Retirement Benefits (Exelon, Generation, ComEd and PECO)

12 Months Ended

Dec. 31, 2012

Retirement Benefits [Abstract]

Retirement Benefits (Exelon, Generation, ComEd and PECO)

14. Retirement Benefits (Exelon, Generation, ComEd, PECO and BGE)

As of December 31, 2012, Exelon sponsored qualifieddefined benefit pension plans, non-qualified defined benefit pension plans and other postretirement benefit plans for essentially all Generation, ComEd, PECO, BGE and BSC employees.In connection with the acquisition of Constellation in March 2012, Exelon assumed Constellation's benefit plans and its related assets. The table below shows the pension and postretirement benefit plans in which each operating company participated at December 31, 2012.

		Operating Company
Name of Plan:		Generation	ComEd	PECO	BGE	BSC
Qualified Pension Plans:
Exelon Corporation Retirement Program		X	X	X		X
Exelon Corporation Cash Balance Pension Plan		X	X	X		X
Exelon Corporation Pension Plan for
	Bargaining Unit Employees	X	X			X
Exelon New England Union Employees Pension Plan		X
Exelon Employee Pension Plan for Clinton,
	TMI and Oyster Creek	X	X			X
Pension Plan of Constellation Energy Group, Inc.		X			X	X
BG New England Union Employees Pension Plan		X
Non-Qualified Pension Plans:
Exelon Corporation Supplemental Pension Benefit Plan
	and 2000 Excess Benefit Plan	X	X	X		X
Exelon Corporation Supplemental Management
	Retirement Plan	X	X	X		X
Benefits Restoration Plan of Constellation Energy Group		X			X	X
Senior Executive Supplemental Pension Plan		X			X	X
Other Postretirement Benefit Plans:
PECO Energy Company Retiree Medical Plan		X		X		X
Exelon Corporation Health Care Program		X	X			X
Exelon Corporation Employees' Life Insurance Plan		X	X	X		X
Constellation Energy Group, Inc. Retiree Medical Plan		X			X	X
Constellation Energy Group, Inc. Retiree Dental Plan		X			X	X
Constellation Energy Group, Inc. Life Insurance Plan
	and Family Life Insurance Plan	X			X
BG New England Post-Employment Medical Savings
	Account Plan	X

Exelon's traditional and cash balance pension plans are intended to be tax-qualified defined benefit plans. 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. Exelon has elected that the trusts underlying these plans be treated under the IRC as qualified trusts. 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

Exelon recognizes the overfunded or underfunded status of defined benefit pension and other postretirement benefit plans as an asset or liability on its balance sheet, with offsetting entries to Accumulated Other Comprehensive Income (AOCI) and regulatory assets, in accordance with the applicable authoritative guidance. The measurement date for the plans is December 31. The following table provides a rollforward of the changes in the benefit obligations and plan assets for the most recent two years for all plans combined:

					Other
	Pension Benefits				Postretirement Benefits
	2012		2011		2012		2011
Change in benefit obligation:
Net benefit obligation at beginning of year	$	13,538	$	12,524	$	4,062	$	3,874
Service cost		280		212		156		142
Interest cost		698		649		205		207
Plan participants’ contributions		0		0		34		25
Actuarial loss		1,520		807		313		4
Plan amendments		0		0		(103)		—
Acquisitions/divestitures		1,880				362
Curtailments		(10)		0		(8)		—
Settlements		(169)		0		—		—
Contractual termination benefits		15		0		6		—
Gross benefits paid		(952)		(654)		(219)		(201)
Federal subsidy on benefits paid		—		—		12		11
Net benefit obligation at end of year	$	16,800	$	13,538	$	4,820	$	4,062
Change in plan assets:
Fair value of net plan assets at beginning of year	$	11,302	$	8,859	$	1,797	$	1,655
Actual return on plan assets		1,484		1,003		197		29
Employer contributions		149		2,094		325		277
Plan participants’ contributions		0		0		34		25
Benefits paid (a)		(952)		(654)		(218)		(189)
Acquisitions/divestitures		1,543		—		0		—
Settlements		(169)		—		0		—
Fair value of net plan assets at end of year	$	13,357	$	11,302	$	2,135	$	1,797

(a)       Exelon's other postretirement benefits paid for the years ended December 31, 2012 and 2011 are net of $1.3 million and $12 million, respectively, of reinsurance proceeds received from the Department of Health and Human Services as part of the Early Retiree Reinsurance Program pursuant to the Affordable Care Act of 2010.

Exelon presents its benefit obligations and plan assets net on its balance sheet within the following line items:

						Other
		Pension Benefits				Postretirement Benefits
		2012		2011		2012		2011
Other current liabilities		$	15	$	42	$	23	$	2
Pension obligations			3,428		2,194		—		—
Non-pension postretirement benefit obligations			—		—		2,662		2,263
Unfunded status (net benefit obligation less
	net plan assets)	$	3,443	$	2,236	$	2,685	$	2,265

The funded status of the pension and other postretirement benefit obligations refers to the difference between plan assets and estimated obligations of the plan. The funded status changes over time due to several factors, including contribution levels, assumed discount rates and actual returns on plan assets.During the fourth quarter of 2012, Exelon completed an optional lump sum election program for select participants in certain of its qualified pension plans, which reduced the obligation and plan assets associated with those plans.This program decreased pension obligations and plan assets by approximately $425 million and $260 million, respectively, resulting in approximately $165 million overall funded status improvement.

The following tables provide the projected benefit obligations (PBO), accumulated benefit obligation (ABO), and fair value of plan assets for all pension plans with a PBO or ABO in excess of plan assets.

	PBO in excess of plan assets
	2012		2011
Projected benefit obligation	$	16,800	$	13,538
Fair value of net plan assets		13,357		11,302
	ABO in excess of plan assets
	2012		2011
Projected benefit obligation	$	16,796	$	13,538
Accumulated benefit obligation		15,657		12,616
Fair value of net plan assets		13,353		11,302

On a PBO basis, the plans were funded at 80%at December 31, 2012 compared to 83% at December 31, 2011. On an ABO basis, the plans were funded at 85% at December 31, 2012 compared to 90% at December 31, 2011. The ABO differs from the PBO in that the ABO includes no assumption about future compensation levels.

Components of Net Periodic Benefit Costs

The following table provides the components of the net periodic benefit costs for the years ended December 31, 2012, 2011 and 2010 for all plans combined. The table reflects anincrease in 2012, and a reduction in2011 and 2010 of net periodic postretirement benefit costs of approximately $(17) million, $28 million and $38 million, respectively, related to a Federal subsidy provided under the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (Medicare Modernization Act), discussed further below.

		Pension Benefits						Other Postretirement Benefits
		2012		2011		2010		2012		2011		2010
Components of net periodic benefit
	cost:
Service cost		$	280	$	212	$	190	$	156	$	142	$	124
Interest cost			698		649		660		205		207		214
Expected return on assets			(988)		(939)		(799)		(115)		(111)		(109)
Amortization of:
	Transition obligation		—		—		—		11		9		9
	Prior service cost (credit)		15		14		14		(17)		(38)		(56)
	Actuarial loss		450		331		254		81		66		74
Curtailment charges			—		0		0		(7)		—		—
Settlement charges			31		0		5		—		—		—
Contractual termination benefits (a)			14		—		—		6		—		1
Net periodic benefit cost		$	500	$	267	$	324	$	320	$	275	$	257

• ComEd and BGE established regulatory assets of $1 million and $4 million, respectively, for their portion of the contractual termination benefit charge.

.

Through Exelon's postretirement benefit plans, the Registrants provide retirees with prescription drug coverage. The Medicare Modernization Act, enacted on December 8, 2003, introduced a prescription drug benefit under Medicare as well as a Federal subsidy to sponsors of retiree healthcare benefit plans that provide a benefit that is at least actuarially equivalent to the Medicare prescription drug benefit. Management believes the prescription drug benefit provided under Exelon's postretirement benefit plans meets the requirements for the subsidy.See the Health Care Reform Legislation section below for further discussion regardingthe income tax treatment of Federal subsidies of prescription drug benefits.

The effect of the subsidy on the components of net periodic postretirement benefit cost for the years ended December 31, 2012, 2011 and 2010 included in the consolidated financial statements was as follows:

	2012		2011		2010
Amortization of the actuarial experience loss	$	(17)	$	3	$	9
Reduction in current period service cost		0		9		10
Reduction in interest cost on the APBO		0		16		19
Total effect of subsidy on net periodic postretirement benefit cost	$	(17)	$	28	$	38

Components of AOCI and Regulatory Assets

Under the authoritative guidance for regulatory accounting, 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 for the years ended December 31, 2012, 2011 and 2010 for all plans combined.

		Pension Benefits						Other Postretirement Benefits
		2012		2011		2010		2012		2011		2010
Changes in plan assets and benefit
	obligations recognized in AOCI
	and regulatory assets:
Current year actuarial (gain) loss		$	1,693	$	744	$	737	$	304	$	74	$	—
Amortization of actuarial gain (loss)			(450)		(331)		(254)		(81)		(66)		(74)
Current year prior service (credit) cost			1		—		—		(109)		—		—
Amortization of prior service (cost)
	credit		(15)		(14)		(14)		17		38		56
Current year transition (asset) obligation			—						1
Amortization of transition asset
	(obligation)		—		—		—		(11)		(9)		(9)
Curtailments			(10)		—		—		(1)		—		—
Settlements			(31)		—		(5)		—		—		—
Total recognized in AOCI and
	regulatory assets (a)	$	1,188	$	399	$	464	$	120	$	37	$	(27)

________________

(a)Of the $1,188 million related to pension benefits, $283 million and $904 million were recognized in AOCI and regulatory assets, respectively, during 2012. Of the $120 million related to other postretirement benefits, $39 million and $81 million were recognized in AOCI and regulatory assets, respectively, during 2012. Of the $399 million related to pension benefits, $181 million and $218 million were recognized in AOCI and regulatory assets, respectively, during 2011. Of the $37 million related to other postretirement benefits, $13 million and $24 million were recognized in AOCI and regulatory assets, respectively, during 2011. Of the $464 million related to pension benefits, $310 million and $154 million were recognized in AOCI and regulatory assets, respectively, during 2010. Of the $(27) million related to other postretirement benefits, $(9) million and $(18) million were recognized in AOCI and regulatory assets, respectively, during 2010.

The following table provides the components of Exelon's gross accumulated other comprehensive loss and regulatory assets that have not been recognized as components of periodic benefit cost atDecember 31, 2012 and 2011, respectively, for all plans combined:

	Pension Benefits				Other Postretirement Benefits
	2012		2011		2012		2011
Transition obligation	$	—	$	—	$	—	$	11
Prior service cost (credit)		76		90		(107)		(16)
Actuarial loss		7,931		6,729		1,185		963
Total (a)	$	8,007	$	6,819	$	1,078	$	958

(a)       Of the $8,007 million related to pension benefits, $4,594 million and $3,413 million are included in AOCI and regulatory assets, respectively, atDecember 31, 2012. Of the $1,078 million related to other postretirement benefits, $514 million and $564 million are included in AOCI and regulatory assets, respectively, atDecember 31, 2012. Of the $6,819 million related to pension benefits, $4,311 million and $2,508million are included in AOCI and regulatory assets, respectively, atDecember 31, 2011. Of the $958 million related to other postretirement benefits, $475 million and $483 million are included in AOCI and regulatory assets, respectively, atDecember 31, 2011.

The following table provides the components of Exelon's AOCI and regulatory assets atDecember 31, 2012 (included in the table above) that are expected to be amortized as components of periodic benefit cost in 2013. These estimates are subject to the completion of an actuarial valuation of Exelon's pension and other postretirement benefit obligations, which will reflect actual census data as of January 1, 2013 and actual claims activity as of December 31, 2012. The valuation is expected to be completed in the first quarter of 2013for legacy Exelon plans and in the second quarter of 2013 for legacy Constellation plans.

	Pension Benefits		Other Postretirement Benefits
Prior service cost (credit)	$	14	$	(19)
Actuarial loss		568		84
Total (a)	$	582	$	65

(a)       Of the $582 million related to pension benefits at December 31, 2012, $315 million and $267 million are expected to be amortized fromAOCI and regulatory assets in 2013, respectively. Of the $65 million related to other postretirement benefits at December 31, 2012, $29 million and $36 million are expected to be amortized fromAOCI and regulatory assets in 2013, respectively.

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 accounting policy elections. When developing the required assumptions, Exelon considers historical information as well as future expectations. The measurement of benefit obligations and costs is impacted by several assumptions including the discount rate applied to benefit obligations, the long-term expected rate of return on plan assets, Exelon's expected level of contributions to the plans, the long-term expected investment rate credited to employees participating in cash balance plans and the anticipated rate of increase of health care costs. Additionally, assumptions related to plan participants include the incidence of mortality, the expected remaining service period, the level of compensation and rate of compensation increases, employee age and length of service, among other factors.

Expected Rate of Return. In selecting the expected rate of return on plan assets, 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.

The following assumptions were used to determine the benefit obligations for all of the plans at December 31, 2012, 2011 and 2010. Assumptions used to determine year-end benefit obligations are the assumptions used to estimate the subsequent year's net periodic benefit costs.

	Pension Benefits			Other Postretirement Benefits
	2012	2011	2010	2012	2011	2010
Discount rate	3.92%	4.74%	5.26%	4.00%	4.80%	5.30%
Rate of compensation increase	(a)	3.75%	3.75%	(a)	3.75%	3.75%
Mortality table	IRS required mortality table for 2013 funding valuation	IRS required mortality table for 2012 funding valuation	IRS required mortality table for 2011 funding valuation	IRS required mortality table for 2013 funding valuation	IRS required mortality table for 2012 funding valuation	IRS required mortality table for 2011 funding valuation
Health care cost trend on covered charges	N/A	N/A	N/A	6.50% decreasing to ultimate trend of 5.00% in 2017	6.50% decreasing to ultimate trend of 5.00% in 2017	7.00% decreasing to ultimate trend of 5.00% in 2015

(a)       3.25% for 2013-2017 and 3.75% thereafter.

The following assumptions were used to determine the net periodic benefit costs for all the plans for the yearsended December 31, 2012, 2011 and 2010:

	Pension Benefits			Other Postretirement Benefits
	2012	2011	2010	2012	2011	2010
Discount rate	3.71% (a)	5.26%	5.83%	3.72% (a)	5.30%	5.83%
Expected return on plan assets	7.50% (b)	8.00% (b)	8.50% (b)	6.68% (b)	7.08% (b)	7.83% (b)
Rate of compensation increase	3.75%	3.75%	4.00%	3.75%	3.75%	4.00%
Mortality table	IRS required mortality table for 2012 funding valuation	IRS required mortality table for 2011 funding valuation	IRS required mortality table for 2010 funding valuation	IRS required mortality table for 2012 funding valuation	IRS required mortality table for 2011 funding valuation	IRS required mortality table for 2010 funding valuation
Health care cost trend on covered charges	N/A	N/A	N/A	6.50% decreasing to ultimate trend of 5.00% in 2017	7.00% decreasing to ultimate trend of 5.00% in 2015	7.50% decreasing to ultimate trend of 5.00% in 2015

(a)       The initial discount rates used to establish Exelon's pension and other postretirement benefits costs for 2012 were 4.74% and 4.80%, respectively. Certain of the benefit plans were remeasured during the year due to the Constellation merger, plan settlement and curtailment events, and plan changes using discount rates within the indicated ranges. 2012 costs reflect the impact of these remeasurements.

(b)       Not applicable to pension and other postretirement benefit plans that do not have plan assets.

Assumed healthcare cost trend rates have a significant effect on the costs reported for the other postretirement benefit plans. A one percentage point change in assumed healthcare cost trend rates would have the following effects:

Effect of a one percentage point increase in assumed health care cost trend:
	on 2012 total service and interest cost components	$	81
	on postretirement benefit obligation at December 31, 2012		845
Effect of a one percentage point decrease in assumed health care cost trend:
	on 2012 total service and interest cost components		(56)
	on postretirement benefit obligation at December 31, 2012		(569)

Health Care Reform Legislation

In March 2010, the Health Care Reform Acts were signed into law, which contain a number of provisions that impact retiree health care plans provided by employers.  One such provision reduces the deductibility, for Federal income tax purposes, of retiree health care costs to the extent an employer's postretirement health care plan receives Federal subsidies that provide retiree prescription drug benefits at least equivalent to those offered by Medicare. Although this change did not take effect immediately, the Registrants were required to recognize the full accounting impact in their financial statements in the period in which the legislation was enacted. As a result, in the first quarter of 2010, Exelon recorded total after-tax charges of approximately $65 million to income tax expense to reverse deferred tax assets previously established. Generation, ComEd, PECO and BGE recorded charges of $24 million, $11 million, $9 million and $3 million, respectively. Additionally, as a result of this deductibility change for employers and other Health Care Reform provisions that impact the federal prescription drug subsidy options provided to employers, Exelon has made a change in the manner in which it will receive prescription drug subsidies beginning in 2013.

Additionally, the Health Care Reform Acts also include a provision that imposes an excise tax on certain high-cost plans beginning in 2018, whereby premiums paid over a prescribed threshold will be taxed at a 40% rate. Although the excise tax does not go into effect until 2018, accounting guidance requires Exelon to incorporate the estimated impact of the excise tax in its annual actuarial valuation. The application of the legislation is still unclear and Exelon continues to monitorthe Department of Labor and IRSfor additional guidance. Certain key assumptions are required to estimate the impact of the excise tax on Exelon's other postretirement benefit obligation, including projected inflation rates (based on the CPI) and whether pre- and post-65 retiree populations can be aggregated in determining the premium values of health care benefits. Exelon reflected its best estimate of the expected impact in its annual actuarial valuation.

Contributions

The following table provides contributions made by Generation, ComEd, PECO, BGE and BSC to the pension and other postretirement benefitplans:

	Pension Benefits						Other Postretirement Benefits
	2012		2011		2010		2012 (a)		2011 (a)		2010 (a)
Generation	$	48	$	954	$	356	$	135	$	121	$	94
ComEd		25		873		260		119		108		60
PECO		13		110		73		33		28		35
BGE (b)		0		0		0		12		0		0
BSC		63		157		77		24		20		14
Exelon	$	149	$	2,094	$	766	$	323	$	277	$	203

(a)       The Registrants present the cash contributions above net of Federal subsidy payments received on each of their respective Consolidated Statements of Cash Flows. Exelon, Generation, ComEd, PECO, and BGE received Federal subsidy payments of $10 million, $5 million, $4 million, $1 million and $2 million, respectively, in 2012, $11 million, $5 million, $4 million, $1 million and $3 million, respectively, in 2011, and $10 million, $5 million, $3 million, $2 million and $2 million, respectively, in 2010.

(b)       BGE's pension benefit contributions for 2012, 2011, and 2010 exclude $0 million, $54 million, and $197 million, respectively, of pension contributions made by BGE prior to the closing of Exelon's merger with Constellation on March 12, 2012. BGE's other postretirement benefit payments for 2012, 2011, and 2010 exclude $4 million, $13 million, and $17 million, respectively, of other postretirement benefit payments made by BGE prior to the closing of Exelon's merger with Constellation on March 12, 2012. These pre-merger contributions are not included in Exelon's financial statements but are reflected in BGE's financial statements.

Exelon plans to contribute approximately $255million to its qualified pension plans in 2013, of which Generation, ComEd, PECO and BGEwill contribute $113 million, $116 million, $11 million and $0 million, respectively. Exelon plans to make non-qualified pension plan benefit payments of approximately $15million in 2013, of which Generation, ComEd, PECO and BGE will pay$6 million, $1 million, $1 million and $2 million, respectively. 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).Additionally, for Exelon's largest qualified pension plan, the projected contributions reflect a funding strategy of contributing the greater of $250 million, which approximates service cost, or the minimum amounts under ERISA to avoid benefit restrictions and at-risk status. This level funding strategy helps minimize volatility of future period required pension contributions.On July 6, 2012, President Obama signed into law the Moving Ahead for Progress in the Twenty-first Century Act, which contains a pension funding provision that results in lower minimum pension contributions in the near term while increasing the premiums pension plans pay to the Pension Benefit Guaranty Corporation. Certain provisions of the law will be applied in 2012 while others take effect in 2013. The estimated impacts of the law are reflected in the projected pension contributions.

Unlike the qualified pension plans, Exelon's other postretirement plans are not subject to regulatory minimum contribution requirements. Management considers several factors in determining the level of contributions to Exelon's other postretirement benefit plans, including levels of benefit claims paid and regulatory implications (amounts deemed prudent to meet regulatory expectations and best assure continued rate recovery). Exelon expects to contribute approximately $292million to the other postretirement benefit plans in 2013, of which Generation, ComEd, PECO and BGE expect to contribute $117million, $114million, $22million and $18 million, respectively.

Estimated Future Benefit Payments

Estimated future benefit payments to participants in all of the pension plans and postretirement benefit plans atDecember 31, 2012 were:

			Other Postretirement
	Pension Benefits		Benefits
2013	$	943	$	197
2014		807		204
2015		891		212
2016		868		220
2017		902		231
2018 through 2022		5,161		1,330
Total estimated future benefit payments through 2022	$	9,572	$	2,394

Allocation to Exelon Subsidiaries

Generation, ComEd, PECO, and BGE account for their participation in Exelon's pension and other postretirement benefit plans by applying multiemployer accounting. Employee-related assets and liabilities, including both pension and postretirement liabilities, for the legacy Exelon plans were allocated by Exelon to its subsidiaries based on the number of active employees as of January 1, 2001 as part of Exelon's corporate restructuring. Exelon allocates the components of pension and other postretirement costs to the subsidiaries in the legacy Exelon plans based upon several factors, including the measures of active employee participation in each participating unit. The obligation for Generation, ComEd and PECO reflects the initial allocation and the cumulative costs incurred and contributions made since January 1, 2001. Pension and postretirement benefit contributions are allocated to legacy Exelon subsidiaries in proportion to active service costs recognized and total costs recognized, respectively.For legacy CEG plans, components of pension and other postretirement benefit costs and contributions are allocated to the subsidiaries based on employee participation (both active and retired). Pension assets are allocated such that each subsidiary has a funded status consistent with the overall plan.

The following approximate amounts were included in capital and operating and maintenance expense for the years ended December 31, 2012, 2011 and 2010, respectively, for Generation's, ComEd's, PECO's,BSC's and BGE's allocated portion of the Exelon-sponsored pension and other postretirement benefit plans. These amounts include the recognized contractual termination benefit charges, curtailment gains, and settlement charges:

For the Year Ended December 31,	Generation		ComEd		PECO		BSC (a)		BGE (b)(c)		Exelon
2012	$	341	$	282	$	50	$	99	$	60	$	820
2011		249		213		32		48		51		542
2010		268		215		46		52		48		581

___________________

• These amounts primarily represent amounts billed to Exelon's subsidiaries through intercompany allocations.
• The amounts included in capital and operating and maintenance expense for the years ended 2012, 2011, and 2010 include $12 million, $51 million, and $48 million, respectively, in costs incurred prior to the closing of Exelon's merger with Constellation on March 12, 2012. These amounts are not included in Exelon's capital and operating and maintenance expense for the years ended 2012, 2011, and 2010.
• BGE's pension and other postretirement benefit costs for the year ended December 31, 2012 include a $3 million contractual termination benefit charge, which was recorded as a regulatory asset.

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 an 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. This investment strategy would tend to result in a lower expected rate of return on plan assets in future years. 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.

Exelon usedan EROAof 7.50% and 6.45% to estimate its 2013 pension and other postretirement benefit costs, respectively.

Exelon's pension and other postretirement benefit plan target asset allocations and December 31, 2012 and 2011 asset allocations were as follows:

Pension Plans			Percentage of Plan Assets
			at December 31,
Asset Category	Target Allocation		2012		2011
Equity securities	34	%	35	%	32	%
Fixed income securities	40	%	40		47
Alternative investments (a)	26	%	25		21
Total			100	%	100	%
Other Postretirement Benefit Plans			Percentage of Plan Assets
			at December 31,
Asset Category	Target Allocation		2012		2011
Equity securities	45	%	46	%	37	%
Fixed income securities	40	%	40		53
Alternative investments (a)	15	%	14		10
Total			100	%	100	%

(a) Alternative investments include private equity, hedge funds and real estate.

Concentrations of Credit Risk. Exelon evaluated its pension and other postretirement benefit plans' asset portfolios for the existence of significant concentrations of credit risk as of December 31, 2012. 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, 2012, there were no significant concentrations (defined as greater than 10 percent of plan assets) of risk in Exelon's pension and other postretirement benefit plan assets.

FairValue Measurements

The following table presents Exelon's pension and other postretirement benefitplan assets measured and recorded at fair value on Exelon's Consolidated Balance Sheets on a recurring basis and their level within the fair value hierarchy at December 31, 2012 and 2011:

At December 31, 2012 (a)		Level 1		Level 2		Level 3		Total
Pension plan assets
	Cash equivalents	$	1	$	0	$	0	$	1
	Equity securities:
	Individually held		2,562		0		0		2,562
	Commingled funds		0		1,111		0		1,111
	Mutual funds (c)		323		0		0		323
	Equity securities subtotal		2,885		1,111		0		3,996
	Fixed income securities:
	Debt securities issued by the U.S. Treasury and
	other U.S. government corporations and agencies		1,037		0		0		1,037
	Debt securities issued by states of the United States
	and by political subdivisions of the states		0		108		0		108
	Foreign debt securities		0		252		0		252
	Corporate debt securities		0		3,330		0		3,330
	Federal agency mortgage-backed securities		0		117		0		117
	Non-Federal agency mortgage-backed securities		0		28		0		28
	Commingled funds		0		274		0		274
	Mutual funds (c)		4		291		0		295
	Derivative instruments (b):
	Assets		0		9		0		9
	Liabilities		0		(21)		0		(21)
	Fixed income securities subtotal		1,041		4,388		0		5,429
	Private equity		0		0		754		754
	Hedge funds		0		1,080		1,235		2,315
	Real estate:
	Individually held		280		0		0		280
	Commingled funds		0		75		0		75
	Real estate funds		0		0		426		426
	Real estate subtotal		280		75		426		781
Pension plan assets subtotal			4,207		6,654		2,415		13,276
Other postretirement benefit plan assets
	Cash equivalents		44		0		0		44
	Equity securities:
	Individually held		198		0		0		198
	Commingled funds		0		530		0		530
	Mutual funds (c)		230		0		0		230
	Equity securities subtotal		428		530		0		958
	Fixed income securities:
	Debt securities issued by the U.S. Treasury and
	other U.S. government corporations and agencies		18		0		0		18
	Debt securities issued by states of the United States
	and by political subdivisions of the states		0		125		0		125
	Foreign debt securities		0		3		0		3
	Corporate debt securities		0		50		0		50
	Federal agency mortgage-backed securities		0		52		0		52
	Non-Federal agency mortgage-backed securities		0		6		0		6
	Commingled funds		0		271		0		271
	Mutual funds (c)		295		2		0		297
	Fixed income securities subtotal		313		509		0		822
	Private equity		0		0		1		1
	Hedge funds		0		188		12		200
	Real estate:
	Individually held		7		0		0		7
	Commingled funds		0		2		0		2
	Real estate funds		0		6		95		101
	Real estate subtotal		7		8		95		110
Other postretirement benefit plan assets subtotal			792		1,235		108		2,135
Total pension and other postretirement
	benefit plan assets (d) (e)	$	4,999	$	7,889	$	2,523	$	15,411
At December 31, 2011 (a)		Level 1		Level 2		Level 3		Total
Pension plan assets
	Cash equivalents	$	8	$	0	$	0	$	8
	Equity securities:
	Individually held		1,985		0		0		1,985
	Commingled funds		0		858		0		858
	Mutual funds		0		389		0		389
	Equity securities subtotal		1,985		1,247		0		3,232
	Fixed income securities:
	Debt securities issued by the U.S. Treasury and
	other U.S. government corporations and agencies		1,616		48		0		1,664
	Debt securities issued by states of the United States
	and by political subdivisions of the states		0		88		0		88
	Foreign debt securities		0		224		0		224
	Corporate debt securities		0		2,561		0		2,561
	Federal agency mortgage-backed securities		0		156		0		156
	Non-Federal agency mortgage-backed securities		0		28		0		28
	Commingled funds		0		202		0		202
	Mutual funds		0		277		0		277
	Fixed income securities subtotal		1,616		3,584		0		5,200
	Private equity		0		0		672		672
	Hedge funds (f)		0		0		1,525		1,525
	Real estate:
	Individually held		207		0		0		207
	Commingled funds		0		125		0		125
	Real estate funds		0		0		229		229
	Real estate subtotal		207		125		229		561
Pension plan assets subtotal			3,816		4,956		2,426		11,198
Other postretirement benefit plan assets
	Cash equivalents		73		0		0		73
	Equity securities:
	Individually held		110		0		0		110
	Commingled funds		0		415		0		415
	Mutual funds		0		171		0		171
	Equity securities subtotal		110		586		0		696
	Fixed income securities:
	Debt securities issued by the U.S. Treasury and
	other U.S. government corporations and agencies		26		3		0		29
	Debt securities issued by states of the United States
	and by political subdivisions of the states		0		93		0		93
	Foreign debt securities		0		4		0		4
	Corporate debt securities		0		41		0		41
	Federal agency mortgage-backed securities		0		34		0		34
	Non-Federal agency mortgage-backed securities		0		7		0		7
	Commingled funds		0		385		0		385
	Mutual funds		0		256		0		256
	Fixed income securities subtotal		26		823		0		849
	Private equity		0		0		1		1
	Hedge funds (f)		0		0		157		157
	Real estate
	Individually held		4		0		0		4
	Commingled funds		0		1		0		1
	Real Estate funds		0		0		7		7
	Real estate subtotal		4		1		7		12
Other postretirement benefit plan assets subtotal			213		1,410		165		1,788
Total pension and other postretirement
	benefit plan assets (d)	$	4,029	$	6,366	$	2,591	$	12,986

• See Note 9- Fair Value of Assets and Liabilities for a description of levels within the fair value hierarchy.
• Derivative instruments have a total notional amount of $2,498 million and $910 million at December 31, 2012 and 2011, 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.
• In 2012, Exelon reassessed its policy over the criteria that mutual fund investments must meet in order to be categorized within Level 1 of the fair value hierarchy. Therefore, certain mutual fund investments that were categorized within Level 2 in prior periods have been re-categorized as Level 1 investments as of December 31, 2012. The re-categorization of these mutual fund investments resulted in a transfer out of Level 2 of $852 million.
• Excludes net assets of $77 million and $43 million at December 31, 2012 and 2011 respectively, which are required to reconcile to the fair value of net plan assets. These items consist primarily of receivables related to pending securities sales, interest and dividends receivable, and payables related to pending securities purchases.
• Includes fixed income commingled fund assets of $66 million as of December 31, 2012. The fair value of these fixed income commingled fund assets of $69 million, as of December 31, 2011, are excluded from the tables above.
• In 2012, Exelon refined its policy over the criteria that hedge fund investments must meet in order to be categorized within Level 2 and Level 3 of the fair value hierarchy. Therefore, certain hedge fund investments that were categorized within Level 3 in prior periods have been re-categorized as Level 2 investments as of December 31, 2012. The re-categorization of these hedge fund investments is reflected as transfers out of Level 3 of $1.1 billion.

The following table presents the reconciliation of Level 3 assets and liabilities measured at fair value for pension and other postretirement benefit plans forthe years ended December 31, 2012 and 2011:

		Hedge funds		Private equity		Real estate		Total
Pension Assets
Balance as of January 1, 2012		$	1,525	$	672	$	229	$	2,426
Actual return on plan assets:
	Relating to assets still held at the reporting date		138		55		24		217
Purchases, sales and settlements:
	Purchases		447		108		134		689
	Sales		(6)		0		0		(6)
	Settlements		(4)		(128)		(28)		(160)
Transfers into (out of) Level 3(a) (b) (c)			(865)		47		67		(751)
Balance as of December 31, 2012		$	1,235	$	754	$	426	$	2,415
Other Postretirement Benefits
Balance as of January 1, 2012		$	157	$	1	$	7	$	165
Actual return on plan assets:
	Relating to assets still held at the reporting date		11		0		3		14
Purchases, sales and settlements:
	Purchases		32		0		91		123
	Sales		0		0		0		0
	Settlements		0		0		(1)		(1)
Transfers into (out of) Level 3 (a) (b) (c)			(188)		0		(5)		(193)
Balance as of December 31, 2012		$	12	$	1	$	95	$	108
		Hedge funds		Private equity		Real estate		Total
Pension Assets
Balance as of January 1, 2011		$	329	$	536	$	179	$	1,044
Actual return on plan assets (d):
	Relating to assets still held at the reporting date		(26)		84		46		104
Purchases, sales and settlements (d):
	Purchases		1,222		121		13		1,356
	Sales		0		0		0		0
	Settlements		0		(69)		(9)		(78)
Transfers into (out of) Level 3			0		0		0		0
Balance as of December 31, 2011		$	1,525	$	672	$	229	$	2,426
Other Postretirement Benefits
Balance as of January 1, 2011		$	5	$	0	$	8	$	13
Actual return on plan assets:
	Relating to assets still held at the reporting date		(3)		0		(1)		(4)
Purchases, sales and settlements:
	Purchases		155		1		0		156
	Sales		0		0		0		0
	Settlements		0		0		0		0
Transfers into (out of) Level 3			0		0		0		0
Balance as of December 31, 2011		$	157	$	1	$	7	$	165

• In connection with the acquisition of Constellation in March 2012, Exelon assumed Constellation's pension plan assets resulting in transfers into Level 3 of $141 million.
• In 2012, Exelon refined its policy over the criteria that hedge fund investments must meet in order to be categorized within Level 2 and Level 3 of the fair value hierarchy. Therefore, certain hedge fund investments that were categorized within Level 3 in prior periods have been re-categorized as Level 2 investments as of December 31, 2012. The re-categorization of these hedge fund investments is reflected as transfers out of Level 3 of $1.1 billion.
• In 2012, the liquidity terms of a certain real estate investment changed to allow redemption within a reasonable period of time from the redemption date which led to a transfer out of Level 3 to Level 2 of $5 million.
• Certain prior year amounts have been reclassified for comparative purposes.

Valuation Techniques Used to Determine Fair Value

Cash equivalents. Investments with maturities of three months or less when purchased, including certain short−term fixed income securities and money market funds, are considered cash equivalents. The fair values are based on observable market prices and, therefore, are included in the recurring fair value measurements hierarchy as Level 1.

Equity securities. With respect to individually held equity securities, including investments in U.S. and international securities, the trustees obtain prices from pricing services, whose prices are obtained from direct feeds from market exchanges, which Exelon is able to independently corroborate. Equity securities held individually are primarily traded on exchanges that contain only actively traded securities, due to the volume trading requirements imposed by these exchanges. Equity securities are valued based on quoted prices in active markets and are categorized as Level 1.

Equity commingled funds and mutual funds are maintained by investment companies that hold certain investments in accordance with a stated set of fund objectives, which are consistent with Exelon's overall investment strategy. The values of some of these funds are publicly quoted. For mutual funds which are publicly quoted, the funds are valued based on quoted prices in active markets and have been categorized as Level 1. For equity commingled funds and mutual funds which are not publicly quoted, the fund administrators value the funds using the net asset value per fund share, derived from the quoted prices in active markets of the underlying securities. These funds have been categorized as Level 2.

Fixedincome. For fixed income securities, which consist primarily of corporate debt securities, foreign government securities, municipal bonds, asset and mortgage-backed securities, mutual funds and derivative instruments, the trustees obtain multiple prices from pricing vendors whenever possible, which enables cross−provider validations in addition to checks for unusual daily movements. A primary price source is identified based on asset type, class or issue for each security. The trustees monitor prices supplied by pricing services and may use a supplemental price source or change the primary price source of a given security if the portfolio managers challenge an assigned price and the trustees determine that another price source is considered to be preferable. Exelon has obtained an understanding of how these prices are derived, including the nature and observability of the inputs used in deriving such prices. Additionally, Exelon selectively corroborates the fair values of securities by comparison to other market−based price sources. Investments in U.S. Treasury securities have been categorized as Level 1 because they trade in highly−liquid and transparent markets. The fair values of fixed income securities, excluding U.S. Treasury securities, are based on evaluated prices that reflect observable market information, such as actual trade information of similar securities, adjusted for observable differences and are categorized as Level 2.

Derivative instruments consisting primarily of interest rate swaps to manage risk are recorded at fair value. Derivative instruments are valued based on external price data of comparable securities and have been categorized as Level 2.

Fixed income commingled funds and mutual funds, including short−term investment funds, are maintained by investment companies and hold certain investments in accordance with a stated set of fund objectives, which are consistent with Exelon's overall investment strategy. The values of some of these funds are publicly quoted. For mutual funds which are publicly quoted, the funds are valued based on quoted prices in active markets and have been categorized as Level 1. For fixed income commingled funds and mutual funds which are not publicly quoted, the fund administrators value the funds using the net asset value per fund share, derived from the quoted prices in active markets of the underlying securities. These funds have been categorized as Level 2.

Private equity. Private equity investments include those in limited partnerships that invest in operating companies that are not publicly traded on a stock exchange such as leveraged buyouts, growth capital, venture capital, distressed investments and investments in natural resources. Private equity valuations are reported by the fund manager and are based on the valuation of the underlying investments, which include inputs such as cost, operating results, discounted future cash flows and market based comparable data. Since these valuation inputs are not highly observable, private equity investments have been categorized as Level 3.

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 ownership interest of the investments. 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. For Exelon's investments that have terms that allow redemption within a reasonable period of time from the measurement date, the hedge fund investments are categorized as Level 2. For investments that have restrictions that may limit Exelon's ability to redeem the investments at the measurement date or within a reasonable period of time, the hedge fund investments are categorized as Level 3.

Real estate.Real estate investment trusts valued daily based on quoted prices in active markets are categorized as Level 1. Real estate commingled funds are maintained by investment companies and hold certain investments in accordance with a stated set of fund objectives, which are consistent with Exelon's overall investment strategy. Since these funds are not publicly quoted, the fund administrators value the funds using the net asset value per fund share, derived from the quoted prices in active markets of the underlying securities. These funds have been categorized as Level 2. Other real estate funds are funds with a direct investment in a pool of real estate properties. These funds are valued by investment managers on a periodic basis using pricing models that use independent appraisals from sources with professional qualifications. Since these valuation inputs are not highly observable, these real estate funds have been categorized as Level 3.

Defined Contribution Savings Plan (Exelon, Generation, ComEd, PECO and BGE)

Exelon, Generation, ComEd, PECO and BGE participate in a 401(k) defined contribution savings plan sponsored by Exelon. The plan is qualified under applicable sections of the IRC and allows employees to contribute a portion of their pre-tax income in accordance with specified guidelines. Exelon, Generation, ComEd, PECO and BGE match a percentage of the employee contribution up to certain limits. The following table presents matching contributions to the savings plan for the years ended December 31, 2012, 2011 and 2010:

For the Year Ended December 31,	Exelon		Generation		ComEd		PECO		BGE
2012	$	67	$	30	$	19	$	7	$	7
2011		78		40		22		9		7
2010		81		42		22		9		6