RETIREMENT BENEFITS AND TRUSTEED ASSETS

The following table details the components of net periodic benefit costs for pension benefits and other postretirement benefits:



	Pension Benefits						Other Postretirement Benefits
	2013			2012			2013			2012
Three Months Ended September 30	(In millions)
Service cost	$	17		$	15		$	6		$	11
Interest cost	36			38			16			23
Expected return on plan assets	(45		)	(41		)	(18		)	(15		)
Amortization of:
Net actuarial loss	39			33			12			16
Prior service cost (credit)	1			—			(27		)	(4		)
Net periodic benefit cost (credit)	$	48		$	45		$	(11	)	$	31



	Pension Benefits						Other Postretirement Benefits
	2013			2012			2013			2012
Nine Months Ended September 30	(In millions)
Service cost	$	55		$	48		$	27		$	38
Interest cost	109			116			50			69
Expected return on plan assets	(138		)	(124		)	(55		)	(46		)
Amortization of:
Net actuarial loss	111			93			36			44
Prior service cost (credit)	1			—			(72		)	(12		)
Net transition liability	—			—			—			1
Settlements	—			2			—			—
Net periodic benefit cost (credit)	$	138		$	135		$	(14	)	$	94

Pension and Other Postretirement Contributions

During the first nine months of 2013, the Company contributed $250 million to its pension plans, including contributions of DTE Energy common stock of $200 million. At the discretion of management, and depending upon financial market conditions, the Company may make up to an additional $25 million contribution to its pension plans in 2013.

In January 2013, the Company contributed $120 million to its other postretirement benefit plans. At the discretion of management, the Company may make up to an additional $120 million contribution to its other postretirement benefit plans in 2013.

Re-Measurement of Other Postretirement Benefit Obligation

In March 2013, the Company reached an agreement on a new four-year labor contract with certain represented employees. As a term of the agreement, the Company replaced sponsored retiree medical, prescription drug and dental coverage for future Medicare eligible retirees with a Retiree Health Care Allowance (RHCA) account of $3,250 per year. The modification in retiree health coverage will reduce future postretirement benefit costs.

Based on the impact of such benefit cost savings on the financial statements, the Company re-measured its retiree health plan as of March 31, 2013. In performing the re-measurement, the Company updated its significant actuarial assumptions, including an adjustment to the discount rate from 4.15% at December 31, 2012 to 4.30% at March 31, 2013. Plan assets were also updated to reflect fair value as of the re-measurement date. As a result of the re-measurement, the accumulated postretirement benefit obligation (APBO) was reduced by $192 million. The Company's Accrued postretirement benefit liability - affiliates at March 31, 2013 was $661 million as compared to $996 million at December 31, 2012, a reduction of $335 million. The reduction reflects the impact of the re-measurement of the plan, January 2013 plan contributions and recognition of first quarter 2013 postretirement benefit costs and benefit payments.

Beginning April 2013, net postretirement benefit costs were recorded based on the updated actuarial assumptions and benefit changes resulting from the new labor contracts. As a result of the re-measurement, fiscal year 2013 postretirement benefit costs are expected to decrease by approximately $51 million to an annual net benefit of approximately $23 million.