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Pension and Other Postemployment Benefits (Tables)
 12 Months Ended
Dec. 31, 2014
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]  
Obligations and Funded Status
 
 
Pension
 
OPEB
Obligations and Funded Status
 
2014
 
2013
 
2014
 
2013
 
 
(In millions)
Change in benefit obligation:
 
 
 
 
 
 
 
 
Benefit obligation as of January 1
 
$
8,263

 
$
8,975

 
$
879

 
$
1,076

 
 
 
 
 
 
 
 
 
Service cost
 
167

 
197

 
9

 
13

Interest cost
 
402

 
372

 
39

 
37

Plan participants’ contributions
 
—

 
—

 
16

 
15

Plan amendments
 
5

 
2

 
(97
)
 
(37
)
Medicare retiree drug subsidy
 
—

 
—

 
—

 
5

Actuarial (gain) loss
 
1,123

 
(846
)
 
13

 
(107
)
Benefits paid
 
(711
)
 
(437
)
 
(102
)
 
(123
)
Benefit obligation as of December 31
 
$
9,249

 
$
8,263

 
$
757

 
$
879

 
 
 
 
 
 
 
 
 
Change in fair value of plan assets:
 
 
 
 
 
 
 
 
Fair value of plan assets as of January 1
 
$
6,171

 
$
6,671

 
$
495

 
$
508

Actual return on plan assets
 
349

 
(77
)
 
38

 
56

Company contributions
 
15

 
14

 
17

 
39

Plan participants’ contributions
 
—

 
—

 
16

 
15

Benefits paid
 
(711
)
 
(437
)
 
(102
)
 
(123
)
Fair value of plan assets as of December 31
 
$
5,824

 
$
6,171

 
$
464

 
$
495

 
 
 
 
 
 
 
 
 
Funded Status:
 
 
 
 
 
 
 
 
Qualified plan
 
$
(3,064
)
 
$
(1,782
)
 
 
 
 
Non-qualified plans
 
(361
)
 
(310
)
 
 
 
 
Funded Status
 
$
(3,425
)
 
$
(2,092
)
 
$
(293
)
 
$
(384
)
 
 
 
 
 
 
 
 
 
Accumulated benefit obligation
 
$
8,744

 
$
7,800

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
Amounts Recognized on the Balance Sheet:
 
 
 
 
 
 
 
 
Current liabilities
 
$
(17
)
 
$
(15
)
 
$
—

 
$
—

Noncurrent liabilities
 
(3,408
)
 
(2,077
)
 
(293
)
 
(384
)
Net liability as of December 31
 
$
(3,425
)
 
$
(2,092
)
 
$
(293
)
 
$
(384
)
 
 
 
 
 
 
 
 
 
Amounts Recognized in AOCI:
 
 
 
 
 
 
 
 
Prior service cost (credit)
 
$
45

 
$
48

 
$
(479
)
 
$
(558
)
 
 
 
 
 
 
 
 
 
Assumptions Used to Determine Benefit Obligations
 
 
 
 
 
 
 
 
(as of December 31)
 
 
 
 
 
 
 
 
Discount rate
 
4.25
%
 
5.00
%
 
4.00
%
 
4.75
%
Rate of compensation increase
 
4.20
%
 
4.20
%
 
N/A

 
N/A

 
 
 
 
 
 
 
 
 
Assumed Health Care Cost Trend Rates
 
 
 
 
 
 
 
 
(as of December 31)
 
 
 
 
 
 
 
 
Health care cost trend rate assumed (pre/post-Medicare)
 
N/A

 
N/A

 
7.0-7.5%

 
7.25-7.75%

Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
 
N/A

 
N/A

 
4.5
%
 
5
%
Year that the rate reaches the ultimate trend rate (pre/post-Medicare)
 
N/A

 
N/A

 
2026

 
2020

 
 
 
 
 
 
 
 
 
Allocation of Plan Assets (as of December 31)
 
 
 
 
 
 
 
 
Equity securities
 
36
%
 
18
%
 
49
%
 
47
%
Bonds
 
33
%
 
40
%
 
40
%
 
40
%
Absolute return strategies
 
14
%
 
23
%
 
1
%
 
3
%
Real estate
 
7
%
 
6
%
 
1
%
 
1
%
Derivatives
 
1
%
 
—
%
 
—
%
 
—
%
Cash and short-term securities
 
9
%
 
13
%
 
9
%
 
9
%
Total
 
100
%
 
100
%
 
100
%
 
100
%
Components of Net Periodic Benefit Costs
 
 
Pension
 
OPEB
Components of Net Periodic Benefit Costs
 
2014
 
2013
 
2012
 
2014
 
2013
 
2012
 
 
(In millions)
Service cost
 
$
167

 
$
197

 
$
161

 
$
9

 
$
13

 
$
12

Interest cost
 
402

 
372

 
389

 
39

 
37

 
47

Expected return on plan assets
 
(462
)
 
(501
)
 
(486
)
 
(34
)
 
(34
)
 
(37
)
Amortization of prior service cost (credit)
 
8

 
12

 
12

 
(176
)
 
(207
)
 
(203
)
Pension & OPEB mark-to-market adjustment
 
1,235

 
(267
)
 
735

 
8

 
(129
)
 
140

Net periodic cost
 
$
1,350

 
$
(187
)
 
$
811

 
$
(154
)
 
$
(320
)
 
$
(41
)
Assumptions Used to Determine Net Periodic Benefit Cost
Assumptions Used to Determine Net Periodic Benefit Cost
for Years Ended December 31
 
Pension
 
OPEB
 
2014
 
2013
 
2012
 
2014
 
2013
 
2012
Weighted-average discount rate
 
5.00
%
 
4.25
%
 
5.00
%
 
4.75
%
 
4.00
%
 
4.75
%
Expected long-term return on plan assets
 
7.75
%
 
7.75
%
 
7.75
%
 
7.75
%
 
7.75
%
 
7.75
%
Rate of compensation increase
 
4.20
%
 
4.70
%
 
5.20
%
 
N/A

 
N/A

 
N/A
Target asset allocations for pension and OPEB portfolio
ies.
FirstEnergy’s target asset allocations for its pension and OPEB trust portfolios for 2014 and 2013 are shown in the following tab
Effect of One-Percentage Point change in assumed health care cost trend rates
ans. A one-percentage-point change in assumed health care cost trend rates would have the following effec
Estimated Future Benefit Payments
s:
 
 
1-Percentage-Point Increase
 
1-Percentage-Point Decrease
 
 
(in millions)
Effect on total of service and interest cost
 
$
2

 
$
(1
)
Effect on accumulated benefit obligation
 
$
23

 
$
(22
)
Taking into account estimated employee future service, FirstEnergy expects to make the following benefit payments from plan assets and other payments, net of participant contributio
Net Pension and OPEB Asset (Liability)
s:
 
 
 
 
OPEB
 
 
Pension
 
Benefit Payments
 
Subsidy Receipts
 
 
(in millions)
2015
 
$
467

 
$
59

 
$
(3
)
2016
 
476

 
59

 
(3
)
2017
 
491

 
58

 
(3
)
2018
 
513

 
56

 
(3
)
2019
 
529

 
55

 
(3
)
Years 2020-2024
 
2,887

 
260

 
(10
)
FES’ share of the pension and OPEB net (liability) asset as of December 31, 2014 and 2013, was as follo
Net Periodic Pension and OPEB Costs
s:
 
 
Pension
 
OPEB
 
 
2014

2013
 
2014

2013
 
 
(In millions)
Net (Liability) Asset
 
$
(295
)
 
$
(149
)
 
$
10

 
$
(8
)
FES’ share of the net periodic pension and OPEB costs (credits) for the three years ended December 31, 2014 was as follo
Pensions  
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]  
Pension investments measured at fair value
The following tables set forth pension financial assets that are accounted for at fair value by level within the fair value hierarchy. See Note 9, Fair Value Measurements, for a description of each level of the fair value hierarchy. There were no significant transfers between levels during 2014 and 2013.
 
 
December 31, 2014
 
Asset Allocation
 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
 
 
(In millions)
 
 
Cash and short-term securities
 
$
—

 
$
517

 
$
—

 
$
517

 
9
%
Equity investments
 
 
 
 
 
 
 
 
 
 
Domestic
 
1,266

 
8

 
—

 
1,274

 
22
%
International
 
355

 
414

 
—

 
769

 
14
%
Fixed income
 
 
 
 
 
 
 
 
 
 
Government bonds
 
—

 
159

 
—

 
159

 
3
%
Corporate bonds
 
—

 
1,386

 
—

 
1,386

 
24
%
High yield debt
 
—

 
300

 
—

 
300

 
5
%
Mortgage-backed securities (non-government)
 
—

 
37

 
—

 
37

 
1
%
Alternatives
 
 
 
 
 
 
 


 
 
Hedge funds (Absolute return)
 
—

 
809

 
—

 
809

 
14
%
Derivatives
 
—

 
35

 
—

 
35

 
1
%
Private equity funds
 
—

 
—

 
25

 
25

 
—
%
Real estate funds
 
—

 
—

 
421

 
421

 
7
%
Total (1)
 
$
1,621


$
3,665


$
446

 
$
5,732

 
100
%

(1) 
Excludes $92 million as of December 31, 2014 of receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value table.

 
 
December 31, 2013
 
Asset Allocation
 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
 
 
(In millions)
 
 
Cash and short-term securities
 
$
—

 
$
782

 
$
—

 
$
782

 
13
%
Equity investments
 


 


 


 
 
 
 
Domestic
 
701

 
3

 
—

 
704

 
11
%
International
 
304

 
118

 
—

 
422

 
7
%
Fixed income
 


 


 


 
 
 
 
Government bonds
 
—

 
314

 
—

 
314

 
5
%
Corporate bonds
 
—

 
2,128

 
—

 
2,128

 
34
%
Mortgage-backed securities (non-government)
 
—

 
87

 
—

 
87

 
1
%
Alternatives
 


 


 


 
 
 
 
Hedge funds (Absolute return)
 
—

 
1,395

 
—

 
1,395

 
23
%
Derivatives
 
—

 
14

 
—

 
14

 
—
%
Private equity funds
 
—

 
—

 
27

 
27

 
—
%
Real estate funds
 
—

 
—

 
385

 
385

 
6
%
Total (1)
 
$
1,005

 
$
4,841

 
$
412

 
$
6,258

 
100
%
Reconciliation of changes in the fair value of pension investments
The following table provides a reconciliation of changes in the fair value of pension investments classified as Level 3 in the fair value hierarchy during 2014 and 2013:
 
 
Private Equity Funds
 
Real Estate Funds
 
 
(In millions)
Balance as of January 1, 2013
 
$
33

 
$
357

Actual return on plan assets:
 


 


Unrealized gains
 
1

 
17

Realized gains
 
5

 
13

Transfers out
 
(12
)
 
(2
)
Balance as of December 31, 2013
 
$
27

 
$
385

Actual return on plan assets:
 
 
 
 
Unrealized gains (losses)
 
(2
)
 
17

Realized gains
 
1

 
14

Transfers in (out)
 
(1
)
 
5

Balance as of December 31, 2014
 
$
25

 
$
421
OPEB  
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]  
Pension investments measured at fair value
2013:
 
 
Private Equity Funds
 
Real Estate Funds
 
 
(In millions)
Balance as of January 1, 2013
 
$
33

 
$
357

Actual return on plan assets:
 


 


Unrealized gains
 
1

 
17

Realized gains
 
5

 
13

Transfers out
 
(12
)
 
(2
)
Balance as of December 31, 2013
 
$
27

 
$
385

Actual return on plan assets:
 
 
 
 
Unrealized gains (losses)
 
(2
)
 
17

Realized gains
 
1

 
14

Transfers in (out)
 
(1
)
 
5

Balance as of December 31, 2014
 
$
25

 
$
421


As of December 31, 2014 and 2013, the OPEB trust investments measured at fair value were as follows:
 
 
December 31, 2014
 
Asset Allocation
 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
 
 
(In millions)
 
 
Cash and short-term securities
 
$
—

 
$
41

 
$
—

 
$
41

 
9
%
Equity investment
 
 
 
 
 
 
 
 
 
 
Domestic
 
230

 
—

 
—

 
230

 
48
%
International
 
3

 
3

 
—

 
6

 
1
%
Fixed income
 
 
 
 
 
 
 
 
 
 
U.S. treasuries
 
—

 
41

 
—

 
41

 
9
%
Government bonds
 
—

 
110

 
—

 
110

 
23
%
Corporate bonds
 
—

 
32

 
—

 
32

 
7
%
High yield debt
 
—

 
2

 
—

 
2

 
—
%
Mortgage-backed securities (non-government)
 
—

 
3

 
—

 
3

 
1
%
Alternatives
 
 
 
 
 
 
 
 
 
 
Hedge funds
 
—

 
5

 
—

 
5

 
1
%
Real estate funds
 
—

 
—

 
3

 
3

 
1
%
Total (1)
 
$
233

 
$
237

 
$
3

 
$
473

 
100
%

(1) 
Excludes $(9) million as of December 31, 2014 of receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value tab
Reconciliation of changes in the fair value of pension investments
le.

The following table provides a reconciliation of changes in the fair value of OPEB trust investments classified as Level 3 in the fair value hierarchy during 2014 and