RETIREMENT BENEFITS AND TRUSTEED ASSETS

DTE Energy's subsidiary, DTE Energy Corporate Services, LLC (LLC), sponsors defined benefit pension plans and other postretirement plans covering certain employees of the Registrants.

The table below represents the pension and other postretirement benefit plans of each Registrant at December 31, 2018:



	Registrants
	DTE Energy	DTE Electric
Qualified Pension Plans
DTE Energy Company Retirement Plan	X	X
DTE Gas Company Retirement Plan for Employees Covered by Collective Bargaining Agreements	X
Shenango Inc. Pension Plan	X
Nonqualified Pension Plans
DTE Energy Company Supplemental Retirement Plan	X	X
DTE Energy Company Executive Supplemental Retirement Plan^(a)	X	X
DTE Energy Company Supplemental Severance Benefit Plan	X
Other Postretirement Benefit Plans
The DTE Energy Company Comprehensive Non-Health Welfare Plan	X	X
The DTE Energy Company Comprehensive Retiree Group Health Care Plan	X	X
DTE Supplemental Retiree Benefit Plan	X	X
DTE Energy Company Retiree Reimbursement Arrangement Plan	X	X

_____________________________________


(a)	Sponsored by the DTE Energy subsidiary, DTE Energy Holding Company.

DTE Electric participates in various plans that provide pension and other postretirement benefits for DTE Energy and its affiliates. The plans are sponsored by the LLC. DTE Electric accounts for its participation in DTE Energy's qualified and nonqualified pension plans by applying multiemployer accounting. DTE Electric accounts for its participation in other postretirement benefit plans by applying multiple-employer accounting. Within multiemployer and multiple-employer plans, participants pool plan assets for investment purposes and to reduce the cost of plan administration. The primary difference between plan types is assets contributed in multiemployer plans can be used to provide benefits for all participating employers, while assets contributed within a multiple-employer plan are restricted for use by the contributing employer. As a result of multiemployer accounting treatment, capitalized costs associated with these plans are reflected in Property, plant, and equipment in DTE Electric's Consolidated Statements of Financial Position. The same capitalized costs are reflected as Regulatory assets and liabilities in DTE Energy's Consolidated Statements of Financial Position. In addition, the service cost and non-service cost components are presented in Operation and maintenance in DTE Electric's Consolidated Statements of Operations. The same non-service cost components are presented in Other (Income) and Deductions — Non-operating retirement benefits, net in DTE Energy's Consolidated Statements of Operations. Plan participants of all plans are solely DTE Energy and affiliate participants.

Pension Plan Benefits

DTE Energy has qualified defined benefit retirement plans for eligible represented and non-represented employees. The plans are noncontributory and provide traditional retirement benefits based on the employee's years of benefit service, average final compensation, and age at retirement. In addition, certain represented and non-represented employees are covered under cash balance provisions that determine benefits on annual employer contributions and interest credits. DTE Energy also maintains supplemental nonqualified, noncontributory, retirement benefit plans for certain management employees. These plans provide for benefits that supplement those provided by DTE Energy’s other retirement plans.

Net pension cost for DTE Energy includes the following components:



	2018			2017			2016
	(In millions)
Service cost	$	99		$	92		$	92
Interest cost	202			214			219
Expected return on plan assets	(329		)	(311		)	(309		)
Amortization of:
Net actuarial loss	176			176			164
Prior service cost	—			1			1
Net pension cost	$	148		$	172		$	167



	2018			2017
	(In millions)
Other changes in plan assets and benefit obligations recognized in Regulatory assets and Other comprehensive income (loss)
Net actuarial loss	$	125		$	27
Amortization of net actuarial loss	(176		)	(176		)
Prior service credit	—			(11		)
Amortization of prior service cost	—			(1		)
Total recognized in Regulatory assets and Other comprehensive income (loss)	$	(51	)	$	(161	)
Total recognized in net periodic pension cost, Regulatory assets, and Other comprehensive income (loss)	$	97		$	11
Estimated amounts to be amortized from Regulatory assets and Accumulated other comprehensive income (loss) into net periodic benefit cost during next fiscal year
Net actuarial loss	$	131		$	178
Prior service cost	$	1		$	—

The following table reconciles the obligations, assets, and funded status of the plans as well as the amounts recognized as prepaid pension cost or pension liability in DTE Energy's Consolidated Statements of Financial Position at December 31:



	DTE Energy
	2018			2017
	(In millions)
Accumulated benefit obligation, end of year	$	4,779		$	5,149
Change in projected benefit obligation
Projected benefit obligation, beginning of year	$	5,576		$	5,171
Service cost	99			92
Interest cost	202			214
Plan amendments	—			(11		)
Actuarial (gain) loss	(438		)	391
Benefits paid	(315		)	(281		)
Projected benefit obligation, end of year	$	5,124		$	5,576
Change in plan assets
Plan assets at fair value, beginning of year	$	4,636		$	4,012
Actual return on plan assets	(233		)	674
Company contributions	185			231
Benefits paid	(315		)	(281		)
Plan assets at fair value, end of year	$	4,273		$	4,636
Funded status	$	(851	)	$	(940	)
Amount recorded as:
Current liabilities	$	(14	)	$	(16	)
Noncurrent liabilities	(837		)	(924		)
	$	(851	)	$	(940	)
Amounts recognized in Accumulated other comprehensive income (loss), pre-tax
Net actuarial loss	$	152		$	163
Prior service cost	5			6
	$	157		$	169
Amounts recognized in Regulatory assets^(a)
Net actuarial loss	$	1,973		$	2,014
Prior service credit	(12		)	(14		)
	$	1,961		$	2,000

______________________________________


(a)	See Note 9 to the Consolidated Financial Statements, "Regulatory Matters."

The Registrants' policy is to fund pension costs by contributing amounts consistent with the provisions of the Pension Protection Act of 2006, and additional amounts when it deems appropriate. The following table provides contributions to the qualified pension plans in:



	2018		2017		2016
	(In millions)
DTE Energy	$	175	$	223	$	179
DTE Electric	175		185		145

During 2018, DTE Energy contributed the following amounts of DTE Energy common stock to the DTE Energy Company Affiliates Employee Benefit Plans Master Trust:



Date	Number of Shares	Price per Share	Amount
			(In millions)
March 7, 2018	1,751,401	$99.92	$	175

The above contribution was made on behalf of DTE Electric, for which DTE Electric paid DTE Energy cash consideration of $175 million in March 2018.

At the discretion of management, and depending upon financial market conditions, DTE Energy anticipates making up to $150 million in contributions, including $100 million of DTE Electric contributions, to the qualified pension plans in 2019.

DTE Energy's subsidiaries are responsible for their share of qualified and nonqualified pension benefit costs. DTE Electric's allocated portion of pension benefit costs included in capital expenditures and operating and maintenance expense were $120 million for the year ended December 31, 2018 and $136 million for the years ended December 31, 2017 and 2016. These amounts include recognized contractual termination benefit charges, curtailment gains, and settlement charges.

At December 31, 2018, the benefits related to DTE Energy's qualified and nonqualified pension plans expected to be paid in each of the next five years and in the aggregate for the five fiscal years thereafter are as follows:



	(In millions)
2019	$	311
2020	317
2021	317
2022	323
2023	332
2024-2028	1,713
Total	$	3,313

Assumptions used in determining the projected benefit obligation and net pension costs of DTE Energy are:



	2018	2017	2016
Projected benefit obligation
Discount rate	4.40%	3.70%	4.25%
Rate of compensation increase	4.98%	4.98%	4.65%
Net pension costs
Discount rate	3.70%	4.25%	4.50%
Rate of compensation increase	4.98%	4.65%	4.65%
Expected long-term rate of return on plan assets	7.50%	7.50%	7.75%

DTE Energy employs a formal process in determining the long-term rate of return for various asset classes. Management reviews historic financial market risks and returns and long-term historic relationships between the asset classes of equities, fixed income, and other assets, consistent with the widely accepted capital market principle that asset classes with higher volatility generate a greater return over the long-term. Current market factors such as inflation, interest rates, asset class risks, and asset class returns are evaluated and considered before long-term capital market assumptions are determined. The long-term portfolio return is also established employing a consistent formal process, with due consideration of diversification, active investment management, and rebalancing. Peer data is reviewed to check for reasonableness. As a result of this process, the Registrants have long-term rate of return assumptions for the pension plans of 7.30% and other postretirement benefit plans of 7.75% for 2019. The Registrants believe these rates are a reasonable assumption for the long-term rate of return on plan assets for 2019 given the current investment strategy.

The DTE Energy Company Affiliates Employee Benefit Plans Master Trust employs a liability driven investment program whereby the characteristics of plan liabilities are considered when determining investment policy. Risk tolerance is established through consideration of future plan cash flows, plan funded status, and corporate financial considerations. The investment portfolio contains a diversified blend of equity, fixed income, and other investments. Furthermore, equity investments are diversified across U.S. and non-U.S. stocks and large and small market capitalizations. Fixed income investments generally include U.S. Treasuries, other governmental debt, diversified corporate bonds, bank loans, and mortgage-backed securities. Other investments are used to enhance long-term returns while improving portfolio diversification. Derivatives may be utilized in a risk controlled manner, to potentially increase the portfolio beyond the market value of invested assets and/or reduce portfolio investment risk. Investment risk is measured and monitored on an ongoing basis through annual liability measurements, periodic asset/liability studies, and quarterly investment portfolio reviews.

Target allocations for DTE Energy's pension plan assets as of December 31, 2018 are listed below:



U.S. Large Capitalization (Cap) Equity Securities	16	%
U.S. Small Cap and Mid Cap Equity Securities	4
Non-U.S. Equity Securities	15
Fixed Income Securities	42
Hedge Funds and Similar Investments	15
Private Equity and Other	8
	100	%

The following tables provide the fair value measurement amounts for DTE Energy's pension plan assets at December 31, 2018 and 2017^(a):



	December 31, 2018											December 31, 2017
	Level 1			Level 2			Other^(b)		Total			Level 1			Level 2			Other^(b)		Total
	(In millions)
DTE Energy asset category:
Short-term Investments^(c)	$	—		$	27		$	—	$	27		$	—		$	114		$	—	$	114
Equity Securities
U.S. Large Cap^(d)	606			3			—		609			821			5			—		826
U.S. Small Cap and Mid Cap^(e)	123			1			—		124			229			5			—		234
Non-U.S.^(f)	337			9			240		586			529			13			280		822
Fixed Income Securities^(g)	6			1,892			—		1,898			1			1,453			—		1,454
Hedge Funds and Similar Investments^(h)	88			—			542		630			265			—			593		858
Private Equity and Other⁽ⁱ⁾	—			—			399		399			—			—			328		328
Securities Lending^(j)	(22		)	(8		)	—		(30		)	(53		)	(13		)	—		(66		)
Securities Lending Collateral^(j)	22			8			—		30			53			13			—		66
DTE Energy Total	$	1,160		$	1,932		$	1,181	$	4,273		$	1,845		$	1,590		$	1,201	$	4,636

_______________________________________


(a)	For a description of levels within the fair value hierarchy, see Note 12 to the Consolidated Financial Statements, "Fair Value."


(b)	Amounts represent assets valued at NAV as a practical expedient for fair value.


(c)	This category predominantly represents certain short-term fixed income securities and money market investments that are managed in separate accounts or commingled funds. Pricing for investments in this category are obtained from quoted prices in actively traded markets or valuations from brokers or pricing services.


(d)	This category represents portfolios of large capitalization domestic equities. Investments in this category are exchange-traded securities whereby unadjusted quoted prices can be obtained.


(e)	This category represents portfolios of small and medium capitalization domestic equities. Investments in this category are exchange-traded securities whereby unadjusted quoted prices can be obtained.


(f)	This category primarily consists of portfolios of non-U.S. developed and emerging market equities. Investments in this category are exchange-traded securities whereby unadjusted quoted prices can be obtained. Exchange-traded securities held in a commingled fund are classified as NAV assets.


(g)	This category includes corporate bonds from diversified industries, U.S. Treasuries, other governmental debt, bank loans, and mortgage-backed securities. Pricing for investments in this category is obtained from quoted prices in actively traded markets and quotations from broker or pricing services.


(h)	This category utilizes a diversified group of strategies that attempt to capture financial market inefficiencies and includes publicly traded mutual funds, commingled funds and limited partnership funds. Pricing for mutual funds in this category is obtained from quoted prices in actively traded markets. Commingled funds and limited partnership funds are classified as NAV assets.


(i)	This category includes a diversified group of funds and strategies that primarily invests in private equity partnerships. This category also includes investments in real estate and private debt. All pricing for investments in this category are classified as NAV assets.


(j)	DTE Energy has a securities lending program with a third-party agent. The program allows the agent to lend certain securities from DTE Energy's pension trust to selected entities against receipt of collateral (in the form of cash) as provided for and determined in accordance with their securities lending agency agreements.

The pension trust holds debt and equity securities directly and indirectly through commingled funds. Exchange-traded debt and equity securities held directly are valued using quoted market prices in actively traded markets. The commingled funds hold exchange-traded equity or debt securities and are valued based on stated NAVs. Non-exchange traded fixed income securities are valued by the trustee based upon quotations available from brokers or pricing services. A primary price source is identified by asset type, class, or issue for each security. The trustee monitors prices supplied by pricing services and may use a supplemental price source or change the primary price source of a given security if the trustee challenges an assigned price and determines that another price source is considered preferable. DTE Energy has obtained an understanding of how these prices are derived, including the nature and observability of the inputs used in deriving such prices.

There were no significant transfers between Level 2 and Level 1 in the years ended December 31, 2018 and 2017 for DTE Energy.

Other Postretirement Benefits

The Registrants participate in defined benefit plans sponsored by the LLC that provide certain other postretirement health care and life insurance benefits for employees who are eligible for these benefits. The Registrants' policy is to fund certain trusts to meet its other postretirement benefit obligations. DTE Energy did not make any contributions to these trusts during 2018 and does not anticipate making any contributions to the trusts in 2019.

DTE Energy and DTE Electric offer a defined contribution VEBA for eligible represented and non-represented employees, in lieu of defined benefit post-employment health care benefits. The Registrants allocate a fixed amount per year to an account in a defined contribution VEBA for each employee. These accounts are managed either by the Registrant (for non-represented and certain represented groups) or by the Utility Workers of America for Local 223 employees. DTE Energy contributions to the VEBA for these accounts were $11 million in 2018, $8 million in 2017, and $6 million in 2016, including DTE Electric contributions of $5 million in 2018, 2017, and 2016.

The Registrants also contribute a fixed amount to a Retiree Reimbursement Account, for certain non-represented and represented retirees, spouses, and surviving spouses when the youngest of the retiree's covered household becomes eligible for Medicare Part A based on age. The amount of the annual allocation to each participant is determined by the employee's retirement date, and increases each year for each eligible participant at the lower of the rate of medical inflation or 2%.

Net other postretirement credit for DTE Energy includes the following components:



	2018			2017			2016
	(In millions)
Service cost	$	27		$	27		$	27
Interest cost	69			73			80
Expected return on plan assets	(143		)	(130		)	(129		)
Amortization of:
Net actuarial loss	11			13			30
Prior service credit	—			(14		)	(118		)
Other	—			—			(1		)
Net other postretirement credit	$	(36	)	$	(31	)	$	(111	)



	2018			2017
	(In millions)
Other changes in plan assets and accumulated postretirement benefit obligation recognized in Regulatory assets and Other comprehensive income (loss)
Net actuarial gain	$	(8	)	$	(21	)
Amortization of net actuarial loss	(11		)	(13		)
Prior service credit	(44		)	(1		)
Amortization of prior service credit	—			14
Total recognized in Regulatory assets and Other comprehensive income (loss)	$	(63	)	$	(21	)
Total recognized in net periodic benefit cost, Regulatory assets, and Other comprehensive income (loss)	$	(99	)	$	(52	)
Estimated amounts to be amortized from Regulatory assets and Accumulated other comprehensive income (loss) into net periodic benefit cost during next fiscal year
Net actuarial loss	$	12		$	11
Prior service credit	$	(9	)	$	(1	)

Net other postretirement credit for DTE Electric includes the following components:



	2018			2017			2016
	(In millions)
Service cost	$	20		$	20		$	20
Interest cost	53			56			61
Expected return on plan assets	(98		)	(90		)	(90		)
Amortization of:
Net actuarial loss	8			8			21
Prior service credit	—			(10		)	(89		)
Net other postretirement credit	$	(17	)	$	(16	)	$	(77	)



	2018			2017
	(In millions)
Other changes in plan assets and accumulated postretirement benefit obligation recognized in Regulatory assets
Net actuarial (gain) loss	$	(46	)	$	2
Amortization of net actuarial loss	(8		)	(8		)
Amortization of prior service (cost) credit	(35		)	10
Total recognized in Regulatory assets	$	(89	)	$	4
Total recognized in net periodic benefit cost and Regulatory assets	$	(106	)	$	(12	)
Estimated amounts to be amortized from Regulatory assets into net periodic benefit cost during next fiscal year
Net actuarial loss	$	5		$	8
Prior service credit	$	(7	)	$	—

The following table reconciles the obligations, assets, and funded status of the plans including amounts recorded as Accrued postretirement liability in the Registrants' Consolidated Statements of Financial Position at December 31:



	DTE Energy						DTE Electric
	2018			2017			2018			2017
	(In millions)
Change in accumulated postretirement benefit obligation
Accumulated postretirement benefit obligation, beginning of year	$	1,910		$	1,795		$	1,470		$	1,373
Service cost	27			27			20			20
Interest cost	69			73			53			56
Plan amendments	(44		)	—			(35		)	—
Actuarial (gain) loss	(227		)	101			(196		)	84
Benefits paid	(90		)	(86		)	(65		)	(63		)
Accumulated postretirement benefit obligation, end of year	$	1,645		$	1,910		$	1,247		$	1,470
Change in plan assets
Plan assets at fair value, beginning of year	$	1,848		$	1,758		$	1,272		$	1,218
Actual return on plan assets	(75		)	252			(52		)	172
Benefits paid	(84		)	(162		)	(62		)	(118		)
Plan assets at fair value, end of year	$	1,689		$	1,848		$	1,158		$	1,272
Funded status	$	44		$	(62	)	$	(89	)	$	(198	)
Amount recorded as:
Noncurrent assets	$	45		$	—		$	189		$	113
Current liabilities	(1		)	(1		)	—			—
Noncurrent liabilities	—			(61		)	(278		)	(311		)
	$	44		$	(62	)	$	(89	)	$	(198	)
Amounts recognized in Accumulated other comprehensive income (loss), pre-tax
Net actuarial (gain) loss	$	1		$	(1	)	$	—		$	—
	$	1		$	(1	)	$	—		$	—
Amounts recognized in Regulatory assets^(a)
Net actuarial loss	$	257		$	279		$	156		$	211
Prior service credit	(44		)	(1		)	(35		)	—
	$	213		$	278		$	121		$	211

______________________________________


(a)	See Note 9 to the Consolidated Financial Statements, "Regulatory Matters."

At December 31, 2018, the benefits expected to be paid, including prescription drug benefits, in each of the next five years and in the aggregate for the five fiscal years thereafter for the Registrants are as follows:



	DTE Energy		DTE Electric
	(In millions)
2019	$	88	$	66
2020	92		70
2021	96		73
2022	100		75
2023	102		77
2024-2028	532		402
Total	$	1,010	$	763

Assumptions used in determining the accumulated postretirement benefit obligation and net other postretirement benefit costs of the Registrants are:



	2018	2017	2016
Accumulated postretirement benefit obligation
Discount rate	4.40%	3.70%	4.25%
Health care trend rate pre- and post- 65	6.75 / 7.25%	6.75 / 7.25%	6.50 / 6.75%
Ultimate health care trend rate	4.50%	4.50%	4.50%
Year in which ultimate reached pre- and post- 65	2031	2030	2028
Other postretirement benefit costs
Discount rate	3.70%	4.25%	4.50%
Expected long-term rate of return on plan assets	7.75%	7.75%	8.00%
Health care trend rate pre- and post- 65	6.75 / 7.25%	6.50 / 6.75%	6.25 / 6.75%
Ultimate health care trend rate	4.50%	4.50%	4.50%
Year in which ultimate reached pre- and post- 65	2030	2028	2027

A one percentage point increase in health care cost trend rates would have increased the total service cost and interest cost components of benefit costs for DTE Energy by $4 million, including $3 million for DTE Electric, in 2018 and would have increased the accumulated benefit obligation for DTE Energy by $72 million, including $51 million for DTE Electric, at December 31, 2018. A one percentage point decrease in the health care cost trend rates would have decreased the total service and interest cost components of benefit costs for DTE Energy by $4 million, including $3 million for DTE Electric, in 2018 and would have decreased the accumulated benefit obligation for DTE Energy by $63 million, including $45 million for DTE Electric, at December 31, 2018.

The process used in determining the long-term rate of return on assets for the other postretirement benefit plans is similar to that previously described for the pension plans.

The DTE Energy Master VEBA Trust employs a total return investment approach. The investment portfolio contains a diversified blend of equity, fixed income, and other investments. Furthermore, equity investments are diversified across U.S. and non-U.S. stocks and large and small market capitalizations. Fixed income investments generally include U.S. Treasuries, other governmental debt, diversified corporate bonds, bank loans, and mortgage-backed securities. Other investments are used to enhance long-term returns while improving portfolio diversification. Derivatives may be utilized in a risk controlled manner to potentially increase the portfolio beyond the market value of invested assets and/or reduce portfolio investment risk. Investment risk is measured and monitored on an ongoing basis through annual liability measurements, periodic asset/liability studies, and quarterly investment portfolio reviews.

Target allocations for the Registrants' other postretirement benefit plan assets as of December 31, 2018 are listed below:



U.S. Large Cap Equity Securities	16	%
U.S. Small Cap and Mid Cap Equity Securities	4
Non-U.S. Equity Securities	19
Fixed Income Securities	28
Hedge Funds and Similar Investments	19
Private Equity and Other	14
	100	%

The following tables provide the fair value measurement amounts for the Registrants' other postretirement benefit plan assets at December 31, 2018 and 2017^(a):



	December 31, 2018											December 31, 2017
	Level 1			Level 2			Other^(b)		Total			Level 1			Level 2			Other^(b)		Total
DTE Energy asset category:	(In millions)
Short-term Investments^(c)	$	14		$	2		$	—	$	16		$	13		$	2		$	—	$	15
Equity Securities
U.S. Large Cap^(d)	225			—			—		225			284			—			—		284
U.S. Small Cap and Mid Cap^(e)	75			—			—		75			131			—			—		131
Non-U.S.^(f)	234			—			67		301			288			1			77		366
Fixed Income Securities^(g)	11			350			130		491			29			324			130		483
Hedge Funds and Similar Investments^(h)	97			—			203		300			116			—			219		335
Private Equity and Other⁽ⁱ⁾	—			—			281		281			—			—			234		234
Securities Lending^(j)	(21		)	(1		)	—		(22		)	(39		)	(1		)	—		(40		)
Securities Lending Collateral^(j)	21			1			—		22			39			1			—		40
DTE Energy Total	$	656		$	352		$	681	$	1,689		$	861		$	327		$	660	$	1,848

DTE Electric asset category:
Short-term Investments^(c)	$	10		$	1		$	—	$	11		$	9		$	1		$	—	$	10
Equity Securities
U.S. Large Cap^(d)	154			—			—		154			195			—			—		195
U.S. Small Cap and Mid Cap^(e)	52			—			—		52			91			—			—		91
Non-U.S.^(f)	163			—			45		208			200			1			52		253
Fixed Income Securities^(g)	7			232			92		331			20			218			92		330
Hedge Funds and Similar Investments^(h)	68			—			139		207			80			—			150		230
Private Equity and Other⁽ⁱ⁾	—			—			195		195			—			—			163		163
Securities Lending^(j)	(15		)	—			—		(15		)	(27		)	(1		)	—		(28		)
Securities Lending Collateral^(j)	15			—			—		15			27			1			—		28
DTE Electric Total	$	454		$	233		$	471	$	1,158		$	595		$	220		$	457	$	1,272

_______________________________________


(a)	For a description of levels within the fair value hierarchy see Note 12 to the Consolidated Financial Statements, "Fair Value."


(b)	Amounts represent assets valued at NAV as a practical expedient for fair value.


(c)	This category predominantly represents certain short-term fixed income securities and money market investments that are managed in separate accounts or commingled funds. Pricing for investments in this category are obtained from quoted prices in actively traded markets or valuations from brokers or pricing services.


(d)	This category represents portfolios of large capitalization domestic equities. Investments in this category are exchange-traded securities whereby unadjusted quoted prices can be obtained.


(e)	This category represents portfolios of small and medium capitalization domestic equities. Investments in this category are exchange-traded securities whereby unadjusted quoted prices can be obtained.


(f)	This category primarily consists of portfolios of non-U.S. developed and emerging market equities. Investments in this category are exchange-traded securities whereby unadjusted quoted prices can be obtained. Exchange-traded securities held in a commingled fund are classified as NAV assets.

(g)

This category includes corporate bonds from diversified industries, U.S. Treasuries, other governmental debt, bank loans, and mortgage backed securities. Pricing for investments in this category is obtained from quoted prices in actively traded markets and quotations from broker or pricing services. Non-exchange traded securities and exchange-traded securities held in commingled funds are classified as NAV assets.


(h)	This category utilizes a diversified group of strategies that attempt to capture financial market inefficiencies and includes publicly traded mutual funds, commingled funds and limited partnership funds. Pricing for mutual funds in this category is obtained from quoted prices in actively traded markets. Commingled funds and limited partnership funds are classified as NAV assets.


(i)	This category includes a diversified group of funds and strategies that primarily invests in private equity partnerships. This category also includes investments in real estate and private debt. All investments in this category are classified as NAV assets.


(j)	The Registrants have a securities lending program with a third-party agent. The program allows the agent to lend certain securities from the Registrants' VEBA trust to selected entities against receipt of collateral (in the form of cash) as provided for and determined in accordance with their securities lending agency agreements.

The DTE Energy Company Master VEBA Trust holds debt and equity securities directly and indirectly through commingled funds. Exchange-traded debt and equity securities held directly are valued using quoted market prices in actively traded markets. The commingled funds hold exchange-traded equity or debt securities and are valued based on NAVs. Non-exchange traded fixed income securities are valued by the trustee based upon quotations available from brokers or pricing services. A primary price source is identified by asset type, class, or issue for each security. The trustee monitors prices supplied by pricing services and may use a supplemental price source or change the primary price source of a given security if the trustee challenges an assigned price and determines that another price source is considered preferable. The Registrants have obtained an understanding of how these prices are derived, including the nature and observability of the inputs used in deriving such prices.

There were no significant transfers between Level 2 and Level 1 in the years ended December 31, 2018 and 2017 for either of the Registrants.

Defined Contribution Plans

The Registrants also sponsor defined contribution retirement savings plans. Participation in one of these plans is available to substantially all represented and non-represented employees. For substantially all employees, the Registrants match employee contributions up to certain predefined limits based upon eligible compensation and the employee’s contribution rate. Additionally, for eligible represented and non-represented employees who do not participate in the Pension Plans, the Registrants annually contribute an amount equivalent to 4% (8% for certain DTE Gas represented employees) of an employee's eligible pay to the employee's defined contribution retirement savings plan. For DTE Energy, the cost of these plans was $61 million, $57 million, and $51 million for the years ended December 31, 2018, 2017, and 2016, respectively. For DTE Electric, the cost of these plans was $29 million, $27 million, and $23 million for the years ended December 31, 2018, 2017, and 2016.