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Pension Benefits | 12 Months Ended
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Dec. 31, 2024
Retirement Benefits [Abstract] |
Pension Benefits | Pension Benefits Con Edison maintains a tax-qualified, non-contributory pension plan, the Consolidated Edison Retirement Plan, that covers substantially all employees of CECONY, O&R and Con Edison Transmission. The plan is designed to comply with the Internal Revenue Code and the Employee Retirement Income Security Act of 1974. Con Edison also maintains additional non–qualified supplemental pension plans. Total Periodic Benefit Cost/(Credit) The components of the Companies’ total periodic benefit cost/(credit) for 2024, 2023 and 2022 were as follows:
| Con Edison | CECONY
(Millions of Dollars) | 2024 | 2023 | 2022 | 2024 | 2023 | 2022
Service cost – including administrative expenses | $177 | $161 | $287 | $167 | $151 | $270
Interest cost on projected benefit obligation | 642 | 649 | 505 | 604 | 611 | 475
Expected return on plan assets | (1,129) | (1,114) | (1,168) | (1,076) | (1,061) | (1,109)
Recognition of net actuarial loss/(gain) | (5) | (232) | 377 | (7) | (219) | 358
Recognition of prior service credit | (17) | (17) | (16) | (19) | (19) | (21)
TOTAL PERIODIC BENEFIT COST/(CREDIT) | $(332) | $(553) | $(15) | $(331) | $(537) | $(27)
Cost capitalized | (94) | (81) | (137) | (90) | (78) | (129)
Reconciliation to rate level | 55 | 282 | 259 | 43 | 261 | 245
Total expense/(benefit) recognized | $(371) | $(352) | $107 | $(378) | $(354) | $89
Accounting rules require that components of net periodic benefit cost other than service cost be presented outside of operating income on consolidated income statements, and that only the service cost component is eligible for capitalization. Accordingly, the service cost components are included in the line "Other operations and maintenance" and the non-service cost components are included in the lines "Other income" or “Other deductions” in the Companies' consolidated income statements. The rules also require disclosure of the weighted-average interest crediting rate used for cash balance plans for all periods presented, and a narrative description of significant changes in the benefit obligation which are included below and, as applicable, in Note F. Funded Status The funded status at December 31, 2024, 2023 and 2022 was as follows:
| Con Edison | CECONY
(Millions of Dollars) | 2024 | 2023 | 2022 | 2024 | 2023 | 2022
CHANGE IN PROJECTED BENEFIT OBLIGATION |  |  |  |  |  |
Projected benefit obligation at beginning of year | $12,712 | $12,113 | $17,357 | $11,977 | $11,395 | $16,341
Service cost – excluding administrative expenses | 172 | 156 | 283 | 162 | 146 | 266
Interest cost on projected benefit obligation | 642 | 649 | 505 | 604 | 611 | 475
Net actuarial loss/(gain) | (557) | 599 | (5,102) | (557) | 572 | (4,845)
Plan amendments | — |  | 3 | — | — | — | —
Benefits paid | (828) | (808) | (930) | (751) | (747) | (842)
PROJECTED BENEFIT OBLIGATION AT END OF YEAR | $12,141 | $12,712 | $12,113 | $11,435 | $11,977 | $11,395
CHANGE IN PLAN ASSETS |  |  |  |  |  |
Fair value of plan assets at beginning of year | $15,404 | $14,979 | $18,504 | $14,674 | $14,248 | $17,566
Actual return on plan assets | 724 | 1,261 | (2,583) | 691 | 1,201 | (2,453)
Employer contributions | 20 | 21 | 30 | 17 | 18 | 17
Benefits paid | (828) | (808) | (930) | (751) | (747) | (842)
Administrative expenses | (42) | (49) | (42) | (40) | (46) | (40)
FAIR VALUE OF PLAN ASSETS AT END OF YEAR | $15,278 | $15,404 | $14,979 | $14,591 | $14,674 | $14,248
FUNDED STATUS | $3,137 | $2,692 | $2,866 | $3,156 | $2,697 | $2,853
Unrecognized net loss/(gain) | $(857) | ($757) | ($1,485) | $(825) | ($705) | ($1,397)
Unrecognized prior service credits | (88) | (105) | (124) | (104) | (124) | (143)
Accumulated benefit obligation | $11,236 | $11,739 | $11,167 | $10,554 | $11,031 | $10,478
The increase in the pension funded status at December 31, 2024 for Con Edison and CECONY of $445 million and $459 million, respectively, compared with December 31, 2023, was primarily due to a decrease in the plan's projected benefit obligation as a result of an increase in the discount rate. The decrease in the pension funded status at December 31, 2023 for Con Edison and CECONY of $174 million and $156 million, respectively, compared with December 31, 2022, was primarily due to an increase in the plan's projected benefit obligation as a result of a decrease in the discount rate, partially offset by a return on plan assets that was greater than the expected return. See below for further information on the change in the discount rate and determination of the discount rate assumption. For Con Edison, the 2024 increase in pension funded status asset corresponds with an increase to regulatory liabilities of $86 million for unrecognized net gains and unrecognized prior service credits associated with the Utilities consistent with the accounting rules for regulated operations, a credit to OCI of $5 million (net of taxes) for the unrecognized net gains, and an immaterial change to OCI (net of taxes) for the unrecognized prior service credits associated with certain employees of Con Edison Transmission and RECO who previously worked for the Utilities. For 2024, included within the funded status are noncurrent liabilities of $319 million and $296 million for Con Edison and CECONY, respectively, and current liabilities of $63 million and $60 million for Con Edison and CECONY, respectively. For 2023, included within the funded status are noncurrent liabilities of $337 million and $313 million for Con Edison and CECONY, respectively. For 2022, included within the funded status are noncurrent liabilities of $311 million and $287 million for Con Edison and CECONY, respectively. For CECONY, the increase in pension funded status asset at December 31, 2024 corresponds with an increase to regulatory liabilities of $101 million for unrecognized net gains and unrecognized prior service credits consistent with the accounting rules for regulated operations, and also a credit to OCI of $7 million (net of taxes) for unrecognized net gains, and an immaterial change to OCI (net of taxes) for the unrecognized prior service costs associated with certain employees of Con Edison Transmission who previously worked for CECONY. At December 31, 2024 and 2023, Con Edison’s investments included $583 million and $524 million, respectively, held in external trust accounts for benefit payments pursuant to the supplemental retirement plans. Included in these amounts for CECONY were $560 million and $502 million, respectively. See Note R. The accumulated benefit obligations for the supplemental retirement plans for Con Edison and CECONY were $380 million and $354 million as of December 31, 2024, respectively, and $349 million and $323 million as of December 31, 2023, respectively. Assumptions The actuarial assumptions were as follows:
| 2024 | 2023 | 2022
Weighted-average assumptions used to determine benefit obligations at December 31: |  |  |
Discount rate | 5.70 | % | 5.15 | % | 5.45 | %
Interest crediting rate for cash balance plan | 4.30 | % | 4.20 | % | 4.00 | %
Rate of compensation increase |  |  |
CECONY | 3.80 | % | 3.80 | % | 3.80 | %
O&R | 3.20 | % | 3.20 | % | 3.20 | %
Weighted-average assumptions used to determine net periodic benefit cost for the years ended December 31: |  |  |
Discount rate | 5.15 | % | 5.45 | % | 3.00 | %
Interest crediting rate for cash balance plan | 4.20 | % | 4.00 | % | 3.50 | %
Expected return on plan assets | 6.75 | % | 6.75 | % | 7.00 | %
Rate of compensation increase |  |  |
CECONY | 3.80 | % | 3.80 | % | 3.80 | %
O&R | 3.20 | % | 3.20 | % | 3.20 | %
The expected return assumption reflects anticipated returns on the plan’s current and future assets. The Companies’ expected return was based on an evaluation of the current environment, market and economic outlook, relationships between the economy and asset class performance patterns, and recent and long-term trends in asset class performance. The projections were based on the plan’s target asset allocation. Discount Rate Assumption To determine the assumed discount rate, the Companies use a model that produces a yield curve based on discounting plan specific cash flows with corresponding spot rates on a yield curve. Term structures of interest rates are based on AA rated corporate bonds. Bonds with questionable pricing information and bonds that are not representative of the overall market are excluded from consideration. For example, the bonds used in the model cannot be callable (with the exception of "make whole" callable bonds). The spot rates defined by the yield curve and the plan’s projected benefit payments are used to develop a weighted average discount rate. Expected Benefit Payments Based on current assumptions, the Companies expect to make the following benefit payments over the next ten years:
(Millions of Dollars) | Con Edison | CECONY
2025 | $840 | $781
2026 | 808 | 749
2027 | 820 | 764
2028 | 824 | 766
2029 | 836 | 778
2030-2034 | $4,227 | $3,952
Expected Contributions Based on estimates as of December 31, 2024, the Companies expect to make contributions to the pension plans during 2025 of $3 million (none of which is to be made by CECONY). The Companies’ policy is to fund the total periodic benefit cost, if any, of the qualified plan to the extent tax deductible and to also contribute to the non-qualified supplemental plans. Plan Assets The asset allocations for the pension plan at the end of 2024, 2023 and 2022, and the target allocation for 2025 are as follows:
| Target Allocation Range |  | Plan Assets at December 31,
Asset Category | 2025 |  | 2024 |  | 2023 |  | 2022
Equity Securities | 26% - 30% |  | 27 | % |  | 26 | % |  | 33 | %
Debt Securities | 42% - 60% |  | 51 | % |  | 50 | % |  | 50 | %
Real Estate and Other Alternatives | 14% - 30% |  | 22 | % |  | 24 | % |  | 17 | %
Total |  |  | 100 | % |  | 100 | % |  | 100 | %
Con Edison has established a pension trust for the investment of assets to be used for the exclusive purpose of providing retirement benefits to participants and beneficiaries and payment of plan expenses. Pursuant to resolutions adopted by Con Edison’s Board of Directors, the Named Fiduciary Committee (the Committee) has general oversight responsibility for Con Edison’s pension and other employee benefit plans. The pension plan’s named fiduciaries have been granted the authority to control and manage the operation and administration of the plans, including overall responsibility for the investment of assets in the trust and the power to appoint and terminate investment managers. The investment objectives of the Con Edison pension plan are to maintain a level and form of assets adequate to meet benefit obligations to participants, to achieve the expected long-term total return on the trust assets within a prudent level of risk and maintain a level of volatility that is not expected to have a material impact on the company’s expected contribution and expense or the company’s ability to meet plan obligations. The assets of the plan have no significant concentration of risk in one country (other than the United States), industry or entity. The strategic asset allocation is intended to meet the objectives of the pension plan by diversifying its funds across asset classes, investment styles and fund managers. An asset/liability study typically is conducted every few years to determine whether the current strategic asset allocation continues to represent the appropriate balance of expected risk and reward for the plan to meet expected liabilities. Each study considers the investment risk of the asset allocation and determines the optimal asset allocation for the plan. The target asset allocation for 2025 reflects the results of such a study conducted in 2022. Individual fund managers operate under written guidelines provided by Con Edison that cover such areas as investment objectives, performance measurement, permissible investments, investment restrictions, trading and execution, and communication and reporting requirements. Con Edison management regularly monitors and the named fiduciaries review asset class performance, total fund performance, and compliance with asset allocation guidelines. Management changes fund managers and rebalances the portfolio as appropriate. The Utilities each participate in the Con Edison Retirement Plan, the assets of which are held in the pension trust. In accordance with the Utilities' current rate plans, pension plan costs and liabilities are allocated to each of the Utilities based on plan participant-level data, while pension plan assets are allocated based on historical and current amounts of contributions, if any, disbursements, and investment returns. Pension plan assets for Con Edison are shown below. Of the amounts disclosed below for Con Edison, 95% are attributable to CECONY. Assets measured at fair value on a recurring basis are summarized below as defined by the accounting rules for fair value measurements (see Note R). The fair values of the pension plan assets at December 31, 2024 by asset category are as follows:
(Millions of Dollars) | Level 1 |  | Level 2 |  | Total
Investments within the fair value hierarchy |  |  |  |  |
U.S. Equity (a) | $2,752 |  | $— |  |  | $2,752
International Equity (b) | 1,508 |  | — |  | 1,508
U.S. Government Issued Debt (c) | — |  | 619 |  | 619
Corporate Bonds Debt (d) | — |  | 5,429 |  | 5,429
Structured Assets Debt (e) | — |  | 159 |  | 159
Other Fixed Income Debt (f) | — |  | 783 |  | 783
Commingled Trust Fund (g) | — |  | 478 |  | 478
Cash and Cash Equivalents (h) | 51 |  | 292 |  | 343
Futures (i) | (4) |  |  | — |  |  | (4) |
Total investments within the fair value hierarchy | $4,307 |  | $7,760 |  | $12,067
Investments measured at NAV per share (o) |  |  |  |  |
Private Equity (j) |  |  |  |  | 975
Real Estate (k) |  |  |  |  | 1,609
Hedge Funds (l) |  |  |  |  | 788
Total investments valued using NAV per share |  |  |  |  | $3,372
Funds for retiree health benefits (m) | (50) |  | (90) |  | (140)
Funds for retiree health benefits measured at NAV per share (m)(o) |  |  |  |  | (39)
Total funds for retiree health benefits |  |  |  |  | $(179)
Investments (excluding funds for retiree health benefits) | $4,257 |  | $7,670 |  | $15,260
Pending activities (n) |  |  |  |  | 18
Total fair value of plan net assets |  |  |  |  | $15,278
(a)U.S. Equity is comprised of both actively- and passively-managed investments in domestic equity index funds and actively-managed small-capitalization equities. (b)International Equity is comprised of investments in international equity index funds and actively-managed international equities. (c)U.S. Government Issued Debt is comprised of agency and treasury securities. (d)Corporate Bonds Debt is comprised of debt issued by various corporations. (e)Structured Assets Debt is comprised of commercial-mortgage-backed securities and collateralized mortgage obligations. (f)Other Fixed Income Debt is comprised of municipal bonds, sovereign debt and regional governments. (g)Commingled Trust Fund is comprised of an actively managed commingled trust fund benchmarked to the Bloomberg Aggregate Bond Index. (h)Cash and Cash Equivalents are comprised of short term investments, money markets, foreign currency and cash collateral. (i)Futures are comprised of exchange-traded financial contracts encompassing U.S. Equity, International Equity and U.S. Government indices. (j)Private Equity is comprised of global private market investments. Private equity's investment objective is to generate returns on capital from a diversified portfolio of primary fund investments, secondaries and co-investments. The plan's unfunded commitments to private equity were approximately $180 million at December 31, 2024. However, the managers also expect to make significant cash flow distributions in 2025 and 2026. While the investments in this asset class cannot be redeemed, the plan would be able to receive distributions from selling its limited partnership interests in the secondary market, which would be expected to take three to six months. (k)Real Estate investments are open-end real estate funds that invest in a portfolio of real properties that are broadly diversified by geography and property type. The real estate asset class is expected to produce returns from income and capital appreciation. Real estate also provides a hedge against inflation. The funds allow for quarterly redemptions, however the amount and timing of distributions are subject to market conditions and are currently uncertain. (l)Hedge Funds are structured as a custom fund of one and can invest in external hedge fund managers that pursue a wide array of strategies including event driven, fundamental long/short, relative value, directional trading, and direct sourcing. These investments seek to generate positive absolute returns with lower volatility than other investments. The various hedge fund managers can invest in all financial instruments. Substantially all of the investment could be liquidated within 18 months. (m)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 F. (n)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. (o)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. The fair values of the pension plan assets at December 31, 2023 by asset category are as follows:
(Millions of Dollars) | Level 1 |  | Level 2 |  | Total
Investments within the fair value hierarchy |  |  |  |  |
U.S. Equity (a) | $2,474 |  | $1 |  |  | $2,475
International Equity (b) | 1,584 |  | — |  | 1,584
U.S. Government Issued Debt (c) | — |  | 615 |  | 615
Corporate Bonds Debt (d) | — |  | 5,526 |  | 5,526
Structured Assets Debt (e) | — |  | 132 |  | 132
Other Fixed Income Debt (f) | — |  | 735 |  | 735
Commingled Trust Fund (g) | — |  |  | 475 |  | 475
Cash and Cash Equivalents (h) | 36 |  |  | 302 |  | 338
Futures (i) | 19 |  |  | — |  | 19 |
Total investments within the fair value hierarchy | $4,113 |  | $7,786 |  | $11,899
Investments measured at NAV per share (o) |  |  |  |  |
Private Equity (j) |  |  |  |  | 1,031
Real Estate (k) |  |  |  |  | 1,876
Hedge Funds (l) |  |  |  |  | 723
Total investments valued using NAV per share |  |  |  |  | $3,630
Funds for retiree health benefits (m) | (52) |  | (96) |  | (148)
Funds for retiree health benefits measured at NAV per share (m)(o) |  |  |  |  | (45)
Total funds for retiree health benefits |  |  |  |  | $(193)
Investments (excluding funds for retiree health benefits) | $4,061 |  | $7,690 |  | $15,336
Pending activities (n) |  |  |  |  | $68
Total fair value of plan net assets |  |  |  |  | $15,404
(a) - (o) Reference is made to footnotes (a) through (n) in the above table of pension plan assets at December 31, 2024 by asset category. The Companies also offer a defined contribution savings plan that covers substantially all employees and made contributions to the plan as follows:
| For the Years Ended December 31,
(Millions of Dollars) | 2024 |  | 2023 |  | 2022
Con Edison | $57 |  | $57 |  | $57
CECONY | 52 |  | 51 |  | 48

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