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		$	5		$	6
Interest expense			21			25			12			15
Expected return on plan assets			(37)			(34)			(22)			(23)
Amortization of:
Net loss			17			23			5			5
Prior service cost (credit)			1			-			(10)			(10)
Net periodic cost (credit)		$	13		$	26		$	(10)		$	(7)
Consumers
Net periodic cost (credit)
Service cost		$	10		$	12		$	4		$	6
Interest expense			21			25			11			14
Expected return on plan assets			(36)			(33)			(20)			(22)
Amortization of:
Net loss			17			22			6			6
Prior service cost (credit)			1			-			(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		$	5		$	6
Interest expense			21			25			12			15
Expected return on plan assets			(37)			(34)			(22)			(23)
Amortization of:
Net loss			17			23			5			5
Prior service cost (credit)			1			-			(10)			(10)
Net periodic cost (credit)		$	13		$	26		$	(10)		$	(7)
Consumers
Net periodic cost (credit)
Service cost		$	10		$	12		$	4		$	6
Interest expense			21			25			11			14
Expected return on plan assets			(36)			(33)			(20)			(22)
Amortization of:
Net loss			17			22			6			6
Prior service cost (credit)			1			-			(10)			(10)
Net periodic cost (credit)		$	13		$	26		$	(9)		$	(6)