to the
price per share of the Company's Common Stock actually received by the Trustee.
Any such transfer is treated as a rollover contribution.
Conversions
During the year 2000, The Thrift and Tax Deferred Savings Plan converted net
assets from the savings plans of two acquired companies, Fluidics Inc, and
Arden Engineering Constructors, Inc. in the amount of $7,632,173 with a
participant count of 83 and $2,369,885, with a participant count of 48
respectively.
3. INVESTMENTS
The following presents investments that represent 5 percent or more of the
Plan's net assets as of December 31, 2000:
2000 1999
------------ --------------
Primco Stable Value Fund $219,628,251 $183,240,270
Common Stock of Public Service Enterprise Group Incorporated 98,166,975 72,392,323
Vanguard Institutional Index Fund 167,205,487 194,554,256
Putnam Vista Mutual Fund 83,834,454 66,586,949
T. Rowe Price International Mutual Fund 41,506,794 44,560,991
The financial statements of the Plan include the following:
A. Thrift Account Investment Funds
(1) On March 31, 1998, the assets of the Stable Value Fund were merged,
for investment purposes, with the Stable Value Fund assets of the
Savings Plan. The assets of the Stable Value Fund are invested in
Traditional GICs or Synthetic GICs. All contract values approximate
fair values. As of December 31, 2000, the Plan's interest in the
following GICs was approximately 62%.
(a) At December 31, 2000, the following Traditional GICs were continuing
in effect:
(i) A two-year contract with Metropolitan Life Insurance Company,
expiring December 10, 2001, with an effective interest rate of
6.95% and a contract value of $10,696,969;
(ii) A three-year contract with New York Life Insurance Company,
expiring April 30, 2001, with an effective interest rate of 7.07%
and a contract value of $6,897,844; and
(iii)A five-year contract with Prudential Life Insurance, expiring
November 11, 2001, with an effective interest rate of 6.99% and a
contract value of $5,023,192.
(b) Also at December 31, 2000, the following Synthetic GICs were
continuing in effect:
(i) 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 crediting rate as of December
31, 2000 of 7.13% and a contract value of $54,144,548;
(ii) An open-ended contract with Bank of America as the book value
wrapper and Pacific Investment Management Company managing the
underlying portfolio providing an effective crediting rate as of
December 31, 2000 of 7.15% and a contract value of $18,057,990;
(iii)An open-ended contract with The Chase Manhattan Bank as the book
value wrapper and Seix Investment Advisors managing the
underlying portfolio providing an effective crediting rate as of
December 31, 2000 of 7.19% and a contract value of $40,183,483;
(iv) An open-ended contract with Allstate Life Insurance Company as
the book value wrapper and PRIMCO Capital Management managing the
underlying portfolio providing an effective crediting rate as of
December 31, 2000 of 5.65% and a contract value of $52,409,601;
(v) An open-ended contract with State Street Bank and Trust Company
as the book value wrapper and PRIMCO Capital Management managing
the underlying portfolio providing an effective crediting rate as
of December 31, 2000 of 5.72% and a contract value of
$55,627,082;
(vi) A pooled separate account expiring May 1, 2007 with John Hancock
Mutual Life Insurance Company as the book value wrapper and
managing underlying portfolio providing an effective crediting
rate as of December 31, 2000 of 5.75% and a contract value of
$9,115,021;
(vii)An open-ended contract with DFP, Inc as the book value wrapper
and PRIMCO Capital Management managing the underlying portfolio
providing an effective crediting rate as of December 31, 2000 of
5.83% and a contract value of $36,011,457;
(viii) Two five-year floating-rate contracts with Caisse des Depots,
expiring November 26, 2002, effective crediting rate on each
contract as of December 31, 2000 of 5.77%, contract values of
$4,022,132 and $2,011,065;
(ix) Two five-year floating-rate contracts with Caisse des Depots,
expiring December 12, 2002, effective crediting rate on each
contract as of December 31, 2000 of 5.51%, contract values of
$4,011,741 and $2,005,870;
(x) A five-year floating-rate contract with Caisse des Depots,
expiring February 3, 2003, effective crediting rate as of
December 31, 2000 of 5.87%, contract value of $3,027,713; and
(xi) An open-ended contract with UBS AG as the book value wrapper and
PRIMCO Capital Management managing the underlying portfolio
providing an effective crediting rate as of December 31, 2000 of
7.17% and a contact value of $50,993,406.
(2) The assets of the Enterprise Common Stock Fund are invested in the
Company's Common Stock.
(3) The assets of the Large Company Stock Index Fund are invested in the
capital stock of Vanguard Institutional Index Fund, a no-load mutual
fund managed by The Vanguard Group, Inc. The prospectus for the
Vanguard Institutional Index Fund indicates that such fund seeks to
replicate the investment performance of the Standard and Poor's 500
Composite Stock Price Index.
(4) The assets of the Diversified Bond Fund are invested in a separate
account managed by BlackRock Financial Management, Inc. The
Diversified Bond Fund invests in a broadly diversified portfolio of
bonds that include U.S. Treasury and agency securities, commercial and
residential mortgage-backed securities, asset-backed securities, and
corporate bonds.
(5) The assets of the International Stock Fund are invested in the capital
stock of the T. Rowe Price International Stock Fund, a no-load mutual
fund managed by Rowe Price-Fleming International, Inc. The prospectus
for the T. Rowe Price International Stock Fund indicates that such
fund invests primarily in common stocks of established, non-U.S.
companies.
(6) The assets of the Mid Size Company Stock Fund are invested in the
capital stock of the Putnam Vista Fund, a no-load mutual fund managed
by Putnam Investment Management, Inc. 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.
(7) The assets of the Small Company Stock Fund are invested in a separate
account managed by Miller Anderson & Sherrerd, LLP. The Small Company
Stock Fund invests in a broadly diversified portfolio of U.S. small
capitalization companies that are considered to be undervalued on a
relative basis by the Fund Manager at the time of purchase. Small
capitalization companies are those with equity capitalizations
generally below $1.5 billion.
(8) The assets of the Conservative Pre-Mix Portfolio are invested in
specific percentages within a mix of five existing Plan investment
Funds: 40% Stable Value Fund, 20% Diversified Bond Fund, 20% Large
Company Stock Index Fund, 10% International Stock Fund, and 10% Small
Company Stock Fund. 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.
(9) The assets of the Moderate Pre-Mix Portfolio are invested in specific
percentages within a mix of five existing Plan investment Funds: 25%
Large Company Stock Index Fund, 20% Stable Value Fund, 20%
International Stock Fund, 20% Diversified Bond Fund, and 15% Small
Company Stock Fund. 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.
(10) The assets of the Aggressive Pre-Mix Portfolio are invested in
specific percentages within a mix of four existing Plan investment
Funds: 30% Large Company Stock Index Fund, 25% International Stock
Fund, 25% Small Company Stock Fund, and 20% Diversified Bond Fund.
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
During 2000 and 1999, no contributions to or transfers into the ESOP Fund were
permitted.
C. Schwab PCRA Fund
Beginning in 1999, an additional investment choice was offered, the Schwab PCRA
Fund. This is a self-directed brokerage account in which Participants can
select and manage a wide selection of investments including mutual funds,
stocks and bonds. Deposits into the Schwab PCRA Fund must come from balances
transferred from the other options in the Plan. Currently, up to 75% of a
Participant's balance may be transferred to the Schwab PCRA Fund.
D. Participants
Participants
As of December 31,
---------------------------------
2000 1999
------------ ------------
Total Active Plan Participants 4,105 3,604
Participants by Fund:
Stable Value Fund 2,318 2,337
Enterprise Common Stock Fund 1,308 1,218
Large Company Stock Index Fund 2,386 2,472
Diversified Bond Fund 483 369
International Stock Fund 1,024 1,000
Mid Size Company Stock Fund 1,759 1,458
Conservative Pre-Mix Portfolio 401 387
Moderate Pre-Mix Portfolio 873 859
Aggressive Pre-Mix Portfolio 1,179 1,143
Small Company Stock Fund 500 118
ESOP Fund 394 423
Schwab PCRA 367 120
4. INVESTMENTS OF THE PLAN AND SAVINGS PLAN IN THE MASTER TRUST
The Plan's investments are included in the Master Trust which was established
for the investment of assets of all of the Company's qualified retirement plans
including the Plan and the Savings Plan. The following tables present the fair
values of and the investment income recognized by the investments of the Plan
and Savings Plan in the Master Trust as of and for the periods ending December
31, 2000 and 1999. As of December 31, 2000 and 1999, the Plan's interest in
such assets of the Master Trust was approximately 62%. See Note 3 for
investments in excess of 5% of Plan Net Assets.
December 31,
-------------------------------------------------
2000 1999
--------------------- ---------------------
Investments at fair value:
Participant Loans $31,058,248 $ 28,151,855
Cash and Cash Equivalents 12,387,447 71,740,378
Common Stock of Enterprise 158,237,865 115,952,779
Mutual Funds 557,693,509 558,830,359
Guaranteed Investment Contracts 354,239,114 295,548,822
Schwab PCRA Fund 27,297,856 11,840,257
--------------------- ---------------------
$1,140,914,039 $ 1,082,064,450
===================== =====================
December 31,
-------------------------------------------------
2000 1999
--------------------- --------------------
Investment income recognized:
Net (depreciation) appreciation in fair value
of Mutual Funds (1) $(56,882,819) $118,766,391
Net appreciation (depreciation) in fair value
of Enterprise Common Stock 46,520,206 (15,922,101)
Interest from Mutual Funds 2,367,179 1,253,314
Interest from Enterprise Common Stock
Funds 136,761 333,839
Interest from Guaranteed Investment Contracts 19,761,800 20,726,074
Dividends from Enterprise Common Stock 6,487,715 6,033,820
--------------------- --------------------
$18,390,842 $131,191,337
===================== =====================
<FN>
(1) Includes dividends earned from mutual funds.
</FN>
5. NON-PARTICIPANT DIRECTED INVESTMENTS
Information about the net assets and the significant components of the changes
in net assets relating to the non-participant directed investments is as
follows:
As of December 31,
-----------------------------------------
2000 1999
------------------- ------------------
Enterprise Common Stock Fund $82,820,144 $61,179,705
------------------- ------------------
Changes in Net Assets:
Deposits and Contributions $5,449,413 $4,982,546
Dividends and Interest 3,866,845 3,563,907
Net Appreciation (Depreciation) in Enterprise
Common Stock 24,087,278 (8,369,129)
Benefits Paid to Participants (4,358,568) (2,446,768)
Forfeitures (9,296) (119,527)
Administrative Expenses (2,388) (933)
Transfers from participant-directed investments (7,392,845) 2,536,651
------------------- ------------------
Total Changes in Net Assets $21,640,439 $146,747
=================== ==================
6. FEDERAL INCOME TAXES
The Plan is intended to be qualified under Section 401(a) of the Internal
Revenue Code of 1986 (the "Code") and is intended to be exempt under Section
501(a) of the Code. The Plan received a favorable Internal Revenue Service
determination letter dated April 8, 1998. The Plan has since been amended.
However, the Plan Administrator believes that the Plan is currently being
operated in compliance with the applicable requirements of the Code. Therefore,
no provision for income taxes has been included in the Plan's financial
statements.
7. 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 Enterprise Group Incorporated
Employee Thrift and Tax-Deferred Savings Plan
(Name of Plan)
By: M. PETER MELLETT
-----------------------------------------
M. Peter Mellett
Chairman of Employee
Benefits Committee
Date: June 29, 2001