Retirement Benefits

9 Months Ended

Sep. 30, 2020

Defined Benefit Plan Disclosure [Line Items]

Retirement Benefits

Retirement Benefits

CMS Energy and Consumers provide pension, OPEB, and other retirement benefits to employees under a number of different plans.

In September 2020, CMS Energy and Consumers determined it was probable that 2020 lump-sum payments to retired employees under DB Pension Plan A would exceed the plan’s service cost and interest cost components of net periodic cost for the year. These lump-sum payments constitute pension plan liability settlements; once such settlements meet the service and interest cost threshold, recognition in earnings is required. As a result, in accordance with GAAP, CMS Energy, including Consumers, performed a remeasurement of DB Pension Plan A as of August 31, 2020 and recognized a settlement loss of $36 million; of this amount, $35 million was deferred as a regulatory asset. Consumers recognized a settlement loss of $35 million, all of which was deferred as a regulatory asset. CMS Energy and Consumers will amortize the regulatory asset over nine years.

As a result of the remeasurement, the liability for DB Pension Plan A increased by $252 million at CMS Energy, with an offsetting increase in the associated regulatory asset of $245 million and a $7 million loss to AOCI. At Consumers, the liability and associated regulatory asset increased by $245 million.

Costs: Presented in the following table are the costs (credits) and other changes in plan assets and benefit obligations incurred in CMS Energy’s and Consumers’ retirement benefits plans:

In Millions
	DB Pension Plans																OPEB Plan
	Three Months Ended								Nine Months Ended								Three Months Ended								Nine Months Ended
September 30	2020				2019				2020				2019				2020				2019				2020				2019
CMS Energy, including Consumers
Net periodic cost (credit)
Service cost		$	12			$	11			$	37			$	31			$	4			$	3			$	12			$	10
Interest cost		20				24				61				73				8				11				25				31
Expected return on plan assets		(47		)		(40		)		(143		)		(121		)		(25		)		(22		)		(75		)		(66		)
Settlement loss		1				—				1				—				—				—				—				—
Amortization of:
Net loss		23				12				67				36				4				7				11				20
Prior service cost (credit)		—				—				1				1				(14		)		(16		)		(42		)		(47		)
Net periodic cost (credit)		$	9			$	7			$	24			$	20			$	(23	)		$	(17	)		$	(69	)		$	(52	)
Consumers
Net periodic cost (credit)
Service cost		$	12			$	10			$	36			$	30			$	3			$	3			$	11			$	10
Interest cost		20				23				59				69				8				10				24				30
Expected return on plan assets		(45		)		(38		)		(136		)		(114		)		(23		)		(21		)		(70		)		(62		)
Amortization of:
Net loss		22				12				64				35				4				7				11				20
Prior service cost (credit)		—				—				1				1				(13		)		(15		)		(40		)		(46		)
Net periodic cost (credit)		$	9			$	7			$	24			$	21			$	(21	)		$	(16	)		$	(64	)		$	(48	)

Contributions: In January 2020, CMS Energy, including Consumers, contributed $531 million and Consumers contributed $518 million to the DB Pension Plans.

Consumers Energy Company

Defined Benefit Plan Disclosure [Line Items]

Retirement Benefits

Retirement Benefits

CMS Energy and Consumers provide pension, OPEB, and other retirement benefits to employees under a number of different plans.

In September 2020, CMS Energy and Consumers determined it was probable that 2020 lump-sum payments to retired employees under DB Pension Plan A would exceed the plan’s service cost and interest cost components of net periodic cost for the year. These lump-sum payments constitute pension plan liability settlements; once such settlements meet the service and interest cost threshold, recognition in earnings is required. As a result, in accordance with GAAP, CMS Energy, including Consumers, performed a remeasurement of DB Pension Plan A as of August 31, 2020 and recognized a settlement loss of $36 million; of this amount, $35 million was deferred as a regulatory asset. Consumers recognized a settlement loss of $35 million, all of which was deferred as a regulatory asset. CMS Energy and Consumers will amortize the regulatory asset over nine years.

As a result of the remeasurement, the liability for DB Pension Plan A increased by $252 million at CMS Energy, with an offsetting increase in the associated regulatory asset of $245 million and a $7 million loss to AOCI. At Consumers, the liability and associated regulatory asset increased by $245 million.

Costs: Presented in the following table are the costs (credits) and other changes in plan assets and benefit obligations incurred in CMS Energy’s and Consumers’ retirement benefits plans:

In Millions
	DB Pension Plans																OPEB Plan
	Three Months Ended								Nine Months Ended								Three Months Ended								Nine Months Ended
September 30	2020				2019				2020				2019				2020				2019				2020				2019
CMS Energy, including Consumers
Net periodic cost (credit)
Service cost		$	12			$	11			$	37			$	31			$	4			$	3			$	12			$	10
Interest cost		20				24				61				73				8				11				25				31
Expected return on plan assets		(47		)		(40		)		(143		)		(121		)		(25		)		(22		)		(75		)		(66		)
Settlement loss		1				—				1				—				—				—				—				—
Amortization of:
Net loss		23				12				67				36				4				7				11				20
Prior service cost (credit)		—				—				1				1				(14		)		(16		)		(42		)		(47		)
Net periodic cost (credit)		$	9			$	7			$	24			$	20			$	(23	)		$	(17	)		$	(69	)		$	(52	)
Consumers
Net periodic cost (credit)
Service cost		$	12			$	10			$	36			$	30			$	3			$	3			$	11			$	10
Interest cost		20				23				59				69				8				10				24				30
Expected return on plan assets		(45		)		(38		)		(136		)		(114		)		(23		)		(21		)		(70		)		(62		)
Amortization of:
Net loss		22				12				64				35				4				7				11				20
Prior service cost (credit)		—				—				1				1				(13		)		(15		)		(40		)		(46		)
Net periodic cost (credit)		$	9			$	7			$	24			$	21			$	(21	)		$	(16	)		$	(64	)		$	(48	)

Contributions: In January 2020, CMS Energy, including Consumers, contributed $531 million and Consumers contributed $518 million to the DB Pension Plans.