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Compensation and Benefit Plans (Tables)
 12 Months Ended
Dec. 31, 2014
Pension and Other Postretirement Benefits  
Employee Savings Plan Employer Contributions
The following employer contributions were made for continuing operations:
 
Edison International
 
SCE
(in millions)
Years ended December 31,
2014
$
71

 
$
70

2013
76

 
76

2012
85

 
84
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs
The following table summarizes total expense and tax benefits (expense) associated with stock based compensation:
 
Edison International
 
SCE
 
Years ended December 31,
(in millions)
2014
 
2013
 
2012
 
2014
 
2013
 
2012
Stock-based compensation expense1:
 
 
 
 
 
 
 
 
 
 
 
   Stock options
$
16

 
$
15

 
$
18

 
$
8

 
$
11

 
$
10

   Performance shares
16

 
4

 
7

 
8

 
2

 
4

   Restricted stock units
7

 
7

 
9

 
4

 
4

 
5

   Other
1

 
1

 
1

 
—

 
—

 
—

Total stock-based compensation expense
$
40

 
$
27

 
$
35

 
$
20

 
$
17

 
$
19

Income tax benefits related to stock compensation expense
$
16

 
$
11

 
$
14

 
$
8

 
$
7

 
$
8

Excess tax benefits (expense)2
15

 
5

 
(6
)
 
20

 
2

 
(13
)
1 
Reflected in "Operation and maintenance" on Edison International's and SCE's consolidated statements of income.
2 
Reflected in "Settlements of stock-based compensation, net" in the financing section of Edison International's and SCE's consolidated statements of cash flows and in "Common stock" in Edison International's consolidated balance sheets and "Additional paid-in capital" in SCE's consolidated balance sheets.
Black-Sholes Option-Pricing Model Assumptions
The Black-Scholes option-pricing model requires various assumptions noted in the following table:
 
Years ended December 31,
 
2014
 
2013
 
2012
Expected terms (in years)
6.0
 
6.2
 
6.9
Risk-free interest rate
1.8% – 2.1%
 
1.0% – 2.1%
 
1.1% – 1.7%
Expected dividend yield
2.4% – 2.7%
 
2.7% – 3.1%
 
2.8% – 3.1%
Weighted-average expected dividend yield
2.7%
 
2.8%
 
3.0%
Expected volatility
17.8% – 19.1%
 
17.7% – 18.6%
 
17.4% – 18.3%
Weighted-average volatility
18.9%
 
17.7%
 
18.3%
Summary of Stock Options Activity
The following is a summary of the status of Edison International's stock options:
 
 
 
Weighted-Average
 
 
 
Stock options
 
Exercise
Price
 
Remaining
Contractual
Term (Years)
 
Aggregate
Intrinsic Value
(in millions)
Edison International:
 
 
 
 
 
 
 
Outstanding at December 31, 2013
17,226,845

 
$
40.22

 
 
 
 

Granted
2,070,819

 
52.67

 
 
 
 

Expired
(20,841
)
 
49.95

 
 
 
 

Forfeited
(278,134
)
 
46.20

 
 
 
 

Exercised
(5,379,954
)
 
38.03

 
 
 
 

Outstanding at December 31, 2014
13,618,735

 
42.84

 
5.81
 
 

Vested and expected to vest at December 31, 2014
13,216,820

 
42.68

 
5.75
 
$
301

Exercisable at December 31, 2014
7,989,189

 
39.43

 
4.32
 
$
208

SCE:
 
 
 
 
 
 
 
Outstanding at December 31, 2013
9,045,998

 
$
40.28

 
 
 
 

Granted
1,194,281

 
53.21

 
 
 
 

Expired
(20,841
)
 
49.95

 
 
 
 

Forfeited
(205,286
)
 
47.27

 
 
 
 

Exercised
(3,210,425
)
 
38.54

 
 
 
 

Transfers, net
(801,567
)
 
37.95

 
 
 
 
Outstanding at December 31, 2014
6,002,160

 
43.82

 
6.29
 
 

Vested and expected to vest at December 31, 2014
5,762,299

 
43.63

 
6.22
 
$
126

Exercisable at December 31, 2014
2,997,941

 
39.61

 
4.63
 
$
78
Schedule of Unrecognized Compensation Expense
At December 31, 2014, total unrecognized compensation cost related to stock options and the weighted-average period the cost is expected to be recognized are as follows:
(in millions)
Edison International
 
SCE
Unrecognized compensation cost, net of expected forfeitures
$
13

 
$
9

Weighted-average period (in years)
2.3

 
2.4
Supplemental Data on Stock-based Compensation
Supplemental Data on Stock Options
 
Edison International
 
SCE
 
Years ended December 31,
(in millions, except per award amounts)
2014
 
2013
 
2012
 
2014
 
2013
 
2012
Stock options:
 
 
 
 
 
 
 
 
 
 
 
Weighted average grant date fair value per option granted
$
7.26

 
$
5.40

 
$
5.22

 
$
7.34

 
$
5.38

 
$
5.22

Fair value of options vested
17

 
17

 
17

 
9

 
10

 
10

Cash used to purchase shares to settle options
300

 
199

 
169

 
181

 
130

 
96

Cash from participants to exercise stock options
205

 
140

 
101

 
125

 
92

 
59

Value of options exercised
95

 
59

 
68

 
56

 
38

 
37

Tax benefits from options exercised
39

 
24

 
27

 
23

 
15

 
15
Summary of Nonvested Share Activity
The following is a summary of the status of Edison International's nonvested performance shares:
 
Equity Awards
 
Liability Awards
 
Shares
 
Weighted-Average
Grant Date
Fair Value
 
Shares
 
Weighted-Average
Fair Value
Edison International:
 
 
 
 
 
 
 
Nonvested at December 31, 2013
156,697

 
$
51.17

 
156,304

 
$
51.72

Granted
61,599

 
61.10

 
61,448

 
 

Forfeited
(4,672
)
 
54.32

 
(4,664
)
 
 
Vested1
(85,324
)
 
51.42

 
(85,113
)
 
 

Nonvested at December 31, 2014
128,300

 
55.66

 
127,975

 
92.92

SCE:
 
 
 
 
 
 
 
Nonvested at December 31, 2013
90,661

 
$
51.19

 
90,357

 
$
51.22

Granted
35,516

 
61.85

 
35,390

 
 

Forfeited
(4,668
)
 
54.37

 
(4,664
)
 
 
Vested1
(44,293
)
 
51.47

 
(44,150
)
 
 

Affiliate transfers, net
(5,419
)
 
51.44

 
(5,413
)
 
 
Nonvested at December 31, 2014
71,797

 
56.06

 
71,520

 
92.33


1 
Relates to performance shares that will be paid in 2015 as performance targets were met at December 31, 2014
Summary of Nonvested Restricted Stock Units Activity
The following is a summary of the status of Edison International's nonvested restricted stock units:
 
Edison International
 
SCE
 
Restricted
Stock Units
 
Weighted-Average
Grant Date
Fair Value
 
Restricted
Stock Units
 
Weighted-Average
Grant Date
Fair Value
Nonvested at December 31, 2013
539,689

 
$
42.70

 
292,839

 
$
42.98

Granted
142,704

 
52.67

 
82,114

 
53.17

Forfeited
(10,513
)
 
48.21

 
(10,509
)
 
48.23

Vested
(238,561
)
 
38.83

 
(115,772
)
 
38.98

Affiliate transfers, net
—

 
—

 
(17,308
)
 
44.23

Nonvested at December 31, 2014
433,319

 
47.89

 
231,364

 
48.26
Accrued Severance Liability Workforce Reduction
In 2012, SCE commenced a broad-based effort to reduce its costs and to improve its operational and service excellence. As part of this effort, SCE made a series of workforce reductions. In addition, in June 2013, SCE announced plans to permanently retire San Onofre, which resulted in additional workforce reductions. During 2014, SCE increased the estimated impact for workforce reductions related to transferring certain information technology activities to third parties and revised its estimate of remaining educational benefits expected to be incurred under the severance program. Through December 31, 2014, SCE's share of estimated cash severance for all of these workforce reductions totaled $215 million. The following table provides a summary of changes in the accrued severance liability associated with these reductions:
(in millions)
 
 
Balance at January 1, 2014
 
$
54

Additions
 
3

Payments
 
(22
)
Balance at December 31, 2014
 
$
35
Pension Plans  
Pension and Other Postretirement Benefits  
Changes in Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status of Plan
Information on pension plan assets and benefit obligations for continuing and discontinued operations is shown below.
 
Edison International
 
SCE
 
Years ended December 31,
(in millions)
2014
 
2013
 
2014
 
2013
Change in projected benefit obligation
 
 
 
 
 
 
 
Projected benefit obligation at beginning of year
$
4,178

 
$
4,948

 
$
3,721

 
$
4,434

Service cost
133

 
174

 
124

 
154

Interest cost
181

 
182

 
159

 
164

Actuarial (gain) loss
469

 
(330
)
 
386

 
(277
)
Curtailment gain
(5
)
 
—

 
—

 
—

Benefits paid
(449
)
 
(796
)
 
(391
)
 
(754
)
Other
10

 
—

 
—

 
—

Projected benefit obligation at end of year
$
4,517

 
$
4,178

 
$
3,999

 
$
3,721

Change in plan assets
 
 
 
 
 
 
 
Fair value of plan assets at beginning of year
$
3,477

 
$
3,542

 
$
3,236

 
$
3,320

Actual return on plan assets
257

 
540

 
240

 
505

Employer contributions
169

 
191

 
132

 
165

Benefits paid
(449
)
 
(796
)
 
(391
)
 
(754
)
Fair value of plan assets at end of year
$
3,454

 
$
3,477

 
$
3,217

 
$
3,236

Funded status at end of year
$
(1,063
)
 
$
(701
)
 
$
(782
)
 
$
(485
)
Amounts recognized in the consolidated balance sheets consist of 1:
 
 
 
 
 
 
 
Current liabilities
$
(27
)
 
$
(15
)
 
$
(5
)
 
$
(5
)
Long-term liabilities
(1,036
)
 
(686
)
 
(777
)
 
(480
)
 
$
(1,063
)
 
$
(701
)
 
$
(782
)
 
$
(485
)
Amounts recognized in accumulated other comprehensive loss consist of:
 
 
 
 
 
 
 
Net loss
$
102

 
$
30

 
$
31

 
$
33

Amounts recognized as a regulatory asset:
 
 
 
 
 
 
 
Prior service cost
$
20

 
$
25

 
$
20

 
$
25

Net loss
640

 
328

 
640

 
328

 
$
660

 
$
353

 
$
660

 
$
353

Total not yet recognized as expense
$
762

 
$
383

 
$
691

 
$
386

Accumulated benefit obligation at end of year
$
4,356

 
$
4,015

 
$
3,881

 
$
3,599

Pension plans with an accumulated benefit obligation in excess of plan assets:
 
 
 
 
 
 
 
Projected benefit obligation
$
4,517

 
$
4,178

 
$
3,999

 
$
3,721

Accumulated benefit obligation
4,356

 
4,015

 
3,881

 
3,599

Fair value of plan assets
3,454

 
3,477

 
3,217

 
3,236

Weighted-average assumptions used to determine obligations at end of year:
 
 
 
 
 
 
 
Discount rate
3.85
%
 
4.75
%
 
3.85
%
 
4.75
%
Rate of compensation increase
4.0
%
 
4.0
%
 
4.0
%
 
4.0
%
Expense Components for Plans
Pension expense components for continuing operations are:
 
Edison International
 
SCE
 
Years ended December 31,
(in millions)
2014
 
2013
 
2012
 
2014
 
2013
 
2012
Service cost
$
133

 
$
162

 
$
163

 
$
128

 
$
159

 
$
160

Interest cost
181

 
170

 
183

 
164

 
167

 
180

Expected return on plan assets
(229
)
 
(222
)
 
(217
)
 
(213
)
 
(222
)
 
(217
)
Settlement costs1
45

 
87

 
5

 
42

 
85

 
4

Curtailment gain
(4
)
 
—

 
—

 
—

 
—

 
—

Amortization of prior service cost
5

 
5

 
3

 
5

 
5

 
3

Amortization of net loss2
12

 
39

 
61

 
7

 
35

 
57

Expense under accounting standards
143

 
241

 
198

 
133

 
229

 
187

Regulatory adjustment (deferred)
8

 
(53
)
 
(19
)
 
8

 
(53
)
 
(19
)
Total expense recognized
$
151

 
$
188

 
$
179

 
$
141

 
$
176

 
$
168


1 
Includes the amount of net loss reclassified from other comprehensive loss. The amount reclassified for Edison International was $3 million and $2 million for the years ended December 31, 2014 and 2013, respectively.
2 
Includes the amount of net loss reclassified from other comprehensive loss. The amount reclassified for Edison International and SCE was $9 million and $4 million, respectively, for the year ended December 31, 2014. The amount reclassified for Edison International and SCE was $11 million and $7 million, respectively, for the year ended December 31, 2013.
Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income
Other changes in pension plan assets and benefit obligations recognized in other comprehensive loss for continuing operations:
 
Edison International
 
SCE
 
Years ended December 31,
(in millions)
2014
 
2013
 
2012
 
2014
 
2013
 
2012
Net (gain) loss
$
85

 
$
(33
)
 
$
36

 
$
37

 
$
(24
)
 
$
20

Amortization of net loss and other
(13
)
 
(13
)
 
(10
)
 
(4
)
 
(7
)
 
(6
)
Total recognized in other comprehensive loss
$
72

 
$
(46
)
 
$
26

 
$
33

 
$
(31
)
 
$
14

Total recognized in expense and other comprehensive loss
$
223

 
$
142

 
$
205

 
$
174

 
$
145

 
$
182
Schedule of Amounts in Accumulated Other Comprehensive Loss to be Recognized During 2013
The estimated pension amounts that will be amortized to expense in 2015 for continuing operations are as follows:
(in millions)
Edison International
 
SCE
Unrecognized net loss to be amortized1
$
34

 
$
30

Unrecognized prior service cost to be amortized
5

 
5


1 
The amount of net loss expected to be reclassified from other comprehensive loss for Edison International's continuing operations and SCE is $12 million and $8 million, respectively.
Schedule of Assumptions Used
Edison International and SCE used the following weighted-average assumptions to determine pension expense for continuing operations:
 
Years ended December 31,
 
2014
 
2013
 
2012
Discount rate
4.5
%
 
4.13
%
 
4.5
%
Rate of compensation increase
4.0
%
 
4.5
%
 
4.5
%
Expected long-term return on plan assets
7.0
%
 
7.0
%
 
7.5
%
Schedule of Expected Benefit Payments
The following benefit payments, which reflect expected future service, are expected to be paid:
 
Edison International
 
SCE
(in millions)
Years ended December 31,
2015
$
489

 
$
448

2016
302

 
261

2017
302

 
263

2018
303

 
273

2019
316

 
281

2020 – 2024
1,557

 
1,414
Schedule of Changes in Fair Value of Level 3 Investments
The following table sets forth a summary of changes in the fair value of Edison International's and SCE's Level 3 investments:
(in millions)
2014
 
2013
Fair value, net at beginning of period
$
390

 
$
414

Actual return on plan assets:
 
 
 
Relating to assets still held at end of period
114

 
61

Relating to assets sold during the period
(44
)
 
10

Purchases
13

 
45

Dispositions
(184
)
 
(140
)
Transfers in and/or out of Level 3
—

 
—

Fair value, net at end of period
$
289

 
$
390
Postretirement Benefits Other than Pension Plan Assets by Hierarchy Levels
The following table sets forth the Master Trust investments for Edison International and SCE that were accounted for at fair value as of December 31, 2014 by asset class and level within the fair value hierarchy:
(in millions)
Level 1
 
Level 2
 
Level 3
 
Total
U.S. government and agency securities1
$
140

 
$
329

 
$
—

 
$
469

Corporate stocks2
716

 
14

 
—

 
730

Corporate bonds3
—

 
801

 
—

 
801

Common/collective funds4
—

 
524

 
—

 
524

Partnerships/joint ventures5
—

 
110

 
289

 
399

Other investment entities6
—

 
278

 
—

 
278

Registered investment companies7
113

 
30

 
—

 
143

Interest-bearing cash
10

 
—

 
—

 
10

Other
5

 
100

 
—

 
105

Total
$
984

 
$
2,186

 
$
289

 
$
3,459

Receivables and payables, net
 

 
 

 
 

 
(5
)
Net plan assets available for benefits
 

 
 

 
 

 
$
3,454

SCE's share of net plan assets
 
 
 
 
 
 
$
3,217

The following table sets forth the Master Trust investments that were accounted for at fair value as of December 31, 2013 by asset class and level within the fair value hierarchy:
(in millions)
Level 1

 
Level 2

 
Level 3

 
Total

U.S. government and agency securities1
$
195

 
$
471

 
$
—

 
$
666

Corporate stocks2
653

 
—

 
—

 
653

Corporate bonds3
—

 
553

 
—

 
553

Common/collective funds4
—

 
546

 
—

 
546

Partnerships/joint ventures5
—

 
148

 
390

 
538

Other investment entities6
—

 
282

 
—

 
282

Registered investment companies7
112

 
81

 
—

 
193

Interest-bearing cash
12

 
—

 
—

 
12

Other
6

 
109

 
—

 
115

Total
$
978

 
$
2,190

 
$
390

 
$
3,558

Receivables and payables, net
 

 
 

 
 

 
(81
)
Net plan assets available for benefits
 

 
 

 
 

 
$
3,477

SCE's share of net plan assets
 
 
 
 
 
 
$
3,236

1 
Level 1 U.S. government and agency securities are U.S. treasury bonds and notes. Level 2 primarily relates to the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation.
2 
Corporate stocks are diversified. For 2014 and 2013, respectively, performance is primarily benchmarked against the Russell Indexes (59% and 51%) and Morgan Stanley Capital International (MSCI) index (41% and 49%).
3 
Corporate bonds are diversified. At December 31, 2014 and 2013, respectively, this category includes $102 million and $78 million for collateralized mortgage obligations and other asset backed securities of which $15 million and $15 million are below investment grade.
4 
At December 31, 2014 and 2013, respectively, the common/collective assets were invested in equity index funds that seek to track performance of the Standard and Poor's (S&P 500) Index (32% and 27%), Russell 1000 indexes (18% and 28%) and the MSCI Europe, Australasia and Far East (EAFE) Index (20% and 15%). A non-index U.S. equity fund representing 27% and 23% of this category for 2014 and 2013, respectively, is actively managed. Another fund representing 3% and 6% of this category for 2014 and 2013, respectively, is a global asset allocation fund.
5 
Partnerships/joint venture Level 2 investments consist primarily of a partnership which invests in publicly traded fixed income securities, primarily from the banking and finance industry and U.S. government agencies. At December 31, 2014 and 2013, respectively, approximately 55% and 64% of the Level 3 partnerships are invested in (1) asset backed securities, including distressed mortgages and (2) commercial and residential loans and debt and equity of banks. The remaining Level 3 partnerships are invested in small private equity and venture capital funds. Investment strategies for these funds include branded consumer products, early stage technology, California geographic focus, and diversified US and non-US fund-of-funds.
6 
Other investment entities were primarily invested in (1) emerging market equity securities, (2) a hedge fund that invests through liquid instruments in a global diversified portfolio of equity, fixed income, interest rate, foreign currency and commodities markets, and (3) domestic mortgage backed securities.
7 
Level 1 of registered investment companies primarily consisted of a global equity mutual fund which seeks to outperform the MSCI World Total Return Index. Level 2 primarily consisted of a short-term bond fund.
Postretirement Benefits Other Than Pensions  
Pension and Other Postretirement Benefits  
Changes in Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status of Plan
Information on PBOP Plan assets and benefit obligations is shown below:
 
Edison International
 
SCE
 
Years ended December 31,
(in millions)
2014
 
2013
 
2014
 
2013
Change in benefit obligation
 
 
 
 
 
 
 
Benefit obligation at beginning of year
$
2,220

 
$
2,460

 
$
2,211

 
$
2,452

Service cost
40

 
49

 
40

 
48

Interest cost
117

 
98

 
117

 
97

Special termination benefits
3

 
11

 
3

 
11

Actuarial (gain) loss
582

 
(313
)
 
582

 
(312
)
Plan participants' contributions
19

 
18

 
19

 
18

Benefits paid
(197
)
 
(103
)
 
(197
)
 
(103
)
Benefit obligation at end of year
$
2,784

 
$
2,220

 
$
2,775

 
$
2,211

Change in plan assets
 
 
 
 
 
 
 
Fair value of plan assets at beginning of year
$
2,065

 
$
1,800

 
$
2,065

 
$
1,800

Actual return on assets
180

 
317

 
180

 
317

Employer contributions
19

 
33

 
19

 
33

Plan participants' contributions
19

 
18

 
19

 
18

Benefits paid
(197
)
 
(103
)
 
(197
)
 
(103
)
Fair value of plan assets at end of year
$
2,086

 
$
2,065

 
$
2,086

 
$
2,065

Funded status at end of year
$
(698
)
 
$
(155
)
 
$
(689
)
 
$
(146
)
Amounts recognized in the consolidated balance sheets consist of:
 
 
 
 
 
 
 
Current liabilities
$
(15
)
 
$
(17
)
 
$
(15
)
 
$
(16
)
Long-term liabilities
(683
)
 
(138
)
 
(674
)
 
(130
)
 
$
(698
)
 
$
(155
)
 
$
(689
)
 
$
(146
)
Amounts recognized in accumulated other comprehensive loss consist of:
 
 
 
 
 
 
 
    Net loss
$
4

 
$
4

 
$
—

 
$
—

Amounts recognized as a regulatory asset (liability):
 
 
 
 
 
 
 
Prior service credit
$
(19
)
 
$
(54
)
 
$
(19
)
 
$
(54
)
Net loss
577

 
69

 
577

 
69

 
$
558

 
$
15

 
$
558

 
$
15

Total not yet recognized as expense
$
562

 
$
19

 
$
558

 
$
15

Weighted-average assumptions used to determine obligations at end of year:
 
 
 
 
 
 
 
Discount rate
4.16
%
 
5.0
%
 
4.16
%
 
5.0
%
Assumed health care cost trend rates:
 
 
 
 
 
 
 
Rate assumed for following year
7.75
%
 
7.75
%
 
7.75
%
 
7.75
%
Ultimate rate
5.0
%
 
5.0
%
 
5.0
%
 
5.0
%
Year ultimate rate reached
2021

 
2020

 
2021

 
2020
Expense Components for Plans
PBOP expense components for continuing operations are:
 
Edison International
 
SCE
 
Years ended December 31,
(in millions)
2014
 
2013
 
2012
 
2014
 
2013
 
2012
Service cost
$
40

 
$
49

 
$
47

 
$
40

 
$
48

 
$
47

Interest cost
117

 
98

 
108

 
117

 
97

 
108

Expected return on plan assets
(108
)
 
(114
)
 
(108
)
 
(108
)
 
(114
)
 
(109
)
Special termination benefits1
3

 
11

 
2

 
3

 
11

 
2

Amortization of prior service credit
(36
)
 
(36
)
 
(35
)
 
(35
)
 
(35
)
 
(35
)
Amortization of net loss
6

 
24

 
39

 
5

 
24

 
39

Total expense
$
22

 
$
32

 
$
53

 
$
22

 
$
31

 
$
52


1 
Due to the reduction in workforce, SCE has incurred costs for extended retiree health care coverage.
Schedule of Amounts in Accumulated Other Comprehensive Loss to be Recognized During 2013
The estimated PBOP amounts that will be amortized to expense in 2015 for continuing operations are as follows:
(in millions)
Edison International
 
SCE
Unrecognized net loss to be amortized
$
23

 
$
23

Unrecognized prior service credit to be amortized
(12
)
 
(12
)
Schedule of Assumptions Used
Edison International and SCE used the following weighted-average assumptions to determine PBOP expense for continuing operations:
 
Years ended December 31,
 
2014
 
2013
 
2012
Discount rate
5.0
%
 
4.25
%
 
4.75
%
Expected long-term return on plan assets
5.5
%
 
6.7
%
 
7.0
%
Assumed health care cost trend rates:
 
 
 
 
 
Current year
7.8
%
 
8.5
%
 
9.5
%
Ultimate rate
5.0
%
 
5.0
%
 
5.25
%
Year ultimate rate reached
2020

 
2020

 
2019
Schedule of Effect of One-Percentage-Point Change in Assumed Health Care Cost Trend Rate
A one-percentage-point change in assumed health care cost trend rate would have the following effects on continuing operations:
 
Edison International
 
SCE
(in millions)
One-Percentage-Point Increase
 
One-Percentage-Point Decrease
 
One-Percentage-Point Increase
 
One-Percentage-Point Decrease
Effect on accumulated benefit obligation as of December 31, 2014
$
335

 
$
(271
)
 
$
334

 
$
(270
)
Effect on annual aggregate service and interest costs
15

 
(12
)
 
15

 
(12
)
Schedule of Expected Benefit Payments
The following benefit payments are expected to be paid:
 
Edison International
 
SCE
(in millions)
Years ended December 31,
2015
$
108

 
$
108

2016
114

 
113

2017
119

 
119

2018
124

 
124

2019
128

 
128

2020 – 2024
707

 
705
Schedule of Changes in Fair Value of Level 3 Investments
The following table sets forth a summary of changes in the fair value of PBOP Level 3 investments:
(in millions)
2014
 
2013
Fair value, net at beginning of period
$
164

 
$
166

Actual return on plan assets
 
 
 
Relating to assets still held at end of period
18

 
24

Relating to assets sold during the period
(1
)
 
5

Purchases
9

 
23

Dispositions
(85
)
 
(54
)
Transfers in and/or out of Level 3
—

 
—

Fair value, net at end of period
$
105

 
$
164
Postretirement Benefits Other than Pension Plan Assets by Hierarchy Levels
The following table sets forth the VEBA Trust assets for SCE that were accounted for at fair value as of December 31, 2014 by asset class and level within the fair value hierarchy:
(in millions)
Level 1
 
Level 2
 
Level 3
 
Total
Common/collective funds1
$
—

 
$
431

 
$
—

 
$
431

Corporate stocks2
250

 
—

 
—

 
250

Corporate notes and bonds3
—

 
883

 
—

 
883

Partnerships4
—

 
19

 
105

 
124

U.S. government and agency securities5
207

 
36

 
—

 
243

Registered investment companies6
64

 
5

 
—

 
69

Interest bearing cash
29

 
—

 
—

 
29

Other7
5

 
125

 
—

 
130

Total
$
555

 
$
1,499

 
$
105

 
$
2,159

Receivables and payables, net
 

 
 

 
 

 
(73
)
Combined net plan assets available for benefits
 

 
 

 
 

 
$
2,086

The following table sets forth the VEBA Trust assets for SCE that were accounted for at fair value as of December 31, 2013 by asset class and level within the fair value hierarchy:
(in millions)
Level 1
 
Level 2
 
Level 3
 
Total
Common/collective funds1
$
—

 
$
863

 
$
—

 
$
863

Corporate stocks2
451

 
—

 
—

 
451

Corporate notes and bonds3
—

 
250

 
—

 
250

Partnerships4
—

 
20

 
164

 
184

U.S. government and agency securities5
118

 
36

 
—

 
154

Registered investment companies6
52

 
5

 
—

 
57

Interest bearing cash
19

 
—

 
—

 
19

Other7
7

 
78

 
—

 
85

Total
$
647

 
$
1,252

 
$
164

 
$
2,063

Receivables and payables, net
 

 
 

 
 

 
2

Combined net plan assets available for benefits
 

 
 

 
 

 
$
2,065

1 
At December 31, 2014 and 2013, respectively, 38% and 60% of the common/collective assets are invested in a large cap index fund which seeks to track performance of the Russell 1000 index. 41% and 23% of the assets in this category are in index funds which seek to track performance in the MSCI Europe, Australasia and Far East (EAFE) Index. 4% and 6% of this category are invested in a privately managed bond fund and 17% and 7% in a fund which invests in equity securities the fund manager believes are undervalued.
2 
Corporate stock performance is primarily benchmarked against the Russell Indexes (47% and 50%) and the MSCI All Country World (ACWI) index (53% and 50%) for 2014 and 2013, respectively.
3 
Corporate notes and bonds are diversified and include approximately $31 million and $29 million for commercial collateralized mortgage obligations and other asset backed securities at December 31, 2014 and 2013, respectively.
4 
At December 31, 2014 and 2013, respectively, 50% and 78% of the Level 3 partnerships category is invested in (1) asset backed securities including distressed mortgages, (2) distressed companies and (3) commercial and residential loans and debt and equity of banks.
5 
Level 1 U.S. government and agency securities are U.S. treasury bonds and notes. Level 2 primarily relates to the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association.
6 
Level 1 registered investment companies consist of an investment grade corporate bond mutual fund and a money market fund.
7 
Other includes $111 million and $76 million of municipal securities at December 31, 2014 and 2013, respectively.