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Pension and Other Postemployment Benefits (Tables)
 12 Months Ended
Dec. 31, 2016
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]  
Obligations and Funded Status
 
 
Pension
 
OPEB
Obligations and Funded Status - Qualified and Non-Qualified Plans
 
2016
 
2015
 
2016
 
2015
 
 
(In millions)
Change in benefit obligation:
 
 
 
 
 
 
 
 
Benefit obligation as of January 1
 
$
9,079

 
$
9,249

 
$
724

 
$
757

 
 
 
 
 
 
 
 
 
Service cost
 
191

 
193

 
5

 
5

Interest cost
 
398

 
383

 
30

 
29

Plan participants’ contributions
 
—

 
—

 
5

 
6

Plan amendments
 
—

 
—

 
(13
)
 
(10
)
Medicare retiree drug subsidy
 
—

 
—

 
1

 
1

Actuarial (gain) loss
 
224

 
(277
)
 
14

 
(2
)
Benefits paid
 
(466
)
 
(469
)
 
(55
)
 
(62
)
Benefit obligation as of December 31
 
$
9,426

 
$
9,079

 
$
711

 
$
724

 
 
 
 
 
 
 
 
 
Change in fair value of plan assets:
 
 
 
 
 
 
 
 
Fair value of plan assets as of January 1
 
$
5,338

 
$
5,824

 
$
431

 
$
464

Actual return (losses) on plan assets
 
442

 
(178
)
 
30

 
6

Company contributions
 
899

 
161

 
9

 
17

Plan participants’ contributions
 
—

 
—

 
5

 
6

Benefits paid
 
(466
)
 
(469
)
 
(55
)
 
(62
)
Fair value of plan assets as of December 31
 
$
6,213

 
$
5,338

 
$
420

 
$
431

 
 
 
 
 
 
 
 
 
Funded Status:
 
 
 
 
 
 
 
 
Qualified plan
 
$
(2,821
)
 
$
(3,366
)
 
 
 
 
Non-qualified plans
 
(392
)
 
(375
)
 
 
 
 
Funded Status
 
$
(3,213
)
 
$
(3,741
)
 
$
(291
)
 
$
(293
)
 
 
 
 
 
 
 
 
 
Accumulated benefit obligation
 
$
8,913

 
$
8,579

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
Amounts Recognized on the Balance Sheet:
 
 
 
 
 
 
 
 
Noncurrent assets
 
$
9

 
$
—

 
$
—

 
$
—

Current liabilities
 
(19
)
 
(18
)
 
—

 
—

Noncurrent liabilities
 
(3,203
)
 
(3,723
)
 
(291
)
 
(293
)
Net liability as of December 31
 
$
(3,213
)
 
$
(3,741
)
 
$
(291
)
 
$
(293
)
 
 
 
 
 
 
 
 
 
Amounts Recognized in AOCI:
 
 
 
 
 
 
 
 
Prior service cost (credit)
 
$
28

 
$
37

 
$
(288
)
 
$
(355
)
 
 
 
 
 
 
 
 
 
Assumptions Used to Determine Benefit Obligations
 
 
 
 
 
 
 
 
(as of December 31)
 
 
 
 
 
 
 
 
Discount rate
 
4.25
%
 
4.50
%
 
4.00
%
 
4.25
%
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

 
6.0-5.5%

 
6.0-5.5%

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

 
N/A

 
4.5
%
 
4.5
%
Year that the rate reaches the ultimate trend rate
 
N/A

 
N/A

 
2027

 
2026

 
 
 
 
 
 
 
 
 
Allocation of Plan Assets (as of December 31)
 
 
 
 
 
 
 
 
Equity securities
 
44
%
 
40
%
 
53
%
 
51
%
Bonds
 
30
%
 
34
%
 
41
%
 
43
%
Absolute return strategies
 
8
%
 
7
%
 
—
%
 
—
%
Real estate
 
10
%
 
11
%
 
—
%
 
—
%
Cash and short-term securities
 
8
%
 
8
%
 
6
%
 
6
%
Total
 
100
%
 
100
%
 
100
%
 
100
%
Components of Net Periodic Benefit Costs
 
 
Pension
 
OPEB
Components of Net Periodic Benefit Costs
 
2016
 
2015
 
2014
 
2016
 
2015
 
2014
 
 
(In millions)
Service cost
 
$
191

 
$
193

 
$
167

 
$
5

 
$
5

 
$
9

Interest cost
 
398

 
383

 
402

 
30

 
29

 
39

Expected return on plan assets
 
(399
)
 
(443
)
 
(462
)
 
(30
)
 
(33
)
 
(34
)
Amortization of prior service cost (credit)
 
8

 
8

 
8

 
(80
)
 
(134
)
 
(176
)
Pension & OPEB mark-to-market adjustment
 
179

 
344

 
1,235

 
15

 
25

 
8

Net periodic benefit cost (credit)
 
$
377

 
$
485

 
$
1,350

 
$
(60
)
 
$
(108
)
 
$
(154
)
Assumptions Used to Determine Net Periodic Benefit Cost
Assumptions Used to Determine Net Periodic Benefit Cost *
for Years Ended December 31
 
Pension
 
OPEB
 
2016
 
2015
 
2014
 
2016
 
2015
 
2014
Weighted-average discount rate
 
4.50
%
 
4.25
%
 
5.00
%
 
4.25
%
 
4.00
%
 
4.75
%
Expected long-term return on plan assets
 
7.50
%
 
7.75
%
 
7.75
%
 
7.50
%
 
7.75
%
 
7.75
%
Rate of compensation increase
 
4.20
%
 
4.20
%
 
4.20
%
 
N/A

 
N/A

 
N/A
Target asset allocations for pension and OPEB portfolio
FirstEnergy’s target asset allocations for its pension and OPEB trust portfolios for 2016 and 2015 are shown in the following table:
Target Asset Allocations
 
 
 
Equities
 
38
%
Fixed income
 
30
%
Absolute return strategies
 
8
%
Real estate
 
10
%
Alternative investments
 
8
%
Cash
 
6
%
 
 
100
%
Effect of One-Percentage Point change in assumed health care cost trend rates
Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects:
 
 
1-Percentage-Point Increase
 
1-Percentage-Point Decrease
 
 
(In millions)
Effect on total of service and interest cost
 
$
1

 
$
(1
)
Effect on accumulated benefit obligation
 
$
23

 
$
(20
)
Estimated Future Benefit Payments
Taking into account estimated employee future service, FirstEnergy expects to make the following benefit payments from plan assets and other payments, net of participant contributions:
 
 
 
 
OPEB
 
 
Pension
 
Benefit Payments
 
Subsidy Receipts
 
 
(In millions)
2016
 
$
505

 
$
52

 
$
(3
)
2017
 
523

 
52

 
(3
)
2018
 
534

 
53

 
(3
)
2019
 
552

 
53

 
(3
)
2020
 
566

 
53

 
(3
)
Years 2021-2025
 
2,999

 
251

 
(7
)
Net Pension and OPEB Asset (Liability)
FES’ share of the pension and OPEB net (liability) asset as of December 31, 2016 and 2015, was as follows:
 
 
Pension
 
OPEB
 
 
2016

2015
 
2016

2015
 
 
(In millions)
Net (Liability) Asset(1)
 
$
(158
)
 
$
(303
)
 
$
36

 
$
25
Net Periodic Pension and OPEB Costs
FES’ share of the net periodic benefit cost (credit), including the pension and OPEB mark-to-market adjustment, for the three years ended December 31, 2016 was as follows:
 
 
Pension
 
OPEB
 
 
2016
 
2015
 
2014
 
2016
 
2015
 
2014
 
 
(In millions)
Net Periodic Cost (Credit)
 
$
(5
)
 
$
10

 
$
150

 
$
(26
)
 
$
(22
)
 
$
(24
)
Pension  
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 10, Fair Value Measurements, for a description of each level of the fair value hierarchy. There were no significant transfers between levels during 2016 and 2015.
 
 
December 31, 2016
 
Asset Allocation
 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
 
 
(In millions)
 
 
Cash and short-term securities
 
$
—

 
$
464

 
$
—

 
$
464

 
8
%
Equity investments
 
 
 
 
 
 
 
 
 
 
Domestic (2)
 
1,048

 
13

 
—

 
1,061

 
17
%
International
 
422

 
1,269

 
—

 
1,691

 
27
%
Fixed income
 
 
 
 
 
 
 
 
 
 
Government bonds
 
—

 
106

 
—

 
106

 
2
%
Corporate bonds
 
—

 
1,245

 
—

 
1,245

 
20
%
High yield debt
 
—

 
372

 
—

 
372

 
6
%
Mortgage-backed securities (non-government)
 
—

 
112

 
—

 
112

 
2
%
Alternatives
 
 
 
 
 
 
 


 
 
Hedge funds (Absolute return)
 
—

 
500

 
—

 
500

 
8
%
Derivatives
 
—

 
(1
)
 
—

 
(1
)
 
—
%
Private equity funds
 
—

 
—

 
33

 
33

 
—
%
Real estate funds
 
—

 
—

 
615

 
615

 
10
%
Total (1)
 
$
1,470


$
4,080


$
648

 
$
6,198

 
100
%

(1) 
Excludes $16 million as of December 31, 2016 of receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value table.
(2) 
As a result of the $500 million equity contribution on December 13, 2016, there was $293 million of FE Stock included in the pension plan assets as of December 31, 2016.

 
 
December 31, 2015
 
Asset Allocation
 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
 
 
(In millions)
 
 
Cash and short-term securities
 
$
—

 
$
427

 
$
—

 
$
427

 
8
%
Equity investments
 


 


 


 
 
 
 
Domestic
 
869

 
75

 
—

 
944

 
18
%
International
 
395

 
794

 
—

 
1,189

 
22
%
Fixed income
 


 


 


 
 
 
 
Government bonds
 
—

 
232

 
—

 
232

 
4
%
Corporate bonds
 
—

 
1,115

 
—

 
1,115

 
21
%
High yield debt
 
—

 
438

 
—

 
438

 
8
%
Mortgage-backed securities (non-government)
 
—

 
31

 
—

 
31

 
1
%
Alternatives
 


 


 


 
 
 
 
Hedge funds (Absolute return)
 
—

 
343

 
—

 
343

 
7
%
Derivatives
 
—

 
15

 
—

 
15

 
—
%
Private equity funds
 
—

 
—

 
24

 
24

 
—
%
Real estate funds
 
—

 
—

 
587

 
587

 
11
%
Total (1)
 
$
1,264

 
$
3,470

 
$
611

 
$
5,345

 
100
%


(1)
Excludes $(7) million as of December 31, 2015 of receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value table.
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 2016 and 2015:
 
 
Private Equity Funds
 
Real Estate Funds
 
 
(In millions)
Balance as of January 1, 2015
 
$
25

 
$
421

Actual return on plan assets:
 


 


Unrealized gains
 
—

 
42

Realized gains (losses)
 
(1
)
 
16

Transfers in
 
—

 
108

Balance as of December 31, 2015
 
$
24

 
$
587

Actual return on plan assets:
 
 
 
 
Unrealized gains
 
1

 
29

Realized gains
 
1

 
14

Transfers in (out)
 
7

 
(15
)
Balance as of December 31, 2016
 
$
33

 
$
615
OPEB  
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]  
Pension investments measured at fair value
As of December 31, 2016 and 2015, the OPEB trust investments measured at fair value were as follows:
 
 
December 31, 2016
 
Asset Allocation
 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
 
 
(In millions)
 
 
Cash and short-term securities
 
$
—

 
$
27

 
$
—

 
$
27

 
6
%
Equity investment
 
 
 
 
 
 
 
 
 
 
Domestic
 
223

 
—

 
—

 
223

 
53
%
International
 
—

 
—

 
—

 
—

 
—
%
Fixed income
 
 
 
 
 
 
 
 
 
 
U.S. treasuries
 
—

 
40

 
—

 
40

 
9
%
Government bonds
 
—

 
108

 
—

 
108

 
26
%
Corporate bonds
 
—

 
24

 
—

 
24

 
6
%
High yield debt
 
—

 
—

 
—

 
—

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

 
2

 
—

 
2

 
—
%
Alternatives
 
 
 
 
 
 
 
 
 
 
Hedge funds
 
—

 
—

 
—

 
—

 
—
%
Real estate funds
 
—

 
—

 
—

 
—

 
—
%
Total (1)
 
$
223

 
$
201

 
$
—

 
$
424

 
100
%

(1) 
Excludes $(4) million as of December 31, 2016 of receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value table.
 
 
December 31, 2015
 
Asset Allocation
 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
 
 
(In millions)
 
 
Cash and short-term securities
 
$
—

 
$
25

 
$
—

 
$
25

 
6
%
Equity investment
 
 
 
 
 
 
 
 
 
 
Domestic
 
219

 
—

 
—

 
219

 
50
%
International
 
1

 
3

 
—

 
4

 
1
%
Fixed income
 
 
 
 
 
 
 
 
 
 
U.S. treasuries
 
—

 
42

 
—

 
42

 
10
%
Government bonds
 
—

 
114

 
—

 
114

 
26
%
Corporate bonds
 
—

 
27

 
—

 
27

 
6
%
High yield debt
 
—

 
1

 
—

 
1

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

 
3

 
—

 
3

 
1
%
Alternatives
 
 
 
 
 
 
 
 
 
 
Hedge funds
 
—

 
1

 
—

 
1

 
—
%
Real estate funds
 
—

 
—

 
2

 
2

 
—
%
Total (1)
 
$
220

 
$
216

 
$
2

 
$
438

 
100
%

(1)
Excludes $(7) million as of December 31, 2015, of receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value table.
Reconciliation of changes in the fair value of pension investments
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 2016 and 2015:
 
 
Real Estate Funds
 
 
(in millions)
Balance as of January 1, 2015
 
$
3

Transfers out
 
(1
)
Balance as of December 31, 2015
 
$
2

Transfers out
 
(2
)
Balance as of December 31, 2016
 
$
—