Retirement Benefits (Tables)

12 Months Ended

Dec. 31, 2018

Defined Benefit Plan Disclosure [Line Items]

Schedule Of SERP Trust Assets, ABO And Contributions

Presented in the following table are the fair values of trust assets, ABO, and contributions for CMS Energy’s and Consumers’ DB SERP:



In Millions
Years Ended December 31	2018			2017
CMS Energy, including Consumers
Trust assets		$	147		$	146
ABO		137			149
Contributions		8			7
Consumers
Trust assets		$	106		$	106
ABO		98			107
Contributions		5			6

Schedule Of Effect Of One-Percentage-Point Change In Assumed Health Care Cost Trend Rates

Presented in the following table are the effects of a one-percentage-point change in the health care cost-trend assumption:



In Millions
Year Ended December 31, 2018	One Percentage Point Increase			One Percentage Point Decrease
CMS Energy, including Consumers
Effect on total service and interest cost component		$	2		$	(2	)
Effect on PBO		30			(26		)
Consumers
Effect on total service and interest cost component		$	2		$	(2	)
Effect on PBO		28			(25		)

Schedule Of Assumptions Used

Presented in the following table are the weighted-average assumptions used in CMS Energy’s and Consumers’ retirement benefits plans to determine benefit obligations and net periodic benefit cost:



December 31	2018		2017		2016
CMS Energy, including Consumers
Weighted average for benefit obligations¹
Discount rate²
DB Pension Plan A³	4.48	%	3.78	%
DB Pension Plan B³	4.32		3.64
DB SERP	4.32		3.65		4.16	%
OPEB Plan	4.42		3.74		4.49
Rate of compensation increase
DB Pension Plan A³	3.50		3.50
DB SERP	5.50		5.50		5.50
Weighted average for net periodic benefit cost1
Service cost discount rate^2,4
DB Pension Plan A³	3.85
DB SERP	3.83		4.51		4.87
OPEB Plan	3.93		4.89		4.75
Interest cost discount rate^2,4
DB Pension Plan A³	3.39
DB Pension Plan B³	3.24
DB SERP	3.26		3.51		3.64
OPEB Plan	3.35		3.79		3.89
Expected long-term rate of return on plan assets⁵
DB Pension Plans	7.00		7.25		7.25
OPEB Plan	7.00		7.25		7.25
Rate of compensation increase
DB Pension Plan A³	3.50
DB SERP	5.50		5.50		5.50


¹	The mortality assumption for benefit obligations was based on the RP-2014 mortality table, with projection scales MP-2018 for 2018, MP-2017 for 2017, and MP-2016 for 2016. The mortality assumption for net periodic benefit cost for 2018, 2017, and 2016 was based on the RP-2014 mortality table, with projection scales MP-2017 for 2018, MP-2016 for 2017, and MP-2015 for 2016.


²	The discount rate reflects the rate at which benefits could be effectively settled and is equal to the equivalent single rate resulting from a yield-curve analysis. This analysis incorporated the projected benefit payments specific to CMS Energy’s and Consumers’ DB Pension Plans and OPEB Plan and the yields on high-quality corporate bonds rated Aa or better.


³	Effective December 31, 2017, CMS Energy’s and Consumers’ existing defined benefit pension plan was amended to include only retired or inactive employees; this amended plan is referred to as DB Pension Plan B. Active employees were moved to a newly created pension plan, referred to as DB Pension Plan A.

The assumptions used to measure the plan obligation of the previous defined benefit pension plan at December 31, 2016 were:


•	discount rate of 4.30 percent


•	weighted-average rate of compensation increase of 3.60 percent

The assumptions used to measure the plan cost of the previous defined benefit pension plan were:


•	service cost discount rate of 4.53 percent at December 31, 2017 and 4.79 percent at December 31, 2016


•	interest cost discount rate of 3.56 percent at December 31, 2017 and 3.66 percent at December 31, 2016


•	weighted-average rate of compensation increase of 3.60 percent at December 31, 2017 and 3.00 percent at December 31, 2016

⁴

In 2016, CMS Energy and Consumers changed the method they use to determine the discount rate used to calculate the service cost and interest cost 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 cost; 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.

⁵

CMS Energy and Consumers determined the long-term rate of return using historical market returns, the present and expected future economic environment, the capital market principles of risk and return, and the expert opinions of individuals and firms with financial market knowledge. CMS Energy and Consumers considered the asset allocation of the portfolio in forecasting the future expected total return of the portfolio. The goal was to determine a long-term rate of return that could be incorporated into the planning of future cash flow requirements in conjunction with the change in the liability. Annually, CMS Energy and Consumers review for reasonableness and appropriateness the forecasted returns for various classes of assets used to construct an expected return model. CMS Energy’s and Consumers’ expected long-term rate of return on the assets of the DB Pension Plans was 7.00 percent in 2018. The actual return (loss) on the assets of the DB Pension Plans was (6.7) percent in 2018, 18.0 percent in 2017, and 8.0 percent in 2016.

Schedule Of Net Benefit Costs

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 Plans and DB SERP												OPEB Plan
Years Ended December 31	2018				2017				2016				2018				2017				2016
CMS Energy, including Consumers
Net periodic cost (credit)
Service cost		$	48			$	45			$	42			$	17			$	19			$	18
Interest cost		95				93				90				34				51				46
Expected return on plan assets		(149		)		(153		)		(147		)		(97		)		(90		)		(85		)
Amortization of:
Net loss		76				82				71				15				29				21
Prior service cost (credit)		3				5				4				(67		)		(40		)		(41		)
Net periodic cost (credit)		$	73			$	72			$	60			$	(98	)		$	(31	)		$	(41	)
Consumers
Net periodic cost (credit)
Service cost		$	47			$	44			$	41			$	16			$	19			$	17
Interest cost		88				90				87				33				49				45
Expected return on plan assets		(139		)		(149		)		(143		)		(91		)		(84		)		(80		)
Amortization of:
Net loss		73				79				68				16				29				22
Prior service cost (credit)		3				4				4				(65		)		(39		)		(40		)
Net periodic cost (credit)		$	72			$	68			$	57			$	(91	)		$	(26	)		$	(36	)

Schedule Of Net Loss And Prior Service Cost (Credit) That Will Be Amortized In Next Fiscal Year

Presented in the following table are the estimated net loss and prior service cost (credit) that will be amortized into net periodic benefit cost in 2019 from or to the associated regulatory asset and AOCI:



In Millions
	DB Pension Plans			OPEB Plan
CMS Energy, including Consumers
Regulatory asset		$	47		$	(35	)
AOCI		3			(1		)
Consumers
Regulatory asset		$	47		$	(35	)

Schedule Of Funded Status Of Retirement Benefit Plans

Presented in the following table are reconciliations of the funded status of CMS Energy’s and Consumers’ retirement benefits plans with their retirement benefits plans’ liabilities:



In Millions
	DB Pension Plans									DB SERP								OPEB Plan
Years Ended December 31	2018				2017					2018				2017				2018				2017
CMS Energy, including Consumers
Benefit obligation at beginning of period		$	2,780			$	2,562				$	154			$	151			$	1,097			$	1,408
Service cost		48				45					—				—				17				19
Interest cost		90				88					5				5				34				51
Plan amendments		—				—					—				—				26				(309		)
Actuarial (gain) loss		(258		)	¹	241			¹		(10		)		7				(74		)	¹	(24		)	¹
Benefits paid		(148		)		(156		)			(9		)		(9		)		(55		)		(48		)
Benefit obligation at end of period		$	2,512			$	2,780				$	140			$	154			$	1,045			$	1,097
Plan assets at fair value at beginning of period		$	2,305			$	2,101				$	—			$	—			$	1,420			$	1,264
Actual return on plan assets		(150		)		360					—				—				(86		)		203
Company contribution		240				—					9				9				—				—
Actual benefits paid		(148		)		(156		)			(9		)		(9		)		(54		)		(47		)
Plan assets at fair value at end of period		$	2,247			$	2,305				$	—			$	—			$	1,280			$	1,420
Funded status		$	(265	)	²	$	(475	)	²		$	(140	)		$	(154	)		$	235			$	323
Consumers
Benefit obligation at beginning of period											$	112			$	109			$	1,053			$	1,365
Service cost											—				—				16				19
Interest cost											4				4				33				49
Plan amendments											—				—				25				(303		)
Actuarial (gain) loss											(8		)		5				(70		)	¹	(31		)	¹
Benefits paid											(7		)		(6		)		(53		)		(46		)
Benefit obligation at end of period											$	101			$	112			$	1,004			$	1,053
Plan assets at fair value at beginning of period											$	—			$	—			$	1,329			$	1,184
Actual return on plan assets											—				—				(80		)		190
Company contribution											7				6				—				—
Actual benefits paid											(7		)		(6		)		(52		)		(45		)
Plan assets at fair value at end of period											$	—			$	—			$	1,197			$	1,329
Funded status											$	(101	)		$	(112	)		$	193			$	276

The actuarial gain for 2018 for the DB Pension Plans was primarily the result of higher discount rates. The actuarial loss for 2017 was primarily the result of lower discount rates. The actuarial gain for 2018 for the OPEB Plan was primarily the result of higher discount rates. The actuarial gain for 2017 was primarily the result of better claim experience in calculating the plan’s funded status.


²	At December 31, 2018, $246 million of the total funded status of the DB Pension Plans was attributable to Consumers, based on an allocation of expenses. At December 31, 2017, $455 million of the total funded status of the DB Pension Plans was attributable to Consumers, based on an allocation of expenses.

Schedule Of Retirement Benefit Plan Assets (Liabilities)

Presented in the following table is the classification of CMS Energy’s and Consumers’ retirement benefit plans’ assets and liabilities:



In Millions
December 31	2018			2017
CMS Energy, including Consumers
Non-current assets
DB Pension Plans		$	38		$	143
OPEB Plan		235			323
Current liabilities
DB SERP		10			9
Non-current liabilities
DB Pension Plans		303			618
DB SERP		130			145
Consumers
Non-current assets
DB Pension Plans		$	49		$	147
OPEB Plan		193			276
Current liabilities
DB SERP		7			7
Non-current liabilities
DB Pension Plans		295			602
DB SERP		94			105

Schedule Of Accumulated And Projected Benefit Obligations

Presented in the following table is information related to the defined benefit pension plan for which the PBO and the ABO exceed plan assets:



In Millions
December 31	2018		2017
CMS Energy, including Consumers
PBO	$	1,363	$	1,511
ABO	1,091		1,164
Fair value of plan assets	1,059		893

Schedule Of Net Periodic Benefit Cost Not Yet Recognized

For additional details on regulatory assets and liabilities, see Note 3, Regulatory Matters.



In Millions
	DB Pension Plans and DB SERP						OPEB Plan
Years Ended December 31	2018			2017			2018				2017
CMS Energy, including Consumers
Regulatory assets (liabilities)
Net loss		$	978		$	1,017		$	402			$	316
Prior service cost (credit)		9			11			(361		)		(451		)
Regulatory assets (liabilities)		$	987		$	1,028		$	41			$	(135	)
AOCI
Net loss (gain)		90			97			2				(6		)
Prior service cost (credit)		—			1			(9		)		(12		)
Total amounts recognized in regulatory assets (liabilities) and AOCI		$	1,077		$	1,126		$	34			$	(153	)
Consumers
Regulatory assets (liabilities)
Net loss		$	978		$	1,017		$	402			$	316
Prior service cost (credit)		9			11			(361		)		(451		)
Regulatory assets (liabilities)		$	987		$	1,028		$	41			$	(135	)
AOCI
Net loss		27			36			—				—
Total amounts recognized in regulatory assets (liabilities) and AOCI		$	1,014		$	1,064		$	41			$	(135	)

Schedule Of Allocation Of Plan Assets

For additional details regarding the fair value hierarchy, see Note 6, Fair Value Measurements.



In Millions
	DB Pension Plans
	December 31, 2018									December 31, 2017
	Total			Level 1			Level 2			Total			Level 1			Level 2
CMS Energy, including Consumers
Cash and short-term investments		$	242		$	242		$	—		$	21		$	21		$	—
U.S. government and agencies securities		11			—			11			4			—			4
Corporate debt		400			—			400			336			—			336
State and municipal bonds		6			—			6			9			—			9
Foreign corporate bonds		35			—			35			31			—			31
Mutual funds		552			552			—			662			662			—
		$	1,246		$	794		$	452		$	1,063		$	683		$	380
Pooled funds		1,001									1,242
Total		$	2,247								$	2,305



In Millions
	OPEB Plan
	December 31, 2018									December 31, 2017
	Total			Level 1			Level 2			Total			Level 1			Level 2
CMS Energy, including Consumers
Cash and short-term investments		$	36		$	36		$	—		$	16		$	16		$	—
U.S. government and agencies securities		2			—			2			1			—			1
Corporate debt		55			—			55			50			—			50
State and municipal bonds		1			—			1			1			—			1
Foreign corporate bonds		5			—			5			4			—			4
Common stocks		41			41			—			40			40			—
Mutual funds		594			594			—			647			647			—
		$	734		$	671		$	63		$	759		$	703		$	56
Pooled funds		546									661
Total		$	1,280								$	1,420

Schedule Of Asset Allocation

Asset Allocations: Presented in the following table are the investment components of the assets of CMS Energy’s DB Pension Plans and OPEB Plan as of December 31, 2018:



	DB Pension Plans			OPEB Plan
Equity securities		52	%		50	%
Fixed-income securities		42			31
Multi-asset investments		6			19
		100	%		100	%

Schedule Of Plan Contributions

Presented in the following table are the contributions to CMS Energy’s and Consumers’ OPEB Plan and DB Pension Plans:



In Millions
Years Ended December 31	2018			2017
CMS Energy, including Consumers
OPEB Plan		$	—		$	—
DB Pension Plans		240			—
Consumers
OPEB Plan		$	—		$	—
DB Pension Plans		234			—

Schedule Of Expected Benefit Payments

Presented in the following table are the expected benefit payments for each of the next five years and the five-year period thereafter:



In Millions
	DB Pension Plans			DB SERP			OPEB Plan
CMS Energy, including Consumers
2019		$	159		$	10		$	59
2020		162			10			61
2021		164			10			64
2022		165			10			65
2023		165			10			66
2024-2028		823			46			328
Consumers
2019		$	149		$	7		$	57
2020		152			7			59
2021		154			7			61
2022		155			7			62
2023		155			7			63
2024-2028		777			31			315

Consumers Energy Company