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Retirement Benefits (All Registrants)
 12 Months Ended
Dec. 31, 2019
Retirement Benefits [Abstract]  
Retirement Benefits (All Registrants) Retirement Benefits (All Registrants)
Exelon sponsors defined benefit pension plans and OPEB plans for essentially all current employees. Substantially all non-union employees and electing union employees hired on or after January 1, 2001 participate in cash balance pension plans. Effective January 1, 2009, substantially all newly-hired union-represented employees participate in cash balance pension plans. Effective February 1, 2018, most newly-hired Generation and BSC non-represented, non-craft, employees are not eligible for pension benefits, and will instead be eligible to receive an enhanced non-discretionary employer contribution in an Exelon defined contribution savings plan. Effective January 1, 2018, most newly-hired non-represented, non-craft, employees are not eligible for OPEB benefits and employees represented by Local 614 are not eligible for retiree health care benefits.
Effective January 1, 2019, Exelon merged the Exelon Corporation Cash Balance Pension Plan (CBPP) into the Exelon Corporation Retirement Program (ECRP). The merging of the plans did not change the benefits offered to the plan participants and, thus, had no impact on Exelon's pension obligation. However, beginning in 2019, actuarial losses and gains related to the CBPP and ECRP are amortized over participants’ average remaining service period of the merged ECRP rather than each individual plan.
The table below shows the pension and OPEB plans in which employees of each operating company participated at December 31, 2019:
 
 
Operating Company(e)
Name of Plan:
 
Generation
 
ComEd
 
PECO
 
BGE
 
PHI
 
Pepco
 
DPL
 
ACE
Qualified Pension Plans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exelon Corporation Retirement Program(a)
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
Exelon Corporation Pension Plan for Bargaining Unit Employees(a)
 
X
  
X
  
 
 
 
 
 
 
 
 
 
 
 
Exelon New England Union Employees Pension Plan(a)
 
X
  
 
 
 
 
 
 
 
 
 
 
 
 
 
Exelon Employee Pension Plan for Clinton, TMI and Oyster Creek(a)
 
X
  
X
  
X
 
 
 
X
 
 
 
 
 
X
Pension Plan of Constellation Energy Group, Inc.(b)
 
X
  
X
 
X
 
X
  
X
 
X
 
X
 
 
Pension Plan of Constellation Energy Nuclear Group, LLC(c)
 
X
 
X
 
 
 
X
 
X
 
 
 
 
 
 
Nine Mile Point Pension Plan(c)
 
X
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Constellation Mystic Power, LLC Union Employees Pension Plan Including Plan A and Plan B(b)
 
X
  
 
 
 
 
 
 
 
 
 
 
 
 
 
Pepco Holdings LLC Retirement Plan(d)
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
Non-Qualified Pension Plans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exelon Corporation Supplemental Pension Benefit Plan and 2000 Excess Benefit Plan(a)
 
X
  
X
  
X
  
 
 
X
 
 
 
 
 
 
Exelon Corporation Supplemental Management Retirement Plan(a)
 
X
  
X
  
X
  
X
 
X
 
X
 
 
 
X
Constellation Energy Group, Inc. Senior Executive Supplemental Plan(b)
 
X
  
 
 
 
 
X
  
 
 
 
 
 
 
 
Constellation Energy Group, Inc. Supplemental Pension Plan(b)
 
X
  
 
 
 
 
X
  
 
 
 
 
 
 
 
Constellation Energy Group, Inc. Benefits Restoration Plan(b)
 
X
  
X
 
 
 
X
  
X
 
 
 
 
 
 
Constellation Energy Nuclear Plan, LLC Executive Retirement Plan(c) 
 
X
 
 
 
 
 
 
 
X
 
 
 
 
 
 
Constellation Energy Nuclear Plan, LLC Benefits Restoration Plan(c)
 
X
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Baltimore Gas & Electric Company Executive Benefit Plan(b)
 
X
  
 
 
 
 
X
  
 
 
 
 
 
 
 
Baltimore Gas & Electric Company Manager Benefit Plan(b)
 
X
  
X
 
 
 
X
  
 
 
 
 
 
 
 
Pepco Holdings LLC 2011 Supplemental Executive Retirement Plan(d)
 
 
 
 
 
 
 
 
 
X
 
X
 
X
 
X
Conectiv Supplemental Executive Retirement Plan (d)
 
X
 
 
 
 
 
 
 
X
 
 
 
X
 
X
Pepco Holdings LLC Combined Executive Retirement Plan (d)
 
 
 
 
 
 
 
 
 
X
 
X
 
 
 
 
Atlantic City Electric Director Retirement Plan (d)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
X
 
 
Operating Company(e)
Name of Plan:
 
Generation
 
ComEd
 
PECO
 
BGE
 
PHI
 
Pepco
 
DPL
 
ACE
OPEB Plans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PECO Energy Company Retiree Medical Plan(a)
 
X
  
X
 
X
  
X
 
X
 
X
 
X
 
X
Exelon Corporation Health Care Program(a)
 
X
  
X
  
X
 
X
 
X
 
X
 
 
 
X
Exelon Corporation Employees’ Life Insurance Plan(a)
 
X
  
X
  
X
  
X
 
 
 
 
 
 
 
 
Exelon Corporation Health Reimbursement Arrangement Plan(a)
 
X
  
X
  
X
  
X
 
 
 
 
 
 
 
 
Constellation Energy Group, Inc. Retiree Medical Plan(b)
 
X
  
X
 
X
 
X
  
X
 
X
 
 
 
 
Constellation Energy Group, Inc. Retiree Dental Plan(b)
 
X
  
 
 
 
 
X
  
 
 
 
 
 
 
 
Constellation Energy Group, Inc. Employee Life Insurance Plan and Family Life Insurance Plan(b)
 
X
  
X
 
X
 
X
  
X
 
X
 
 
 
 
Constellation Mystic Power, LLC
Post-Employment Medical Account Savings Plan(b)
 
X
  
 
 
 
 
 
 
 
 
 
 
 
 
 
Exelon New England Union Post-Employment Medical Savings Account Plan(a)
 
X
  
 
 
 
 
 
 
 
 
 
 
 
 
 
Retiree Medical Plan of Constellation Energy Nuclear Group LLC(c)
 
X
 
 
 
 
 
X
 
 
 
X
 
 
 
 
Retiree Dental Plan of Constellation Energy Nuclear Group LLC(c)
 
X
 
 
 
 
 
X
 
 
 
X
 
 
 
 
Nine Mile Point Nuclear Station, LLC Medical Care and Prescription Drug Plan for Retired Employees(c)
 
X
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pepco Holdings LLC Welfare Plan for Retirees(d)
 
X
 
X
 
X
 
X
 
X
 
X
 
X
 
X
__________
(a)
These plans are collectively referred to as the legacy Exelon plans.
(b)
These plans are collectively referred to as the legacy Constellation Energy Group (CEG) Plans.
(c)
These plans are collectively referred to as the legacy CENG plans.
(d)
These plans are collectively referred to as the legacy PHI plans.
(e)
Employees generally remain in their legacy benefit plans when transferring between operating companies.
Exelon’s traditional and cash balance pension plans are intended to be tax-qualified defined benefit plans. Exelon has elected that the trusts underlying these plans be treated as qualified trusts under the IRC. If certain conditions are met, Exelon can deduct payments made to the qualified trusts, subject to certain IRC limitations.
Benefit Obligations, Plan Assets and Funded Status
During the first quarter of 2019, Exelon received an updated valuation of its pension and OPEB to reflect actual census data as of January 1, 2019. This valuation resulted in an increase to the pension and OPEB obligations of $75 million and $36 million, respectively. Additionally, accumulated other comprehensive loss increased by $39 million (after-tax) and regulatory assets and liabilities increased by $53 million and decreased by $5 million, respectively.
The following tables provide a rollforward of the changes in the benefit obligations and plan assets of Exelon for the most recent two years for all plans combined:
 
Pension Benefits
 
OPEB
 
2019
 
2018
 
2019
 
2018
Change in benefit obligation:
 
 
 
 
 
 
 
Net benefit obligation at beginning of year
$
20,692

 
$
22,337

 
$
4,369

 
$
4,856

Service cost
357

 
405


93

 
112

Interest cost
883

 
802


188

 
175

Plan participants’ contributions
—

 
—

 
44

 
45

Actuarial (gain) loss(a)
2,322

 
(1,561
)
 
250

 
(540
)
Plan amendments
68

 
(4
)
 
—

 
—

Curtailments
(3
)
 
—

 
—

 
—

Settlements
(35
)
 
(48
)

(4
)
 
(4
)
Contractual termination benefits
1

 
—

 
—

 
—

Gross benefits paid
(1,417
)
 
(1,239
)

(282
)
 
(275
)
Net benefit obligation at end of year
$
22,868

 
$
20,692

 
$
4,658

 
$
4,369

 
Pension Benefits
 
OPEB
 
2019
 
2018
 
2019
 
2018
Change in plan assets:
 
 
 
 
 
 
 
Fair value of net plan assets at beginning of year
$
16,678

 
$
18,573

 
$
2,408

 
$
2,732

Actual return on plan assets
3,008

 
(945
)
 
324

 
(136
)
Employer contributions
356


337


51


46

Plan participants’ contributions
—

 
—

 
44

 
45

Gross benefits paid
(1,417
)

(1,239
)

(282
)

(275
)
Settlements
(35
)

(48
)

(4
)

(4
)
Fair value of net plan assets at end of year
$
18,590

 
$
16,678

 
$
2,541

 
$
2,408

__________
(a)
The pension actuarial loss in 2019 primarily reflects a decrease in the discount rate. The OPEB actuarial loss in 2019 primarily reflects a decrease in the discount rate. The pension actuarial gain in 2018 primarily reflects an increase in the discount rate. The OPEB actuarial gain in 2018 primarily reflects an increase in the discount rate and favorable health care claims experience.
Exelon presents its benefit obligations and plan assets net on its balance sheet within the following line items:
 
Pension Benefits
 
OPEB
 
2019
 
2018
 
2019
 
2018
Other current liabilities
$
31

 
$
26

 
$
41

 
$
33

Pension obligations
4,247


3,988


—


—

Non-pension postretirement benefit obligations
—

 
—

 
2,076


1,928

Unfunded status (net benefit obligation less plan assets)
$
4,278


$
4,014


$
2,117


$
1,961


The following table provides the accumulated benefit obligation (ABO) and fair value of plan assets for all pension plans with an ABO in excess of plan assets. Information for pension and OPEB plans with projected benefit obligations (PBO) and accumulated postretirement benefit obligation (APBO), respectively, in excess of plan assets has been disclosed in the Obligations and Plan Assets table above as all pension and OPEB plans are underfunded.
ABO in excess of plan assets
Exelon
 
2019
 
2018
Accumulated benefit obligation
21,727

 
19,656

Fair value of net plan assets
18,590

 
16,678


Components of Net Periodic Benefit Costs
The majority of the 2019 pension benefit cost for the Exelon-sponsored plans is calculated using an expected long-term rate of return on plan assets of 7.00% and a discount rate of 4.31%. The majority of the 2019 OPEB cost is calculated using an expected long-term rate of return on plan assets of 6.67% for funded plans and a discount rate of 4.30%.
A portion of the net periodic benefit cost for all plans is capitalized within the Consolidated Balance Sheets. The following tables present the components of Exelon’s net periodic benefit costs, prior to capitalization, for the years ended December 31, 2019, 2018 and 2017.
 
Pension Benefits
 
OPEB
 
2019
 
2018
 
2017(a)
 
2019
 
2018
 
2017(a)
Components of net periodic benefit cost:
 
 
 
 
 
 
 
 
 
 
 
Service cost
$
357


$
405


$
387


$
93


$
112


$
106

Interest cost
883


802


842


188


175


182

Expected return on assets
(1,225
)
 
(1,252
)
 
(1,196
)
 
(153
)
 
(173
)
 
(162
)
Amortization of:
 
 
 
 
 
 
 
 
 
 
 
Prior service cost (credit)
—

 
2

 
1

 
(179
)
 
(186
)
 
(188
)
Actuarial loss
414

 
629

 
607

 
45

 
66

 
61

Settlement and other charges
17

 
3

 
3

 
1

 
1

 
—

Contractual termination benefits
1

 
—

 
—

 
—

 
—

 
—

Net periodic benefit cost
$
447

 
$
589

 
$
644

 
$
(5
)
 
$
(5
)
 
$
(1
)

__________ 
(a)
FitzPatrick net benefit costs are included for the period after acquisition.
Cost Allocation to Exelon Subsidiaries
All Registrants account for their participation in Exelon’s pension and OPEB plans by applying multi-employer accounting. Exelon allocates costs related to its pension and OPEB plans to its subsidiaries based on both active and retired employee participation in each plan.
The amounts below represent the Registrants’ allocated pension and OPEB costs. As a result of new pension guidance effective on January 1, 2018, certain balances have been reclassified on Exelon’s Consolidated Statements of Operations and Comprehensive Income for the year ended December 31, 2017. For Exelon, the service cost component is included in Operating and maintenance expense and Property, plant and equipment, net, while the non–service cost components are included in Other, net and Regulatory assets for the years ended December 31, 2019 and December 31, 2018 and in Other, net and Property, plant and equipment, net, for the year ended December 31, 2017. For Generation and the Utility Registrants, the service cost and non–service cost components are included
in Operating and maintenance expense and Property, plant and equipment, net on their consolidated financial statements.
For the Years Ended December 31,
Exelon
 
Generation(a)
 
ComEd
 
PECO
 
BGE
 
PHI
 
Pepco
 
DPL
 
ACE
2019
$
442

 
$
135

 
$
96

 
$
12

 
$
61

 
$
95

 
$
25

 
$
15

 
$
16

2018
583

 
204

 
177

 
18

 
60

 
67

 
15

 
6

 
12

2017
643

 
227

 
176

 
29

 
64

 
94

 
25

 
13

 
13

__________
(a)
FitzPatrick net benefit costs are included for the period after acquisition.
Components of AOCI and Regulatory Assets
Exelon recognizes the overfunded or underfunded status of defined benefit pension and OPEB plans as an asset or liability on its balance sheet, with offsetting entries to AOCI and regulatory assets (liabilities). A portion of current year actuarial gains and losses and prior service costs (credits) is capitalized within Exelon’s Consolidated Balance Sheets to reflect the expected regulatory recovery of these amounts, which would otherwise be recorded to AOCI. The following tables provide the components of AOCI and regulatory assets (liabilities) for Exelon for the years ended December 31, 2019, 2018 and 2017 for all plans combined.
 
Pension Benefits
 
OPEB
 
2019
 
2018
 
2017
 
2019
 
2018
 
2017
Changes in plan assets and benefit obligations recognized in AOCI and regulatory assets (liabilities):
 
 
 
 
 
 
 
 
 
 
 
Current year actuarial (gain) loss
$
538

 
$
635

 
$
(222
)
 
$
80

 
$
(232
)
 
$
166

Amortization of actuarial loss
(414
)
 
(629
)
 
(607
)
 
(45
)
 
(66
)
 
(61
)
Current year prior service cost (credit)
68

 
(4
)
 
9

 
—

 
—

 
—

Amortization of prior service (cost) credit
—

 
(2
)
 
(1
)
 
179

 
186

 
188

Curtailments
(3
)
 
—

 
—

 
—

 
—

 
—

Settlements
(17
)
 
(3
)
 
(3
)
 
(1
)
 
—

 
—

Total recognized in AOCI and regulatory assets (liabilities)
$
172


$
(3
)
 
$
(824
)
 
$
213


$
(112
)
 
$
293

 
 
 
 
 
 
 
 
 
 
 
 
Total recognized in AOCI
$
169

 
$
3

 
$
(401
)
 
$
107

 
$
(55
)
 
$
168

Total recognized in regulatory assets (liabilities)
$
3

 
$
(6
)
 
$
(423
)
 
$
106

 
$
(57
)
 
$
125


The following table provides the components of gross accumulated other comprehensive loss and regulatory assets (liabilities) for Exelon that have not been recognized as components of periodic benefit cost at December 31, 2019 and 2018, respectively, for all plans combined:
 
Pension Benefits
 
OPEB
 
2019

2018
 
2019
 
2018
Prior service (credit) cost
$
39


$
(29
)
 
$
(158
)
 
$
(337
)
Actuarial loss
7,662

 
7,558

 
565

 
531

Total
$
7,701

 
$
7,529

 
$
407

 
$
194

 
 
 
 
 
 
 
 
Total included in AOCI
$
4,068

 
$
3,899

 
$
177

 
$
70

Total included in regulatory assets (liabilities)
$
3,633

 
$
3,630

 
$
230

 
$
124


Average Remaining Service Period
For pension benefits, Exelon amortizes its unrecognized prior service costs and certain actuarial gains and losses, as applicable, based on participants’ average remaining service periods.
For OPEB, Exelon amortizes its unrecognized prior service costs over participants’ average remaining service period to benefit eligibility age and amortizes certain actuarial gains and losses over participants’ average remaining service period to expected retirement. The resulting average remaining service periods for pension and OPEB were as follows:
 
 
2019
 
2018
 
2017
Pension plans
 
11.7

 
12.0

 
11.8

OPEB plans:
 
 
 
 
 
 
Benefit Eligibility Age
 
8.7

 
8.8

 
8.8

Expected Retirement
 
9.3

 
9.5

 
9.6

Assumptions
The measurement of the plan obligations and costs of providing benefits under Exelon’s defined benefit and other postretirement plans involves various factors, including the development of valuation assumptions and inputs and accounting policy elections. The measurement of benefit obligations and costs is impacted by several assumptions and inputs, as shown below, among other factors. When developing the required assumptions, Exelon considers historical information as well as future expectations.
Expected Rate of Return. In selecting the EROA, Exelon considers historical economic indicators (including inflation and GDP growth) that impact asset returns, as well as expectations regarding future long-term capital market performance, weighted by Exelon’s target asset class allocations.
Mortality. The mortality assumption is composed of a base table that represents the current expectation of life expectancy of the population adjusted by an improvement scale that attempts to anticipate future improvements in life expectancy. For the year ended December 31, 2018, Exelon’s mortality assumption was supported by an actuarial experience study of Exelon's plan participants and utilized the IRS's RP–2000 base table projected to 2012 with improvement scale AA and projected thereafter with generational improvement scale BB two-dimensional adjusted to a 0.75% long-term rate reached in 2027. For the year ended December 31, 2019, Exelon's mortality assumption utilizes the Society of Actuaries' 2019 base table (Pri-2012) and MP-2019 improvement scale adjusted to a 0.75% long-term rate reached in 2035.
For Exelon, the following assumptions were used to determine the benefit obligations for the plans at December 31, 2019 and 2018. Assumptions used to determine year-end benefit obligations are the assumptions used to estimate the subsequent year’s net periodic benefit costs.
 
Pension Benefits
OPEB
 
2019
 
2018
 
2019
 
2018
 
Discount rate
3.34
%
(a)  
4.31
%
(a)  
3.31
%
(a)  
4.30
%
(a)  
Investment Crediting Rate
3.82
%
(b)  
4.46
%
(b)  
N/A

 
N/A

 
Rate of compensation increase
    
(c) 
    
(c) 
    
(c) 
    
(c) 
Mortality table
Pri-2012 table with MP- 2019 improvement scale (adjusted)
  
  
  
  
  
  
  
RP-2000 table projected to 2012 with improvement scale AA, with Scale BB-2D improvements (adjusted)
  
  
  
  
  
  
  
Pri-2012 table with MP- 2019 improvement scale (adjusted)
  
  
  
  
  
  
  
RP-2000 table projected to 2012 with improvement scale AA, with Scale BB-2D improvements (adjusted)
  
  
  
  
  
  
  
Health care cost trend on covered charges
N/A
 
N/A
 
5.00% with
ultimate trend of 5.00% in
2017
 
5.00% with
ultimate trend of 5.00% in
2017
 
__________
(a)
The discount rates above represent the blended rates used to determine the majority of Exelon’s pension and OPEB obligations. Certain benefit plans used individual rates, which range from 3.02% - 3.44% and 3.27% - 3.4% for pension and OPEB plans, respectively, as of December 31, 2019 and 4.13% - 4.36% and 4.27% - 4.38% for pension and OPEB plans, respectively, as of December 31, 2018.
(b)
The investment crediting rate above represents a weighted average rate.
(c)
3.25% through 2019 and 3.75% thereafter.
The following assumptions were used to determine the net periodic benefit cost for Exelon for the years ended December 31, 2019, 2018 and 2017: 
 
Pension Benefits
 
Other Postretirement Benefits
 
Exelon
2019
 
2018
 
2017
 
2019
 
2018
 
2017
 
Discount rate
4.31
%
(a) 
3.62
%
(a) 
4.04
%
(a) 
4.30
%
(a) 
3.61
%
(a) 
4.04
%
(a) 
Investment Crediting Rate
4.46
%
(b)  
4.00
%
(b)  
4.46
%
(b)  
N/A

 
N/A

 
N/A

 
Expected return on plan assets
7.00
%
(c) 
7.00
%
(c) 
7.00
%
(c) 
6.67
%
(c) 
6.60
%
(c) 
6.58
%
(c) 
Rate of compensation increase
    

(d)  
 
(d)  
 
(e) 
    

(d)  
 
(d)  
 
(e) 
Mortality table
RP-2000 table projected to 2012 with improvement scale AA, with Scale BB-2D improvements (adjusted)
  
  
  
  
  
  
  
RP-2000 table projected to 2012 with improvement scale AA, with Scale BB-2D improvements (adjusted)
  
  
  
  
  
  
  
RP-2000 table projected to 2012 with improvement scale AA, with Scale BB-2D improvements (adjusted)
  
  
  
  
  
  
  
RP-2000 table projected to 2012 with improvement scale AA, with Scale BB-2D improvements (adjusted)
  
  
  
  
  
  
  
RP-2000 table projected to 2012 with improvement scale AA, with Scale BB-2D improvements (adjusted)
  
  
  
  
  
  
  
RP-2000 table projected to 2012 with improvement scale AA, with Scale BB-2D improvements (adjusted)
  
  
  
  
  
  
  
Health care cost trend on covered charges
N/A
  
N/A
  
N/A
  
5.00%
with
ultimate
trend of
5.00% in
2017
  
  
  
  
  
  
  
5.00%
with
ultimate
trend of
5.00% in
2017
  
  
  
  
  
  
  
5.50%
decreasing
to
ultimate
trend of
5.00% in
2017
  
  
  
  
  
  
  
__________
(a)
The discount rates above represent the blended rates used to establish the majority of Exelon’s pension and OPEB costs. Certain benefit plans used individual rates, which range from 4.13%-4.36% and 4.27%-4.38% for pension and OPEB plans, respectively, for the year ended December 31, 2019; 3.49%-3.65% and 3.57%-3.68% for pension and OPEB plans; respectively, for the year ended December 31, 2018; and 3.66%-4.11% and 4.00%-4.17% for pension and OPEB plans, respectively, for the year ended December 31, 2017.
(b)
The investment crediting rate above represents a weighted average rate.
(c)
Not applicable to pension and other postretirement benefit plans that do not have plan assets.
(d)
3.25% through 2019 and 3.75% thereafter.
(e)
The legacy Exelon, CEG and CENG pension and other postretirement plans used a rate of compensation increase of 3.25% through 2019 and 3.75% thereafter, while the legacy PHI pension and OPEB plans used a weighted-average rate of compensation increase of 5% for all periods.
Contributions
Exelon allocates contributions related to its legacy Exelon pension and OPEB plans to its subsidiaries based on accounting cost. For legacy CEG, CENG, FitzPatrick, and PHI plans, pension and OPEB contributions are allocated to the subsidiaries based on employee participation (both active and retired). The following tables provide contributions to the pension and OPEB plans:
 
Pension Benefits
 
OPEB
 
2019(a)
 
2018(a)
 
2017(a)
 
2019
 
2018
 
2017
Exelon
$
356


$
337


$
341


$
51

 
$
46

 
$
64

Generation
160

 
128

 
137

 
15

 
11

 
11

ComEd
72

 
38

 
36

 
5

 
4

 
5

PECO
27

 
28

 
24

 
1

 
—

 
—

BGE
34

 
40

 
39

 
14

 
14

 
14

PHI
10

 
62

 
67

 
15

 
12

 
32

Pepco
2

 
6

 
62

 
12

 
11

 
10

DPL
1

 
—

 
—

 
—

 
—

 
2

ACE
—

 
6

 
—

 
1

 
—

 
20

__________
(a)
Exelon's and Generation's pension contributions include $21 million related to the legacy CENG plans that was funded by CENG as provided in an Employee Matters Agreement (EMA) between Exelon and CENG for the year ended December 31, 2017. There were no pension contributions for the years ended December 31, 2019 and 2018.
Management considers various factors when making pension funding decisions, including actuarially determined minimum contribution requirements under ERISA, contributions required to avoid benefit restrictions and at-risk status as defined by the Pension Protection Act of 2006 (the Act), management of the pension obligation and regulatory implications. The Act requires the attainment of certain funding levels to avoid benefit restrictions (such as an inability to pay lump sums or to accrue benefits prospectively), and at-risk status (which triggers higher minimum contribution requirements and participant notification). The projected contributions below reflect a funding strategy to make levelized annual contributions with the objective of achieving 100% funded status on an ABO basis over time. This level funding strategy helps minimize volatility of future period required pension contributions. Based on this funding strategy and current market conditions, which are subject to change, Exelon’s estimated annual qualified pension contributions will be approximately $500 million beginning in 2020. Unlike the qualified pension plans, Exelon’s non-qualified pension plans are not funded, given that they are not subject to statutory minimum contribution requirements.
While other postretirement plans are also not subject to statutory minimum contribution requirements, Exelon does fund certain of its plans. For Exelon's funded OPEB plans, contributions generally equal accounting costs, however, Exelon’s management has historically considered several factors in determining the level of contributions to its OPEB plans, including liabilities management, levels of benefit claims paid and regulatory implications (amounts deemed prudent to meet regulatory expectations and best assure continued rate recovery). The amounts below include benefit payments related to unfunded plans.
The following table provides all registrants' planned contributions to the qualified pension plans, planned benefit payments to non-qualified pension plans, and planned contributions to other postretirement plans in 2020:

Qualified Pension Plans

Non-Qualified Pension Plans

OPEB
Exelon
$
505


$
36


$
42

Generation
227


14


16

ComEd
141


2


3

PECO
17


1


—

BGE
56


2


16

PHI
22


9


7

Pepco
—


2


7

DPL
—


1


—

ACE
2


—


—


Estimated Future Benefit Payments
Estimated future benefit payments to participants in all of the pension plans and postretirement benefit plans at December 31, 2019 were:
 
Pension
Benefits
 
OPEB
2020
$
1,227

 
$
258

2021
1,252

 
263

2022
1,295

 
267

2023
1,310

 
270

2024
1,324

 
275

2025 through 2029
6,770

 
1,402

Total estimated future benefit payments through 2029
$
13,178


$
2,735


Plan Assets
Investment Strategy. On a regular basis, Exelon evaluates its investment strategy to ensure that plan assets will be sufficient to pay plan benefits when due. As part of this ongoing evaluation, Exelon may make changes to its targeted asset allocation and investment strategy.
Exelon has developed and implemented a liability hedging investment strategy for its qualified pension plans that has reduced the volatility of its pension assets relative to its pension liabilities. Exelon is likely to continue to gradually increase the liability hedging portfolio as the funded status of its plans improves. The overall objective is to achieve attractive risk-adjusted returns that will balance the liquidity requirements of the plans’ liabilities while striving to minimize the risk of significant losses. Trust assets for Exelon’s other postretirement plans are managed in a diversified investment strategy that prioritizes maximizing liquidity and returns while minimizing asset volatility.
Actual asset returns have an impact on the costs reported for the Exelon-sponsored pension and OPEB plans. The actual asset returns across Exelon’s pension and OPEB plans for the year ended December 31, 2019 were 18.80% and 14.40%, respectively, compared to an expected long-term return assumption of 7.00% and 6.67%, respectively. Exelon used an EROA of 7.00% and 6.69% to estimate its 2020 pension and OPEB costs, respectively.
Exelon’s pension and OPEB plan target asset allocations at December 31, 2019 and 2018 were as follows:
 
December 31, 2019
 
December 31, 2018
Asset Category
Pension Benefits
 
OPEB
 
Pension Benefits
 
OPEB
Equity securities
33
%
 
46
%
 
35
%
 
47
%
Fixed income securities
44
%
 
32
%
 
37
%
 
28
%
Alternative investments(a)
23
%
 
22
%
 
28
%
 
25
%
Total
100
%
 
100
%
 
100
%
 
100
%
__________
(a)
Alternative investments include private equity, hedge funds, real estate, and private credit.
Concentrations of Credit Risk. Exelon evaluated its pension and OPEB plans’ asset portfolios for the existence of significant concentrations of credit risk as of December 31, 2019. Types of concentrations that were evaluated include, but are not limited to, investment concentrations in a single entity, type of industry, foreign country, and individual fund. As of December 31, 2019, there were no significant concentrations (defined as greater than 10% of plan assets) of risk in Exelon’s pension and OPEB plan assets.
Fair Value Measurements
The following tables present pension and OPEB plan assets measured and recorded at fair value in Exelon's Consolidated Balance Sheets on a recurring basis and their level within the fair value hierarchy at December 31, 2019 and 2018:
December 31, 2019(a)
Level 1
 
Level 2
 
Level 3
 
Not subject to leveling
 
Total
Pension plan assets
 
 
 
 
 
 
 
 
 
Cash equivalents
$
258

 
$
—

 
$
—

 
$
—

 
$
258

Equities(b)
3,616

 
—

 
5

 
2,589

 
6,210

Fixed income:





 
 
 

U.S. Treasury and agencies
1,294

 
280

 
—

 
—

 
1,574

State and municipal debt
—

 
56

 
—

 
—

 
56

Corporate debt
—

 
4,342

 
245

 
—

 
4,587

Other(b)
—

 
461

 
—

 
851

 
1,312

Fixed income subtotal
1,294


5,139


245

 
851

 
7,529

Private equity
—

 
—

 
—

 
1,391

 
1,391

Hedge funds
—

 
—

 
—

 
1,126

 
1,126

Real estate
—

 
—

 
—

 
1,030

 
1,030

Private credit
—

 
—

 
237

 
929

 
1,166

Pension plan assets subtotal
$
5,168


$
5,139


$
487

 
$
7,916

 
$
18,710

December 31, 2019(a)
Level 1
 
Level 2
 
Level 3
 
Not subject to leveling
 
Total
OPEB plan assets
 
 
 
 
 
 
 
 
 
Cash equivalents
$
39

 
$
—

 
$
—

 
$
—

 
$
39

Equities
473

 
3

 
—

 
719

 
1,195

Fixed income:





 
 
 

U.S. Treasury and agencies
17

 
64

 
—

 
—

 
81

State and municipal debt
—

 
107

 
—

 
—

 
107

Corporate debt
—

 
49

 
—

 
—

 
49

Other
258

 
78

 
—

 
201

 
537

Fixed income subtotal
275


298


—


201

 
774

Hedge funds
—

 
—

 
—

 
293

 
293

Real estate
—

 
—

 
—

 
109

 
109

Private credit
—

 
—

 
—

 
131

 
131

OPEB plan assets subtotal
$
787


$
301


$
—

 
$
1,453


$
2,541

Total pension and OPEB plan assets(c)
$
5,955

 
$
5,440

 
$
487

 
$
9,369

 
$
21,251

December 31, 2018(a)
Level 1
 
Level 2
 
Level 3
 
Not subject to leveling
 
Total
Pension plan assets
 
 
 
 
 
 
 
 
 
Cash equivalents
$
350

 
$
—

 
$
—

 
$
—

 
$
350

Equities(b)
3,364

 
—

 
2

 
1,980

 
5,346

Fixed income:


 


 


 
 
 


U.S. Treasury and agencies
996

 
173

 
—

 
—

 
1,169

State and municipal debt
—

 
59

 
—

 
—

 
59

Corporate debt
—

 
3,716

 
216

 
—

 
3,932

Other(b)
—

 
329

 
—

 
613

 
942

Fixed income subtotal
996


4,277


216

 
613

 
6,102

Private equity
—

 
—

 
—

 
1,219

 
1,219

Hedge funds
—

 
—

 
—

 
1,608

 
1,608

Real estate
—

 
—

 
—

 
1,029

 
1,029

Private credit
—

 
—

 
268

 
798

 
1,066

Pension plan assets subtotal
$
4,710


$
4,277


$
486

 
$
7,247


$
16,720

December 31, 2018(a)
Level 1
 
Level 2
 
Level 3
 
Not subject to leveling
 
Total
OPEB plan assets
 
 
 
 
 
 
 
 
 
Cash equivalents
$
22

 
$
—

 
$
—

 
$
—

 
$
22

Equities
537

 
2

 
—

 
508

 
1,047

Fixed income:





 
 
 

U.S. Treasury and agencies
11

 
56

 
—

 
—

 
67

State and municipal debt
—

 
126

 
—

 
—

 
126

Corporate debt
—

 
48

 
—

 
—

 
48

Other
183

 
72

 
—

 
170

 
425

Fixed income subtotal
194


302


—

 
170

 
666

Hedge funds
—

 
—

 
—

 
411

 
411

Real estate
—

 
—

 
—

 
132

 
132

Private credit
—

 
—

 
—

 
132

 
132

OPEB plan assets subtotal
$
753


$
304


$
—

 
$
1,353

 
$
2,410

Total pension and OPEB plan assets(c)
$
5,463

 
$
4,581

 
$
486

 
$
8,600

 
$
19,130

__________
(a)
See Note 17—Fair Value of Financial Assets and Liabilities for a description of levels within the fair value hierarchy.
(b)
Includes derivative instruments of $2 million and less than $1 million, which have a total notional amount of $6,668 million and $5,991 million at December 31, 2019 and 2018, respectively. The notional principal amounts for these instruments provide one measure of the transaction volume outstanding as of the fiscal years ended and do not represent the amount of the company’s exposure to credit or market loss.
(c)
Excludes net liabilities of $120 million and $44 million at December 31, 2019 and 2018, respectively, which are required to reconcile to the fair value of net plan assets. These items consist primarily of receivables or payables related to pending securities sales and purchases, interest and dividends receivable.
The following table presents the reconciliation of Level 3 assets and liabilities for Exelon measured at fair value for pension and OPEB plans for the years ended December 31, 2019 and 2018:
 
Fixed Income
 
Equities
 
Private
Credit
 
Total
Pension Assets
 
 
 
 
 
 
 
Balance as of January 1, 2019
$
216


$
2

 
$
268

 
$
486

Actual return on plan assets:



 
 
 


Relating to assets still held at the
reporting date
28


3

 
28

 
59

Relating to assets sold during the
period
(7
)

—

 
—

 
(7
)
Purchases, sales and settlements:



 
 
 


Purchases
26


—

 
41

 
67

Sales
(4
)

—

 
—

 
(4
)
Settlements(a)
(2
)

—

 
(100
)
 
(102
)
Transfers out of Level 3
(12
)

—

 
—

 
(12
)
Balance as of December 31, 2019
$
245


$
5

 
$
237

 
$
487

 
Fixed income
 
Equities
 
Private
Credit
 
Total
Pension Assets
 
 
 
 
 
 
 
Balance as of January 1, 2018
$
232


$
2

 
$
224

 
$
458

Actual return on plan assets:



 
 
 


Relating to assets still held at the
reporting date
(14
)

—

 
9

 
(5
)
Relating to assets sold during the
period
(1
)

—

 
—

 
(1
)
Purchases, sales and settlements:



 
 
 


Purchases
19


—

 
35

 
54

Sales
(8
)

—

 
—

 
(8
)
Settlements(a)
(12
)

—

 
—

 
(12
)
Balance as of December 31, 2018
$
216


$
2


$
268

 
$
486

__________
(a)
Represents cash settlements only.
There were no significant transfers between Level 1 and Level 2 during the year ended December 31, 2019 for the pension and OPEB plan assets.
Valuation Techniques Used to Determine Fair Value
The techniques used to fair value the pension and OPEB assets invested in cash equivalents, equities, fixed income, derivatives, private equity, real estate, and private credit investments are the same as the valuation techniques for these types of investments in NDTFs. See Cash Equivalents and NDT Fund Investments in Note 17 - Fair Value of Financial Assets and Liabilities for further information.
Pension and OPEB assets also include investments in hedge funds. Hedge fund investments include those seeking to maximize absolute returns using a broad range of strategies to enhance returns and provide additional diversification. The fair value of hedge funds is determined using NAV or its equivalent as a practical expedient, and therefore, hedge funds are not classified within the fair value hierarchy. Exelon has the ability to redeem these investments at NAV or its equivalent subject to certain restrictions which may include a lock-up period or a gate.
Defined Contribution Savings Plan (All Registrants)
The Registrants participate in various 401(k) defined contribution savings plans that are sponsored by Exelon. The plans are qualified under applicable sections of the IRC and allow employees to contribute a portion of their pre-tax and/or after-tax income in accordance with specified guidelines. All Registrants match a percentage of the employee contributions up to certain limits. The following table presents matching contributions to the savings plan for the years ended December 31, 2019, 2018 and 2017:
For the Year Ended December 31,
Exelon
 
Generation
 
ComEd
 
PECO
 
BGE
 
PHI
 
Pepco
 
DPL
 
ACE
2019
$
161

 
$
73


$
35


$
11


$
12


13

 
$
3

 
$
3

 
$
2

2018
179

 
86


37


9


12


13

 
3

 
2

 
2

2017
128

 
55


31


10


10


13

 
3

 
2

 
2