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Pension and Other Postemployment Benefits (Tables)
 12 Months Ended
Dec. 31, 2015
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]  
Obligations and Funded Status
 
 
Pension
 
OPEB
Obligations and Funded Status
 
2015
 
2014
 
2015
 
2014
 
 
(In millions)
Change in benefit obligation:
 
 
 
 
 
 
 
 
Benefit obligation as of January 1
 
$
9,249

 
$
8,263

 
$
757

 
$
879

 
 
 
 
 
 
 
 
 
Service cost
 
193

 
167

 
5

 
9

Interest cost
 
383

 
402

 
29

 
39

Plan participants’ contributions
 
—

 
—

 
6

 
16

Plan amendments
 
—

 
5

 
(10
)
 
(97
)
Medicare retiree drug subsidy
 
—

 
—

 
1

 
—

Actuarial (gain) loss
 
(277
)
 
1,123

 
(2
)
 
13

Benefits paid
 
(469
)
 
(711
)
 
(62
)
 
(102
)
Benefit obligation as of December 31
 
$
9,079

 
$
9,249

 
$
724

 
$
757

 
 
 
 
 
 
 
 
 
Change in fair value of plan assets:
 
 
 
 
 
 
 
 
Fair value of plan assets as of January 1
 
$
5,824

 
$
6,171

 
$
464

 
$
495

Actual return (losses) on plan assets
 
(178
)
 
349

 
6

 
38

Company contributions
 
161

 
15

 
17

 
17

Plan participants’ contributions
 
—

 
—

 
6

 
16

Benefits paid
 
(469
)
 
(711
)
 
(62
)
 
(102
)
Fair value of plan assets as of December 31
 
$
5,338

 
$
5,824

 
$
431

 
$
464

 
 
 
 
 
 
 
 
 
Funded Status:
 
 
 
 
 
 
 
 
Qualified plan
 
$
(3,366
)
 
$
(3,064
)
 
 
 
 
Non-qualified plans
 
(375
)
 
(361
)
 
 
 
 
Funded Status
 
$
(3,741
)
 
$
(3,425
)
 
$
(293
)
 
$
(293
)
 
 
 
 
 
 
 
 
 
Accumulated benefit obligation
 
$
8,579

 
$
8,744

 
$
—

 
$
—

 
 
 
 
 
 
 
 
 
Amounts Recognized on the Balance Sheet:
 
 
 
 
 
 
 
 
Current liabilities
 
$
(18
)
 
$
(17
)
 
$
—

 
$
—

Noncurrent liabilities
 
(3,723
)
 
(3,408
)
 
(293
)
 
(293
)
Net liability as of December 31
 
$
(3,741
)
 
$
(3,425
)
 
$
(293
)
 
$
(293
)
 
 
 
 
 
 
 
 
 
Amounts Recognized in AOCI:
 
 
 
 
 
 
 
 
Prior service cost (credit)
 
$
37

 
$
45

 
$
(355
)
 
$
(479
)
 
 
 
 
 
 
 
 
 
Assumptions Used to Determine Benefit Obligations
 
 
 
 
 
 
 
 
(as of December 31)
 
 
 
 
 
 
 
 
Discount rate
 
4.50
%
 
4.25
%
 
4.25
%
 
4.00
%
Rate of compensation increase
 
4.20
%
 
4.20
%
 
N/A

 
N/A

 
 
 
 
 
 
 
 
 
Assumed Health Care Cost Trend Rates
 
 
 
 
 
 
 
 
(as of December 31)
 
 
 
 
 
 
 
 
Health care cost trend rate assumed (pre/post-Medicare)
 
N/A

 
N/A

 
6.0-5.5%

 
7.5-7.0%

Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)
 
N/A

 
N/A

 
4.5
%
 
4.5
%
Year that the rate reaches the ultimate trend rate
 
N/A

 
N/A

 
2026

 
2026

 
 
 
 
 
 
 
 
 
Allocation of Plan Assets (as of December 31)
 
 
 
 
 
 
 
 
Equity securities
 
40
%
 
36
%
 
51
%
 
49
%
Bonds
 
34
%
 
33
%
 
43
%
 
40
%
Absolute return strategies
 
7
%
 
14
%
 
—
%
 
1
%
Real estate
 
11
%
 
7
%
 
—
%
 
1
%
Derivatives
 
—
%
 
1
%
 
—
%
 
—
%
Cash and short-term securities
 
8
%
 
9
%
 
6
%
 
9
%
Total
 
100
%
 
100
%
 
100
%
 
100
%
Components of Net Periodic Benefit Costs
 
 
Pension
 
OPEB
Components of Net Periodic Benefit Costs
 
2015
 
2014
 
2013
 
2015
 
2014
 
2013
 
 
(In millions)
Service cost
 
$
193

 
$
167

 
$
197

 
$
5

 
$
9

 
$
13

Interest cost
 
383

 
402

 
372

 
29

 
39

 
37

Expected return on plan assets
 
(443
)
 
(462
)
 
(501
)
 
(33
)
 
(34
)
 
(34
)
Amortization of prior service cost (credit)
 
8

 
8

 
12

 
(134
)
 
(176
)
 
(207
)
Pension & OPEB mark-to-market adjustment
 
344

 
1,235

 
(267
)
 
25

 
8

 
(129
)
Net periodic cost (credit)
 
$
485

 
$
1,350

 
$
(187
)
 
$
(108
)
 
$
(154
)
 
$
(320
)
Assumptions Used to Determine Net Periodic Benefit Cost
Assumptions Used to Determine Net Periodic Benefit Cost
for Years Ended December 31
 
Pension
 
OPEB
 
2015
 
2014
 
2013
 
2015
 
2014
 
2013
Weighted-average discount rate
 
4.25
%
 
5.00
%
 
4.25
%
 
4.00
%
 
4.75
%
 
4.00
%
Expected long-term return on plan assets
 
7.75
%
 
7.75
%
 
7.75
%
 
7.75
%
 
7.75
%
 
7.75
%
Rate of compensation increase
 
4.20
%
 
4.20
%
 
4.70
%
 
N/A

 
N/A

 
N/A
Target asset allocations for pension and OPEB portfolio
FirstEnergy’s target asset allocations for its pension and OPEB trust portfolios for 2015 and 2014 are shown in the following table:
Target Asset Allocations
 
 
2015
 
2014
Equities
 
38
%
 
42
%
Fixed income
 
30
%
 
32
%
Absolute return strategies
 
8
%
 
14
%
Real estate
 
10
%
 
5
%
Alternative investments
 
8
%
 
1
%
Cash
 
6
%
 
6
%
 
 
100
%
 
100
%
Effect of One-Percentage Point change in assumed health care cost trend rates
Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plans. A one-percentage-point change in assumed health care cost trend rates would have the following effects:
 
 
1-Percentage-Point Increase
 
1-Percentage-Point Decrease
 
 
(In millions)
Effect on total of service and interest cost
 
$
1

 
$
(1
)
Effect on accumulated benefit obligation
 
$
26

 
$
(23
)
Estimated Future Benefit Payments
Taking into account estimated employee future service, FirstEnergy expects to make the following benefit payments from plan assets and other payments, net of participant contributions:
 
 
 
 
OPEB
 
 
Pension
 
Benefit Payments
 
Subsidy Receipts
 
 
(In millions)
2016
 
$
484

 
$
54

 
$
(3
)
2017
 
505

 
54

 
(3
)
2018
 
522

 
54

 
(3
)
2019
 
533

 
54

 
(3
)
2020
 
551

 
54

 
(3
)
Years 2021-2025
 
2,946

 
259

 
(9
)
Net Pension and OPEB Asset (Liability)
FES’ share of the pension and OPEB net (liability) asset as of December 31, 2015 and 2014, was as follows:
 
 
Pension
 
OPEB
 
 
2015

2014
 
2015

2014
 
 
(In millions)
Net (Liability) Asset
 
$
(303
)
 
$
(295
)
 
$
25

 
$
10
Net Periodic Pension and OPEB Costs
FES’ share of the net periodic benefit cost (credit), including the pension and OPEB mark-to-market adjustment, for the three years ended December 31, 2015 was as follows:
 
 
Pension
 
OPEB
 
 
2015
 
2014
 
2013
 
2015
 
2014
 
2013
 
 
(In millions)
Net Periodic Cost (Credit)
 
$
10

 
$
150

 
$
(30
)
 
$
(22
)
 
$
(24
)
 
$
(40
)
Pensions  
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]  
Pension investments measured at fair value
The following tables set forth pension financial assets that are accounted for at fair value by level within the fair value hierarchy. See Note 9, Fair Value Measurements, for a description of each level of the fair value hierarchy. There were no significant transfers between levels during 2015 and 2014.
 
 
December 31, 2015
 
Asset Allocation
 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
 
 
(In millions)
 
 
Cash and short-term securities
 
$
—

 
$
427

 
$
—

 
$
427

 
8
%
Equity investments
 
 
 
 
 
 
 
 
 
 
Domestic
 
869

 
75

 
—

 
944

 
18
%
International
 
395

 
794

 
—

 
1,189

 
22
%
Fixed income
 
 
 
 
 
 
 
 
 
 
Government bonds
 
—

 
232

 
—

 
232

 
4
%
Corporate bonds
 
—

 
1,115

 
—

 
1,115

 
21
%
High yield debt
 
—

 
438

 
—

 
438

 
8
%
Mortgage-backed securities (non-government)
 
—

 
31

 
—

 
31

 
1
%
Alternatives
 
 
 
 
 
 
 


 
 
Hedge funds (Absolute return)
 
—

 
343

 
—

 
343

 
7
%
Derivatives
 
—

 
15

 
—

 
15

 
—
%
Private equity funds
 
—

 
—

 
24

 
24

 
—
%
Real estate funds
 
—

 
—

 
587

 
587

 
11
%
Total (1)
 
$
1,264


$
3,470


$
611

 
$
5,345

 
100
%

(1) 
Excludes $(7) million as of December 31, 2015 of receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value table.

 
 
December 31, 2014
 
Asset Allocation
 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
 
 
(In millions)
 
 
Cash and short-term securities
 
$
—

 
$
517

 
$
—

 
$
517

 
9
%
Equity investments
 


 


 


 
 
 
 
Domestic
 
1,266

 
8

 
—

 
1,274

 
22
%
International
 
355

 
414

 
—

 
769

 
14
%
Fixed income
 


 


 


 
 
 
 
Government bonds
 
—

 
159

 
—

 
159

 
3
%
Corporate bonds
 
—

 
1,386

 
—

 
1,386

 
24
%
High yield debt
 
—

 
300

 
—

 
300

 
5
%
Mortgage-backed securities (non-government)
 
—

 
37

 
—

 
37

 
1
%
Alternatives
 


 


 


 
 
 
 
Hedge funds (Absolute return)
 
—

 
809

 
—

 
809

 
14
%
Derivatives
 
—

 
35

 
—

 
35

 
1
%
Private equity funds
 
—

 
—

 
25

 
25

 
—
%
Real estate funds
 
—

 
—

 
421

 
421

 
7
%
Total (1)
 
$
1,621

 
$
3,665

 
$
446

 
$
5,732

 
100
%


(1)
Excludes $92 million as of December 31, 2014 of receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value table.
Reconciliation of changes in the fair value of pension investments
The following table provides a reconciliation of changes in the fair value of pension investments classified as Level 3 in the fair value hierarchy during 2015 and 2014:
 
 
Private Equity Funds
 
Real Estate Funds
 
 
(In millions)
Balance as of January 1, 2014
 
$
27

 
$
385

Actual return on plan assets:
 


 


Unrealized gains (losses)
 
(2
)
 
17

Realized gains
 
1

 
14

Transfers in (out)
 
(1
)
 
5

Balance as of December 31, 2014
 
$
25

 
$
421

Actual return on plan assets:
 
 
 
 
Unrealized gains
 
—

 
42

Realized gains (losses)
 
(1
)
 
16

Transfers in
 
—

 
108

Balance as of December 31, 2015
 
$
24

 
$
587
OPEB  
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]  
Pension investments measured at fair value
As of December 31, 2015 and 2014, the OPEB trust investments measured at fair value were as follows:
 
 
December 31, 2015
 
Asset Allocation
 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
 
 
(In millions)
 
 
Cash and short-term securities
 
$
—

 
$
25

 
$
—

 
$
25

 
6
%
Equity investment
 
 
 
 
 
 
 
 
 
 
Domestic
 
219

 
—

 
—

 
219

 
50
%
International
 
1

 
3

 
—

 
4

 
1
%
Fixed income
 
 
 
 
 
 
 
 
 
 
U.S. treasuries
 
—

 
42

 
—

 
42

 
10
%
Government bonds
 
—

 
114

 
—

 
114

 
26
%
Corporate bonds
 
—

 
27

 
—

 
27

 
6
%
High yield debt
 
—

 
1

 
—

 
1

 
—
%
Mortgage-backed securities (non-government)
 
—

 
3

 
—

 
3

 
1
%
Alternatives
 
 
 
 
 
 
 
 
 
 
Hedge funds
 
—

 
1

 
—

 
1

 
—
%
Real estate funds
 
—

 
—

 
2

 
2

 
—
%
Total (1)
 
$
220

 
$
216

 
$
2

 
$
438

 
100
%

(1) 
Excludes $(7) million as of December 31, 2015 of receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value table.
 
 
December 31, 2014
 
Asset Allocation
 
 
Level 1
 
Level 2
 
Level 3
 
Total
 
 
 
(In millions)
 
 
Cash and short-term securities
 
$
—

 
$
41

 
$
—

 
$
41

 
9
%
Equity investment
 
 
 
 
 
 
 
 
 
 
Domestic
 
230

 
—

 
—

 
230

 
48
%
International
 
3

 
3

 
—

 
6

 
1
%
Fixed income
 
 
 
 
 
 
 
 
 
 
U.S. treasuries
 
—

 
41

 
—

 
41

 
9
%
Government bonds
 
—

 
110

 
—

 
110

 
23
%
Corporate bonds
 
—

 
32

 
—

 
32

 
7
%
High yield debt
 
—

 
2

 
—

 
2

 
—
%
Mortgage-backed securities (non-government)
 
—

 
3

 
—

 
3

 
1
%
Alternatives
 
 
 
 
 
 
 
 
 
 
Hedge funds
 
—

 
5

 
—

 
5

 
1
%
Real estate funds
 
—

 
—

 
3

 
3

 
1
%
Total (1)
 
$
233

 
$
237

 
$
3

 
$
473

 
100
%

(1)
Excludes $(9) million as of December 31, 2014, of receivables, payables, taxes and accrued income associated with financial instruments reflected within the fair value table.
Reconciliation of changes in the fair value of pension investments
The following table provides a reconciliation of changes in the fair value of OPEB trust investments classified as Level 3 in the fair value hierarchy during 2015 and 2014:
 
 
Real Estate Funds
 
 
 
Balance as of January 1, 2014
 
$
5

Transfers out
 
(2
)
Balance as of December 31, 2014
 
$
3

Transfers out
 
(1
)
Balance as of December 31, 2015
 
$
2