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v3.19.3.a.u2

Employee Retirement Benefits (Tables) | 12 Months Ended
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Dec. 31, 2019
Retirement Benefits [Abstract] |
Plan assets, benefit obligations, and funded status included in the consolidated balance sheets | Pension Plan Assets, Benefit Obligations and Funded Status - The changes in assets, benefit obligations and the funded status of the pension plan are as follows:
| 2019 |  | 2018
| (millions)
Change in pension plan assets: |  |  |
Fair value of plan assets at January 1 | $ | 3,806 |  |  | $ | 4,020 |
Actual return on plan assets | 736 |  |  | (69 | )
Benefit payments | (235 | ) |  | (160 | )
Acquisitions(a) | 493 |  |  | 15 |
Fair value of plan assets at December 31 | $ | 4,800 |  |  | $ | 3,806 |
Change in pension benefit obligation: |  |  |  |  |
Obligation at January 1 | $ | 2,522 |  |  | $ | 2,593 |
Service cost | 80 |  |  | 70 |
Interest cost | 114 |  |  | 82 |
Acquisitions(a) | 503 |  |  | 15 |
Special termination benefits(b) | 19 |  |  | 35 |
Plan amendments | 3 |  |  | — |
Actuarial losses (gains) - net | 357 |  |  | (113 | )
Benefit payments | (235 | ) |  | (160 | )
Obligation at December 31(c) | $ | 3,363 |  |  | $ | 2,522 |
Funded status: |  |  |  |  |
Prepaid pension benefit costs at NEE at December 31 | $ | 1,437 |  |  | $ | 1,284 |
Prepaid pension benefit costs at FPL at December 31(d) | $ | 1,477 |  |  | $ | 1,407 |
_________________________
(a) | Relates to substantially funded pension obligations in connection with the acquisitions of Gulf Power and Florida City Gas, see Note 8.
(b) | Reflects enhanced early retirement programs.
(c) | NEE's accumulated pension benefit obligation, which includes no assumption about future salary levels, at December 31, 2019 and 2018 was approximately $3,281 million and $2,479 million, respectively.
(d) Reflects FPL's allocated benefits under NEE's pension plan.
Unrecognized amounts included in accumulated other comprehensive income (loss) | NEE's unrecognized amounts included in accumulated other comprehensive income (loss) yet to be recognized as components of prepaid pension benefit costs are as follows:
| 2019 |  | 2018
| (millions)
Unrecognized prior service benefit (net of $2 and $2 tax expense, respectively) | $ | 2 |  |  | $ | 2 |
Unrecognized losses (net of $37 and $27 tax benefit, respectively) | (108 | ) |  | (71 | )
Total | $ | (106 | ) |  | $ | (69 | )
Unrecognized amounts included in regulatory assets (liabilities) | NEE's unrecognized amounts included in regulatory assets yet to be recognized as components of net prepaid pension benefit costs are as follows:
| 2019 |  | 2018
| (millions)
Unrecognized prior service benefit | $ | (2 | ) |  | $ | (3 | )
Unrecognized losses | 263 |  |  | 376 |
Total | $ | 261 |  |  | $ | 373 |
Significant assumptions used to determine benefit obligations and net periodic benefit (income) cost | The following table provides the assumptions used to determine the benefit obligation for the pension plan. These rates are used in determining net periodic pension income in the following year.
| 2019 |  | 2018
Discount rate(a) | 3.22 | % |  | 4.26 | %
Salary increase | 4.40 | % |  | 4.40 | %
_________________________ (a) The method of estimating the interest cost component of net periodic benefit costs uses a full yield curve approach by applying a specific spot rate along the yield curve. The assumptions used to determine net periodic pension income for the pension plan are as follows:
| 2019 |  | 2018 |  | 2017
Discount rate | 4.26 | % |  | 3.59 | % |  | 4.09 | %
Salary increase | 4.40 | % |  | 4.10 | % |  | 4.10 | %
Expected long-term rate of return, net of investment management fees(a) | 7.35 | % |  | 7.35 | % |  | 7.35 | %
______________________ (a) In developing the expected long-term rate of return on assets assumption for its pension plan, NEE evaluated input, including other qualitative and quantitative factors, from its actuaries and consultants, as well as information available in the marketplace. NEE considered different models, capital market return assumptions and historical returns for a portfolio with an equity/bond asset mix similar to its pension fund. NEE also considered its pension fund's historical compounded returns.
Fair value measurements of pension plan assets by hierarchy level | The fair value measurements of NEE's pension plan assets by fair value hierarchy level are as follows:
| December 31, 2019(a)
| Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total
| (millions)
Equity securities(b) | $ | 1,593 |  |  | $ | 9 |  |  | $ | 3 |  |  | $ | 1,605 |
Equity commingled vehicles(c) | — |  |  | 706 |  |  | — |  |  | 706 |
U.S. Government and municipal bonds | 95 |  |  | 7 |  |  | — |  |  | 102 |
Corporate debt securities(d) | — |  |  | 247 |  |  | — |  |  | 247 |
Asset-backed securities | — |  |  | 416 |  |  | — |  |  | 416 |
Debt security commingled vehicles(e) | 47 |  |  | 143 |  |  | — |  |  | 190 |
Convertible securities(f) | 32 |  |  | 372 |  |  | — |  |  | 404 |
Total investments in the fair value hierarchy | $ | 1,767 |  |  | $ | 1,900 |  |  | $ | 3 |  |  | 3,670 |
Total investments measured at net asset value(g) |  |  |  |  |  |  | 1,130 |
Total fair value of plan assets |  |  |  |  |  |  | $ | 4,800 |
_____________________
(a) | See Note 5 for discussion of fair value measurement techniques and inputs.
(b) | Includes foreign investments of $741 million.
(c) | Includes foreign investments of $141 million.
(d) | Includes foreign investments of $76 million.
(e) | Includes foreign investments of $5 million.
(f) | Includes foreign investments of $20 million.
(g) | Includes foreign investments of $190 million.
| December 31, 2018(a)
| Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) |  | Significant Other Observable Inputs (Level 2) |  | Significant Unobservable Inputs (Level 3) |  | Total
| (millions)
Equity securities(b) | $ | 1,030 |  |  | $ | 11 |  |  | $ | 2 |  |  | $ | 1,043 |
Equity commingled vehicles(c) | — |  |  | 638 |  |  | — |  |  | 638 |
U.S. Government and municipal bonds | 84 |  |  | 11 |  |  | — |  |  | 95 |
Corporate debt securities(d) | — |  |  | 252 |  |  | — |  |  | 252 |
Asset-backed securities | — |  |  | 253 |  |  | — |  |  | 253 |
Debt security commingled vehicles | — |  |  | 133 |  |  | — |  |  | 133 |
Convertible securities(e) | 17 |  |  | 303 |  |  | — |  |  | 320 |
Total investments in the fair value hierarchy | $ | 1,131 |  |  | $ | 1,601 |  |  | $ | 2 |  |  | 2,734 |
Total investments measured at net asset value(f) |  |  |  |  |  |  | 1,072 |
Total fair value of plan assets |  |  |  |  |  |  | $ | 3,806 |
______________________
(a) | See Note 5 for discussion of fair value measurement techniques and inputs.
(b) | Includes foreign investments of $459 million.
(c) | Includes foreign investments of $193 million.
(d) | Includes foreign investments of $77 million.
(e) | Includes foreign investments of $30 million.
(f) | Includes foreign investments of $214 million.
Expected benefit payments, net of government drug subsidy | Expected Cash Flows - The following table provides information about benefit payments expected to be paid by the pension plan for each of the following calendar years (in millions):
2020 | $ | 211 |
2021 | $ | 203 |
2022 | $ | 203 |
2023 | $ | 206 |
2024 | $ | 207 |
2025 - 2029 | $ | 1,044 |
Net periodic benefit (income) cost | Net Periodic Income - The components of net periodic income for the plans are as follows:
| Pension Benefits |  | Postretirement Benefits
| 2019 |  | 2018 |  | 2017 |  | 2019 |  | 2018 |  | 2017
|  |  | (millions) |  |
Service cost | $ | 80 |  |  | $ | 70 |  |  | $ | 66 |  |  | $ | 1 |  |  | $ | 1 |  |  | $ | 1 |
Interest cost | 114 |  |  | 82 |  |  | 83 |  |  | 9 |  |  | 7 |  |  | 8 |
Expected return on plan assets | (312 | ) |  | (276 | ) |  | (270 | ) |  | — |  |  | — |  |  | — |
Amortization of prior service benefit | (1 | ) |  | (1 | ) |  | (1 | ) |  | (15 | ) |  | (15 | ) |  | (10 | )
Special termination benefits | 19 |  |  | 35 |  |  | 38 |  |  | — |  |  | — |  |  | — |
Postretirement benefits settlement | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1 |
Net periodic income at NEE | $ | (100 | ) |  | $ | (90 | ) |  | $ | (84 | ) |  | $ | (5 | ) |  | $ | (7 | ) |  | $ | — |
Net periodic income allocated to FPL | $ | (71 | ) |  | $ | (57 | ) |  | $ | (51 | ) |  | $ | (4 | ) |  | $ | (6 | ) |  | $ | — |
Components of net periodic benefit income (cost) recognized in OCI | Other Comprehensive Income - The components of net periodic income recognized in OCI for the pension plan are as follows:
| 2019 |  | 2018 |  | 2017
| (millions)
Net gains (losses) (net of $10 tax benefit, $4 tax benefit and $23 tax expense, respectively) | $ | (36 | ) |  | $ | (13 | ) |  | $ | 37 |
Components of net periodic benefit (income) cost recognized in regulatory assets (liabilities) | Regulatory Assets (Liabilities) - The components of net periodic income recognized during the year in regulatory assets (liabilities) for the pension plan are as follows:
| 2019 |  | 2018
| (millions)
Unrecognized losses (gains) | $ | (113 | ) |  | $ | 216 |
Amortization of prior service cost | 1 |  |  | 1 |
Total | $ | (112 | ) |  | $ | 217 |

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