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Retirement Benefits
3 Months Ended
Mar. 31, 2016
Retirement Benefits

8:Retirement Benefits

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

In January 2016, CMS Energy and Consumers changed the method they use to determine the discount rate used to calculate the service cost and interest expense components of net periodic benefit costs for the DB Pension and OPEB Plans. Historically, the discount rate used for this purpose represented a single weighted-average rate derived from the yield curve used to determine the benefit obligation. CMS Energy and Consumers have elected to use instead a full-yield-curve approach in the estimation of service cost and interest expense; this approach is more accurate in that it applies individual spot rates along the yield curve to future projected benefit payments based on the time of payment. For the three months ended March 31, 2016, the service cost and interest expense components of net periodic benefit costs were reduced by $6 million for the DB Pension Plan and by $3 million for the OPEB Plan for both CMS Energy and Consumers as a result of changing to the full-yield-curve approach to determine the discount rate.

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 Plan

 

OPEB Plan

 

Three Months Ended March 31

2016  2015 

 

2016  2015 

 

CMS Energy, including Consumers

 

Net periodic cost (credit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service cost

 

$

11 

 

$

12 

 

 

$

 

$

 

Interest expense

 

 

21 

 

 

25 

 

 

 

12 

 

 

15 

 

Expected return on plan assets

 

 

(37)

 

 

(34)

 

 

 

(22)

 

 

(23)

 

Amortization of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

17 

 

 

23 

 

 

 

 

 

 

Prior service cost (credit)

 

 

 

 

 -

 

 

 

(10)

 

 

(10)

 

Net periodic cost (credit)

 

$

13 

 

$

26 

 

 

$

(10)

 

$

(7)

 

Consumers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net periodic cost (credit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service cost

 

$

10 

 

$

12 

 

 

$

 

$

 

Interest expense

 

 

21 

 

 

25 

 

 

 

11 

 

 

14 

 

Expected return on plan assets

 

 

(36)

 

 

(33)

 

 

 

(20)

 

 

(22)

 

Amortization of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

17 

 

 

22 

 

 

 

 

 

 

Prior service cost (credit)

 

 

 

 

 -

 

 

 

(10)

 

 

(10)

 

Net periodic cost (credit)

 

$

13 

 

$

26 

 

 

$

(9)

 

$

(6)

 



                   

                   

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.

In January 2016, CMS Energy and Consumers changed the method they use to determine the discount rate used to calculate the service cost and interest expense components of net periodic benefit costs for the DB Pension and OPEB Plans. Historically, the discount rate used for this purpose represented a single weighted-average rate derived from the yield curve used to determine the benefit obligation. CMS Energy and Consumers have elected to use instead a full-yield-curve approach in the estimation of service cost and interest expense; this approach is more accurate in that it applies individual spot rates along the yield curve to future projected benefit payments based on the time of payment. For the three months ended March 31, 2016, the service cost and interest expense components of net periodic benefit costs were reduced by $6 million for the DB Pension Plan and by $3 million for the OPEB Plan for both CMS Energy and Consumers as a result of changing to the full-yield-curve approach to determine the discount rate.

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 Plan

 

OPEB Plan

 

Three Months Ended March 31

2016  2015 

 

2016  2015 

 

CMS Energy, including Consumers

 

Net periodic cost (credit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service cost

 

$

11 

 

$

12 

 

 

$

 

$

 

Interest expense

 

 

21 

 

 

25 

 

 

 

12 

 

 

15 

 

Expected return on plan assets

 

 

(37)

 

 

(34)

 

 

 

(22)

 

 

(23)

 

Amortization of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

17 

 

 

23 

 

 

 

 

 

 

Prior service cost (credit)

 

 

 

 

 -

 

 

 

(10)

 

 

(10)

 

Net periodic cost (credit)

 

$

13 

 

$

26 

 

 

$

(10)

 

$

(7)

 

Consumers

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net periodic cost (credit)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service cost

 

$

10 

 

$

12 

 

 

$

 

$

 

Interest expense

 

 

21 

 

 

25 

 

 

 

11 

 

 

14 

 

Expected return on plan assets

 

 

(36)

 

 

(33)

 

 

 

(20)

 

 

(22)

 

Amortization of:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

 

17 

 

 

22 

 

 

 

 

 

 

Prior service cost (credit)

 

 

 

 

 -

 

 

 

(10)

 

 

(10)

 

Net periodic cost (credit)

 

$

13 

 

$

26 

 

 

$

(9)

 

$

(6)