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Other Postretirement Benefits (Tables)
 12 Months Ended
Dec. 31, 2018
Retirement Benefits [Abstract]  
Net Periodic Benefit Costs
The components of the Companies’ total periodic benefit costs for 2018, 2017 and 2016 were as follows:
  
Con Edison
CECONY
(Millions of Dollars)
2018
2017
2016
2018
2017
2016
Service cost – including administrative expenses
$290
$263
$275
$272
$246
$258
Interest cost on projected benefit obligation
561
591
596
525
554
559
Expected return on plan assets
(1,033)
(968)
(947)
(979)
(917)
(898)
Recognition of net actuarial loss
688
595
596
651
563
565
Recognition of prior service cost/(credit)
(17)
(17)
4
(19)
(19)
2
TOTAL PERIODIC BENEFIT COST
$489
$464
$524
$450
$427
$486
Cost capitalized
(127)
(181)
(214)
(119)
(169)
(203)
Reconciliation to rate level
(92)
(34)
54
(100)
(41)
58
Total expense recognized
$270
$249
$364
$231
$217
$341

The components of the Companies’ total periodic postretirement benefit costs for 2018, 2017 and 2016 were as follows:
  
Con Edison
CECONY
(Millions of Dollars)
2018
2017
2016
2018
2017
2016
Service cost
$20
$20
$18
$14
$13
$13
Interest cost on accumulated other postretirement benefit obligation
42
46
48
34
38
40
Expected return on plan assets
(73)
(69)
(77)
(63)
(61)
(67)
Recognition of net actuarial loss/(gain)
8
2
5
3
(3)
3
Recognition of prior service cost/(credit)
(6)
(17)
(20)
(2)
(11)
(14)
TOTAL PERIODIC POSTRETIREMENT BENEFIT COST/(CREDIT)
$(9)
$(18)
$(26)
$(14)
$(24)
$(25)
Cost capitalized
(8)
8
11
(6)
10
10
Reconciliation to rate level
8
(4)
22
9
(2)
22
Total expense/(credit) recognized
$(9)
$(14)
$7
$(11)
$(16)
$7
Schedule of Funded Status
The funded status at December 31, 2018, 2017 and 2016 was as follows:
 
Con Edison
CECONY
(Millions of Dollars)
2018

2017
2016
2018

2017

2016
CHANGE IN PROJECTED BENEFIT OBLIGATION
 
 
 
 
 
 
Projected benefit obligation at beginning of year
$15,536
$14,095
$14,377
$14,567
$13,203
$13,482
Service cost – excluding administrative expenses
286
259
271
267
241
254
Interest cost on projected benefit obligation
561
591
596
525
554
559
Net actuarial loss/(gain)
(1,219)
1,231
(302)
(1,159)
1,171
(282)
Plan amendments
—

6
(256)
—

—

(259)
Benefits paid
(715)
(646)
(591)
(658)
(602)
(551)
PROJECTED BENEFIT OBLIGATION AT END OF YEAR
$14,449
$15,536
$14,095
$13,542
$14,567
$13,203
CHANGE IN PLAN ASSETS
 
 
 
 
 
 
Fair value of plan assets at beginning of year
$14,274
$12,472
$11,759
$13,519
$11,815
$11,141
Actual return on plan assets
(536)
2,041
829
(507)
1,935
787
Employer contributions
473
450
508
434
412
469
Benefits paid
(715)
(646)
(591)
(658)
(602)
(551)
Administrative expenses
(46)
(43)
(33)
(44)
(41)
(31)
FAIR VALUE OF PLAN ASSETS AT END OF YEAR
$13,450
$14,274
$12,472
$12,744
$13,519
$11,815
FUNDED STATUS
$(999)
$(1,262)
$(1,623)
$(798)
$(1,048)
$(1,388)
Unrecognized net loss
$2,464
$2,760
$3,157
$2,338
$2,624
$2,995
Unrecognized prior service costs
(205)
(223)
(244)
(222)
(242)
(258)
Accumulated benefit obligation
13,030
13,897
12,655
12,161
12,972
11,806
The funded status of the programs at December 31, 2018, 2017 and 2016 were as follows:
  
Con Edison
CECONY
(Millions of Dollars)
2018
2017
2016
2018
2017
2016
CHANGE IN BENEFIT OBLIGATION
 
 
 
 
 
 
Benefit obligation at beginning of year
$1,219
$1,198
$1,287
$985
$1,007
$1,093
Service cost
20
20
18
14
13
13
Interest cost on accumulated postretirement benefit obligation
42
46
48
34
38
40
Net actuarial loss/(gain)
(70)
53
(57)
(32)
16
(52)
Benefits paid and administrative expenses, net of subsidies
(135)
(134)
(134)
(125)
(124)
(122)
Participant contributions
38
36
36
37
35
35
BENEFIT OBLIGATION AT END OF YEAR
$1,114
$1,219
$1,198
$913
$985
$1,007
CHANGE IN PLAN ASSETS
 
 
 
 
 
 
Fair value of plan assets at beginning of year
$1,039
$975
$994
$893
$851
$870
Actual return on plan assets
(66)
150
60
(54)
130
52
Employer contributions
6
17
7
6
8
7
Employer group waiver plan subsidies
34
34
35
32
30
33
Participant contributions
37
35
36
37
35
35
Benefits paid
(165)
(172)
(157)
(155)
(161)
(146)
FAIR VALUE OF PLAN ASSETS AT END OF YEAR
$885
$1,039
$975
$759
$893
$851
FUNDED STATUS
$(229)
$(180)
$(223)
$(154)
$(92)
$(156)
Unrecognized net loss/(gain)
$14
$(47)
$(24)
$(2)
$(85)
$(42)
Unrecognized prior service costs
(8)
(14)
(31)
(5)
(7)
(18)
Schedule of Actuarial Assumptions
The actuarial assumptions were as follows: 
 
2018

2017

2016

Weighted-average assumptions used to determine benefit obligations at December 31:
 
 
 
Discount rate
4.25
%
3.70
%
4.25
%
Rate of compensation increase
 
 
 
CECONY
4.25
%
4.25
%
4.25
%
O&R
4.00
%
4.00
%
4.00
%
Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31:
 
 
 
Discount rate
3.70
%
4.25
%
4.25
%
Expected return on plan assets
7.50
%
7.50
%
7.80
%
Rate of compensation increase
 
 
 
CECONY
4.25
%
4.25
%
4.25
%
O&R
4.00
%
4.00
%
4.00
%
The actuarial assumptions were as follows: 
 
2018

2017

2016

Weighted-average assumptions used to determine benefit obligations at December 31:
 
 
 
Discount Rate
 
 
 
CECONY
4.15
%
3.55
%
4.00
%
O&R
4.30
%
3.70
%
4.20
%
Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31:
 
 
 
Discount Rate
 
 
 
CECONY
3.55
%
4.00
%
4.05
%
O&R
3.70
%
4.20
%
4.20
%
Expected Return on Plan Assets
7.50
%
7.50
%
7.00
%
Schedule of Change of Assumed Health Care Cost Trend Rate
A one-percentage point change in the assumed health care cost trend rate would have the following effects at December 31, 2018:
  
Con Edison
CECONY
  
1-Percentage-Point
(Millions of Dollars)
Increase
Decrease
Increase
Decrease
Effect on accumulated other postretirement benefit obligation
$9
$11
$(18)
$31
Effect on service cost and interest cost components for 2018
2
(1)
(1)
1
Schedule of Expected Benefit Payments
Based on current assumptions, the Companies expect to make the following benefit payments over the next ten years:
(Millions of Dollars)
2019
2020
2021
2022
2023
2024-2028
Con Edison
$707
$726
$740
$755
$772
$4,072
CECONY
658
676
689
703
718
3,795
Based on current assumptions, the Companies expect to make the following benefit payments over the next ten years, net of receipt of governmental subsidies:
(Millions of Dollars)
2019
2020
2021
2022
2023
2024-2028
Con Edison
$80
$78
$76
$75
$74
$359
CECONY
70
67
65
64
63
302
Schedule of Plan Assets Allocations
The asset allocations for the pension plan at the end of 2018, 2017 and 2016, and the target allocation for 2019 are as follows:
  
Target
Allocation Range
 
           Plan Assets at December 31,
Asset Category
2019
 
2018

 
2017

 
2016

Equity Securities
45% - 55%
 
51
%
 
58
%
 
58
%
Debt Securities
33% - 43%
 
39
%
 
33
%
 
33
%
Real Estate
10% -14%
 
10
%
 
9
%
 
9
%
Total
100%
 
100
%
 
100
%
 
100
%
The asset allocations for CECONY’s other postretirement benefit plans at the end of 2018, 2017 and 2016, and the target allocation for 2019 are as follows:
  
Target Allocation Range
 
Plan Assets at December 31,
Asset Category
2019
 
2018

 
2017

 
2016

Equity Securities
42%-80%
 
52
%
 
60
%
 
60
%
Debt Securities
20%-58%
 
48
%
 
40
%
 
40
%
Total
100%
 
100
%
 
100
%
 
100
%
Schedule of Fair Value of Plan Assets
The fair values of the pension plan assets at December 31, 2018 by asset category are as follows:
(Millions of Dollars)
Level 1

 
Level 2

 
Total
Investments within the fair value hierarchy
 
 
 
 
 
U.S. Equity (a)
$3,515
 
$10
 
$3,525
International Equity (b)
2,896
 
—

 
2,896
U.S. Government Issued Debt (c)
—

 
1,886
 
1,886
Corporate Bonds Debt (d)
—

 
2,619
 
2,619
Structured Assets Debt (e)
—

 
6
 
6
Other Fixed Income Debt (f)
—

 
121
 
121
Cash and Cash Equivalents (g)
160
 
556
 
716
Futures (h)
568
 
—

 
568
Total investments within the fair value hierarchy
$7,139
 
$5,198
 
$12,337
Investments measured at NAV per share (n)


 


 

Private Equity (i)
 
 
 
 
440
Real Estate (j)
 
 
 
 
1,310
Hedge Funds (k)
 
 
 
 
255
Total investments valued using NAV per share

 

 
$2,005
Funds for retiree health benefits (l)
(118)
 
(86)
 
(204)
Funds for retiree health benefits measured at NAV per share (l)(n)

 

 
(33)
Total funds for retiree health benefits

 

 
$(237)
Investments (excluding funds for retiree health benefits)
$7,021
 
$5,112
 
$14,105
Pending activities (m)
 
 
 
 
(655)
Total fair value of plan net assets
 
 
 
 
$13,450
(a)
U.S. Equity includes both actively- and passively-managed assets with investments in domestic equity index funds and actively-managed small-capitalization equities.
(b)
International Equity includes international equity index funds and actively-managed international equities.
(c)
U.S. Government Issued Debt includes agency and treasury securities.
(d)
Corporate Bonds Debt consists of debt issued by various corporations.
(e)
Structured Assets Debt includes commercial-mortgage-backed securities and collateralized mortgage obligations.
(f)
Other Fixed Income Debt includes municipal bonds, sovereign debt and regional governments.
(g)
Cash and Cash Equivalents include short term investments, money markets, foreign currency and cash collateral.
(h)
Futures consist of exchange-traded financial contracts encompassing U.S. Equity, International Equity and U.S. Government indices.
(i)
Private Equity consists of global equity funds that are not exchange-traded.
(j)
Real Estate investments include real estate funds based on appraised values that are broadly diversified by geography and property type.
(k)
Hedge Funds are within a commingled structure which invests in various hedge fund managers who can invest in all financial instruments.
(l)
The Companies set aside funds for retiree health benefits through a separate account within the pension trust, as permitted under Section 401(h) of the Internal Revenue Code of 1986, as amended. In accordance with the Code, the plan’s investments in the 401(h) account may not be used for, or diverted to, any purpose other than providing health benefits for retirees. The net assets held in the 401(h) account are calculated based on a pro-rata percentage allocation of the net assets in the pension plan. The related obligations for health benefits are not included in the pension plan’s obligations and are included in the Companies’ other postretirement benefit obligation. See Note F.
(m)
Pending activities include security purchases and sales that have not settled, interest and dividends that have not been received and reflects adjustments for available estimates at year end.
(n)
In accordance with ASU 2015-07, Fair Value Measurements (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or its equivalent), certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.
The fair values of the pension plan assets at December 31, 2017 by asset category are as follows:
(Millions of Dollars)
Level 1

 
Level 2

 
Total
Investments within the fair value hierarchy
 
 
 
 
 
U.S. Equity (a)
$3,872
 
$28
 
$3,900
International Equity (b)
4,132
 
—

 
4,132
U.S. Government Issued Debt (c)
—

 
1,786
 
1,786
Corporate Bonds Debt (d)
—

 
2,450
 
2,450
Structured Assets Debt (e)
—

 
3
 
3
Other Fixed Income Debt (f)
—

 
125
 
125
Cash and Cash Equivalents (g)
124
 
352
 
476
Futures (h)
308
 
—

 
308
Total investments within the fair value hierarchy
$8,436
 
$4,744
 
$13,180
Investments measured at NAV per share (n)
 
 
 
 
 
Private Equity (i)
 
 
 
 
336
Real Estate (j)
 
 
 
 
1,214
Hedge Funds (k)


 
 
 
251
Total investments valued using NAV per share

 

 
$1,801
Funds for retiree health benefits (l)
(168)
 
(94)
 
(262)
Funds for retiree health benefits measured at NAV per share (l)(n)
 
 
 
 
(36)
Total funds for retiree health benefits
 
 
 
 
$(298)
Investments (excluding funds for retiree health benefits)
$8,268
 
$4,650
 
$14,683
Pending activities (m)
 
 
 
 
(409)
Total fair value of plan net assets
 
 
 
 
$14,274
(a) - (n) Reference is made to footnotes (a) through (n) in the above table of pension plan assets at December 31, 2018 by asset category.
The fair values of the plans' assets at December 31, 2018 by asset category as defined by the accounting rules for fair value measurements (see Note P) are as follows:
(Millions of Dollars)
Level 1

 
Level 2
 
Total
Equity (a)

$—

 
$322
 
$322
Other Fixed Income Debt (b)
—

 
289
 
289
Cash and Cash Equivalents (c)
—

 
14
 
14
Total investments

$—

 
$625
 
$625
Funds for retiree health benefits (d)
118

 
86
 
204
Investments (including funds for retiree health benefits)

$118

 
$711
 
$829
Funds for retiree health benefits measured at net asset value (d)(e)
 
 
 
 
33
Pending activities (f)
 
 
 
 
23
Total fair value of plan net assets
 
 
 
 
$885
(a)
Equity includes a passively managed commingled index fund benchmarked to the MSCI All Country World Index.
(b)
Other Fixed Income Debt includes a passively managed commingled index fund benchmarked to the Bloomberg Barclays U.S. Long Credit Index and an active separately managed fund indexed to the Bloomberg Barclays U.S. Long Credit Index.
(c)
Cash and Cash Equivalents include short term investments and money markets.
(d)
The Companies set aside funds for retiree health benefits through a separate account within the pension trust, as permitted under Section 401(h) of the Internal Revenue Code of 1986, as amended. In accordance with the Code, the plan’s investments in the 401(h) account may not be used for, or diverted to, any purpose other than providing health benefits for retirees. The net assets held in the 401(h) account are calculated based on a pro-rata percentage allocation of the net assets in the pension plan. The related obligations for health benefits are not included in the pension plan’s obligations and are included in the Companies’ other postretirement benefit obligation. See Note E.
(e)
In accordance with ASU 2015-07, Fair Value Measurements (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or its equivalent), certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.
(f)
Pending activities include security purchases and sales that have not settled, interest and dividends that have not been received, and reflects adjustments for available estimates at year end.

The fair values of the plans' assets at December 31, 2017 by asset category (see Note P) are as follows:
(Millions of Dollars)
Level 1

 
Level 2
 
Total
Equity (a)

$—

 
$420
 
$420
Other Fixed Income Debt (b)
—

 
286
 
286
Cash and Cash Equivalents (c)
—

 
16
 
16
Total investments

$—

 
$722
 
$722
Funds for retiree health benefits (d)
168

 
94
 
262
Investments (including funds for retiree health benefits)

$168

 
$816
 
$984
Funds for retiree health benefits measured at net asset value (d)(e)
 
 
 
 
36
Pending activities (f)
 
 
 
 
19
Total fair value of plan net assets
 
 
 
 
$1,039
(a) - (f) Reference is made to footnotes (a) through (f) in the above table of other postretirement benefit plan assets at December 31, 2018 by asset category.