Retirement Benefits

9 Months Ended

Sep. 30, 2011

Retirement Benefits

10: RETIREMENT BENEFITS

CMS Energy and Consumers provide pension, OPEB, and other retirement benefits to employees.

Presented in the following tables are the costs and other changes in plan assets and benefit obligations incurred in CMS Energy's and Consumers' retirement benefits plans:

	In Millions
	Pension
	Three Months Ended						Nine Months Ended
September 30	2011			2010			2011			2010
CMS Energy, including Consumers
Net periodic pension cost
Service cost	$	12		$	11		$	36		$	33
Interest expense		25			25			75			74
Expected return on plan assets		(28	)		(24	)		(84	)		(70	)
Amortization of:
Net loss		16			13			47			39
Prior service cost		1			1			4			4
Net periodic pension cost	$	26		$	26		$	78		$	80
Regulatory adjustment1		—			7			—			30
Net periodic pension cost after regulatory adjustment	$	26		$	33		$	78		$	110
Consumers
Net periodic pension cost
Service cost	$	12		$	11		$	35		$	32
Interest expense		24			23			73			71
Expected return on plan assets		(27	)		(22	)		(82	)		(67	)
Amortization of:
Net loss		15			13			46			38
Prior service cost		1			1			4			4
Net periodic pension cost	$	25		$	26		$	76		$	78
Regulatory adjustment1		—			7			—			30
Net periodic pension cost after regulatory adjustment	$	25		$	33		$	76		$	108

¹ Regulatory adjustments are the differences between amounts included in rates and the periodic benefit cost calculated. These regulatory adjustments were offset by surcharge revenues, resulting in no impact to net income for the periods presented.

CMS Energy's and Consumers' expected long-term rate of return on Pension Plan assets is eight percent. For the twelve months ended September 30, 2011, the actual return on Pension Plan assets was two percent, and for the twelve months ended September 30, 2010, the actual return was 11.6 percent. The expected rate of return is an assumption about long-term asset performance that CMS Energy and Consumers review annually for reasonableness and appropriateness.

In Millions
	OPEB
	Three Months Ended						Nine Months Ended
September 30	2011			2010			2011			2010
CMS Energy, including Consumers
Net periodic OPEB cost
Service cost	$	7		$	7		$	20		$	20
Interest expense		20			20			58			61
Expected return on plan assets		(17	)		(16	)		(50	)		(45	)
Amortization of:
Net loss		7			8			23			24
Prior service cost		(5	)		(5	)		(15	)		(12	)
Net periodic OBEB cost	$	12		$	14		$	36		$	48
Regulatory adjustment1		—			(1	)		—			5
Net periodic OPEB cost after regulatory adjustment	$	12		$	13		$	36		$	53
Consumers
Net periodic OPEB cost
Service cost	$	7		$	6		$	20		$	19
Interest expense		19			19			56			59
Expected return on plan assets		(15	)		(14	)		(46	)		(42	)
Amortization of:
Net loss		7			8			23			24
Prior service cost		(5	)		(5	)		(15	)		(11	)
Net periodic OPEB cost	$	13		$	14		$	38		$	49
Regulatory adjustment1		—			(1	)		—			5
Net periodic OPEB cost after regulatory adjustment	$	13		$	13		$	38		$	54

¹ Regulatory adjustments are the differences between amounts included in rates and the periodic benefit cost calculated. These regulatory adjustments were offset by surcharge revenues, resulting in no impact to net income for the periods presented.

Consumers Energy Company [Member]

Retirement Benefits

10: RETIREMENT BENEFITS

CMS Energy and Consumers provide pension, OPEB, and other retirement benefits to employees.

Presented in the following tables are the costs and other changes in plan assets and benefit obligations incurred in CMS Energy's and Consumers' retirement benefits plans:

In Millions
	Pension
	Three Months Ended						Nine Months Ended
September 30	2011			2010			2011			2010
CMS Energy, including Consumers
Net periodic pension cost
Service cost	$	12		$	11		$	36		$	33
Interest expense		25			25			75			74
Expected return on plan assets		(28	)		(24	)		(84	)		(70	)
Amortization of:
Net loss		16			13			47			39
Prior service cost		1			1			4			4
Net periodic pension cost	$	26		$	26		$	78		$	80
Regulatory adjustment1		—			7			—			30
Net periodic pension cost after regulatory adjustment	$	26		$	33		$	78		$	110
Consumers
Net periodic pension cost
Service cost	$	12		$	11		$	35		$	32
Interest expense		24			23			73			71
Expected return on plan assets		(27	)		(22	)		(82	)		(67	)
Amortization of:
Net loss		15			13			46			38
Prior service cost		1			1			4			4
Net periodic pension cost	$	25		$	26		$	76		$	78
Regulatory adjustment1		—			7			—			30
Net periodic pension cost after regulatory adjustment	$	25		$	33		$	76		$	108

¹     Regulatory adjustments are the differences between amounts included in rates and the periodic benefit cost calculated. These regulatory adjustments were offset by surcharge revenues, resulting in no impact to net income for the periods presented.

CMS Energy's and Consumers' expected long-term rate of return on Pension Plan assets is eight percent. For the twelve months ended September 30, 2011, the actual return on Pension Plan assets was two percent, and for the twelve months ended September 30, 2010 the actual return was 11.6 percent. The expected rate of return is an assumption about long-term asset performance that CMS Energy and Consumers review annually for reasonableness and appropriateness.

In Millions
	OPEB
	Three Months Ended						Nine Months Ended
September 30	2011			2010			2011			2010
CMS Energy, including Consumers
Net periodic OPEB cost
Service cost	$	7		$	7		$	20		$	20
Interest expense		20			20			58			61
Expected return on plan assets		(17	)		(16	)		(50	)		(45	)
Amortization of:
Net loss		7			8			23			24
Prior service cost		(5	)		(5	)		(15	)		(12	)
Net periodic OBEB cost	$	12		$	14		$	36		$	48
Regulatory adjustment1		—			(1	)		—			5
Net periodic OPEB cost after regulatory adjustment	$	12		$	13		$	36		$	53
Consumers
Net periodic OPEB cost
Service cost	$	7		$	6		$	20		$	19
Interest expense		19			19			56			59
Expected return on plan assets		(15	)		(14	)		(46	)		(42	)
Amortization of:
Net loss		7			8			23			24
Prior service cost		(5	)		(5	)		(15	)		(11	)
Net periodic OPEB cost	$	13		$	14		$	38		$	49
Regulatory adjustment1		—			(1	)		—			5
Net periodic OPEB cost after regulatory adjustment	$	13		$	13		$	38		$	54

¹   Regulatory adjustments are the differences between amounts included in rates and the periodic benefit cost calculated. These regulatory adjustments were offset by surcharge revenues, resulting in no impact to net income for the periods presented.