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Retirement Benefits (Tables)

12 Months Ended

Dec. 31, 2019

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	2019			2018
CMS Energy, including Consumers
Trust assets		$	143		$	147
ABO		149			137
Contributions		—			8
Consumers
Trust assets		$	104		$	106
ABO		107			98
Contributions		—			5

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	2019		2018		2017
CMS Energy, including Consumers
Weighted average for benefit obligations¹
Discount rate²
DB Pension Plan A	3.37	%	4.48	%	3.78	%
DB Pension Plan B	3.17		4.32		3.64
DB SERP	3.15		4.32		3.65
OPEB Plan	3.32		4.42		3.74
Rate of compensation increase
DB Pension Plan A	3.50		3.50		3.50
DB SERP	5.50		5.50		5.50
Weighted average for net periodic benefit cost¹
Service cost discount rate^2,3
DB Pension Plan A⁴	4.55		3.85
DB SERP	4.58		3.83		4.51
OPEB Plan	4.63		3.93		4.89
Interest cost discount rate^2,3
DB Pension Plan A⁴	4.08		3.39
DB Pension Plan B⁴	3.93		3.24
DB SERP	3.94		3.26		3.51
OPEB Plan	4.03		3.35		3.79
Expected long-term rate of return on plan assets⁵
DB Pension Plans	7.00		7.00		7.25
OPEB Plan	7.00		7.00		7.25
Rate of compensation increase
DB Pension Plan A⁴	3.50		3.50
DB SERP	5.50		5.50		5.50

The mortality assumption for benefit obligations was based on the Pri-2012 mortality table for 2019 and on the RP-2014 mortality table for 2018 and 2017, with projection scales MP-2019 for 2019, MP-2018 for 2018, and MP-2017 for 2017. The mortality assumption for net periodic benefit cost for 2019, 2018, and 2017 was based on the RP-2014 mortality table, with projection scales MP-2018 for 2019, MP-2017 for 2018, and MP-2016 for 2017.


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	CMS Energy and Consumers have elected to use a full-yield-curve approach in the estimation of service cost and interest cost; this approach applies individual spot rates along the yield curve to future projected benefit payments based on the time of payment.


⁴	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 cost of the previous defined benefit pension plan at December 31, 2017 were:


•	service cost discount rate of 4.53 percent


•	interest cost discount rate of 3.56 percent


•	weighted-average rate of compensation increase of 3.60 percent

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 2019. The actual return (loss) on the assets of the DB Pension Plans was 21.0 percent in 2019, (6.7) percent in 2018, and 18.0 percent in 2017.

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	2019				2018				2017				2019				2018				2017
CMS Energy, including Consumers
Net periodic cost (credit)
Service cost		$	41			$	48			$	45			$	14			$	17			$	19
Interest cost		103				95				93				41				34				51
Expected return on plan assets		(162		)		(149		)		(153		)		(88		)		(97		)		(90		)
Amortization of:
Net loss		50				76				82				26				15				29
Prior service cost (credit)		1				3				5				(62		)		(67		)		(40		)
Net periodic cost (credit)		$	33			$	73			$	72			$	(69	)		$	(98	)		$	(31	)
Consumers
Net periodic cost (credit)
Service cost		$	40			$	47			$	44			$	13			$	16			$	19
Interest cost		97				88				90				40				33				49
Expected return on plan assets		(153		)		(139		)		(149		)		(82		)		(91		)		(84		)
Amortization of:
Net loss		47				73				79				26				16				29
Prior service cost (credit)		1				3				4				(61		)		(65		)		(39		)
Net periodic cost (credit)		$	32			$	72			$	68			$	(64	)		$	(91	)		$	(26	)

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	2019				2018					2019				2018				2019				2018
CMS Energy, including Consumers
Benefit obligation at beginning of period		$	2,512			$	2,780				$	140			$	154			$	1,045			$	1,097
Service cost		41				48					—				—				14				17
Interest cost		98				90					5				5				41				34
Plan amendments		—				—					—				—				—				26
Actuarial loss (gain)		476			¹	(258		)	¹		15				(10		)		110			¹	(74		)	¹
Benefits paid		(154		)		(148		)			(10		)		(9		)		(45		)		(55		)
Benefit obligation at end of period		$	2,973			$	2,512				$	150			$	140			$	1,165			$	1,045
Plan assets at fair value at beginning of period		$	2,247			$	2,305				$	—			$	—			$	1,280			$	1,420
Actual return on plan assets		453				(150		)			—				—				273				(86		)
Company contribution		—				240					10				9				—				—
Actual benefits paid		(154		)		(148		)			(10		)		(9		)		(44		)		(54		)
Plan assets at fair value at end of period		$	2,546			$	2,247				$	—			$	—			$	1,509			$	1,280
Funded status		$	(427	)	²	$	(265	)	²		$	(150	)		$	(140	)		$	344			$	235
Consumers
Benefit obligation at beginning of period											$	101			$	112			$	1,004			$	1,053
Service cost											—				—				13				16
Interest cost											4				4				40				33
Plan amendments											—				—				—				25
Actuarial loss (gain)											11				(8		)		106			¹	(70		)	¹
Benefits paid											(7		)		(7		)		(43		)		(53		)
Benefit obligation at end of period											$	109			$	101			$	1,120			$	1,004
Plan assets at fair value at beginning of period											$	—			$	—			$	1,197			$	1,329
Actual return on plan assets											—				—				255				(80		)
Company contribution											7				7				—				—
Actual benefits paid											(7		)		(7		)		(42		)		(52		)
Plan assets at fair value at end of period											$	—			$	—			$	1,410			$	1,197
Funded status											$	(109	)		$	(101	)		$	290			$	193

The actuarial loss for 2019 for the DB Pension Plans was primarily the result of lower discount rates and lower interest rates used to calculate the value of lump-sum payments. The actuarial gain for 2018 was primarily the result of higher discount rates. The actuarial loss for 2019 for the OPEB Plan was primarily the result of lower discount rates. The actuarial gain for 2018 was primarily the result of higher discount rates.

The total funded status of the DB Pension Plans attributable to Consumers, based on an allocation of expenses, was $408 million at December 31, 2019 and $246 million at December 31, 2018.

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	2019			2018
CMS Energy, including Consumers
Non‑current assets
DB Pension Plans		$	104		$	38
OPEB Plan		344			235
Current liabilities
DB SERP		10			10
Non‑current liabilities
DB Pension Plans		531			303
DB SERP		140			130
Consumers
Non‑current assets
DB Pension Plans		$	109		$	49
OPEB Plan		290			193
Current liabilities
DB SERP		7			7
Non‑current liabilities
DB Pension Plans		517			295
DB SERP		102			94

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	2019			2018
CMS Energy, including Consumers
PBO		$	1,736		$	1,363
ABO		1,398			1,091
Fair value of plan assets		1,205			1,059

Schedule Of Net Periodic Benefit Cost Not Yet Recognized

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



In Millions
	DB Pension Plans and DB SERP						OPEB Plan
Years Ended December 31	2019			2018			2019				2018
CMS Energy, including Consumers
Regulatory assets
Net loss		$	1,114		$	978		$	308			$	402
Prior service cost (credit)		8			9			(300		)		(361		)
Regulatory assets		$	1,122		$	987		$	8			$	41
AOCI
Net loss (gain)		105			90			(6		)		2
Prior service credit		—			—			(8		)		(9		)
Total amounts recognized in regulatory assets and AOCI		$	1,227		$	1,077		$	(6	)		$	34
Consumers
Regulatory assets
Net loss		$	1,114		$	978		$	308			$	402
Prior service cost (credit)		8			9			(300		)		(361		)
Regulatory assets		$	1,122		$	987		$	8			$	41
AOCI
Net loss		36			27			—				—
Total amounts recognized in regulatory assets and AOCI		$	1,158		$	1,014		$	8			$	41

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, 2019									December 31, 2018
	Total			Level 1			Level 2			Total			Level 1			Level 2
CMS Energy, including Consumers
Cash and short-term investments		$	44		$	44		$	—		$	242		$	242		$	—
U.S. government and agencies securities		66			—			66			11			—			11
Corporate debt		493			—			493			400			—			400
State and municipal bonds		17			—			17			6			—			6
Foreign corporate bonds		33			—			33			35			—			35
Mutual funds		640			640			—			552			552			—
		$	1,293		$	684		$	609		$	1,246		$	794		$	452
Pooled funds		1,253									1,001
Total		$	2,546								$	2,247



In Millions
	OPEB Plan
	December 31, 2019									December 31, 2018
	Total			Level 1			Level 2			Total			Level 1			Level 2
CMS Energy, including Consumers
Cash and short-term investments		$	9		$	9		$	—		$	36		$	36		$	—
U.S. government and agencies securities		10			—			10			2			—			2
Corporate debt		71			—			71			55			—			55
State and municipal bonds		2			—			2			1			—			1
Foreign corporate bonds		5			—			5			5			—			5
Common stocks		55			55			—			41			41			—
Mutual funds		713			713			—			594			594			—
		$	865		$	777		$	88		$	734		$	671		$	63
Pooled funds		644									546
Total		$	1,509								$	1,280

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, 2019:



	DB Pension Plans			OPEB Plan
Equity securities		55	%		48	%
Fixed-income securities		39			33
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’ DB Pension Plans:



In Millions
Years Ended December 31	2019			2018
CMS Energy, including Consumers
DB Pension Plans		$	—		$	240
Consumers
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
2020		$	174		$	10		$	58
2021		176			10			60
2022		177			10			62
2023		177			10			63
2024		175			10			64
2025-2029		870			46			319
Consumers
2020		$	165		$	7		$	56
2021		166			7			58
2022		167			7			59
2023		167			7			60
2024		166			7			61
2025-2029		825			32			305

Consumers Energy Company