Retirement Benefits

3 Months Ended

Mar. 31, 2022

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 March 2022, CMS Energy and Consumers determined it was probable that 2022 lump-sum payments to participants 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 it is probable such settlements will 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 March 31, 2022 and recognized a settlement loss of $4 million; of this amount, $4 million was deferred as a regulatory asset. Consumers recognized a settlement loss of $4 million, all of which was deferred as a regulatory asset. CMS Energy and Consumers will amortize the regulatory asset over eight years.

As a result of the remeasurement, the non-current asset for DB Pension Plan A increased by $91 million at CMS Energy, with an offsetting decrease in the associated regulatory asset of $89 million and a $2 million gain to AOCI. At Consumers, the non-current asset increased by $89 million and the associated regulatory asset decreased by $89 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 benefit plans:

In Millions
	DB Pension Plans						OPEB Plan
Three Months Ended March 31	2022			2021			2022			2021
CMS Energy, including Consumers
Net periodic cost (credit)
Service cost		$	12		$	14		$	4		$	4
Interest cost		18			15			7			6
Expected return on plan assets		(52)			(52)			(29)			(27)
Amortization of:
Net loss		17			25			—			2
Prior service cost (credit)		1			1			(12)			(13)
Settlement loss		2			1			—			—
Net periodic cost (credit)		$	(2)		$	4		$	(30)		$	(28)
Consumers
Net periodic cost (credit)
Service cost		$	12		$	13		$	4		$	4
Interest cost		16			14			7			6
Expected return on plan assets		(49)			(49)			(27)			(25)
Amortization of:
Net loss		16			25			—			2
Prior service cost (credit)		1			1			(12)			(13)
Settlement loss		2			1			—			—
Net periodic cost (credit)		$	(2)		$	5		$	(28)		$	(26)

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 March 2022, CMS Energy and Consumers determined it was probable that 2022 lump-sum payments to participants 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 it is probable such settlements will 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 March 31, 2022 and recognized a settlement loss of $4 million; of this amount, $4 million was deferred as a regulatory asset. Consumers recognized a settlement loss of $4 million, all of which was deferred as a regulatory asset. CMS Energy and Consumers will amortize the regulatory asset over eight years.

As a result of the remeasurement, the non-current asset for DB Pension Plan A increased by $91 million at CMS Energy, with an offsetting decrease in the associated regulatory asset of $89 million and a $2 million gain to AOCI. At Consumers, the non-current asset increased by $89 million and the associated regulatory asset decreased by $89 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 benefit plans:

In Millions
	DB Pension Plans						OPEB Plan
Three Months Ended March 31	2022			2021			2022			2021
CMS Energy, including Consumers
Net periodic cost (credit)
Service cost		$	12		$	14		$	4		$	4
Interest cost		18			15			7			6
Expected return on plan assets		(52)			(52)			(29)			(27)
Amortization of:
Net loss		17			25			—			2
Prior service cost (credit)		1			1			(12)			(13)
Settlement loss		2			1			—			—
Net periodic cost (credit)		$	(2)		$	4		$	(30)		$	(28)
Consumers
Net periodic cost (credit)
Service cost		$	12		$	13		$	4		$	4
Interest cost		16			14			7			6
Expected return on plan assets		(49)			(49)			(27)			(25)
Amortization of:
Net loss		16			25			—			2
Prior service cost (credit)		1			1			(12)			(13)
Settlement loss		2			1			—			—
Net periodic cost (credit)		$	(2)		$	5		$	(28)		$	(26)