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Retirement Benefits (Tables)

12 Months Ended

Dec. 31, 2020

Defined Benefit Plan Disclosure [Line Items]

Schedule Of SERP Trust Assets, ABO And Contributions

Presented in the following table are the fair values of trust assets, ABO, and contributions for CMS Energy’s and Consumers’ DB SERP:


In Millions
Years Ended December 31	2020			2019
CMS Energy, including Consumers
Trust assets		$	146		$	143
ABO		159			149
Contributions		8			—
Consumers
Trust assets		$	107		$	104
ABO		115			107
Contributions		5			—

Schedule Of Assumptions Used

Presented in the following table are the weighted-average assumptions used in CMS Energy’s and Consumers’ retirement benefits plans to determine benefit obligations and net periodic benefit cost:


December 31	2020		2019		2018
CMS Energy, including Consumers
Weighted average for benefit obligations1
Discount rate2
DB Pension Plan A	2.73	%	3.37	%	4.48	%
DB Pension Plan B	2.41		3.17		4.32
DB SERP	2.40		3.15		4.32
OPEB Plan	2.69		3.32		4.42
Rate of compensation increase
DB Pension Plan A	3.70		3.50		3.50
DB SERP	5.50		5.50		5.50
Weighted average for net periodic benefit cost1
Service cost discount rate2,3
DB Pension Plan A	3.44	%	4.55	%	3.85	%
DB SERP	3.46		4.58		3.83
OPEB Plan	3.57		4.63		3.93
Interest cost discount rate2,3
DB Pension Plan A	2.92		4.08		3.39
DB Pension Plan B	2.74		3.93		3.24
DB SERP	2.74		3.94		3.26
OPEB Plan	2.88		4.03		3.35
Expected long-term rate of return on plan assets4
DB Pension Plans	6.75		7.00		7.00
OPEB Plan	6.75		7.00		7.00
Rate of compensation increase
DB Pension Plan A	3.50		3.50		3.50
DB SERP	5.50		5.50		5.50

1The mortality assumption for benefit obligations was based on the Pri-2012 Mortality Table for 2020 and 2019 and the RP-2014 Mortality Table for 2018, with improvement scales MP-2020 for 2020, MP-2019 for 2019, and MP-2018 for 2018. The mortality assumption for net periodic benefit cost was based on the Pri-2012 Mortality Table for 2020 and the RP-2014 Mortality Table for 2019 and 2018, with improvement scales MP-2019 for 2020, MP-2018 for 2019, and MP-2017 for 2018.

2The discount rate reflects the rate at which benefits could be effectively settled and is equal to the equivalent single rate resulting from a yield-curve analysis. This analysis incorporated the projected benefit payments specific to CMS Energy’s and Consumers’ DB Pension Plans and OPEB Plan and the yields on high-quality corporate bonds rated Aa or better.

3CMS Energy and Consumers have elected to use a full-yield-curve approach in the estimation of service cost and interest cost; this approach applies individual spot rates along the yield curve to future projected benefit payments based on the time of payment.

4CMS Energy and Consumers determined the long-term rate of return using historical market returns, the present and expected future economic environment, the capital market principles of risk and return, and the

expert opinions of individuals and firms with financial market knowledge. CMS Energy and Consumers considered the asset allocation of the portfolio in forecasting the future expected total return of the portfolio. The goal was to determine a long-term rate of return that could be incorporated into the planning of future cash flow requirements in conjunction with the change in the liability. Annually, CMS Energy and Consumers review for reasonableness and appropriateness the forecasted returns for various classes of assets used to construct an expected return model. CMS Energy’s and Consumers’ expected long-term rate of return on the assets of the DB Pension Plans was 6.75 percent in 2020. The actual return (loss) on the assets of the DB Pension Plans was 13.6 percent in 2020, 21.0 percent in 2019, and (6.7) percent in 2018.

Schedule Of Net Benefit Costs

Presented in the following table are the costs (credits) and other changes in plan assets and benefit obligations incurred in CMS Energy’s and Consumers’ retirement benefits plans:


In Millions
	DB Pension Plans and DB SERP									OPEB Plan
Years Ended December 31	2020			2019			2018			2020			2019			2018
CMS Energy, including Consumers
Net periodic cost (credit)
Service cost		$	50		$	41		$	48		$	16		$	14		$	17
Interest cost		83			103			95			33			41			34
Settlement loss		1			—			—			—			—			—
Expected return on plan assets		(191)			(162)			(149)			(100)			(88)			(97)
Amortization of:
Net loss		95			50			76			15			26			15
Prior service cost (credit)		1			1			3			(56)			(62)			(67)
Settlement loss		2			—			—			—			—			—
Net periodic cost (credit)		$	41		$	33		$	73		$	(92)		$	(69)		$	(98)
Consumers
Net periodic cost (credit)
Service cost		$	49		$	40		$	47		$	15		$	13		$	16
Interest cost		78			97			88			31			40			33
Expected return on plan assets		(181)			(153)			(139)			(93)			(82)			(91)
Amortization of:
Net loss		90			47			73			15			26			16
Prior service cost (credit)		1			1			3			(54)			(61)			(65)
Settlement loss		2			—			—			—			—			—
Net periodic cost (credit)		$	39		$	32		$	72		$	(86)		$	(64)		$	(91)

Schedule Of Funded Status Of Retirement Benefit Plans

Presented in the following table are reconciliations of the funded status of CMS Energy’s and Consumers’ retirement benefits plans with their retirement benefits plans’ liabilities:


In Millions
	DB Pension Plans							DB SERP						OPEB Plan
Years Ended December 31	2020			2019				2020			2019			2020			2019
CMS Energy, including Consumers
Benefit obligation at beginning of period		$	2,973		$	2,512			$	150		$	140		$	1,165		$	1,045
Service cost		50			41				—			—			16			14
Interest cost		79			98				4			5			33			41
Plan amendments		24			—				—			—			—			—
Actuarial loss		355		1	476		1		16			15			39		1	110		1
Benefits paid		(215)			(154)				(10)			(10)			(48)			(45)
Benefit obligation at end of period		$	3,266		$	2,973			$	160		$	150		$	1,205		$	1,165
Plan assets at fair value at beginning of period		$	2,546		$	2,247			$	—		$	—		$	1,509		$	1,280
Actual return on plan assets		371			453				—			—			182			273
Company contribution		700			—				10			10			1			—
Actual benefits paid		(215)			(154)				(10)			(10)			(47)			(44)
Plan assets at fair value at end of period		$	3,402		$	2,546			$	—		$	—		$	1,645		$	1,509
Funded status		$	136	2	$	(427)	2		$	(160)		$	(150)		$	440		$	344
Consumers
Benefit obligation at beginning of period									$	109		$	101		$	1,120		$	1,004
Service cost									—			—			15			13
Interest cost									3			4			31			40

Actuarial loss									12			11			37		1	106		1
Benefits paid									(7)			(7)			(45)			(43)
Benefit obligation at end of period									$	117		$	109		$	1,158		$	1,120
Plan assets at fair value at beginning of period									$	—		$	—		$	1,410		$	1,197
Actual return on plan assets									—			—			169			255
Company contribution									7			7			1			—
Actual benefits paid									(7)			(7)			(45)			(42)
Plan assets at fair value at end of period									$	—		$	—		$	1,535		$	1,410
Funded status									$	(117)		$	(109)		$	377		$	290

1The actuarial loss for 2020 and 2019 for the DB Pension Plans was primarily the result of lower discount rates and lower interest rates used to calculate the value of lump-sum payments. The actuarial loss for 2020 and 2019 for the OPEB Plan was primarily the result of lower discount rates.

2The total funded status of the DB Pension Plans attributable to Consumers, based on an allocation of expenses, was $138 million at December 31, 2020 and $(408) million at December 31, 2019.

Schedule Of Retirement Benefit Plan Assets (Liabilities)

Presented in the following table is the classification of CMS Energy’s and Consumers’ retirement benefit plans’ assets and liabilities:


In Millions
December 31	2020			2019
CMS Energy, including Consumers
Non-current assets
DB Pension Plans		$	136		$	104
OPEB Plan		440			344
Current liabilities
DB SERP		10			10
Non-current liabilities
DB Pension Plans		—			531
DB SERP		150			140

Consumers
Non-current assets
DB Pension Plans		$	138		$	109
OPEB Plan		377			290
Current liabilities
DB SERP		7			7
Non-current liabilities
DB Pension Plans		—			517
DB SERP		110			102

Schedule Of Accumulated And Projected Benefit Obligations

At December 31, 2019, the PBO and ABO for one of the defined benefit pension plans exceeded plan assets; presented in the following table is information related to that plan:


In Millions
December 31	2019
CMS Energy, including Consumers
PBO		$	1,736
ABO		1,398
Fair value of plan assets		1,205

Schedule Of Net Periodic Benefit Cost Not Yet Recognized

For additional details on regulatory assets, see Note 3, Regulatory Matters.


In Millions
	DB Pension Plans and DB SERP						OPEB Plan
December 31	2020			2019			2020			2019
CMS Energy, including Consumers
Regulatory assets
Net loss		$	1,194		$	1,114		$	254		$	308
Prior service cost (credit)		29			8			(246)			(300)
Regulatory assets		$	1,223		$	1,122		$	8		$	8
AOCI
Net loss (gain)		120			105			(10)			(6)
Prior service cost (credit)		1			—			(6)			(8)
Total amounts recognized in regulatory assets and AOCI		$	1,344		$	1,227		$	(8)		$	(6)
Consumers
Regulatory assets
Net loss		$	1,194		$	1,114		$	254		$	308
Prior service cost (credit)		29			8			(246)			(300)
Regulatory assets		$	1,223		$	1,122		$	8		$	8
AOCI
Net loss		47			36			—			—
Total amounts recognized in regulatory assets and AOCI		$	1,270		$	1,158		$	8		$	8

Schedule Of Allocation Of Plan Assets

For additional details regarding the fair value hierarchy, see Note 6, Fair Value Measurements.


In Millions
	DB Pension Plans
	December 31, 2020									December 31, 2019
	Total			Level 1			Level 2			Total			Level 1			Level 2
CMS Energy, including Consumers
Cash and short-term investments		$	115		$	115		$	—		$	44		$	44		$	—
U.S. government and agencies securities		150			—			150			66			—			66
Corporate debt		540			—			540			493			—			493
State and municipal bonds		11			—			11			17			—			17
Foreign corporate bonds		41			—			41			33			—			33
Mutual funds		971			971			—			640			640			—
		$	1,828		$	1,086		$	742		$	1,293		$	684		$	609
Pooled funds		1,574									1,253
Total		$	3,402								$	2,546


In Millions
	OPEB Plan
	December 31, 2020									December 31, 2019
	Total			Level 1			Level 2			Total			Level 1			Level 2
CMS Energy, including Consumers
Cash and short-term investments		$	33		$	33		$	—		$	9		$	9		$	—
U.S. government and agencies securities		18			—			18			10			—			10
Corporate debt		64			—			64			71			—			71
State and municipal bonds		2			—			2			2			—			2
Foreign corporate bonds		5			—			5			5			—			5
Common stocks		66			66			—			55			55			—
Mutual funds		807			807			—			713			713			—
		$	995		$	906		$	89		$	865		$	777		$	88
Pooled funds		650									644
Total		$	1,645								$	1,509

Schedule Of Asset Allocation

Asset Allocations: Presented in the following table are the investment components of the assets of CMS Energy’s DB Pension Plans and OPEB Plan as of December 31, 2020:


	DB Pension Plans			OPEB Plan
Equity securities		55.0	%		50.0	%
Fixed-income securities		34.0			30.0

Multi-asset investments		11.0			20.0
		100.0	%		100.0	%

Schedule Of Plan Contributions

Presented in the following table are the contributions to CMS Energy’s and Consumers’ DB Pension Plans and OPEB Plan:


In Millions
Years Ended December 31	2020			2019
CMS Energy, including Consumers
DB Pension Plans		$	700		$	—
OPEB Plan		1			—
Consumers
DB Pension Plans		$	682		$	—
OPEB Plan		1			—

Schedule Of Expected Benefit Payments

Presented in the following table are the expected benefit payments for each of the next five years and the five-year period thereafter:


In Millions
	DB Pension Plans			DB SERP			OPEB Plan
CMS Energy, including Consumers
2021		$	191		$	10		$	52
2022		188			10			54
2023		184			10			56
2024		182			10			57
2025		182			10			58
2026-2030		890			46			299
Consumers
2021		$	181		$	7		$	50
2022		178			7			52
2023		175			7			53
2024		173			7			55
2025		172			7			56
2026-2030		845			32			286

Consumers Energy Company