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Pension and Other Postemployment Benefits (Tables)
 12 Months Ended
Dec. 31, 2012
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]  
Obligations and Funded Status
Obligations and Funded Status
 
Pensions
 
OPEB
 
 
2012
 
2011
 
2012
 
2011
 
 
(In millions)
Change in benefit obligation:
 
 
 
 
 
 
 
 
Benefit obligation as of January 1
 
$
7,977

 
$
5,858

 
$
1,037

 
$
861

Liabilities assumed with Allegheny Merger
 
—

 
1,341

 
—

 
272

Service cost
 
161

 
130

 
12

 
13

Interest cost
 
389

 
374

 
47

 
48

Plan participants’ contributions
 
—

 
—

 
17

 
39

Plan amendments
 
8

 
—

 
(85
)
 
(98
)
Special termination benefits
 
—

 
6

 
—

 
—

Medicare retiree drug subsidy
 
—

 
—

 
—

 
9

Actuarial (gain) loss
 
861

 
647

 
152

 
19

Benefits paid
 
(421
)
 
(379
)
 
(104
)
 
(126
)
Benefit obligation as of December 31
 
$
8,975

 
$
7,977

 
$
1,076

 
$
1,037

 
 
 
 
 
 
 
 
 
Change in fair value of plan assets:
 
 
 
 
 
 
 
 
Fair value of plan assets as of January 1
 
$
5,867

 
$
4,544

 
$
528

 
$
498

Assets assumed with Allegheny Merger
 
—

 
954

 
—

 
75

Actual return on plan assets
 
611

 
364

 
48

 
23

Company contributions
 
614

 
384

 
19

 
19

Plan participants’ contributions
 
—

 
—

 
17

 
39

Benefits paid
 
(421
)
 
(379
)
 
(104
)
 
(126
)
Fair value of plan assets as of December 31
 
$
6,671

 
$
5,867

 
$
508

 
$
528

 
 
 
 
 
 
 
 
 
Funded Status:
 
 
 
 
 
 
 
 
Qualified plan
 
$
(1,967
)
 
$
(1,820
)
 
 
 
 
Non-qualified plans
 
(336
)
 
(290
)
 
 
 
 
Funded Status
 
$
(2,303
)
 
$
(2,110
)
 
$
(566
)
 
$
(509
)
 
 
 
 
 
 
 
 
 
Accumulated benefit obligation
 
$
8,355

 
$
7,409

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
Amounts Recognized on the Balance Sheet:
 
 
 
 
 
 
 
 
Current liabilities
 
$
(14
)
 
$
(13
)
 
$
45

 
$
—

Noncurrent liabilities
 
(2,289
)
 
(2,097
)
 
(611
)
 
(509
)
Net liability as of December 31
 
$
(2,303
)
 
$
(2,110
)
 
$
(566
)
 
$
(509
)
 
 
 
 
 
 
 
 
 
Amounts Recognized in AOCI:
 
 
 
 
 
 
 
 
Prior service cost (credit)
 
$
58

 
$
67

 
$
(728
)
 
$
(847
)
 
 
 
 
 
 
 
 
 
Assumptions Used to Determine Benefit Obligations
 
 
 
 
 
 
 
 
(as of December 31)
 
 
 
 
 
 
 
 
Discount rate
 
4.25
%
 
5.00
%
 
4.00
%
 
4.75
%
Rate of compensation increase
 
4.70
%
 
5.20
%
 
N/A

 
N/A

 
 
 
 
 
 
 
 
 
Assumed Health Care Cost Trend Rates
 
 
 
 
 
 
 
 
(as of December 31)
 
 
 
 
 
 
 
 
Health care cost trend rate assumed (pre/post-Medicare)
 
N/A

 
N/A

 
7.5-8.0%

 
7.5-8.5%

Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
 
N/A

 
N/A

 
5
%
 
5
%
Year that the rate reaches the ultimate trend rate (pre/post-Medicare)
 
N/A

 
N/A

 
2020

 
2016-2018

 
 
 
 
 
 
 
 
 
Allocation of Plan Assets (as of December 31)
 
 
 
 
 
 
 
 
Equity securities
 
15
%
 
19
%
 
39
%
 
38
%
Bonds
 
47

 
48

 
40

 
44

Absolute return strategies
 
22

 
21

 
4

 
13

Real estate
 
5

 
6

 
1

 
1

Private equities
 
1

 
2

 
—

 
—

Cash and short-term securities
 
10

 
4

 
16

 
4

Total
 
100
%
 
100
%
 
100
%
 
100
%
Components of Net Periodic Benefit Costs
 
 
Pensions
 
OPEB
Components of Net Periodic Benefit Costs
 
2012
 
2011
 
2010
 
2012
 
2011
 
2010
 
 
(In millions)
Service cost
 
$
161

 
$
130

 
$
99

 
$
12

 
$
13

 
$
10

Interest cost
 
389

 
374

 
314

 
47

 
48

 
45

Expected return on plan assets
 
(486
)
 
(446
)
 
(361
)
 
(37
)
 
(40
)
 
(36
)
Amortization of prior service cost (credit)
 
12

 
14

 
13

 
(203
)
 
(203
)
 
(193
)
Other adjustments (settlements, curtailments, etc.)
 
—

 
6

 
—

 
—

 
—

 
—

Pensions & OPEB mark-to-market adjustment
 
735

 
729

 
264

 
140

 
36

 
22

Net periodic cost
 
$
811

 
$
807

 
$
329

 
$
(41
)
 
$
(146
)
 
$
(152
)
Assumptions Used to Determine Net Periodic Benefit Cost
Assumptions Used to Determine Net Periodic Benefit Cost
for Years Ended December 31
 
Pensions
 
OPEB
 
2012
 
2011
 
2010
 
2012
 
2011
 
2010
Weighted-average discount rate
 
5.00
%
 
5.50
%
 
6.00
%
 
4.75
%
 
5.00
%
 
5.75
%
Expected long-term return on plan assets
 
7.75
%
 
8.25
%
 
8.50
%
 
7.75
%
 
8.50
%
 
8.50
%
Rate of compensation increase
 
5.20
%
 
5.20
%
 
5.20
%
 
N/A

 
N/A

 
N/A
Target asset allocations for pension and OPEB portfolio
FirstEnergy’s target asset allocations for its pensions and OPEB trust portfolios for 2012 and 2011 are shown in the following table:
 
 
Target Asset Allocations
 
 
2012
 
2011
Equities
 
20
%
 
23
%
Fixed income
 
51

 
50

Absolute return strategies
 
21

 
19

Real estate
 
5

 
6

Private equity
 
—

 
2

Cash
 
3

 
—

 
 
100
%
 
100
%
Effect of One-Percentage Point change in assumed health care cost trend rates
A one-percentage-point change in assumed health care cost trend rates would have the following effects:
 
 
1-Percentage-Point Increase
 
1-Percentage-Point Decrease
 
 
(in millions)
Effect on total of service and interest cost
 
$
3

 
$
(3
)
Effect on accumulated benefit obligation
 
$
34

 
$
(30
)
Estimated Future Benefit Payments
Taking into account estimated employee future service, FirstEnergy expects to make the following benefit payments from plan assets and other payments, net of participant contributions:
 
 
 
 
OPEB
 
 
Pensions
 
Benefit Payments
 
Subsidy Receipts
 
 
(in millions)
2013
 
$
439

 
$
157

 
$
(3
)
2014
 
473

 
127

 
(3
)
2015
 
486

 
68

 
(3
)
2016
 
496

 
68

 
(3
)
2017
 
505

 
68

 
(3
)
Years 2018-2022
 
2,687

 
337

 
(13
)
Net Pension and OPEB Asset (Liability)
FES’, OE's and JCP&L's shares of the net pensions and OPEB liability as of December 31, 2012 and 2011, were as follows:
 
 
Pensions
 
OPEB
Net Liability
 
2012
 
2011
 
2012
 
2011
 
 
(In millions)
FES
 
$
(180
)
 
$
(313
)
 
$
(36
)
 
$
(18
)
OE
 
(182
)
 
(108
)
 
(78
)
 
(75
)
JCP&L
 
(130
)
 
(75
)
 
(111
)
 
(94
)
Net Periodic Pension and OPEB Costs
FES’ OE's and JCP&L's shares of the net periodic pensions and OPEB costs for the three years ended December 31, 2012 were as follows:
 
 
Pensions
 
OPEB
Net Periodic Costs
 
2012
 
2011
 
2010
 
2012
 
2011
 
2010
 
 
(In millions)
FES
 
$
78

 
$
80

 
$
80

 
$
(11
)
 
$
(21
)
 
$
—

OE
 
84

 
79

 
21

 
(20
)
 
(34
)
 
(26
)
JCP&L
 
57

 
70

 
31

 
4

 
2

 
(10
)
Pensions
  
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]  
Pension investments measured at fair value
The following tables set forth pension financial assets that are accounted for at fair value by level within the fair value hierarchy. See Note 8, Fair Value Measurements, for a description of each level of the fair value hierarchy. There were no significant transfers between levels during 2012 and 2011.
 
 
December 31, 2012
 
Asset Allocation
 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
 
 
(In millions)
 
 
Cash and short-term securities
 
$
—

 
$
652

 
$
—

 
$
652

 
10
%
Equity investments
 
 
 
 
 
 
 
 
 
 
Domestic
 
547

 
8

 
—

 
555

 
8
%
International
 
275

 
153

 
—

 
428

 
7
%
Fixed income
 
 
 
 
 
 
 
 
 
 
Government bonds
 
4

 
564

 
—

 
568

 
8
%
Corporate bonds
 
—

 
1,899

 
—

 
1,899

 
28
%
High Yield Debt
 
—

 
369

 
—

 
369

 
6
%
Mortgaged-backed securities (non-government)
 
—

 
330

 
—

 
330

 
5
%
Alternatives
 
 
 
 
 
 
 
 
 
 
Hedge funds
 
—

 
1,498

 
—

 
1,498

 
22
%
Derivatives
 
—

 
18

 
—

 
18

 
—
%
Private equity funds
 
—

 
—

 
33

 
33

 
1
%
Real estate funds
 
—

 
—

 
357

 
357

 
5
%
 
 
$
826

 
$
5,491

 
$
390

 
$
6,707

 
100
%
 
 
December 31, 2011
 
Asset Allocation
 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
 
 
(In millions)
 
 
Cash and short-term securities
 
$
—

 
$
198

 
$
—

 
$
198

 
4
%
Equity investments
 
 
 
 
 
 
 
 
 
 
Domestic
 
223

 
323

 
—

 
546

 
9
%
International
 
198

 
379

 
—

 
577

 
10
%
Fixed income
 
 
 
 
 
 
 
 
 
 
Government bonds
 
348

 
430

 
—

 
778

 
13
%
Corporate bonds
 
—

 
1,998

 
—

 
1,998

 
34
%
High yield debt
 
—

 
—

 
—

 
—

 
—
%
Mortgaged-backed securities (non-government)
 
—

 
48

 
—

 
48

 
1
%
Alternatives
 
 
 
 
 
 
 
 
 
 
Hedge funds
 
—

 
1,131

 
—

 
1,131

 
19
%
Derivatives
 
—

 
75

 
70

 
145

 
2
%
Private equity funds
 
—

 
—

 
135

 
135

 
2
%
Real estate funds
 
—

 
—

 
327

 
327

 
6
%
 
 
$
769

 
$
4,582

 
$
532

 
$
5,883

 
100
%
Reconciliation of changes in the fair value of pension investments
The following table provides a reconciliation of changes in the fair value of pension investments classified as Level 3 in the fair value hierarchy during 2012 and 2011:
 
 
Private Equity Funds
 
Real Estate Funds
 
Derivatives
 
 
(In millions)
Balance as of January 1, 2011
 
$
119

 
$
282

 
$
—

Actual return on plan assets:
 
 
 
 
 
 
Unrealized gains
 
11

 
28

 
7

Realized gains
 
5

 
17

 
—

Purchases, sales and settlements
 
—

 
—

 
63

Transfers in (out)
 
—

 
—

 
—

Balance as of December 31, 2011
 
135

 
327

 
70

Actual return on plan assets:
 
 
 
 
 
 
Unrealized gains (losses)
 
(14
)
 
29

 
—

Realized gains (losses)
 
(10
)
 
4

 
—

Purchases, sales and settlements
 
—

 
—

 
(70
)
Transfers out
 
(78
)
 
(3
)
 
—

Balance as of December 31, 2012
 
$
33

 
$
357

 
$
—
OPEB
  
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]  
Pension investments measured at fair value
As of December 31, 2012 and 2011, the OPEB trust investments measured at fair value were as follows:
 
 
December 31, 2012
 
Asset Allocation
 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
 
 
(In millions)
 
 
Cash and short-term securities
 
$
—

 
$
83

 
$
—

 
$
83

 
16
%
Equity investment
 
 
 
 
 
 
 
 
 
 
Domestic
 
183

 
—

 
—

 
183

 
36
%
International
 
4

 
2

 
—

 
6

 
1
%
Mutual funds
 
8

 
3

 
—

 
11

 
2
%
Fixed income
 
 
 
 
 
 
 
 
 
 
U.S. treasuries
 
—

 
48

 
—

 
48

 
9
%
Government bonds
 
—

 
88

 
—

 
88

 
17
%
Corporate bonds
 
—

 
59

 
—

 
59

 
11
%
High yield debt
 
—

 
5

 
—

 
5

 
1
%
Mortgage-backed securities (non-government)
 
—

 
9

 
—

 
9

 
2
%
Alternatives
 
 
 
 
 
 
 
 
 
 
Hedge funds
 
—

 
21

 
—

 
21

 
4
%
Private equity funds
 
—

 
—

 
—

 
—

 
—
%
Real estate funds
 
—

 
—

 
5

 
5

 
1
%
 
 
$
195

 
$
318

 
$
5

 
$
518

 
100
%
 
 
December 31, 2011
 
Asset Allocation
 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
 
 
(In millions)
 
 
Cash and short-term securities
 
$
—

 
$
19

 
$
—

 
$
19

 
4
%
Equity investment
 
 
 
 
 
 
 
 
 
 
Domestic
 
164

 
25

 
—

 
189

 
35
%
International
 
15

 
3

 
—

 
18

 
3
%
Mutual funds
 
7

 
2

 
—

 
9

 
2
%
Fixed income
 
 
 
 
 
 
 
 
 
 
U.S. treasuries
 
—

 
30

 
—

 
30

 
6
%
Government bonds
 
8

 
136

 
—

 
144

 
27
%
Corporate bonds
 
—

 
89

 
—

 
89

 
17
%
Mortgage-backed securities (non-government)
 
—

 
5

 
—

 
5

 
—
%
Alternatives
 
 
 
 
 
 
 
 
 
 
Hedge funds
 
—

 
25

 
—

 
25

 
5
%
Private equity funds
 
—

 
—

 
3

 
3

 
—
%
Real estate funds
 
—

 
—

 
7

 
7

 
1
%
 
 
$
194

 
$
334

 
$
10

 
$
538

 
100
%
Reconciliation of changes in the fair value of pension investments
The following table provides a reconciliation of changes in the fair value of OPEB trust investments classified as Level 3 in the fair value hierarchy during 2012 and 2011:
 
 
Private Equity Funds
 
Real Estate Funds
 
 
(in millions)
Balance as of January 1, 2011
 
$
3

 
$
9

Actual return on plan assets:
 
 
 
 
Unrealized gains (losses)
 
—

 
1

Transfers out
 
—

 
(3
)
Balance as of December 31, 2011
 
3

 
7

Actual return on plan assets:
 
 
 
 
Unrealized gains
 
(1
)
 
—

Realized gains (losses)
 
—

 
—

Purchases, sales and settlements
 
—

 
—

Transfers in (out)
 
(2
)
 
(2
)
Balance as of December 31, 2012
 
$
—

 
$
5