Retirement Benefits

9 Months Ended

Sep. 30, 2014

Retirement Benefits

8:RETIREMENT BENEFITS

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

Following amendments to the OPEB Plan in July 2013, Consumers’ OPEB costs decreased substantially and, as a result, the OPEB Plan was fully funded at December 31, 2013.  In May 2014, Consumers filed an application with the MPSC requesting approval to suspend contributions to Consumers’ OPEB Plan during 2014 and 2015 if the OPEB Plan continues to be fully funded.  Consumers’ electric and gas rates still reflect the higher OPEB costs, and previous MPSC orders required Consumers to contribute to the OPEB Plan the associated amount collected in rates annually.

In September 2014, the MPSC approved a settlement agreement addressing Consumers’ OPEB Plan funding application.  Under the settlement agreement, Consumers will contribute $25 million to the plan in 2014 and $29 million in February 2015.  Consumers will then suspend further contributions until the MPSC determines funding requirements in future general rate cases.

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
	Pension												OPEB
	Three Months Ended							Nine Months Ended					Three Months Ended							Nine Months Ended
September 30	2014			2013			2014			2013			2014			2013			2014			2013
CMS Energy, including Consumers
Net periodic cost (credit)
Service cost		$	10		$	13		$	30		$	40		$	5		$	5		$	15		$	23
Interest expense			24			23			74			70			14			14			42			52
Expected return on    plan assets			(33)			(32)			(101)			(96)			(22)			(20)			(66)			(58)
Amortization of:
Net loss			14			24			43			72			1			3			2			24
Prior service cost    (credit)			-			1			1			3			(10)			(10)			(31)			(20)
Net periodic cost (credit)		$	15		$	29		$	47		$	89		$	(12)		$	(8)		$	(38)		$	21
Consumers
Net periodic cost (credit)
Service cost		$	10		$	13		$	30		$	39		$	5		$	5		$	15		$	23
Interest expense			24			23			72			69			13			14			40			50
Expected return on    plan assets			(33)			(31)			(99)			(94)			(20)			(19)			(62)			(54)
Amortization of:
Net loss			14			23			42			70			-			3			2			24
Prior service cost    (credit)			-			1			1			3			(10)			(10)			(30)			(20)
Net periodic cost (credit)		$	15		$	29		$	46		$	87		$	(12)		$	(7)		$	(35)		$	23

Consumers Energy Company [Member]

Retirement Benefits

8:RETIREMENT BENEFITS

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

Following amendments to the OPEB Plan in July 2013, Consumers’ OPEB costs decreased substantially and, as a result, the OPEB Plan was fully funded at December 31, 2013.  In May 2014, Consumers filed an application with the MPSC requesting approval to suspend contributions to Consumers’ OPEB Plan during 2014 and 2015 if the OPEB Plan continues to be fully funded.  Consumers’ electric and gas rates still reflect the higher OPEB costs, and previous MPSC orders required Consumers to contribute to the OPEB Plan the associated amount collected in rates annually.

In September 2014, the MPSC approved a settlement agreement addressing Consumers’ OPEB Plan funding application.  Under the settlement agreement, Consumers will contribute $25 million to the plan in 2014 and $29 million in February 2015.  Consumers will then suspend further contributions until the MPSC determines funding requirements in future general rate cases.

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
	Pension												OPEB
	Three Months Ended							Nine Months Ended					Three Months Ended							Nine Months Ended
September 30	2014			2013			2014			2013			2014			2013			2014			2013
CMS Energy, including Consumers
Net periodic cost (credit)
Service cost		$	10		$	13		$	30		$	40		$	5		$	5		$	15		$	23
Interest expense			24			23			74			70			14			14			42			52
Expected return on    plan assets			(33)			(32)			(101)			(96)			(22)			(20)			(66)			(58)
Amortization of:
Net loss			14			24			43			72			1			3			2			24
Prior service cost    (credit)			-			1			1			3			(10)			(10)			(31)			(20)
Net periodic cost (credit)		$	15		$	29		$	47		$	89		$	(12)		$	(8)		$	(38)		$	21
Consumers
Net periodic cost (credit)
Service cost		$	10		$	13		$	30		$	39		$	5		$	5		$	15		$	23
Interest expense			24			23			72			69			13			14			40			50
Expected return on    plan assets			(33)			(31)			(99)			(94)			(20)			(19)			(62)			(54)
Amortization of:
Net loss			14			23			42			70			-			3			2			24
Prior service cost    (credit)			-			1			1			3			(10)			(10)			(30)			(20)
Net periodic cost (credit)		$	15		$	29		$	46		$	87		$	(12)		$	(7)		$	(35)		$	23