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

6 Months Ended

Jun. 30, 2013

Retirement Benefits [Line Items]

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

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

Exelon sponsors defined benefit pension plansand other postretirement benefit plans for essentially all Generation, ComEd, PECO, BGE and BSC employees.

Defined Benefit Pension and Other Postretirement Benefits

During the first quarter of 2013, Exelon received an updated valuation of itslegacy Exelon pension and other postretirement benefit obligations to reflect actual census data as of January 1, 2013. This valuation resulted in anincreaseto the pension obligation of $8 million and a decrease to the other postretirement benefit obligation of$39 million. Additionally, accumulated other comprehensive loss decreased by approximately $75million (after tax) and regulatory assets increased approximately by $93 million.During the second quarter of 2013, Exelon received the updated valuation for the legacy Constellation pension and other postretirement obligations to reflect actual census data as of January 1, 2013. This valuation resulted in an increase to the pension obligation of $23 million and a decrease to the other postretirement benefit obligation of $12 million. Additionally, accumulated other comprehensive loss increased by approximately $2 million (after tax) and regulatory assets increased by approximately $14 million.

The following tables present the components of Exelon's net periodic benefit costs for the three andsix months ended June 30, 2013 and 2012. The 2013 pension benefit cost for all plans is calculated using an expected long-term rate of return on plan assets of 7.50% and a discount rate of 3.92%. The 2013other postretirement benefit cost is calculated using an expected long-term rate of return on plan assets of 6.45% for funded plans and a discount rate of 4.00% for all plans. Legacy Constellation other postretirement benefit plans are not funded. A portion of the net periodic benefit cost is capitalized within the Consolidated Balance Sheets.

			Pension Benefits				Other Postretirement Benefits
			Three Months Ended				Three Months Ended
			June 30,				June 30,
			2013		2012		2013		2012
Service cost		$	79	$	74	$	40	$	39
Interest cost			163		179		49		54
Expected return on assets			(254)		(253)		(33)		(29)
Amortization of:
	Transition obligation		0		0		0		2
	Prior service cost (benefit)		4		3		(6)		(3)
	Actuarial loss		141		115		21		19
Contractual termination benefit cost (a)			0		14		0		6
Curtailment gain			0		0		0		(2)
Net periodic benefit cost		$	133	$	132	$	71	$	86
			Pension Benefits				Other Postretirement Benefits
			Six Months Ended				Six Months Ended
			June 30,				June 30,
			2013		2012		2013		2012
Service cost		$	159	$	135	$	81	$	76
Interest cost			326		343		97		104
Expected return on assets			(508)		(484)		(66)		(58)
Amortization of:
	Transition obligation		0		0		0		6
	Prior service cost (benefit)		7		7		(10)		(6)
	Actuarial loss		281		221		42		38
Contractual termination benefit cost (a)			0		14		0		6
Curtailment gain			0		0		0		(2)
Net periodic benefit cost		$	265	$	236	$	144	$	164

• ComEd and BGE established regulatory assets of $1 million and $4 million, respectively, for their portion of the second quarter 2012 contractual termination benefit charge.

The amounts below were included in capital additions and operating and maintenance expense during the three and six months ended June 30, 2013 and 2012, for Generation's, ComEd's, PECO's, BGE's and BSC's allocated portion of the pension and postretirement benefit plan costs.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
Pension and Other Postretirement Benefit Costs	2013		2012		2013		2012
Generation	$	87	$	94	$	173	$	175
ComEd		77		68		154		137
PECO		10		13		21		26
BGE (a)(b)		14		18		27		32
BSC (c)		16		25		34		42

(a)       BGE's pension and postretirement benefit costs for the sixmonths ended June30, 2012include $12 million of costs incurred prior to the closing of Exelon's merger with Constellation on March 12, 2012.These amounts are not included in Exelon's net periodic benefit costs for the sixmonths ended June30, 2012 shown in the first table of the Defined Benefit Pension and Other Postretirement Benefits section above.

(b)       BGE's pension and other postretirement benefit costs for the three and six months ended June 30, 2012 includes a $3 million contractual termination benefit charge, which was recorded as a regulatory asset as of June 30, 2012.

(c)       These amounts primarily represent amounts billed to Exelon's subsidiaries through intercompany allocations. These amounts are not included in the Generation, ComEd, PECO or BGE amounts above.As of June 30, 2012, ComEd and BGE each recorded a regulatory asset of $1 million related to their BSC-billed portion of the second quarter 2012 contractual termination benefit charge.

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, management of the pension obligation and regulatory implications. Exelon expects to contribute $255 million to its qualified pension plans in 2013, of which Generation, ComEd,PECO and BGE will contribute $113 million, $115 million, $11 million and $0 million, respectively. Unlike the qualified pension plans, Exelon's non-qualified pension plans are not funded. Exelon expects to make non-qualified pension plan benefit payments of $81 million in 2013, of which Generation, ComEd, PECO, and BGE will make payments of $7 million, $1 million, $1 million, and $2 million, respectively.

Unlike qualified pension plans, other postretirement plans are not subject to regulatory minimum contribution requirements. Exelon's management has historically considered several factors in determining the level of contributions to its other postretirement benefit plans, including levels of benefit claims paid and regulatory implications (amounts deemed prudent to meet regulator expectations and best assure continued recovery). In 2013, Exelon anticipates funding its other postretirement benefit plans based on the funding considerations discussed above, with the exception of those plans previously sponsored by Constellation and AmerGen, which remain unfunded. Exelon expects to make other postretirement benefit plan contributions, including benefit payments related to unfunded plans, of approximately $276 million in 2013, of which Generation, ComEd, PECO, and BGE expect to contribute $108 million, $112 million, $21 million, and $17 million, respectively.

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.

Defined Contribution Savings Plans

The Registrants participate in various 401(k) defined contribution savings plansthat 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 income in accordance with specified guidelines. All Registrants match a percentage of the employee contributions up to certain limits. The following table presents thematching contributions to the savings plans during the three andsix months ended June 30, 2013 and 2012:

(b)       BGE's pension and other postretirement benefit costs for the three and six months ended June 30, 2012 includes a $3 million contractual termination benefit charge, which was recorded as a regulatory asset as of June 30, 2012.

(a)       BGE's pension and postretirement benefit costs for the sixmonths ended June30, 2012include $12 million of costs incurred prior to the closing of Exelon's merger with Constellation on March 12, 2012.These amounts are not included in Exelon's net periodic benefit costs for the sixmonths ended June30, 2012 shown in the first table of the Defined Benefit Pension and Other Postretirement Benefits section above.

(b)       BGE's pension and other postretirement benefit costs for the three and six months ended June 30, 2012 includes a $3 million contractual termination benefit charge, which was recorded as a regulatory asset as of June 30, 2012.

(c)       These amounts primarily represent amounts billed to Exelon's subsidiaries through intercompany allocations. These amounts are not included in the Generation, ComEd, PECO or BGE amounts above.As of June 30, 2012, ComEd and BGE each recorded a regulatory asset of $1 million related to their BSC-billed portion of the second quarter 2012 contractual termination benefit charge.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
Savings Plan Matching Contributions	2013		2012		2013		2012
Exelon	$	21	$	19	$	43	$	35
Generation		10		8		21		16
ComEd		5		5		10		9
PECO		2		2		4		4
BGE (a)		2		1		4		3
BSC (b)		2		3		4		4

• BGE's matching contributions for the six months ended June 30, 2012 include $1 million of costs incurred prior to the closing of Exelon's merger with Constellation on March 12, 2012, which is not included in Exelon's matching contributions for the six months ended June 30, 2012.
• These amounts primarily represent amounts billed to Exelon's subsidiaries through intercompany allocations. These costs are not included in the Generation, ComEd, PECO or BGE amounts above.