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Other Postretirement Benefits | 12 Months Ended
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Dec. 31, 2023
Retirement Benefits [Abstract] |
Other Postretirement Benefits | Other Postretirement Benefits The Utilities and Con Edison Transmission currently have contributory comprehensive hospital, medical and prescription drug programs for eligible retirees, their dependents and surviving spouses. CECONY also has a contributory life insurance program for bargaining unit employees and provides basic life insurance benefits up to a specified maximum at no cost to certain retired management employees. O&R has a non-contributory life insurance program for retirees. Certain employees of Con Edison Transmission are eligible to receive benefits under these programs. Programs include the Consolidated Edison Retiree Health Program for Management Employees, the Consolidated Edison Retiree Health Program for Weekly Employees, the Consolidated Edison Group Life Insurance Plan, the Orange and Rockland Utilities, Inc. Hourly Retirees’ Group Insurance Plan, and the Orange and Rockland Utilities, Inc. Management Retirees’ Group Insurance Plan. Total Periodic Benefit Cost The components of the Companies’ total periodic postretirement benefit costs/(credit) for 2023, 2022 and 2021 were as follows:
| Con Edison | CECONY
(Millions of Dollars) | 2023 | 2022 | 2021 | 2023 | 2022 | 2021
Service cost | $14 | $18 | $22 | $12 | $15 | $16
Interest cost on accumulated other postretirement benefit obligation | 57 | 35 | 33 | 49 | 30 | 28
Expected return on plan assets | (70) | (72) | (68) | (56) | (58) | (56)
Recognition of net actuarial loss/(gain) | (16) | (14) | 31 | (8) | (9) | 27
Recognition of prior service credit | (2) | (1) | (3) | — | — | (1)
TOTAL PERIODIC POSTRETIREMENT BENEFIT COST/(CREDIT) | $(17) | $(34) | $15 | $(3) | $(22) | $14
Cost capitalized | (6) | (8) | (9) | (5) | (7) | (7)
Reconciliation to rate level | 4 | 29 | (7) | (2) | 24 | (12)
Total credit recognized | $(19) | $(13) | $(1) | $(10) | $(5) | $(5)
For information about the presentation of the components of net periodic benefit cost and disclosure requirements, see Note E. Funded Status The funded status of the programs at December 31, 2023, 2022 and 2021 were as follows:
| Con Edison | CECONY
(Millions of Dollars) | 2023 | 2022 | 2021 | 2023 | 2022 | 2021
CHANGE IN BENEFIT OBLIGATION |  |  |  |  |  |
Benefit obligation at beginning of year | $1,058 | $1,398 | $1,425 | $921 | $1,189 | $1,209
Service cost | 14 | 18 | 22 | 12 | 15 | 16
Interest cost on accumulated postretirement benefit obligation | 57 | 35 | 33 | 49 | 30 | 28
Net actuarial gain | (93) | (311) | (13) | (94) | (239) | (3)
Benefits paid and administrative expenses, net of subsidies | (128) | (130) | (117) | (118) | (121) | (107)
Participant contributions | 55 | 48 | 48 | 55 | 47 | 46
BENEFIT OBLIGATION AT END OF YEAR | $963 | $1,058 | $1,398 | $825 | $921 | $1,189
CHANGE IN PLAN ASSETS |  |  |  |  |  |
Fair value of plan assets at beginning of year | $860 | $1,150 | $1,115 | $708 | $955 | $940
Actual return on plan assets | 116 | (225) | 92 | 84 | (187) | 67
Employer contributions | 22 | 13 | 6 | 17 | 10 | 3
Employer group waiver plan subsidies | 56 | 55 | 21 | 52 | 50 | 19
Participant contributions | 55 | 48 | 48 | 55 | 47 | 46
Benefits paid | (180) | (181) | (132) | (166) | (167) | (120)
FAIR VALUE OF PLAN ASSETS AT END OF YEAR | $929 | $860 | $1,150 | $750 | $708 | $955
FUNDED STATUS | $(34) | $(198) | $(248) | $(75) | $(213) | $(234)
Unrecognized net loss/(gain) | ($90) | $37 | $41 | ($41) | $78 | $67
Unrecognized prior service costs | (10) | (12) | (13) | — | — | —
The decrease in the other postretirement benefits funded status liability at December 31, 2023 for Con Edison and CECONY of $164 million and $138 million, respectively, compared with December 31, 2022, was primarily due to updated per capita costs based on plan experience and higher asset returns in 2023. The decrease in the other postretirement benefits funded status liability at December 31, 2022 for Con Edison and CECONY of $50 million and $21 million, respectively, compared with December 31, 2021, was primarily due to a decrease in the plans' projected benefit obligation as a result of an increase in the discount rate, which more than offset the decrease in the fair value of plan assets as a result of the actual return on plan assets. For 2023, included within the funded status are noncurrent assets of $224 million and $154 million for Con Edison and CECONY, respectively. For 2022, included within the funded status are noncurrent assets of $72 million and $27 million for Con Edison and CECONY, respectively. For Con Edison, the decrease in funded status liability at December 31, 2023 corresponds with a net decrease to regulatory assets and increase to regulatory liabilities of $123 million for unrecognized net gains and unrecognized prior service costs associated with the Utilities consistent with the accounting rules for regulated operations, a credit to OCI of $2 million (net of taxes) for the unrecognized net gains and an immaterial change to OCI for the unrecognized prior service costs associated with Con Edison Transmission and RECO. For CECONY, the decrease in funded status liability at December 31, 2023 corresponds with a net decrease to regulatory assets and increase to regulatory liabilities of $119 million for unrecognized net gains and the unrecognized prior service costs associated with the company consistent with the accounting rules for regulated operations, a debit to OCI of $1 million (net of taxes) for the unrecognized net gains and an immaterial change to OCI for the unrecognized prior service costs associated with eligible employees of Con Edison Transmission who previously worked for CECONY. Assumptions The actuarial assumptions were as follows:
| 2023 | 2022 | 2021
Weighted-average assumptions used to determine benefit obligations at December 31: |  |  |
Discount Rate |  |  |
CECONY | 5.05 | % | 5.35 | % | 2.75 | %
O&R | 5.15 | % | 5.45 | % | 3.00 | %
Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31: |  |  |
Discount Rate |  |  |
CECONY | 5.35 | % | 2.75 | % | 2.25 | %
O&R | 5.45 | % | 3.00 | % | 2.55 | %
Expected Return on Plan Assets | 6.80 | % | 6.80 | % | 6.80 | %
Refer to Note E for descriptions of the basis for determining the expected return on assets, investment policies and strategies and the assumed discount rate. The health care cost trend rates for covered medical and prescription medication expenses used to determine the accumulated other postretirement benefit obligations (APBO) at December 31, 2023 were assumed to increase each year, with the initial rate gradually decreasing to the ultimate rate as follows:
| Initial Cost Trend Rate | Ultimate Cost Trend Rate | Year That Ultimate Rate is Reached
Pre-65 Medical | 6.80% | 4.50% | 2036
Post-65 Medical | 4.50% | 4.50% | —
Prescription Medications | 7.25% | 4.50% | 2035
Expected Benefit Payments Based on current assumptions, the Companies expect to make the following benefit payments over the next ten years, net of receipt of governmental subsidies and participant contributions:
(Millions of Dollars) | 2024 | 2025 | 2026 | 2027 | 2028 | 2029-2033
Con Edison | $68 | $72 | $73 | $73 | $73 | $353
CECONY | 60 | 63 | 64 | 64 | 64 | 308
Expected Contributions Based on estimates as of December 31, 2023, Con Edison expects to make a contribution of $7 million (all of which is expected to be made by CECONY) to the other postretirement benefit plans in 2024. The Companies’ policy is to fund the total periodic benefit cost of the plans to the extent tax deductible. Plan Assets The asset allocations for CECONY’s other postretirement benefit plans at the end of 2023, 2022 and 2021, and the target allocation for 2024 are as follows:
| Target Allocation Range | Plan Assets at December 31,
Asset Category | 2024 | 2023 | 2022 |  | 2021
Equity Securities | 35%-55% | 44 | % | 49 | % |  | 55 | %
Debt Securities | 40%-60% | 51 | % | 51 | % |  | 45 | %
Real Estate and Other Alternatives | —%-9% | 5 | % | — | % |  | — | %
Total | 100% | 100 | % | 100 | % |  | 100 | %
Con Edison has established postretirement health and life insurance benefit plan trusts for the investment of assets to be used for the exclusive purpose of providing other postretirement benefits to participants and beneficiaries. Refer to Note E for a discussion of Con Edison’s investment policy for its benefit plans. The fair values of the plans' assets at December 31, 2023 by asset category as defined by the accounting rules for fair value measurements (see Note R) are as follows:
(Millions of Dollars) | Level 1 |  | Level 2 |  | Total
Equity (a) | $— |  | $331 |  | $331
Other Fixed Income Debt (b) | — |  | 323 |  | 323
Cash and Cash Equivalents (c) | 7 |  | 18 |  | 25
Asset Allocation Funds (d) | — |  | 38 |  | 38
Total investments | $7 |  | $710 |  | $717
Funds for retiree health benefits (e) | 52 |  | 96 |  | 148
Investments (including funds for retiree health benefits) | $59 |  | $806 |  | $865
Funds for retiree health benefits measured at net asset value (e)(f) |  |  |  |  | 45
Pending activities (g) |  |  |  |  | 19
Total fair value of plan net assets |  |  |  |  | $929
(a)Equity is comprised of a passively managed commingled index fund benchmarked to the MSCI All Country World Index. (b)Other Fixed Income Debt is comprised of a passively managed commingled index fund benchmarked to the Bloomberg Barclays U.S. Long Credit Index and an active separately managed fund indexed to the Bloomberg Barclays U.S. Long Credit Index. (c)Cash and Cash Equivalents is comprised of short-term investments and money markets. (d)Asset Allocation Funds is comprised of investments in a global asset allocation fund. (e)The Companies set aside funds for retiree health benefits through a separate account within the pension trust, as permitted under Section 401(h) of the Internal Revenue Code of 1986, as amended. In accordance with the Code, the plan’s investments in the 401(h) account may not be used for, or diverted to, any purpose other than providing health benefits for retirees. The net assets held in the 401(h) account are calculated based on a pro-rata percentage allocation of the net assets in the pension plan. The related obligations for health benefits are not included in the pension plan’s obligations and are included in the Companies’ other postretirement benefit obligation. See Note E. (f)In accordance with ASU 2015-07, Fair Value Measurements (Topic 820): Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or its equivalent), certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. (g)Pending activities include security purchases and sales that have not settled, interest and dividends that have not been received, and reflects adjustments for available estimates at year-end. The fair values of the plans' assets at December 31, 2022 by asset category (see Note R) are as follows:
(Millions of Dollars) | Level 1 |  | Level 2 |  | Total
Equity (a) | $— |  | $339 |  | $339
Other Fixed Income Debt (b) | 10 |  | 275 |  | 285
Cash and Cash Equivalents (c) | — |  | 25 |  | 25
Total investments | $10 |  | $639 |  | $649
Funds for retiree health benefits (d) | 48 |  | 91 |  | 139
Investments (including funds for retiree health benefits) | $58 |  | $730 |  | $788
Funds for retiree health benefits measured at net asset value (d)(e) |  |  |  |  | 51
Pending activities (f) |  |  |  |  | 21
Total fair value of plan net assets |  |  |  |  | $860
(a) - (f) Reference is made to footnotes (a) through (f) in the above table of other postretirement benefit plan assets at December 31, 2023 by asset category.

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- Definition The entire disclosure for postemployment benefits, which may include supplemental unemployment benefits, obligations recognized for all types of benefits provided to former or inactive employees, their beneficiaries, and covered dependents after employment but before retirement. Disclosure may also include discussion that an obligation for postemployment benefits is not accrued in accordance with regulation only because the amount cannot be reasonably estimated. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 712 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//712/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 712 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org//1943274/2147481565/712-10-50-2 + Details
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