Pension and Other Postemployment Benefits (Tables)

12 Months Ended

Dec. 31, 2018

Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]



	Pension						OPEB
Obligations and Funded Status - Qualified and Non-Qualified Plans	2018			2017			2018			2017
	(In millions)
Change in benefit obligation:
Benefit obligation as of January 1	$	10,167		$	9,426		$	731		$	711

Service cost	224			208			5			5
Interest cost	372			390			25			27
Plan participants’ contributions	—			—			3			4
Plan amendments	5			11			5			—
Special termination benefits	31			—			8			—
Medicare retiree drug subsidy	—			—			1			1
Annuity purchase	(129		)	—			—			—
Actuarial (gain) loss	(710		)	610			(121		)	32
Benefits paid	(498		)	(478		)	(49		)	(49		)
Benefit obligation as of December 31	$	9,462		$	10,167		$	608		$	731

Change in fair value of plan assets:
Fair value of plan assets as of January 1	$	6,704		$	6,213		$	439		$	420
Actual return on plan assets	(363		)	950			(8		)	49
Annuity purchase	(129		)	—			—			—
Company contributions	1,270			18			22			16
Plan participants’ contributions	—			—			3			4
Benefits paid	(498		)	(477		)	(48		)	(50		)
Fair value of plan assets as of December 31	$	6,984		$	6,704		$	408		$	439

Funded Status:
Qualified plan	$	(2,093	)	$	(3,043	)	$	—		$	—
Non-qualified plans	(385		)	(420		)	—			—
Funded Status	$	(2,478	)	$	(3,463	)	$	(200	)	$	(292	)

Accumulated benefit obligation	$	8,951		$	9,583		$	—		$	—

Amounts Recognized on the Balance Sheet:
Noncurrent assets	$	14		$	—		$	—		$	—
Current liabilities	(20		)	(19		)	—			—
Noncurrent liabilities	(2,472		)	(3,444		)	(200		)	(292		)
Net liability as of December 31	$	(2,478	)	$	(3,463	)	$	(200	)	$	(292	)

Amounts Recognized in AOCI:
Prior service cost (credit)	$	30		$	32		$	(121	)	$	(206	)

Assumptions Used to Determine Benefit Obligations
(as of December 31)
Discount rate	4.44		%	3.75		%	4.30		%	3.50		%
Rate of compensation increase	4.10		%	4.20		%	N/A			N/A
Cash balance weighted average interest crediting rate	3.34		%	2.88		%	N/A			N/A

Assumed Health Care Cost Trend Rates
(as of December 31)
Health care cost trend rate assumed (pre/post-Medicare)	6.0-5.5%			6.0-5.5%			6.0-5.5%			6.0-5.5%
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)	4.5		%	4.5		%	4.5		%	4.5		%
Year that the rate reaches the ultimate trend rate	2028			2027			2028			2027

Allocation of Plan Assets (as of December 31)
Equity securities	36		%	42		%	48		%	50		%
Bonds	34		%	32		%	35		%	33		%
Absolute return strategies	11		%	10		%	—		%	—		%
Real estate funds	10		%	9		%	—		%	—		%
Derivatives	2		%	—		%	—		%	—		%
Private equity funds	2		%	1		%	—		%	—		%
Cash and short-term securities	5		%	6		%	17		%	17		%
Total	100		%	100		%	100		%	100		%

Components of Net Periodic Benefit Costs



Components of Net Periodic Benefit Costs for Years Ended December 31,	Pension									OPEB
	2018			2017			2016			2018			2017			2016
	(In millions)
Service cost	$	224		$	208		$	191		$	5		$	5		$	5
Interest cost	372			390			398			25			27			30
Expected return on plan assets	(574		)	(448		)	(399		)	(31		)	(30		)	(30		)
Amortization of prior service cost (credit)	7			7			8			(81		)	(81		)	(80		)
Special termination costs	31			—			—			8			—			—
Pension & OPEB mark-to-market adjustment	227			108			179			(82		)	13			15
Net periodic benefit cost (credit)	$	287		$	265		$	377		$	(156	)	$	(66	)	$	(60	)

Assumptions Used to Determine Net Periodic Benefit Cost



Assumptions Used to Determine Net Periodic Benefit Cost for the Years Ended December 31,*	Pension						OPEB
	2018		2017		2016		2018		2017		2016
Weighted-average discount rate	3.75	%	4.25	%	4.50	%	3.50	%	4.00	%	4.25	%
Expected long-term return on plan assets	7.50	%	7.50	%	7.50	%	7.50	%	7.50	%	7.50	%
Rate of compensation increase	4.20	%	4.20	%	4.20	%	N/A		N/A		N/A

^*Excludes impact of pension and OPEB mark-to-market adjustment.

Target asset allocations for pension and OPEB portfolio

FirstEnergy’s target asset allocations for its pension and OPEB trust portfolios for 2018 and 2017 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	%

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)
2019	$	509	$	57	$	(1	)
2020	533		48		(1		)
2021	554		48		(1		)
2022	566		47		(1		)
2023	580		46		(1		)
Years 2024-2028	3,047		213		(3		)

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 11, "Fair Value Measurements," for a description of each level of the fair value hierarchy. There were no significant transfers between levels during 2018 and 2017.



	December 31, 2018								Asset Allocation
	Level 1		Level 2		Level 3		Total		Asset Allocation
	(In millions)
Cash and short-term securities	$	—	$	342	$	—	$	342	5	%
Equity investments:
Domestic	723		122		—		845		12	%
International	392		1,232		—		1,624		22	%
Fixed income:
Government bonds	—		59		—		59		1	%
Corporate bonds	—		1,674		—		1,674		23	%
High yield debt	—		667		—		667		10	%
Alternatives:
Hedge funds (absolute return)	—		681		—		681		11	%
Derivatives	108		—		—		108		2	%
Real estate funds	—		—		665		665		10	%
Total ⁽¹⁾	$	1,223	$	4,777	$	665	$	6,665	96	%

Private equity funds ⁽²⁾							143		2	%
Insurance-linked securities ⁽²⁾							108		2	%

Total Investments							$	6,916	100	%


⁽¹⁾	Excludes $68 million as of December 31, 2018, of receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value table.


⁽²⁾	Net asset value used as a practical expedient to approximate fair value.



	December 31, 2017										Asset Allocation
	Level 1		Level 2			Level 3		Total			Asset Allocation
	(In millions)
Cash and short-term securities	$	—	$	379		$	—	$	379		6	%
Equity investments:
Domestic	695		27			—		722			11	%
International	514		1,569			—		2,083			31	%
Fixed income:
Government bonds	—		251			—		251			4	%
Corporate bonds	—		1,237			—		1,237			18	%
High yield debt	—		689			—		689			10	%
Mortgage-backed securities (non-government)	—		31			—		31			—	%
Alternatives:
Hedge funds (absolute return)	—		635			—		635			10	%
Derivatives	—		(1		)	—		(1		)	—	%
Real estate funds	—		—			631		631			9	%
Total ⁽¹⁾	$	1,209	$	4,817		$	631	$	6,657		99	%

Private equity funds ⁽²⁾								57			1	%

Total Investments								$	6,714		100	%


⁽¹⁾	Excludes $(10) million as of December 31, 2017, of receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value table.


⁽²⁾	Net asset value used as a practical expedient to approximate fair value.

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 2018 and 2017:



	Real Estate Funds

Balance as of January 1, 2017	$	615
Actual return on plan assets:
Unrealized gains	3
Realized gains	10
Transfers in	3
Balance as of December 31, 2017	$	631
Actual return on plan assets:
Unrealized gains	102
Realized losses	(65		)
Transfers out	(3		)
Balance as of December 31, 2018	$	665

OPEB

Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]

Pension investments measured at fair value

As of December 31, 2018 and 2017, the OPEB trust investments measured at fair value were as follows:



	December 31, 2018								Asset Allocation
	Level 1		Level 2		Level 3		Total		Asset Allocation
	(In millions)
Cash and short-term securities	$	—	$	71	$	—	$	71	17	%
Equity investment:
Domestic	196		—		—		196		48	%
Fixed income:
Government bonds	—		107		—		107		26	%
Corporate bonds	—		32		—		32		8	%
Mortgage-backed securities (non-government)			4		—		4		1	%
Total ⁽¹⁾	$	196	$	214	$	—	$	410	100	%


⁽¹⁾	Excludes $(2) million as of December 31, 2018, of receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value table.



	December 31, 2017								Asset Allocation
	Level 1		Level 2		Level 3		Total		Asset Allocation
	(In millions)
Cash and short-term securities	$	—	$	75	$	—	$	75	17	%
Equity investment:
Domestic	220		—		—		220		50	%
Fixed income:
Government bonds	—		109		—		109		24	%
Corporate bonds	—		34		—		34		8	%
Mortgage-backed securities (non-government)			3		—		3		1	%
Total ⁽¹⁾	$	220	$	221	$	—	$	441	100	%


⁽¹⁾	Excludes $(2) million as of December 31, 2017, of receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value table.