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Retirement Benefits
 12 Months Ended
Dec. 31, 2019
Defined Benefit Plan [Abstract]  
RETIREMENT BENEFITS RETIREMENT BENEFITS
The primary objective of the Ameren pension and postretirement benefit plans is to provide eligible employees with pension and postretirement health care and life insurance benefits. Ameren has defined benefit pension plans covering substantially all of its employees. Ameren has postretirement benefit plans covering non-union employees hired before October 2015 and union employees hired before January 2020. Ameren uses a measurement date of December 31 for its pension and postretirement benefit plans. Ameren Missouri and Ameren Illinois each participate in Ameren’s single-employer pension and other postretirement plans. Ameren’s qualified pension plan is the
Ameren Retirement Plan. Ameren also has an unfunded nonqualified pension plan, the Ameren Supplemental Retirement Plan, which is available to provide certain management employees and retirees with a supplemental benefit when their qualified pension plan benefits are capped in compliance with Internal Revenue Code limitations. Ameren’s other postretirement plan is the Ameren Retiree Welfare Benefit Plan. Only Ameren subsidiaries participate in the plans listed above.
Ameren’s unfunded obligation under its pension and other postretirement benefit plans was $216 million and $481 million as of December 31, 2019 and 2018, respectively. These net liabilities are recorded in “Other current liabilities,” “Pension and other postretirement benefits,” and “Other assets” on Ameren’s consolidated balance sheet. The decrease in the unfunded obligation during 2019 was primarily the result of an increase in the return on plan assets of the pension and postretirement trusts offset by a 75 basis point decrease in the pension and other postretirement benefit plan discount rates used to determine the present value of the obligation. The decrease in the unfunded obligation also resulted in a decrease to “Regulatory assets” on Ameren’s, Ameren Missouri’s, and Ameren Illinois’ balance sheets.
The following table presents the net benefit liability/(asset) recorded on the balance sheets as of December 31, 2019 and 2018:
 
2019

2018

Ameren(a)
$
216

$
481

Ameren Missouri
142

229

Ameren Illinois(a)
(16
)
120


(a)
Assets associated with other postretirement benefits are recorded in “Other assets” on the balance sheet.
Ameren recognizes the underfunded status of its pension and postretirement plans as a liability on its consolidated balance sheet, with offsetting entries to accumulated OCI and regulatory assets. The following table presents the funded status of Ameren’s pension and postretirement benefit plans as of December 31, 2019 and 2018. It also provides the amounts included in regulatory assets and accumulated OCI at December 31, 2019 and 2018, that have not been recognized in net periodic benefit costs.
 
2019
 
2018
 
Pension Benefits
 
Postretirement
Benefits
 
Pension Benefits
 
Postretirement
Benefits
Accumulated benefit obligation at end of year
$
4,735

$
(a)

 
$
4,258

$
(a)

Change in benefit obligation:
 
 
 
 
 
 
 
Net benefit obligation at beginning of year
$
4,459

$
1,034

 
$
4,827

$
1,240

Service cost
88

 
18

 
100

 
21

Interest cost
187

 
43

 
169

 
40

Plan amendments
—

 
2

 
—

 
(49
)
Participant contributions
—

 
8

 
—

 
9

Actuarial (gain) loss
469

 
69

 
(401
)
 
(163
)
Benefits paid
(236
)
 
(64
)
 
(236
)
 
(64
)
Net benefit obligation at end of year
4,967

 
1,110

 
4,459

 
1,034

Change in plan assets:
 
 
 
 
 
 
 
Fair value of plan assets at beginning of year
3,899

 
1,113

 
4,293

 
1,223

Actual return on plan assets
878

 
237

 
(218
)
 
(57
)
Employer contributions
23

 
3

 
60

 
2

Participant contributions
—

 
8

 
—

 
9

Benefits paid
(236
)
 
(64
)
 
(236
)
 
(64
)
Fair value of plan assets at end of year
4,564

 
1,297

 
3,899

 
1,113

Funded status – deficiency (surplus)
403

 
(187
)
 
560

 
(79
)
Accrued benefit cost (asset) at December 31
$
403

$
(187
)
 
$
560

$
(79
)
Amounts recognized in the balance sheet consist of:
 
 
 
 
 
 
 
Noncurrent asset(b)
$
—

$
(187
)
 
$
—

$
(79
)
Current liability(c)
2

 
—

 
2

 
—

Noncurrent liability
401

 
—

 
558

 
—

Net liability (asset) recognized
$
403

$
(187
)
 
$
560

$
(79
)
Amounts recognized in regulatory assets consist of:
 
 
 
 
 
 
 
Net actuarial (gain) loss
$
244

$
(170
)
 
$
393

$
(91
)
Prior service credit
—

 
(41
)
 
(2
)
 
(48
)
Amounts recognized in accumulated OCI (pretax) consist of:
 
 
 
 
 
 
 
Net actuarial loss
26

 
4

 
35

 
3

Total
$
270

$
(207
)
 
$
426

$
(136
)

(a)
Not applicable.
(b)
Included in “Other assets” on Ameren’s consolidated balance sheet.
(c)
Included in “Other current liabilities” on Ameren’s consolidated balance sheet.
The following table presents the assumptions used to determine our benefit obligations at December 31, 2019 and 2018:
  
Pension Benefits
 
Postretirement Benefits
  
2019
 
2018
 
2019
 
2018
Discount rate at measurement date
3.50
%
 
4.25
%
 
3.50
%
 
4.25
%
Increase in future compensation
3.50

 
3.50

 
3.50

 
3.50

Medical cost trend rate (initial)(a)
(b)

 
(b)

 
5.00

 
5.00

Medical cost trend rate (ultimate)(a)
(b)

 
(b)

 
5.00

 
5.00


(a)
Initial and ultimate medical cost trend rate for certain Medicare-eligible participants is 3.00%.
(b)
Not applicable.
Ameren determines discount rate assumptions by identifying a theoretical settlement portfolio of high-quality corporate bonds sufficient to provide for a plan’s projected benefit payments. The settlement portfolio of bonds is selected from a pool of nearly 900 high-quality corporate bonds. A single discount rate is then determined; that rate results in a discounted value of the plan’s benefit payments that equates to the market value of the selected bonds. In addition, during 2019, Ameren adopted the Society of Actuaries mortality table and adopted the
Society of Actuaries 2019 Mortality Improvement Scale. The updated mortality table reflects lower life expectancy in aggregate compared with the 2018 Society of Actuaries mortality table. The updated improvement scale assumes a lower rate of mortality improvement, compared with the 2018 Mortality Improvement Scale. The impact of the adoption of the table and the scale results in a decrease to our pension and other postretirement benefit obligations.
Funding
Pension benefits are based on the employees’ years of service, age, and compensation. Ameren’s pension plans are funded in compliance with income tax regulations, federal funding, and other regulatory requirements. As a result, Ameren expects to fund its pension plan at a level equal to the greater of the pension cost or the legally required minimum contribution. Based on its assumptions at December 31, 2019, its investment performance in 2019, and its pension funding policy, Ameren expects to make annual contributions of up to approximately $45 million in each of the next five years, with aggregate estimated contributions of $70 million. Ameren Missouri and Ameren Illinois estimate that their portion of the future funding requirements will be 30% and 60%, respectively. These estimates may change based on actual investment performance, changes in interest rates, changes in our assumptions, changes in government regulations, and any voluntary contributions. Our funding policy for postretirement benefits is primarily to fund the Voluntary Employee Beneficiary Association (VEBA) trusts to match the annual postretirement expense.
The following table presents the cash contributions made to our defined benefit retirement plan and to our postretirement plans during 2019, 2018, and 2017:
 
Pension Benefits
 
Postretirement Benefits
 
2019
 
2018
 
2017
 
2019
 
2018
 
2017
Ameren Missouri
$
3

 
$
18

 
$
19

 
$
1

 
$
1

 
$
1

Ameren Illinois
19

 
35

 
37

 
1

 
1

 
1

Other
1

 
7

 
8

 
1

 
—

 
—

Ameren
$
23

 
$
60

 
$
64

 
$
3

 
$
2

 
$
2

Investment Strategy and Policies
Ameren manages plan assets in accordance with the “prudent investor” guidelines contained in ERISA. The investment committee, which includes members of senior management, approves and implements investment strategy and asset allocation guidelines for the plan assets. The investment committee’s goals are twofold: first, to ensure that sufficient funds are available to provide the benefits at the time they are payable; and second, to maximize total return on plan assets and to minimize expense volatility consistent with its tolerance for risk. Ameren delegates the task of investment management to specialists in each asset class. As appropriate, Ameren provides each investment manager with guidelines that specify allowable and prohibited investment types. The investment committee regularly monitors manager performance and compliance with investment guidelines.
The expected return on plan assets assumption is based on historical and projected rates of return for current and planned asset classes in the investment portfolio. Projected rates of return for each asset class were estimated after an analysis of historical experience, future expectations, and the volatility of the various asset classes. After considering the target asset allocation for each asset class, we adjusted the overall expected rate of return for the portfolio for historical and expected experience of active portfolio management results compared with benchmark returns and for the effect of expenses paid from plan assets. Ameren will use an expected return on plan assets for its pension and postretirement plan assets of 7.00% in 2020. No plan assets are expected to be returned to Ameren during 2020.
Ameren’s investment committee strives to assemble a portfolio of diversified assets that does not create a significant concentration of risks. The investment committee develops asset allocation guidelines between asset classes, and it creates diversification through investments in assets that differ by type (equity, debt, real estate, private equity), duration, market capitalization, country, style (growth or value), and industry, among other factors. The diversification of assets is displayed in the target allocation table below. The investment committee also routinely rebalances the plan assets to adhere to the diversification goals. The investment committee’s strategy reduces the concentration of investment risk; however, Ameren is still subject to overall market risk. The following table presents our target allocations for 2020 and our pension and postretirement plans’ asset categories as of December 31, 2019 and 2018:
Asset
Category
Target Allocation
2020
 
Percentage of Plan Assets at December 31,
2019
 
2018
Pension Plan:
 
 
 
 
 
Cash and cash equivalents
0% – 5%
 
3
%
 
1
%
Equity securities:
 
 
 
 
 
U.S. large-capitalization
21% – 31%
 
27
%
 
24
%
U.S. small- and mid-capitalization
3% – 13%
 
7
%
 
7
%
International
9% – 19%
 
14
%
 
13
%
Global
3% – 13%
 
9
%
 
8
%
Total equity
51% – 61%
 
57
%
 
52
%
Debt securities
35% – 45%
 
36
%
 
42
%
Real estate
0% – 9%  
 
4
%
 
5
%
Private equity
0% – 5%
 
(a)

 
(a)

Total
 
 
100
%
 
100
%
Postretirement Plans:
 
 
 
 
 
Cash and cash equivalents
0% – 7%
 
1
%
 
2
%
Equity securities:
 
 
 
 
 
U.S. large-capitalization
23% – 33%
 
31
%
 
40
%
U.S. small- and mid-capitalization
3% – 13%
 
9
%
 
7
%
International
9% – 19%
 
14
%
 
13
%
Global
5% – 15%
 
11
%
 
—
%
Total equity
55% – 65%
 
65
%
 
60
%
Debt securities
33% – 43%
 
34
%
 
38
%
Total
 
 
100
%
 
100
%

(a)
Less than 1% of plan assets.
In general, the United States large-capitalization equity investments are passively managed or indexed, whereas the international, global, United States small-capitalization, and United States mid-capitalization equity investments are actively managed by investment managers. Debt securities include a broad range of fixed-income vehicles. Debt security investments in high-yield securities and non-United-States-dollar-denominated securities are owned by the plans, but in limited quantities to reduce risk. Most of the debt security investments are under active management by investment managers. Real estate investments include private real estate vehicles; however, Ameren does not, by policy, hold direct investments in real estate property. Additionally, Ameren’s investment committee allows investment managers to use derivatives, such as index futures, foreign exchange futures, and options, in certain situations to increase or to reduce market exposure in an efficient and timely manner.
Fair Value Measurements of Plan Assets
Investments in the pension and postretirement benefit plans were stated at fair value as of December 31, 2019. The fair value of an asset is the amount that would be received upon its sale in an orderly transaction between market participants at the measurement date. Cash and cash equivalents have initial maturities of three months or less and are recorded at cost plus accrued interest. Investments traded in active markets on national or international securities exchanges are valued at closing prices on the measurement date or, if that is not a business day, on the last business day before that date. Securities traded in over-the-counter markets are valued by quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. Investments measured under NAV as a practical expedient are based on the fair values of the underlying assets provided by the funds and their administrators. The fair value of real estate investments is based on NAV; it is determined by annual appraisal reports prepared by an independent real estate appraiser. Investments measured at NAV often provide for daily, monthly, or quarterly redemptions with 60 or less days of notice depending on the fund. For some funds, redemption may also require approval from the fund’s board of directors. Derivative contracts are valued at fair value, as determined by the investment managers (or independent third parties on behalf of the investment managers), who use proprietary models and take into consideration exchange quotations on underlying instruments, dealer quotations, and other market information.
The following table sets forth, by level within the fair value hierarchy discussed in Note 8 – Fair Value Measurements, the pension plans’ assets measured at fair value and NAV as of December 31, 2019 and 2018:
 
December 31, 2019
 
 
December 31, 2018
 
Level 1
 
Level 2
 
NAV
 
Total
 
 
Level 1
 
Level 2
 
NAV
 
Total
Cash and cash equivalents
$
—

 
$
—

 
$
139

 
$
139

 
 
$
—

 
$
—

 
$
41

 
$
41

Equity securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. large-capitalization
—

 
—

 
1,253

 
1,253

 
 
—

 
—

 
955

 
955

U.S. small- and mid-capitalization
344

 
—

 
—

 
344

 
 
272

 
—

 
—

 
272

International
296

 
—

 
363

 
659

 
 
224

 
—

 
298

 
522

Global
—

 
—

 
407

 
407

 
 
—

 
—

 
321

 
321

Debt securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate bonds
—

 
597

 
13

 
610

 
 
—

 
701

 
19

 
720

Municipal bonds
—

 
75

 
—

 
75

 
 
—

 
87

 
—

 
87

U.S. Treasury and agency securities
5

 
1,010

 
—

 
1,015

 
 
—

 
891

 
—

 
891

Other
—

 
8

 
—

 
8

 
 
1

 
11

 
—

 
12

Real estate
—

 
—

 
211

 
211

 
 
—

 
—

 
202

 
202

Private equity
—

 
—

 
2

 
2

 
 
—

 
—

 
3

 
3

Total
$
645

 
$
1,690

 
$
2,388

 
$
4,723

 
 
$
497

 
$
1,690

 
$
1,839

 
$
4,026

Less: Medical benefit assets(a)
 
 
 
 
 
 
(176
)
 
 
 
 
 
 
 
 
(144
)
Plus: Net receivables(b)
 
 
 
 
 
 
17

 
 
 
 
 
 
 
 
17

Fair value of pension plans’ assets
 
 
 
 
 
 
$
4,564

 
 
 
 
 
 
 
 
$
3,899


(a)
Medical benefit (health and welfare) component for accounts maintained in accordance with Section 401(h) of the Internal Revenue Code to fund a portion of the postretirement obligation.
(b)
Receivables related to pending securities sales, offset by payables related to pending securities purchases.
The following table sets forth, by level within the fair value hierarchy discussed in Note 8 – Fair Value Measurements, the postretirement benefit plans’ assets measured at fair value and NAV as of December 31, 2019 and 2018:
 
December 31, 2019
 
 
December 31, 2018
 
Level 1
 
Level 2
 
NAV
 
Total
 
 
Level 1
 
Level 2
 
NAV
 
Total
Cash and cash equivalents
$
12

 
$
—

 
$
—

 
$
12

 
 
$
32

 
$
—

 
$
—

 
$
32

Equity securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. large-capitalization
238

 
—

 
112

 
350

 
 
297

 
—

 
89

 
386

U.S. small- and mid-capitalization
93

 
—

 
—

 
93

 
 
63

 
—

 
—

 
63

International
59

 
—

 
102

 
161

 
 
45

 
—

 
84

 
129

Global
—

 
—

 
120

 
120

 
 
—

 
—

 
—

 
—

Other
—

 
—

 
—

 
—

 
 
—

 
12

 
—

 
12

Debt securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate bonds
—

 
—

 
—

 
—

 
 
—

 
144

 
—

 
144

Municipal bonds
—

 
107

 
—

 
107

 
 
—

 
107

 
—

 
107

U.S. Treasury and agency securities
—

 
—

 
—

 
—

 
 
—

 
62

 
—

 
62

Other
—


—

 
277

 
277

 
 
—

 
7

 
34

 
41

Total
$
402


$
107

 
$
611

 
$
1,120

 
 
$
437

 
$
332

 
$
207

 
$
976

Plus: Medical benefit assets(a)
 
 
 
 
 
 
176

 
 
 
 
 
 
 
 
144

Less: Net payables(b)
 
 
 
 
 
 
1

 
 
 
 
 
 
 
 
(7
)
Fair value of postretirement benefit plans’ assets
 
 
 
 
 
 
$
1,297

 
 
 
 
 
 
 
 
$
1,113

(a)
Medical benefit (health and welfare) component for accounts maintained in accordance with Section 401(h) of the Internal Revenue Code to fund a portion of the postretirement obligation. These 401(h) assets are included in the pension plan assets shown above.
(b)
Payables related to pending securities purchases, offset by interest receivables and receivables related to pending securities sales.
Net Periodic Benefit Cost
The following table presents the components of the net periodic benefit cost of Ameren’s pension and postretirement benefit plans during 2019, 2018, and 2017:
 
Pension Benefits
 
 
Postretirement Benefits
 
2019
 
2018
 
2017
 
 
2019
 
2018
 
2017
Service cost(a)
$
88

 
$
100

 
$
93

 
 
$
18

 
$
21

 
$
21

Non-service cost components:
 
 
 
 
 
 
 
 
 
 
 
 
Interest cost
187

 
169

 
179

 
 
43

 
40

 
47

Expected return on plan assets
(276
)
 
(276
)
 
(262
)
 
 
(77
)
 
(77
)
 
(75
)
Amortization of:
 
 
 
 
 
 
 
 
 
 
 
 
Prior service credit
(1
)
 
(1
)
 
(1
)
 
 
(5
)
 
(4
)
 
(5
)
Actuarial (gain) loss
25

 
68

 
55

 
 
(15
)
 
(6
)
 
(6
)
Total non-service cost components(b)
$
(65
)
 
$
(40
)
 
$
29

 
 
$
(54
)
 
$
(47
)
 
$
(39
)
Net periodic benefit cost (income)
$
23

 
$
60

 
$
64

 
 
$
(36
)
 
$
(26
)
 
$
(18
)
(a)    Service cost, net of capitalization, is reflected in “Operating Expenses - Other operations and maintenance” on Ameren’s statement of income.
(b)
2019 and 2018 amounts and the non-capitalized portion of 2017 non-service cost components are reflected in “Other Income, Net” on Ameren’s consolidated statement of income. See Note 6 – Other Income, Net for additional information.
The estimated amounts that will be amortized from regulatory assets and accumulated OCI into Ameren’s net periodic benefit cost in 2020 are as follows:
 
Pension Benefits
 
Postretirement Benefits
Regulatory assets:
 
 
 
Prior service credit
$
(1
)
 
$
(4
)
Net actuarial (gain) loss
52

 
(9
)
Accumulated OCI:
 
 
 
Net actuarial loss
5

 
—

Total
$
56

 
$
(13
)
Prior service cost is amortized on a straight-line basis over the average future service of active participants benefiting under the plan amendment. Net actuarial gains or losses subject to amortization are amortized on a straight-line basis over 10 years.
The Ameren Companies are responsible for their share of the pension and postretirement benefit costs. The following table presents the pension costs and the postretirement benefit costs incurred for the years ended December 31, 2019, 2018, and 2017:
  
Pension Costs
 
Postretirement Costs
  
2019
 
2018
 
2017
 
2019
 
2018
 
2017
Ameren Missouri(a)
$
5

 
$
22

 
$
24

 
$
(6
)
 
$
(1
)
 
$
(4
)
Ameren Illinois
20

 
39

 
41

 
(30
)
 
(25
)
 
(14
)
Other
(2
)
 
(1
)
 
(1
)
 
—

 
—

 
—

Ameren
$
23

 
$
60

 
$
64

 
(36
)
 
$
(26
)
 
$
(18
)
(a)
Does not include the impact of the regulatory tracking mechanism for the difference between the level of pension and postretirement benefit costs incurred by Ameren Missouri and the level of such costs included in customer rates.
The expected pension and postretirement benefit payments from qualified trust and company funds, which reflect expected future service, as of December 31, 2019, are as follows:
  
Pension Benefits
 
Postretirement Benefits
  
Paid from
Qualified
Trust Funds
 
Paid from
Company
Funds
 
Paid from
Qualified
Trust Funds
 
Paid from
Company
Funds
2020
$
257

 
$
3

 
$
58

 
$
2

2021
269

 
3

 
60

 
2

2022
274

 
3

 
61

 
2

2023
279

 
3

 
63

 
2

2024
284

 
3

 
64

 
2

2025 – 2029
1,446

 
12

 
313

 
12


The following table presents the assumptions used to determine net periodic benefit cost for our pension and postretirement benefit plans for the years ended December 31, 2019, 2018, and 2017:
  
Pension Benefits
 
Postretirement Benefits
  
2019
 
2018
 
2017
 
2019
 
2018
 
2017
Discount rate at measurement date
4.25
%
 
3.50
%
 
4.00
%
 
4.25
%
 
3.50
%
 
4.00
%
Expected return on plan assets
7.00

 
7.00

 
7.00

 
7.00

 
7.00

 
7.00

Increase in future compensation
3.50

 
3.50

 
3.50

 
3.50

 
3.50

 
3.50

Medical cost trend rate (initial)(a)
(b)

 
(b)

 
(b)

 
5.00

 
5.00

 
5.00

Medical cost trend rate (ultimate)(a)
(b)

 
(b)

 
(b)

 
5.00

 
5.00

 
5.00


(a)
Initial and ultimate medical cost trend rate for certain Medicare-eligible participants is 3.00%.
(b)
Not applicable.
The table below reflects the sensitivity of Ameren’s plans to potential changes in key assumptions:
  
Pension Benefits
 
Postretirement Benefits
  
Service Cost
and Interest
Cost
 
Expected
Return on
Assets
 
Projected
Benefit
Obligation
 
Service Cost
and Interest
Cost
 
Expected
Return on
Assets
 
Postretirement
Benefit
Obligation
0.25% decrease in discount rate
$
(1
)
 
$
—

 
$
165

 
$
—

 
$
—

 
$
36

0.25% decrease in return on assets
—

 
10

 
—

 
—

 
3

 
—

0.25% increase in future compensation
2

 
—

 
14

 
—

 
—

 
—

1.00% increase in annual medical trend
—

 
—

 
—

 
3

 
—

 
57

1.00% decrease in annual medical trend
—

 
—

 
—

 
(3
)
 
—

 
(57
)

Other
Ameren sponsors a 401(k) plan for eligible employees. The Ameren 401(k) plan covered all eligible Ameren employees at December 31, 2019. The plan allows employees to contribute a portion of their compensation in accordance with specific guidelines. Ameren matches a percentage of the employee contributions up to certain limits. The following table presents the portion of the matching contribution to the Ameren 401(k) plan attributable to each of the Ameren Companies for the years ended December 31, 2019, 2018, and 2017:
 
2019
 
2018
 
2017
Ameren Missouri
$
19

 
$
17

 
$
16

Ameren Illinois
16

 
15

 
13

Other
—

 
1

 
1

Ameren
$
35

 
$
33

 
$
30