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Employee Benefit Plans
 12 Months Ended
Dec. 31, 2020
Retirement Benefits [Abstract]  
Employee Benefit Plans EMPLOYEE BENEFIT PLANS
DEFINED BENEFIT RETIREMENT PLANS
Duke Energy and certain subsidiaries maintain, and the Subsidiary Registrants participate in, qualified, non-contributory defined benefit retirement plans. The Duke Energy plans cover most employees using a cash balance formula. Under a cash balance formula, a plan participant accumulates a retirement benefit consisting of pay credits based upon a percentage of current eligible earnings, age or age and years of service and interest credits. Certain employees are eligible for benefits that use a final average earnings formula. Under these final average earnings formulas, a plan participant accumulates a retirement benefit equal to the sum of percentages of their (i) highest three-year, four-year, or five-year average earnings, (ii) highest three-year, four-year, or five-year average earnings in excess of covered compensation per year of participation (maximum of 35 years) or (iii) highest three-year average earnings times years of participation in excess of 35 years. Duke Energy also maintains, and the Subsidiary Registrants participate in, non-qualified, non-contributory defined benefit retirement plans that cover certain executives. The qualified and non-qualified, non-contributory defined benefit plans are closed to new participants.
Duke Energy uses a December 31 measurement date for its defined benefit retirement plan assets and obligations. Actuarial gains experienced by the defined benefit retirement plans in remeasuring plan assets as of December 31, 2020, and 2019, were attributable to actual investment performance that exceeded expected investment performance. Actuarial losses experienced by the defined benefit retirement plans in remeasuring plan obligations as of December 31, 2020, and 2019, were primarily attributable to the decrease in the discount rate used to measure plan obligations.
As a result of the application of settlement accounting due to total lump-sum benefit payments exceeding the settlement threshold (defined as the sum of the service cost and interest cost on projected benefit obligation components of net periodic pension costs) for one of its qualified pension plans, Duke Energy recognized settlement charges of $94 million, primarily as a regulatory asset within Other Noncurrent Assets on the Consolidated Balance Sheets as of December 31, 2019 (an immaterial amount was recorded in Other income and expenses, net within the Consolidated Statement of Operations).
Settlement charges recognized by the Subsidiary Registrants as of December 31, 2019, which represent amounts allocated by Duke Energy for employees of the Subsidiary Registrants and allocated charges for their proportionate share of settlement charges for employees of Duke Energy’s shared services affiliate, were $53 million for Duke Energy Carolinas, $26 million for Progress Energy, $20 million for Duke Energy Progress, $6 million for Duke Energy Florida, $4 million for Duke Energy Indiana, $2 million for Duke Energy Ohio and $8 million for Piedmont.
The settlement charges reflect the recognition of a pro-rata portion of previously unrecognized actuarial losses, equal to the percentage of reduction in the projected benefit obligation resulting from total lump-sum benefit payments as of December 31, 2019. Settlement charges recognized as a regulatory asset within Other Noncurrent Assets on the Consolidated Balance Sheets are amortized over the average remaining service period for participants in the plan. Amortization of settlement charges is disclosed in the tables below as a component of net periodic pension costs.
Net periodic benefit costs disclosed in the tables below represent the cost of the respective benefit plan for the periods presented prior to capitalization of amounts reflected as Net property, plant and equipment, on the Consolidated Balance Sheets. Only the service cost component of net periodic benefit costs is eligible to be capitalized. The remaining non-capitalized portions of net periodic benefit costs are classified as either: (1) service cost, which is recorded in Operations, maintenance and other on the Consolidated Statements of Operations; or as (2) components of non-service cost, which is recorded in Other income and expenses, net, on the Consolidated Statements of Operations. Amounts presented in the tables below for the Subsidiary Registrants represent the amounts of pension and other post-retirement benefit cost allocated by Duke Energy for employees of the Subsidiary Registrants. Additionally, the Consolidated Statements of Operations of the Subsidiary Registrants also include allocated net periodic benefit costs for their proportionate share of pension and post-retirement benefit cost for employees of Duke Energy’s shared services affiliate that provide support to the Subsidiary Registrants. However, in the tables below, these amounts are only presented within the Duke Energy column (except for amortization of settlement charges). These allocated amounts are included in the governance and shared service costs discussed in Note 13.
Duke Energy’s policy is to fund amounts on an actuarial basis to provide assets sufficient to meet benefit payments to be paid to plan participants. Duke Energy does not anticipate making any contributions in 2021. The following table includes information related to the Duke Energy Registrants’ contributions to its qualified defined benefit pension plans.
DukeDukeDukeDukeDuke
DukeEnergyProgressEnergyEnergyEnergyEnergy
(in millions) EnergyCarolinasEnergyProgressFloridaOhioIndianaPiedmont
Contributions Made:
2020$— $— $— $— $— $— $— $— 
201977 7 57 4 53 2 2 1 
2018141 46 45 25 20 — 8 — 
QUALIFIED PENSION PLANS
Components of Net Periodic Pension Costs
Year Ended December 31, 2020
DukeDukeDukeDukeDuke
DukeEnergyProgressEnergyEnergyEnergyEnergy
(in millions)EnergyCarolinasEnergyProgressFloridaOhioIndianaPiedmont
Service cost$165 $51 $48 $27 $21 $5 $9 $6 
Interest cost on projected benefit obligation269 62 85 38 46 15 22 9 
Expected return on plan assets(572)(145)(190)(87)(101)(28)(42)(21)
Amortization of actuarial loss128 28 41 18 23 6 12 9 
Amortization of prior service credit(32)(8)(3)(2)(1)— (2)(9)
Amortization of settlement charges18 9 7 6 1 — 1 1 
Net periodic pension costs(a)(b)
$(24)$(3)$(12)$— $(11)$(2)$— $(5)
Year Ended December 31, 2019
DukeDukeDukeDukeDuke
DukeEnergyProgressEnergyEnergyEnergyEnergy
(in millions)EnergyCarolinasEnergyProgressFloridaOhioIndianaPiedmont
Service cost$158 $49 $46 $26 $20 $4 $9 $5 
Interest cost on projected benefit obligation317 75 100 45 54 18 26 10 
Expected return on plan assets(567)(147)(178)(88)(89)(28)(43)(22)
Amortization of actuarial loss108 24 39 15 24 4 8 8 
Amortization of prior service credit(32)(8)(3)(2)(1)— (2)(9)
Amortization of settlement charges6 2 1 1 — 2 — — 
Net periodic pension costs(a)(b)
$(10)$(5)$5 $(3)$8 $— $(2)$(8)
Year Ended December 31, 2018
DukeDukeDukeDukeDuke
DukeEnergyProgressEnergyEnergyEnergyEnergy
(in millions)EnergyCarolinasEnergyProgressFloridaOhioIndianaPiedmont
Service cost$182 $58 $51 $29 $22 $5 $11 $7 
Interest cost on projected benefit obligation299 72 94 43 50 17 23 11 
Expected return on plan assets(559)(147)(178)(85)(91)(28)(42)(22)
Amortization of actuarial loss132 29 44 21 23 5 10 11 
Amortization of prior service credit(32)(8)(3)(2)(1)— (2)(10)
Net periodic pension costs(a)(b)
$22 $4 $8 $6 $3 $(1)$— $(3)
(a)    Duke Energy amounts exclude $4 million, $4 million and $5 million for the years ended December 2020, 2019 and 2018, respectively, of regulatory asset amortization resulting from purchase accounting adjustments associated with Duke Energy's merger with Cinergy in April 2006.
(b)     Duke Energy Ohio amounts exclude $2 million, $2 million and $2 million for the years ended December 2020, 2019 and 2018, respectively, of regulatory asset amortization resulting from purchase accounting adjustments associated with Duke Energy's merger with Cinergy in April 2006.
Amounts Recognized in Accumulated Other Comprehensive Income and Regulatory Assets
Year Ended December 31, 2020
DukeDukeDukeDukeDuke
DukeEnergyProgressEnergyEnergyEnergyEnergy
(in millions)EnergyCarolinasEnergyProgressFloridaOhioIndianaPiedmont
Regulatory assets, net increase (decrease)$(62)$(39)$(26)$(30)$4 $(2)$5 $(1)
Accumulated other comprehensive loss (income)
Deferred income tax expense (benefit)$2 $— $1 $— $1 $— $— $— 
Amortization of prior year service credit1 — — — — — — — 
Amortization of prior year actuarial losses(11)— (1)— (3)— — — 
Net amount recognized in accumulated other comprehensive income$(8)$— $— $— $(2)$— $— $— 
Year Ended December 31, 2019
DukeDukeDukeDukeDuke
DukeEnergyProgressEnergyEnergyEnergyEnergy
(in millions)EnergyCarolinasEnergyProgressFloridaOhioIndianaPiedmont
Regulatory assets, net (decrease) increase$(212)$(156)$(79)$(59)$(20)$12 $22 $— 
Accumulated other comprehensive (income) loss
Deferred income tax expense (benefit)$20 $— $1 $— $(1)$— $— $— 
Amortization of prior year service credit1 — — — — — — — 
Amortization of prior year actuarial losses(15)— (2)— 3 — — — 
Net amount recognized in accumulated other comprehensive income$6 $— $(1)$— $2 $— $— $— 
Reconciliation of Funded Status to Net Amount Recognized
Year Ended December 31, 2020
DukeDukeDukeDukeDuke
DukeEnergyProgressEnergyEnergyEnergyEnergy
(in millions)EnergyCarolinasEnergyProgressFloridaOhioIndianaPiedmont
Change in Projected Benefit Obligation
Obligation at prior measurement date $8,321 $1,923 $2,608 $1,170 $1,424 $481 $693 $292 
Service cost157 49 46 26 20 4 8 5 
Interest cost269 62 85 38 46 15 22 9 
Actuarial loss433 83 144 50 93 21 46 14 
Transfers— 8 (8)(8)— 15 — — 
Benefits paid(541)(137)(160)(83)(76)(34)(49)(27)
Benefits paid – settlements(5)— — — — — (5)— 
Obligation at measurement date$8,634 $1,988 $2,715 $1,193 $1,507 $502 $715 $293 
Accumulated Benefit Obligation at measurement date$8,577 $1,989 $2,684 $1,194 $1,476 $493 $709 $294 
Change in Fair Value of Plan Assets
Plan assets at prior measurement date$8,910 $2,263 $2,898 $1,364 $1,515 $443 $667 $335 
Actual return on plan assets973 247 319 149 166 48 71 35 
Benefits paid(541)(137)(160)(83)(76)(34)(49)(27)
Benefits paid – settlements(5)— — — — — (5)— 
Transfers— 8 (8)(8)— 15 — — 
Plan assets at measurement date$9,337 $2,381 $3,049 $1,422 $1,605 $472 $684 $343 
Funded status of plan$703 $393 $334 $229 $98 $(30)$(31)$50 
Year Ended December 31, 2019
DukeDukeDukeDukeDuke
DukeEnergyProgressEnergyEnergyEnergyEnergy
(in millions)EnergyCarolinasEnergyProgressFloridaOhioIndianaPiedmont
Change in Projected Benefit Obligation
Obligation at prior measurement date $7,869 $1,954 $2,433 $1,125 $1,295 $435 $618 $264 
Service cost150 47 43 25 18 4 8 5 
Interest cost317 75 100 45 54 18 26 10 
Actuarial loss716 101 223 87 135 54 87 33 
Transfers— 11 — — — — — — 
Benefits paid(731)(265)(191)(112)(78)(30)(46)(20)
Obligation at measurement date$8,321 $1,923 $2,608 $1,170 $1,424 $481 $693 $292 
Accumulated Benefit Obligation at measurement date$8,262 $1,923 $2,578 $1,170 $1,392 $471 $686 $292 
Change in Fair Value of Plan Assets
Plan assets at prior measurement date$8,233 $2,168 $2,606 $1,268 $1,322 $405 $611 $305 
Employer contributions77 7 57 4 53 2 2 1 
Actual return on plan assets1,331 342 426 204 218 66 100 49 
Benefits paid(731)(265)(191)(112)(78)(30)(46)(20)
Transfers— 11 — — — — — — 
Plan assets at measurement date$8,910 $2,263 $2,898 $1,364 $1,515 $443 $667 $335 
Funded status of plan$589 $340 $290 $194 $91 $(38)$(26)$43 
Amounts Recognized in the Consolidated Balance Sheets
December 31, 2020
DukeDukeDukeDukeDuke
DukeEnergyProgressEnergyEnergyEnergyEnergy
(in millions)EnergyCarolinasEnergyProgressFloridaOhioIndianaPiedmont
Prefunded pension(a)
$780 $393 $379 $229 $143 $58 $79 $50 
Noncurrent pension liability(b)
$77 $— $45 $— $45 $88 $110 $— 
Net asset (liability) recognized$703 $393 $334 $229 $98 $(30)$(31)$50 
Regulatory assets$1,910 $381 $691 $283 $408 $110 $209 $80 
Accumulated other comprehensive (income) loss 
Deferred income tax benefit$(21)$— $— $— $— $— $— $— 
Prior service credit(2)— — — — — — — 
Net actuarial loss100 — 2 — — — — — 
Net amounts recognized in accumulated other comprehensive loss$77 $— $2 $— $— $— $— $— 
December 31, 2019
DukeDukeDukeDukeDuke
DukeEnergyProgressEnergyEnergyEnergyEnergy
(in millions)EnergyCarolinasEnergyProgressFloridaOhioIndianaPiedmont
Prefunded pension(a)
$621 $340 $322 $194 $123 $38 $57 $43 
Noncurrent pension liability(b)
$32 $— $32 $— $32 $76 $83 $— 
Net asset recognized$589 $340 $290 $194 $91 $(38)$(26)$43 
Regulatory assets$1,972 $420 $717 $313 $404 $112 $204 $81 
Accumulated other comprehensive (income) loss
Deferred income tax benefit$(23)$— $(1)$— $(1)$— $— $— 
Prior service credit(3)— — — — — — — 
Net actuarial loss111 — 3 — 3 — — — 
Net amounts recognized in accumulated other comprehensive loss$85 $— $2 $— $2 $— $— $— 
Amounts to be recognized in net periodic pension costs in the next year
Unrecognized net actuarial loss$135 $29 $43 $19 $24 $7 $10 $9 
Unrecognized prior service credit(32)(8)(3)(2)(1)(1)(2)(9)
(a)    Included in Other within Other Noncurrent Assets on the Consolidated Balance Sheets.
(b)    Included in Accrued pension and other post-retirement benefit costs on the Consolidated Balance Sheets.
Information for Plans with Accumulated Benefit Obligation in Excess of Plan Assets
December 31, 2020
DukeDukeDuke
DukeProgressEnergyEnergyEnergy
(in millions)EnergyEnergyFloridaOhioIndiana
Projected benefit obligation$4,914 $828 $828 $184 $293 
Accumulated benefit obligation4,856 796 796 176 285 
Fair value of plan assets4,837 783 783 96 183 
December 31, 2019
DukeDuke
EnergyEnergy
(in millions)OhioIndiana
Projected benefit obligation$155 $260 
Accumulated benefit obligation146 252 
Fair value of plan assets79 177 
Assumptions Used for Pension Benefits Accounting
The discount rate used to determine the current year pension obligation and following year’s pension expense is based on a bond selection-settlement portfolio approach. This approach develops a discount rate by selecting a portfolio of high-quality corporate bonds that generate sufficient cash flow to provide for projected benefit payments of the plan. The selected bond portfolio is derived from a universe of non-callable corporate bonds rated Aa quality or higher. After the bond portfolio is selected, a single interest rate is determined that equates the present value of the plan’s projected benefit payments discounted at this rate with the market value of the bonds selected.
The average remaining service period for participants in active plans and life expectancy of participants in inactive plans is 13 years for Duke Energy, Duke Energy Indiana and Duke Energy Ohio, 14 years for Progress Energy, Duke Energy Progress and Duke Energy Florida, 12 years for Duke Energy Carolinas and nine years for Piedmont.
The following tables present the assumptions or range of assumptions used for pension benefit accounting.
December 31,
202020192018
Benefit Obligations
Discount rate2.60%3.30%4.30%
Interest crediting rate4.00%4.00%4.00%
Salary increase 3.50 %–4.00%3.50 %–4.00%3.50 %–4.00%
Net Periodic Benefit Cost
Discount rate3.30%4.30%3.60%
Interest crediting rate4.00%4.00%4.00%
Salary increase3.50 %–4.00%3.50 %–4.00%3.50 %–4.00%
Expected long-term rate of return on plan assets6.85%6.85%6.50%
Expected Benefit Payments
DukeDukeDukeDukeDuke
DukeEnergyProgressEnergyEnergyEnergyEnergy
(in millions)EnergyCarolinasEnergyProgressFloridaOhioIndianaPiedmont
Years ending December 31,
2021$667 $169 $177 $94 $82 $40 $53 $29 
2022650 170 176 92 83 39 51 25 
2023655 174 181 95 85 38 49 22 
2024644 168 184 96 87 37 49 21 
2025617 163 181 93 88 35 47 19 
2025-20292,745 677 846 399 443 154 217 83 
NON-QUALIFIED PENSION PLANS
The accumulated benefit obligation, which equals the projected benefit obligation for non-qualified pension plans, was $320 million for Duke Energy, $13 million for Duke Energy Carolinas, $111 million for Progress Energy, $33 million for Duke Energy Progress, $45 million for Duke Energy Florida, $4 million for Duke Energy Ohio, $2 million for Duke Energy Indiana and $4 million for Piedmont as of December 31, 2020.
Employer contributions, which equal benefits paid for non-qualified pension plans, were $23 million for Duke Energy, $2 million for Duke Energy Carolinas, $8 million for Progress Energy, $3 million for Duke Energy Progress and $3 million for Duke Energy Florida for the year ended December 31, 2020. Employer contributions were not material for Duke Energy Ohio, Duke Energy Indiana or Piedmont for the year ended December 31, 2020.
Net periodic pension costs for non-qualified pension plans were not material for the years ended December 31, 2020, 2019 or 2018.
OTHER POST-RETIREMENT BENEFIT PLANS
Duke Energy provides, and the Subsidiary Registrants participate in, some health care and life insurance benefits for retired employees on a contributory and non-contributory basis. Employees are eligible for these benefits if they have met age and service requirements at retirement, as defined in the plans. The health care benefits include medical, dental and prescription drug coverage and are subject to certain limitations, such as deductibles and copayments.
Duke Energy did not make any pre-funding contributions to its other post-retirement benefit plans during the years ended December 31, 2020, 2019 or 2018.
Components of Net Periodic Other Post-Retirement Benefit Costs
Year Ended December 31, 2020
DukeDukeDukeDukeDuke
DukeEnergyProgressEnergyEnergyEnergyEnergy
(in millions)EnergyCarolinasEnergyProgressFloridaOhioIndianaPiedmont
Service cost$4 $1 $1 $— $— $— $1 $— 
Interest cost on accumulated post-retirement benefit obligation23 5 10 5 4 1 2 1 
Expected return on plan assets(13)(8)— — — — — (2)
Amortization of actuarial loss2 — 1 — 1 — 4 — 
Amortization of prior service credit(14)(4)(3)(1)(2)(1)(1)(2)
Net periodic post-retirement benefit costs (a)(b)
$2 $(6)$9 $4 $3 $— $6 $(3)
Year Ended December 31, 2019
DukeDukeDukeDukeDuke
DukeEnergyProgressEnergyEnergyEnergyEnergy
(in millions)EnergyCarolinasEnergyProgressFloridaOhioIndianaPiedmont
Service cost$4 $1 $1 $— $1 $— $1 $— 
Interest cost on accumulated post-retirement benefit obligation30 7 12 7 5 1 3 1 
Expected return on plan assets(12)(7)— — — — — (1)
Amortization of actuarial loss4 2 1 — 1 — 4 — 
Amortization of prior service credit(19)(5)(8)(1)(7)(1)(1)(2)
Net periodic post-retirement benefit costs(a)(b)
$7 $(2)$6 $6 $— $— $7 $(2)
Year Ended December 31, 2018
DukeDukeDukeDukeDuke
DukeEnergyProgressEnergyEnergyEnergyEnergy
(in millions)EnergyCarolinasEnergyProgressFloridaOhioIndianaPiedmont
Service cost$6 $1 $1 $— $1 $1 $1 $1 
Interest cost on accumulated post-retirement benefit obligation28 7 12 6 6 1 3 1 
Expected return on plan assets(13)(8)— — — — — (2)
Amortization of actuarial loss6 3 1 1 — — 4 — 
Amortization of prior service credit(19)(5)(8)(1)(7)(1)(1)(2)
Net periodic post-retirement benefit costs(a)(b)
$8 $(2)$6 $6 $— $1 $7 $(2)
(a)    Duke Energy amounts exclude $6 million, $6 million and $7 million for the years ended December 2020, 2019 and 2018, respectively, of regulatory asset amortization resulting from purchase accounting adjustments associated with Duke Energy's merger with Cinergy in April 2006.
(b)    Duke Energy Ohio amounts exclude $1 million, $2 million and $2 million for the years ended December 2020, 2019 and 2018, respectively, of regulatory asset amortization resulting from purchase accounting adjustments associated with Duke Energy's merger with Cinergy in April 2006.
Amounts Recognized in Accumulated Other Comprehensive Income and Regulatory Assets and Liabilities
Year Ended December 31, 2020
DukeDukeDukeDukeDuke
DukeEnergyProgressEnergyEnergyEnergyEnergy
(in millions)EnergyCarolinasEnergyProgressFloridaOhioIndianaPiedmont
Regulatory assets, net increase (decrease)$9 $— $9 $6 $3 $— $(4)$— 
Regulatory liabilities, net increase (decrease)$(10)$(7)$— $— $— $— $(1)$— 
Accumulated other comprehensive (income) loss
Deferred income tax benefit$— $— $— $— $— $— $— $— 
Amortization of prior year service credit1 — — — — — — — 
Net amount recognized in accumulated other comprehensive income$1 $— $— $— $— $— $— $— 
Year Ended December 31, 2019
DukeDukeDukeDukeDuke
DukeEnergyProgressEnergyEnergyEnergyEnergy
(in millions)EnergyCarolinasEnergyProgressFloridaOhioIndianaPiedmont
Regulatory assets, net increase (decrease)$(127)$— $(127)$(82)$(45)$— $(5)$— 
Regulatory liabilities, net increase (decrease)$(152)$1 $(149)$(93)$(56)$(1)$(4)$3 
Accumulated other comprehensive (income) loss
Deferred income tax benefit$— $— $— $— $— $— $— $— 
Amortization of prior year actuarial gain(4)— — — — — — — 
Net amount recognized in accumulated other comprehensive income$(4)$— $— $— $— $— $— $— 
Reconciliation of Funded Status to Accrued Other Post-Retirement Benefit Costs
Year Ended December 31, 2020
DukeDukeDukeDukeDuke
DukeEnergyProgressEnergyEnergyEnergyEnergy
(in millions)EnergyCarolinasEnergyProgressFloridaOhioIndianaPiedmont
Change in Projected Benefit Obligation
Accumulated post-retirement benefit obligation at prior measurement date$723 $175 $303 $168 $135 $29 $64 $30 
Service cost4 1 1 — — — 1 — 
Interest cost23 5 10 5 4 1 2 1 
Plan participants' contributions15 3 5 3 2 1 2 — 
Actuarial losses19 8 8 5 2 — 1 1 
Benefits paid(75)(18)(28)(15)(13)(4)(9)(2)
Accumulated post-retirement benefit obligation at measurement date$709 $174 $299 $166 $130 $27 $61 $30 
Change in Fair Value of Plan Assets
Plan assets at prior measurement date$220 $130 $(1)$(1)$— $9 $5 $34 
Actual return on plan assets24 14 — — — — 1 4 
Benefits paid(75)(18)(28)(15)(13)(4)(9)(2)
Employer contributions53 10 23 11 10 3 8 1 
Plan participants' contributions15 3 5 3 2 1 2 — 
Plan assets at measurement date$237 $139 $(1)$(2)$(1)$9 $7 $37 
Funded status of plan$(472)$(35)$(300)$(168)$(131)$(18)$(54)$7 
Year Ended December 31, 2019
DukeDukeDukeDukeDuke
DukeEnergyProgressEnergyEnergyEnergyEnergy
(in millions)EnergyCarolinasEnergyProgressFloridaOhioIndianaPiedmont
Change in Projected Benefit Obligation
Accumulated post-retirement benefit obligation at prior measurement date$728 $174 $303 $166 $137 $29 $67 $30 
Service cost4 1 1 — 1 — 1 — 
Interest cost30 7 12 7 5 1 3 1 
Plan participants' contributions16 3 6 3 2 1 2 — 
Actuarial losses28 9 13 9 5 1 2 — 
Benefits paid(83)(19)(32)(17)(15)(3)(11)(1)
Accumulated post-retirement benefit obligation at measurement date$723 $175 $303 $168 $135 $29 $64 $30 
Change in Fair Value of Plan Assets
Plan assets at prior measurement date$195 $115 $— $— $— $8 $5 $29 
Actual return on plan assets32 20 (1)— — 1 — 6 
Benefits paid(83)(19)(32)(17)(15)(3)(11)(1)
Employer contributions60 11 26 13 13 2 9 — 
Plan participants' contributions16 3 6 3 2 1 2 — 
Plan assets at measurement date$220 $130 $(1)$(1)$— $9 $5 $34 
Funded status of plan$(503)$(45)$(304)$(169)$(135)$(20)$(59)$4 
Amounts Recognized in the Consolidated Balance Sheets
December 31, 2020
DukeDukeDukeDukeDuke
DukeEnergyProgressEnergyEnergyEnergyEnergy
(in millions)EnergyCarolinasEnergyProgressFloridaOhioIndianaPiedmont
Prefunded post-retirement benefit$8 $— $— $— $— $1 $— $7 
Current post-retirement liability(a)
9 — 6 4 2 2 — — 
Noncurrent post-retirement liability(b)
471 35 294 164 129 17 54 — 
Net liability (asset) recognized$472 $35 $300 $168 $131 $18 $54 $(7)
Regulatory assets$144 $— $144 $88 $56 $— $32 $— 
Regulatory liabilities$139 $32 $— $— $— $17 $62 $3 
Accumulated other comprehensive (income) loss
Deferred income tax expense$3 $— $— $— $— $— $— $— 
Prior service credit(1)— — — — — — — 
Net actuarial gain(13)— — — — — — — 
Net amounts recognized in accumulated other comprehensive income$(11)$— $— $— $— $— $— $— 
December 31, 2019
DukeDukeDukeDukeDuke
DukeEnergyProgressEnergyEnergyEnergyEnergy
(in millions)EnergyCarolinasEnergyProgressFloridaOhioIndianaPiedmont
Current post-retirement liability(a)
$9 $— $5 $3 $2 $1 $— $— 
Noncurrent post-retirement liability(b)
494 45 299 163 133 19 59 (4)
Total accrued post-retirement liability$503 $45 $304 $166 $135 $20 $59 $(4)
Regulatory assets$135 $— $135 $82 $53 $— $36 $— 
Regulatory liabilities$149 $39 $— $— $— $17 $63 $3 
Accumulated other comprehensive (income) loss
Deferred income tax expense$3 $— $— $— $— $— $— $— 
Prior service credit(2)— — — — — — — 
Net actuarial gain(13)— — — — — — — 
Net amounts recognized in accumulated other comprehensive income$(12)$— $— $— $— $— $— $— 
Amounts to be recognized in net periodic pension expense in the next year
Unrecognized net actuarial loss$5 $3 $1 $— $1 $— $— $— 
Unrecognized prior service credit(14)(4)(3)(1)(2)(1)(1)(2)
(a)    Included in Other within Current Liabilities on the Consolidated Balance Sheets. 
(b)    Included in Accrued pension and other post-retirement benefit costs on the Consolidated Balance Sheets.
Assumptions Used for Other Post-Retirement Benefits Accounting
The discount rate used to determine the current year other post-retirement benefits obligation and following year’s other post-retirement benefits expense is based on a bond selection-settlement portfolio approach. This approach develops a discount rate by selecting a portfolio of high-quality corporate bonds that generate sufficient cash flow to provide for projected benefit payments of the plan. The selected bond portfolio is derived from a universe of non-callable corporate bonds rated Aa quality or higher. After the bond portfolio is selected, a single interest rate is determined that equates the present value of the plan’s projected benefit payments discounted at this rate with the market value of the bonds selected.
The average remaining service period of active covered employees is eight years for Duke Energy, seven years for Progress Energy, Duke Energy Florida and Duke Energy Ohio and six years for Duke Energy Carolinas, Duke Energy Progress, Duke Energy Indiana and Piedmont.
The following tables present the assumptions used for other post-retirement benefits accounting.
December 31,
202020192018
Benefit Obligations
Discount rate2.60 %3.30 %4.30 %
Net Periodic Benefit Cost
Discount rate3.30 %4.30 %3.60 %
Expected long-term rate of return on plan assets6.85 %6.85 %6.50 %
Assumed tax rate23 %23 %35 %
Assumed Health Care Cost Trend Rate
December 31,
20202019
Health care cost trend rate assumed for next year6.25 %6.00 %
Rate to which the cost trend is assumed to decline (the ultimate trend rate)4.75 %4.75 %
Year that rate reaches ultimate trend20282026
Expected Benefit Payments
DukeDukeDukeDukeDuke
DukeEnergyProgressEnergyEnergyEnergyEnergy
(in millions)EnergyCarolinasEnergyProgressFloridaOhioIndianaPiedmont
Years ending December 31,
2021$73 $17 $28 $15 $12 $3 $8 $2 
202266 16 26 14 12 3 7 2 
202362 15 25 14 11 3 6 2 
202458 14 24 13 11 2 6 2 
202554 13 22 12 10 2 5 2 
2026-2030223 54 94 52 41 9 21 11 
PLAN ASSETS
Description and Allocations
Duke Energy Master Retirement Trust
Assets for both the qualified pension and other post-retirement benefits are maintained in the Duke Energy Master Retirement Trust. Approximately 98% of the Duke Energy Master Retirement Trust assets were allocated to qualified pension plans and approximately 2% were allocated to other post-retirement plans (comprised of 401(h) accounts), as of December 31, 2020, and 2019. The investment objective of the Duke Energy Master Retirement Trust is to invest in a diverse portfolio of assets that is expected to generate positive surplus return over time (i.e., asset growth greater than liability growth) subject to a prudent level of portfolio risk, for the purpose of enhancing the security of benefits for plan participants.
As of December 31, 2020, Duke Energy assumes pension and other post-retirement plan assets will generate a long-term rate of return of 6.5%. The expected long-term rate of return was developed using a weighted average calculation of expected returns based primarily on future expected returns across asset classes considering the use of active asset managers, where applicable. The asset allocation targets were set after considering the investment objective and the risk profile. Equity securities are held for their higher expected returns. Debt securities are primarily held to hedge the qualified pension plan. Return seeking debt securities, hedge funds and other global securities are held for diversification. Investments within asset classes are diversified to achieve broad market participation and reduce the impact of individual managers or investments.
Effective January 1, 2020, the target asset allocation for the Duke Energy Retirement Master Trust is 58% liability hedging assets and 42% return-seeking assets. Duke Energy periodically reviews its asset allocation targets, and over time, as the funded status of the benefit plans increase, the level of asset risk relative to plan liabilities may be reduced to better manage Duke Energy's benefit plan liabilities and reduce funded status volatility.
The Duke Energy Master Retirement Trust is authorized to engage in the lending of certain plan assets. Securities lending is an investment management enhancement that utilizes certain existing securities of the Duke Energy Master Retirement Trust to earn additional income. Securities lending involves the loaning of securities to approved parties. In return for the loaned securities, the Duke Energy Master Retirement Trust receives collateral in the form of cash and securities as a safeguard against possible default of any borrower on the return of the loan under terms that permit the Duke Energy Master Retirement Trust to sell the securities. The Duke Energy Master Retirement Trust mitigates credit risk associated with securities lending arrangements by monitoring the fair value of the securities loaned, with additional collateral obtained or refunded as necessary. The fair value of securities on loan was approximately $482 million and $351 million at December 31, 2020, and 2019, respectively. Cash and securities obtained as collateral exceeded the fair value of the securities loaned at December 31, 2020, and 2019, respectively. Securities lending income earned by the Duke Energy Master Retirement Trust was immaterial for the years ended December 31, 2020, 2019 and 2018, respectively.
Qualified pension and other post-retirement benefits for the Subsidiary Registrants are derived from the Duke Energy Master Retirement Trust, as such, each are allocated their proportionate share of the assets discussed below.
The following table includes the target asset allocations by asset class at December 31, 2020, and the actual asset allocations for the Duke Energy Master Retirement Trust.
Actual Allocation at
TargetDecember 31,
Allocation20202019
Global equity securities28 %30 %27 %
Global private equity securities1 %1 %1 %
Debt securities58 %55 %57 %
Return seeking debt securities4 %5 %5 %
Hedge funds3 %3 %3 %
Real estate and cash6 %6 %7 %
Total100 %100 %100 %
Other post-retirement assets
Duke Energy's other post-retirement assets are comprised of Voluntary Employees' Beneficiary Association (VEBA) trusts and 401(h) accounts held within the Duke Energy Master Retirement Trust. Duke Energy's investment objective is to achieve sufficient returns, subject to a prudent level of portfolio risk, for the purpose of promoting the security of plan benefits for participants.
The following table presents target and actual asset allocations for the VEBA trusts at December 31, 2020.
Actual Allocation at
TargetDecember 31,
Allocation20202019
U.S. equity securities30 %36 %35 %
Non-U.S. equity securities6 %6 %9 %
Real estate2 %2 %2 %
Debt securities45 %42 %37 %
Cash17 %14 %17 %
Total100 %100 %100 %
Fair Value Measurements
Duke Energy classifies recurring and non-recurring fair value measurements based on the fair value hierarchy as discussed in Note 16.
Valuation methods of the primary fair value measurements disclosed below are as follows:
Investments in equity securities
Investments in equity securities are typically valued at the closing price in the principal active market as of the last business day of the reporting period. Principal active markets for equity prices include published exchanges such as NASDAQ and NYSE. Foreign equity prices are translated from their trading currency using the currency exchange rate in effect at the close of the principal active market. Prices have not been adjusted to reflect after-hours market activity. The majority of investments in equity securities are valued using Level 1 measurements. When the price of an institutional commingled fund is unpublished, it is not categorized in the fair value hierarchy, even though the funds are readily available at the fair value.
Investments in corporate debt securities and U.S. government securities
Most debt investments are valued based on a calculation using interest rate curves and credit spreads applied to the terms of the debt instrument (maturity and coupon interest rate) and consider the counterparty credit rating. Most debt valuations are Level 2 measurements. If the market for a particular fixed-income security is relatively inactive or illiquid, the measurement is Level 3. U.S. Treasury debt is typically Level 2.
Investments in short-term investment funds
Investments in short-term investment funds are valued at the net asset value of units held at year end and are readily redeemable at the measurement date. Investments in short-term investment funds with published prices are valued as Level 1. Investments in short-term investment funds with unpublished prices are valued as Level 2.
Duke Energy Master Retirement Trust
The following tables provide the fair value measurement amounts for the Duke Energy Master Retirement Trust qualified pension and other post-retirement assets.
December 31, 2020
Total FairNot
(in millions)ValueLevel 1Level 2Level 3
Categorized(b)
Equity securities$3,202 $3,162 $— $— $40 
Corporate debt securities4,162 — 4,162 — — 
Short-term investment funds397 247 150 — — 
Partnership interests97 — — — 97 
Hedge funds198 — — — 198 
U.S. government securities1,164 — 1,164 — — 
Governments bonds – foreign73 — 73 — — 
Cash98 98 — — — 
Net pending transactions and other investments88 34 54 — — 
Total assets(a)
$9,479 $3,541 $5,603 $— $335 
(a)    Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont were allocated approximately 26%, 32%, 15%, 17%, 5%, 7% and 4%, respectively, of the Duke Energy Master Retirement Trust at December 31, 2020. Accordingly, all amounts included in the table above are allocable to the Subsidiary Registrants using these percentages.
(b)    Certain investments that are measured at fair value using the net asset value per share practical expedient have not been categorized in the fair value hierarchy.
December 31, 2019
Total FairNot
(in millions)ValueLevel 1Level 2Level 3
Categorized(b)
Equity securities$2,730 $2,712 $— $— $18 
Corporate debt securities3,999 — 3,999 — — 
Short-term investment funds545 455 90 — — 
Partnership interests104 — — — 104 
Hedge funds206 — — — 206 
U.S. government securities1,231 — 1,231 — — 
Guaranteed investment contracts11 — — 11 — 
Governments bonds – foreign78 — 78 — — 
Cash75 75 — — — 
Net pending transactions and other investments46 (43)89 — — 
Total assets(a)
$9,025 $3,199 $5,487 $11 $328 
(a)    Duke Energy Carolinas, Progress Energy, Duke Energy Progress, Duke Energy Florida, Duke Energy Ohio, Duke Energy Indiana and Piedmont were allocated approximately 26%, 31%, 15%, 17%, 5%, 7% and 4%, respectively, of the Duke Energy Master Retirement Trust at December 31, 2019. Accordingly, all amounts included in the table above are allocable to the Subsidiary Registrants using these percentages.
(b)    Certain investments that are measured at fair value using the net asset value per share practical expedient have not been categorized in the fair value hierarchy.
The following table provides a reconciliation of beginning and ending balances of Duke Energy Master Retirement Trust qualified pension and other post-retirement assets at fair value on a recurring basis where the determination of fair value includes significant unobservable inputs (Level 3).
(in millions)20202019
Balance at January 1$11 $27 
Sales(12)(18)
Total gains and other, net1 2 
Transfer of Level 3 assets to other classifications— — 
Balance at December 31$— $11 
Other post-retirement assets
The following tables provide the fair value measurement amounts for VEBA trust assets.
December 31, 2020
Total Fair
(in millions)ValueLevel 2
Cash and cash equivalents$5 $5 
Real estate1 1 
Equity securities23 23 
Debt securities19 19 
Total assets$48 $48 
December 31, 2019
Total Fair
(in millions)ValueLevel 2
Cash and cash equivalents$9 $9 
Real estate1 1 
Equity securities22 22 
Debt securities18 18 
Total assets$50 $50 
EMPLOYEE SAVINGS PLANS
Retirement Savings Plan
Duke Energy or its affiliates sponsor, and the Subsidiary Registrants participate in, employee savings plans that cover substantially all U.S. employees. Most employees participate in a matching contribution formula where Duke Energy provides a matching contribution generally equal to 100% of employee before-tax and Roth 401(k) contributions of up to 6% of eligible pay per pay period. Dividends on Duke Energy shares held by the savings plans are charged to retained earnings when declared and shares held in the plans are considered outstanding in the calculation of basic and diluted EPS.
For new and rehired employees who are not eligible to participate in Duke Energy’s defined benefit plans, an additional employer contribution of 4% of eligible pay per pay period, which is subject to a three-year vesting schedule, is provided to the employee’s savings plan account. Certain Piedmont employees whose participation in a prior Piedmont defined benefit plan (that was frozen as of December 31, 2017) are eligible for employer transition credit contributions of 3% to 5% of eligible pay per period, for each pay period during the three-year period ending December 31, 2020.
The following table includes pretax employer matching contributions made by Duke Energy and expensed by the Subsidiary Registrants.
DukeDukeDukeDukeDuke
DukeEnergyProgressEnergyEnergyEnergyEnergy
(in millions)EnergyCarolinasEnergyProgressFloridaOhioIndianaPiedmont
Years ended December 31,
2020$213 $67 $57 $38 $19 $5 $11 $13 
2019214 66 58 38 20 5 11 13 
2018213 68 58 40 19 4 10 12