Retirement Benefits

9 Months Ended

Sep. 30, 2022

Defined Benefit Plan Disclosure [Line Items]

Retirement Benefits

Retirement Benefits

CMS Energy and Consumers provide pension, OPEB, and other retirement benefits to employees under a number of different plans.

In March 2022, CMS Energy and Consumers determined it was probable that 2022 lump-sum payments to participants under DB Pension Plan A would exceed the plan’s service cost and interest cost components of net periodic cost for the year. These lump-sum payments constitute pension plan liability settlements; once it is probable such settlements will meet the service and interest cost threshold, recognition in earnings is required. As a result, in accordance with GAAP, CMS Energy, including Consumers, performed a remeasurement of DB Pension Plan A as of March 31, 2022, June 30, 2022, and September 30, 2022. For the nine months ended September 30, 2022, CMS Energy, including Consumers, recognized a settlement loss of $19 million; of this amount, $19 million was deferred as a regulatory asset. Consumers recognized a settlement loss of $19 million, all of which was deferred as a regulatory asset. CMS Energy and Consumers will amortize the regulatory asset over eight years.

As a result of the remeasurements, the non-current asset for DB Pension Plan A increased by $69 million from December 31, 2021 at CMS Energy, with an offsetting decrease in the associated regulatory asset of $67 million and a $2 million gain to accumulated other comprehensive loss. At Consumers, the non‑current asset increased by $67 million and the associated regulatory asset decreased by $67 million.

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 benefit plans:

In Millions
	DB Pension Plans												OPEB Plan
	Three Months Ended						Nine Months Ended						Three Months Ended						Nine Months Ended
September 30	2022			2021			2022			2021			2022			2021			2022			2021
CMS Energy, including Consumers
Net periodic cost (credit)
Service cost		$	9		$	14		$	32		$	41		$	4		$	5		$	13		$	14
Interest cost		21			14			59			44			7			6			21			17
Expected return on plan assets		(51)			(51)			(155)			(155)			(29)			(28)			(87)			(82)
Amortization of:
Net loss		5			25			32			76			—			2			1			6
Prior service cost (credit)		1			1			3			3			(12)			(14)			(38)			(40)
Settlement loss		2			1			6			4			—			—			—			—
Net periodic cost (credit)		$	(13)		$	4		$	(23)		$	13		$	(30)		$	(29)		$	(90)		$	(85)
Consumers
Net periodic cost (credit)
Service cost		$	9		$	14		$	32		$	40		$	4		$	4		$	13		$	13
Interest cost		20			14			56			42			6			6			20			17
Expected return on plan assets		(48)			(49)			(147)			(147)			(26)			(26)			(80)			(77)
Amortization of:
Net loss		5			24			30			73			—			2			—			6
Prior service cost (credit)		1			1			3			3			(13)			(12)			(38)			(38)
Settlement loss		2			1			6			4			—			—			—			—
Net periodic cost (credit)		$	(11)		$	5		$	(20)		$	15		$	(29)		$	(26)		$	(85)		$	(79)

Consumers Energy Company

Defined Benefit Plan Disclosure [Line Items]

Retirement Benefits

Retirement Benefits

CMS Energy and Consumers provide pension, OPEB, and other retirement benefits to employees under a number of different plans.

In March 2022, CMS Energy and Consumers determined it was probable that 2022 lump-sum payments to participants under DB Pension Plan A would exceed the plan’s service cost and interest cost components of net periodic cost for the year. These lump-sum payments constitute pension plan liability settlements; once it is probable such settlements will meet the service and interest cost threshold, recognition in earnings is required. As a result, in accordance with GAAP, CMS Energy, including Consumers, performed a remeasurement of DB Pension Plan A as of March 31, 2022, June 30, 2022, and September 30, 2022. For the nine months ended September 30, 2022, CMS Energy, including Consumers, recognized a settlement loss of $19 million; of this amount, $19 million was deferred as a regulatory asset. Consumers recognized a settlement loss of $19 million, all of which was deferred as a regulatory asset. CMS Energy and Consumers will amortize the regulatory asset over eight years.

As a result of the remeasurements, the non-current asset for DB Pension Plan A increased by $69 million from December 31, 2021 at CMS Energy, with an offsetting decrease in the associated regulatory asset of $67 million and a $2 million gain to accumulated other comprehensive loss. At Consumers, the non‑current asset increased by $67 million and the associated regulatory asset decreased by $67 million.

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 benefit plans:

In Millions
	DB Pension Plans												OPEB Plan
	Three Months Ended						Nine Months Ended						Three Months Ended						Nine Months Ended
September 30	2022			2021			2022			2021			2022			2021			2022			2021
CMS Energy, including Consumers
Net periodic cost (credit)
Service cost		$	9		$	14		$	32		$	41		$	4		$	5		$	13		$	14
Interest cost		21			14			59			44			7			6			21			17
Expected return on plan assets		(51)			(51)			(155)			(155)			(29)			(28)			(87)			(82)
Amortization of:
Net loss		5			25			32			76			—			2			1			6
Prior service cost (credit)		1			1			3			3			(12)			(14)			(38)			(40)
Settlement loss		2			1			6			4			—			—			—			—
Net periodic cost (credit)		$	(13)		$	4		$	(23)		$	13		$	(30)		$	(29)		$	(90)		$	(85)
Consumers
Net periodic cost (credit)
Service cost		$	9		$	14		$	32		$	40		$	4		$	4		$	13		$	13
Interest cost		20			14			56			42			6			6			20			17
Expected return on plan assets		(48)			(49)			(147)			(147)			(26)			(26)			(80)			(77)
Amortization of:
Net loss		5			24			30			73			—			2			—			6
Prior service cost (credit)		1			1			3			3			(13)			(12)			(38)			(38)
Settlement loss		2			1			6			4			—			—			—			—
Net periodic cost (credit)		$	(11)		$	5		$	(20)		$	15		$	(29)		$	(26)		$	(85)		$	(79)