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Retirement and Postemployment Benefits (Tables) | 12 Months Ended
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Dec. 31, 2017
Defined Benefit Plan Disclosure [Line Items] |
Schedule Of Net Periodic Defined Benefit Costs (Credits) | The following table provides the components of net periodic defined benefit costs for PPL's domestic (U.S.) and WPD's (U.K.) pension and other postretirement benefit plans for the years ended December 31.
| Pension Benefits |  |  |  |  |  |
| U.S. |  | U.K. |  | Other Postretirement Benefits
| 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015
Net periodic defined benefit costs (credits): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Service cost | $ | 65 |  |  | $ | 66 |  |  | $ | 96 |  |  | $ | 76 |  |  | $ | 69 |  |  | $ | 79 |  |  | $ | 7 |  |  | $ | 7 |  |  | $ | 11 |
Interest cost | 168 |  |  | 174 |  |  | 194 |  |  | 178 |  |  | 235 |  |  | 314 |  |  | 23 |  |  | 26 |  |  | 26 |
Expected return on plan assets | (231 | ) |  | (228 | ) |  | (258 | ) |  | (514 | ) |  | (504 | ) |  | (523 | ) |  | (22 | ) |  | (22 | ) |  | (26 | )
Amortization of: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Prior service cost (credit) | 10 |  |  | 8 |  |  | 7 |  |  | — |  |  | — |  |  | — |  |  | (1 | ) |  | — |  |  | 1 |
Actuarial (gain) loss | 69 |  |  | 50 |  |  | 84 |  |  | 144 |  |  | 138 |  |  | 158 |  |  | 1 |  |  | 1 |  |  | — |
Net periodic defined benefit costs (credits) prior to settlements and termination benefits | 81 |  |  | 70 |  |  | 123 |  |  | (116 | ) |  | (62 | ) |  | 28 |  |  | 8 |  |  | 12 |  |  | 12 |
Settlements | 1 |  |  | 3 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Termination benefits | 1 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Net periodic defined benefit costs (credits) | $ | 83 |  |  | $ | 73 |  |  | $ | 123 |  |  | $ | (116 | ) |  | $ | (62 | ) |  | $ | 28 |  |  | $ | 8 |  |  | $ | 12 |  |  | $ | 12 |
| Pension Benefits |  |  |  |  |  |
| U.S. |  | U.K. |  | Other Postretirement Benefits
| 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015
Other Changes in Plan Assets and Benefit Obligations Recognized in OCI and Regulatory Assets/Liabilities - Gross: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Divestiture (a) | $ | — |  |  | $ | — |  |  | $ | (353 | ) |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | (6 | )
Settlement | (1 | ) |  | (3 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Net (gain) loss | 27 |  |  | 253 |  |  | 63 |  |  | 346 |  |  | 7 |  |  | 508 |  |  | (28 | ) |  | 9 |  |  | (9 | )
Prior service cost (credit) | (1 | ) |  | 15 |  |  | 18 |  |  | — |  |  | — |  |  | — |  |  | 8 |  |  | — |  |  | — |
Amortization of: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Prior service (cost) credit | (10 | ) |  | (8 | ) |  | (7 | ) |  | — |  |  | — |  |  | — |  |  | 1 |  |  | (1 | ) |  | (1 | )
Actuarial gain (loss) | (69 | ) |  | (50 | ) |  | (85 | ) |  | (144 | ) |  | (138 | ) |  | (158 | ) |  | (1 | ) |  | (1 | ) |  | — |
Total recognized in OCI and regulatory assets/liabilities (b) | (54 | ) |  | 207 |  |  | (364 | ) |  | 202 |  |  | (131 | ) |  | 350 |  |  | (20 | ) |  | 7 |  |  | (16 | )
Total recognized in net periodic defined benefit costs, OCI and regulatory assets/liabilities (b) | $ | 29 |  |  | $ | 280 |  |  | $ | (241 | ) |  | $ | 86 |  |  | $ | (193 | ) |  | $ | 378 |  |  | $ | (12 | ) |  | $ | 19 |  |  | $ | (4 | )
(a) | As a result of the spinoff of PPL Energy Supply, amounts in AOCI were allocated to certain former active and inactive employees of PPL Energy Supply and included in the distribution. See Note 8 for additional details.
(b) | WPD is not subject to accounting for the effects of certain types of regulation as prescribed by GAAP. As a result, WPD does not record regulatory assets/liabilities.
Schedule of Amounts Recognized in Other Comprehensive Income and Regulatory Assets and Liabilities | For PPL's U.S. pension benefits and for other postretirement benefits, the amounts recognized in OCI and regulatory assets/liabilities for the years ended December 31 were as follows:
| U.S. Pension Benefits |  | Other Postretirement Benefits
| 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015
OCI | $ | (53 | ) |  | $ | 236 |  |  | $ | (269 | ) |  | $ | (25 | ) |  | $ | 7 |  |  | $ | 12 |
Regulatory assets/liabilities | (1 | ) |  | (29 | ) |  | (95 | ) |  | 5 |  |  | — |  |  | (28 | )
Total recognized in OCI and regulatory assets/liabilities | $ | (54 | ) |  | $ | 207 |  |  | $ | (364 | ) |  | $ | (20 | ) |  | $ | 7 |  |  | $ | (16 | )
Schedule of Amounts to be Amortized from AOCI and Regulatory Assets/Liabilities in Next Fiscal Year | The estimated amounts to be amortized from AOCI and regulatory assets/liabilities into net periodic defined benefit costs in 2018 are as follows:
| Pension Benefits
| U.S. |  | U.K.
Prior service cost (credit) | $ | 10 |  |  | $ | — |
Actuarial (gain) loss | 86 |  |  | 152 |
Total | $ | 96 |  |  | $ | 152 |
Amortization from Balance Sheet: |  |  |  |
AOCI | $ | 28 |  |  | $ | 152 |
Regulatory assets/liabilities | 68 |  |  | — |
Total | $ | 96 |  |  | $ | 152 |
Schedule of Net Periodic Defined Benefit Costs Included in Income Statement | The following net periodic defined benefit costs (credits) were charged to operating expense or regulatory assets, excluding amounts charged to construction and other non-expense accounts. The U.K. pension benefits apply to PPL only.
| Pension Benefits |  |  |  |  |  |
| U.S. |  | U.K. |  | Other Postretirement Benefits
| 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015
PPL | $ | 59 |  |  | $ | 53 |  |  | $ | 71 |  |  | $ | (151 | ) |  | $ | (95 | ) |  | $ | (21 | ) |  | $ | 5 |  |  | $ | 7 |  |  | $ | 8 |
PPL Electric (a) | 12 |  |  | 10 |  |  | 15 |  |  |  |  |  |  |  |  |  |  |  | — |  |  | 1 |  |  | — |
LKE (b) | 28 |  |  | 24 |  |  | 37 |  |  |  |  |  |  |  |  |  |  |  | 5 |  |  | 6 |  |  | 8 |
LG&E (b) | 8 |  |  | 8 |  |  | 12 |  |  |  |  |  |  |  |  |  |  |  | 3 |  |  | 3 |  |  | 4 |
KU (a) (b) | 4 |  |  | 5 |  |  | 9 |  |  |  |  |  |  |  |  |  |  |  | 1 |  |  | 2 |  |  | 2 |
(a) | PPL Electric and KU do not directly sponsor any defined benefit plans. PPL Electric and KU were allocated these costs of defined benefit plans sponsored by PPL Services (for PPL Electric) and by LKE (for KU), based on their participation in those plans, which management believes are reasonable. KU is also allocated costs of defined benefit plans from LKS for defined benefit plans sponsored by LKE. See Note 14 for additional information on costs allocated to KU from LKS.
(b) | As a result of the 2014 Kentucky rate case settlement that became effective July 1, 2015, the difference between net periodic defined benefit costs calculated in accordance with LKE's, LG&E's and KU's pension accounting policy and the net periodic defined benefit costs calculated using a 15 year amortization period for gains and losses is recorded as a regulatory asset. Of the costs charged to operating expense or regulatory assets, excluding amounts charged to construction and other non-expense accounts, $4 million for LG&E and $2 million for KU were recorded as regulatory assets in 2017, $3 million for LG&E and $2 million for KU were recorded as regulatory assets in 2016 and $4 million for LG&E and $1 million for KU were recorded as regulatory assets in 2015.
Defined Benefit Plan Assumptions and Impact of One Point Change on Postretirement Plans | The following weighted-average assumptions were used in the valuation of the benefit obligations at December 31. The U.K. pension benefits apply to PPL only.
| Pension Benefits |  |  |  |
| U.S. |  | U.K. |  | Other Postretirement Benefits
| 2017 |  | 2016 |  | 2017 |  | 2016 |  | 2017 |  | 2016
PPL |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate | 3.70 | % |  | 4.21 | % |  | 2.65 | % |  | 2.87 | % |  | 3.64 | % |  | 4.11 | %
Rate of compensation increase | 3.78 | % |  | 3.95 | % |  | 3.50 | % |  | 3.50 | % |  | 3.75 | % |  | 3.92 | %
LKE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate | 3.69 | % |  | 4.19 | % |  |  |  |  |  |  |  | 3.65 | % |  | 4.12 | %
Rate of compensation increase | 3.50 | % |  | 3.50 | % |  |  |  |  |  |  |  | 3.50 | % |  | 3.50 | %
LG&E |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate | 3.65 | % |  | 4.13 | % |  |  |  |  |  |  |  |  |  |  |  |
The following weighted-average assumptions were used to determine the net periodic defined benefit costs for the years ended December 31. The U.K. pension benefits apply to PPL only.
| Pension Benefits |  |  |  |  |  |
| U.S. |  | U.K. |  | Other Postretirement Benefits
| 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015
PPL |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate service cost (b) | 4.21 | % |  | 4.59 | % |  | 4.25 | % |  | 2.99 | % |  | 3.90 | % |  | 3.85 | % |  | 4.11 | % |  | 4.48 | % |  | 4.09 | %
Discount rate interest cost (b) | 4.21 | % |  | 4.59 | % |  | 4.25 | % |  | 2.41 | % |  | 3.14 | % |  | 3.85 | % |  | 4.11 | % |  | 4.48 | % |  | 4.09 | %
Rate of compensation increase | 3.95 | % |  | 3.93 | % |  | 3.91 | % |  | 3.50 | % |  | 4.00 | % |  | 4.00 | % |  | 3.92 | % |  | 3.91 | % |  | 3.86 | %
Expected return on plan assets (a) | 7.00 | % |  | 7.00 | % |  | 7.00 | % |  | 7.22 | % |  | 7.20 | % |  | 7.19 | % |  | 6.21 | % |  | 6.11 | % |  | 6.06 | %
LKE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate | 4.19 | % |  | 4.56 | % |  | 4.25 | % |  |  |  |  |  |  |  |  |  |  | 4.12 | % |  | 4.49 | % |  | 4.06 | %
Rate of compensation increase | 3.50 | % |  | 3.50 | % |  | 3.50 | % |  |  |  |  |  |  |  |  |  |  | 3.50 | % |  | 3.50 | % |  | 3.50 | %
Expected return on plan assets (a) | 7.00 | % |  | 7.00 | % |  | 7.00 | % |  |  |  |  |  |  |  |  |  |  | 6.82 | % |  | 6.82 | % |  | 6.82 | %
| Pension Benefits |  |  |  |  |  |
| U.S. |  | U.K. |  | Other Postretirement Benefits
| 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015
LG&E |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate | 4.13 | % |  | 4.49 | % |  | 4.20 | % |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Expected return on plan assets (a) | 7.00 | % |  | 7.00 | % |  | 7.00 | % |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(a) | The expected long-term rates of return for pension and other postretirement benefits are based on management's projections using a best-estimate of expected returns, volatilities and correlations for each asset class. Each plan's specific current and expected asset allocations are also considered in developing a reasonable return assumption.
(b) | As of January 1, 2016, WPD began using individual spot rates from the yield curve used to discount the benefit obligation to measure service cost and interest cost. PPL's U.S. plans use a single discount rate derived from an individual bond matching model to measure the benefit obligation, service cost and interest cost. See Note 1 for additional details.
(PPL and LKE) The following table provides the assumed health care cost trend rates for the years ended December 31:
| 2017 |  | 2016 |  | 2015
PPL and LKE |  |  |  |  |
Health care cost trend rate assumed for next year |  |  |  |  |
– obligations | 6.6 | % |  | 7.0 | % |  | 6.8 | %
– cost | 7.0 | % |  | 6.8 | % |  | 7.2 | %
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) |  |  |  |  |
– obligations | 5.0 | % |  | 5.0 | % |  | 5.0 | %
– cost | 5.0 | % |  | 5.0 | % |  | 5.0 | %
Year that the rate reaches the ultimate trend rate |  |  |  |  |
– obligations | 2022 |  |  | 2022 |  |  | 2020 |
– cost | 2022 |  |  | 2020 |  |  | 2020 |
A one percentage point change in the assumed health care costs trend rate assumption would have had the following effects on the other postretirement benefit plans in 2017:
| One Percentage Point
| Increase |  | Decrease
Effect on accumulated postretirement benefit obligation |  |  |
PPL | $ | 4 |  |  | $ | (4 | )
LKE | 3 |  |  | (3 | )
Schedule of Funded Status of Defined Benefit Plans | The funded status of PPL's plans at December 31 was as follows:
| Pension Benefits |  |  |  |
| U.S. |  | U.K. |  | Other Postretirement Benefits
| 2017 |  | 2016 |  | 2017 |  | 2016 |  | 2017 |  | 2016
Change in Benefit Obligation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Benefit Obligation, beginning of period | $ | 4,079 |  |  | $ | 3,863 |  |  | $ | 7,383 |  |  | $ | 8,404 |  |  | $ | 591 |  |  | $ | 596 |
Service cost | 65 |  |  | 66 |  |  | 76 |  |  | 69 |  |  | 7 |  |  | 7 |
Interest cost | 168 |  |  | 174 |  |  | 178 |  |  | 235 |  |  | 23 |  |  | 26 |
Participant contributions | — |  |  | — |  |  | 13 |  |  | 14 |  |  | 14 |  |  | 14 |
Plan amendments | (1 | ) |  | 14 |  |  | — |  |  | — |  |  | 8 |  |  | — |
Actuarial (gain) loss | 233 |  |  | 214 |  |  | 293 |  |  | 484 |  |  | 4 |  |  | 11 |
Settlements | (6 | ) |  | (9 | ) |  | (1 | ) |  | — |  |  | — |  |  | — |
Termination benefits | 1 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Gross benefits paid | (251 | ) |  | (243 | ) |  | (345 | ) |  | (357 | ) |  | (59 | ) |  | (64 | )
Federal subsidy | — |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | 1 |
Currency conversion | — |  |  | — |  |  | 622 |  |  | (1,466 | ) |  | — |  |  | — |
Benefit Obligation, end of period | 4,288 |  |  | 4,079 |  |  | 8,219 |  |  | 7,383 |  |  | 589 |  |  | 591 |
Change in Plan Assets |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Plan assets at fair value, beginning of period | 3,243 |  |  | 3,227 |  |  | 7,211 |  |  | 7,625 |  |  | 378 |  |  | 379 |
Actual return on plan assets | 437 |  |  | 189 |  |  | 480 |  |  | 979 |  |  | 54 |  |  | 25 |
Employer contributions | 65 |  |  | 79 |  |  | 486 |  |  | 330 |  |  | 15 |  |  | 19 |
Participant contributions | — |  |  | — |  |  | 13 |  |  | 14 |  |  | 13 |  |  | 14 |
Settlements | (6 | ) |  | (9 | ) |  | (1 | ) |  | — |  |  | — |  |  | — |
Gross benefits paid | (251 | ) |  | (243 | ) |  | (345 | ) |  | (357 | ) |  | (55 | ) |  | (59 | )
Currency conversion | — |  |  | — |  |  | 646 |  |  | (1,380 | ) |  | — |  |  | — |
Plan assets at fair value, end of period | 3,488 |  |  | 3,243 |  |  | 8,490 |  |  | 7,211 |  |  | 405 |  |  | 378 |
Funded Status, end of period | $ | (800 | ) |  | $ | (836 | ) |  | $ | 271 |  |  | $ | (172 | ) |  | $ | (184 | ) |  | $ | (213 | )
Amounts recognized in the Balance Sheets consist of: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Noncurrent asset | $ | — |  |  | $ | — |  |  | $ | 284 |  |  | $ | 10 |  |  | $ | 2 |  |  | $ | 2 |
Current liability | (13 | ) |  | (17 | ) |  | — |  |  | — |  |  | (3 | ) |  | (3 | )
Noncurrent liability | (787 | ) |  | (819 | ) |  | (13 | ) |  | (182 | ) |  | (183 | ) |  | (212 | )
Net amount recognized, end of period | $ | (800 | ) |  | $ | (836 | ) |  | $ | 271 |  |  | $ | (172 | ) |  | $ | (184 | ) |  | $ | (213 | )
Amounts recognized in AOCI and regulatory assets/liabilities (pre-tax) consist of: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Prior service cost (credit) | $ | 49 |  |  | $ | 59 |  |  | $ | — |  |  | $ | — |  |  | $ | 9 |  |  | $ | — |
Net actuarial (gain) loss | 1,134 |  |  | 1,178 |  |  | 2,755 |  |  | 2,553 |  |  | 16 |  |  | 45 |
Total (a) | $ | 1,183 |  |  | $ | 1,237 |  |  | $ | 2,755 |  |  | $ | 2,553 |  |  | $ | 25 |  |  | $ | 45 |
Total accumulated benefit obligation for defined benefit pension plans | $ | 4,000 |  |  | $ | 3,807 |  |  | $ | 7,542 |  |  | $ | 6,780 |  |  |  |  |  |  |
(a) | WPD is not subject to accounting for the effects of certain types of regulation as prescribed by GAAP and as a result, does not record regulatory assets/liabilities.
For PPL's U.S. pension and other postretirement benefit plans, the amounts recognized in AOCI and regulatory assets/liabilities at December 31 were as follows:
| U.S. Pension Benefits |  | Other Postretirement Benefits
| 2017 |  | 2016 |  | 2017 |  | 2016
AOCI | $ | 374 |  |  | $ | 357 |  |  | $ | 15 |  |  | $ | 20 |
Regulatory assets/liabilities | 809 |  |  | 880 |  |  | 10 |  |  | 25 |
Total | $ | 1,183 |  |  | $ | 1,237 |  |  | $ | 25 |  |  | $ | 45 |
Schedule of Projected or Accumulated Benefit Obligations In Excess of Plan Assets | The following tables provide information on pension plans where the projected benefit obligation (PBO) or accumulated benefit obligation (ABO) exceed the fair value of plan assets:
| U.S. |  | U.K.
| PBO in excess of plan assets |  | PBO in excess of plan assets
| 2017 |  | 2016 |  | 2017 |  | 2016
Projected benefit obligation | $ | 4,288 |  |  | $ | 4,079 |  |  | $ | 3,083 |  |  | $ | 3,403 |
Fair value of plan assets | 3,488 |  |  | 3,243 |  |  | 3,070 |  |  | 3,221 |
| U.S. |  | U.K.
| ABO in excess of plan assets |  | ABO in excess of plan assets
| 2017 |  | 2016 |  | 2017 |  | 2016
Accumulated benefit obligation | $ | 4,000 |  |  | $ | 3,807 |  |  | $ | 10 |  |  | $ | 657 |
Fair value of plan assets | 3,488 |  |  | 3,243 |  |  | — |  |  | 643 |
Schedules of Asset Allocation of U.S. Pension Trusts Assets | The asset allocation for the trust and the target allocation by portfolio at December 31 are as follows:
| Percentage of trust assets |  | 2017
| 2017 (a) |  | 2016 |  | Target Asset Allocation (a)
Growth Portfolio | 56 | % |  | 52 | % |  | 55 | %
Equity securities | 32 | % |  | 30 | % |  |
Debt securities (b) | 14 | % |  | 12 | % |  |
Alternative investments | 10 | % |  | 10 | % |  |
Immunizing Portfolio | 43 | % |  | 46 | % |  | 43 | %
Debt securities (b) | 39 | % |  | 43 | % |  |
Derivatives | 4 | % |  | 3 | % |  |
Liquidity Portfolio | 1 | % |  | 2 | % |  | 2 | %
Total | 100 | % |  | 100 | % |  | 100 | %
(a) | Allocations exclude consideration of a group annuity contract held by the LG&E and KU Retirement Plan.
(b) | Includes commingled debt funds, which PPL treats as debt securities for asset allocation purposes.
Schedule of Fair Value of Financial Assets for U.S. Pension Plan Assets | The fair value of net assets in the Master Trust by asset class and level within the fair value hierarchy was:
| December 31, 2017 |  | December 31, 2016
|  |  | Fair Value Measurements Using |  |  |  | Fair Value Measurements Using
| Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3
PPL Services Corporation Master Trust |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 301 |  |  | $ | 301 |  |  | $ | — |  |  | $ | — |  |  | $ | 181 |  |  | $ | 181 |  |  | $ | — |  |  | $ | — |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Equity | 229 |  |  | 229 |  |  | — |  |  | — |  |  | 152 |  |  | 152 |  |  | — |  |  | — |
U.S. Equity fund measured at NAV (a) | 364 |  |  | — |  |  | — |  |  | — |  |  | 272 |  |  | — |  |  | — |  |  | — |
International equity fund at NAV (a) | 538 |  |  | — |  |  | — |  |  | — |  |  | 551 |  |  | — |  |  | — |  |  | — |
Commingled debt measured at NAV (a) | 611 |  |  | — |  |  | — |  |  | — |  |  | 546 |  |  | — |  |  | — |  |  | — |
| December 31, 2017 |  | December 31, 2016
|  |  | Fair Value Measurements Using |  |  |  | Fair Value Measurements Using
| Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3
Debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and U.S. government sponsored agency | 186 |  |  | 186 |  |  | — |  |  | — |  |  | 381 |  |  | 381 |  |  | — |  |  | — |
Corporate | 883 |  |  | — |  |  | 870 |  |  | 13 |  |  | 850 |  |  | — |  |  | 837 |  |  | 13 |
Other | 10 |  |  | — |  |  | 10 |  |  | — |  |  | 8 |  |  | — |  |  | 8 |  |  | — |
Alternative investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate measured at NAV (a) | 109 |  |  | — |  |  | — |  |  | — |  |  | 102 |  |  | — |  |  | — |  |  | — |
Private equity measured at NAV (a) | 80 |  |  | — |  |  | — |  |  | — |  |  | 80 |  |  | — |  |  | — |  |  | — |
Hedge funds measured at NAV (a) | 175 |  |  | — |  |  | — |  |  | — |  |  | 167 |  |  | — |  |  | — |  |  | — |
Derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps and swaptions | 50 |  |  | — |  |  | 50 |  |  | — |  |  | 61 |  |  | — |  |  | 61 |  |  | — |
Other | 1 |  |  | — |  |  | 1 |  |  | — |  |  | 3 |  |  | — |  |  | 3 |  |  | — |
Insurance contracts | 24 |  |  | — |  |  | — |  |  | 24 |  |  | 27 |  |  | — |  |  | — |  |  | 27 |
PPL Services Corporation Master Trust assets, at fair value | 3,561 |  |  | $ | 716 |  |  | $ | 931 |  |  | $ | 37 |  |  | 3,381 |  |  | $ | 714 |  |  | $ | 909 |  |  | $ | 40 |
Receivables and payables, net (b) | 72 |  |  |  |  |  |  |  |  |  |  |  | (15 | ) |  |  |  |  |  |  |  |  |
401(h) accounts restricted for other postretirement benefit obligations | (145 | ) |  |  |  |  |  |  |  |  |  |  | (123 | ) |  |  |  |  |  |  |  |  |
Total PPL Services Corporation Master Trust pension assets | $ | 3,488 |  |  |  |  |  |  |  |  |  |  |  | $ | 3,243 |  |  |  |  |  |  |  |  |  |
(a) | In accordance with accounting guidance certain investments that are measured at fair value using the net asset value per share (NAV), or its equivalent, practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.
(b) | Receivables and payables represent amounts for investments sold/purchased but not yet settled along with interest and dividends earned but not yet received.
Reconciliation of U.S. Pension Trust Assets Classified as Level 3 Included in Earnings | A reconciliation of the Master Trust assets classified as Level 3 at December 31, 2017 is as follows:
| Corporate debt |  | Insurance contracts |  | Total
Balance at beginning of period | $ | 13 |  |  | $ | 27 |  |  | $ | 40 |
Actual return on plan assets |  |  |  |  |
Relating to assets still held at the reporting date | — |  |  | 1 |  |  | 1 |
Purchases, sales and settlements | — |  |  | (4 | ) |  | (4 | )
Balance at end of period | $ | 13 |  |  | $ | 24 |  |  | $ | 37 |
A reconciliation of the Master Trust assets classified as Level 3 at December 31, 2016 is as follows:
| Corporate debt |  | Insurance contracts |  | Total
Balance at beginning of period | $ | 10 |  |  | $ | 32 |  |  | $ | 42 |
Actual return on plan assets |  |  |  |  |
Relating to assets still held at the reporting date | — |  |  | 1 |  |  | 1 |
Purchases, sales and settlements | 3 |  |  | (6 | ) |  | (3 | )
Balance at end of period | $ | 13 |  |  | $ | 27 |  |  | $ | 40 |
Schedules of Target Allocation of U.S. Other Postretirement Benefit Plans VEBA Trust | The asset allocation for the PPL VEBA trusts, excluding LKE, and the target allocation, by asset class, at December 31 are detailed below.
| Percentage of plan assets |  | Target Asset Allocation
| 2017 |  | 2016 |  | 2017
Asset Class |  |  |  |  |
U.S. Equity securities | 47 | % |  | 48 | % |  | 45 | %
Debt securities (a) | 49 | % |  | 50 | % |  | 50 | %
Cash and cash equivalents (b) | 4 | % |  | 2 | % |  | 5 | %
Total | 100 | % |  | 100 | % |  | 100 | %
(a) | Includes commingled debt funds and debt securities.
(b) | Includes money market funds.
Schedule of Fair Value of Financial Assets for U.S. Postretirement Benefits | The fair value of assets in the U.S. other postretirement benefit plans by asset class and level within the fair value hierarchy was:
| December 31, 2017 |  | December 31, 2016
|  |  | Fair Value Measurement Using |  |  |  | Fair Value Measurement Using
| Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3
Money market funds | $ | 10 |  |  | $ | 10 |  |  | $ | — |  |  | $ | — |  |  | $ | 5 |  |  | $ | 5 |  |  | $ | — |  |  | $ | — |
U.S. Equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Large-cap equity fund measure at NAV (a) | 123 |  |  | — |  |  | — |  |  | — |  |  | 123 |  |  | — |  |  | — |  |  | — |
Commingled debt fund measured at NAV (a) | 96 |  |  | — |  |  | — |  |  | — |  |  | 114 |  |  | — |  |  | — |  |  | — |
Debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate bonds | 30 |  |  | — |  |  | 30 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Municipalities | — |  |  | — |  |  | — |  |  | — |  |  | 12 |  |  | — |  |  | 12 |  |  | — |
Total VEBA trust assets, at fair value | 259 |  |  | $ | 10 |  |  | $ | 30 |  |  | $ | — |  |  | 254 |  |  | $ | 5 |  |  | $ | 12 |  |  | $ | — |
Receivables and payables, net (b) | 1 |  |  |  |  |  |  |  |  |  |  |  | 1 |  |  |  |  |  |  |  |  |
401(h) account assets | 145 |  |  |  |  |  |  |  |  |  |  |  | 123 |  |  |  |  |  |  |  |  |
Total other postretirement benefit plan assets | $ | 405 |  |  |  |  |  |  |  |  |  |  |  | $ | 378 |  |  |  |  |  |  |  |  |
(a) | In accordance with accounting guidance certain investments that are measured at fair value using the net asset value per share (NAV), or its equivalent, practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.
(b) | Receivables and payables represent amounts for investments sold/purchased but not yet settled along with interest and dividends earned but not yet received.
Schedules of Asset Allocation of U.K. Pension Plan Assets | The asset allocation and target allocation at December 31 of WPD's pension plans are detailed below.
|  |  |  |  | Target Asset
| Percentage of plan assets |  | Allocation
| 2017 |  | 2016 |  | 2017
Asset Class |  |  |  |  |
Cash and cash equivalents | 2 | % |  | 1 | % |  | — | %
Equity securities |  |  |  |  |
U.K. | 2 | % |  | 3 | % |  | 2 | %
European (excluding the U.K.) | 1 | % |  | 2 | % |  | 1 | %
Asian-Pacific | 1 | % |  | 2 | % |  | 1 | %
North American | 1 | % |  | 3 | % |  | 1 | %
Emerging markets | 1 | % |  | 3 | % |  | 1 | %
Global equities | 16 | % |  | 6 | % |  | 10 | %
Global Tactical Asset Allocation | 33 | % |  | 33 | % |  | 41 | %
Debt securities (a) | 37 | % |  | 41 | % |  | 38 | %
Alternative investments | 6 | % |  | 6 | % |  | 5 | %
Total | 100 | % |  | 100 | % |  | 100 | %
(a) | Includes commingled debt funds.
Schedule of Fair Value of Financial Assets for U.K. Pension Plan Assets | The fair value of assets in the U.K. pension plans by asset class and level within the fair value hierarchy was:
| December 31, 2017 |  | December 31, 2016
|  |  | Fair Value Measurement Using |  |  |  | Fair Value Measurement Using
| Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3
Cash and cash equivalents | $ | 216 |  |  | $ | 216 |  |  | $ | — |  |  | $ | — |  |  | $ | 42 |  |  | $ | 42 |  |  | $ | — |  |  | $ | — |
Equity securities measured at NAV (a) : |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.K. companies | 157 |  |  | — |  |  | — |  |  | — |  |  | 210 |  |  | — |  |  | — |  |  | — |
European companies (excluding the U.K.) | 98 |  |  | — |  |  | — |  |  | — |  |  | 177 |  |  | — |  |  | — |  |  | — |
Asian-Pacific companies | 60 |  |  | — |  |  | — |  |  | — |  |  | 140 |  |  | — |  |  | — |  |  | — |
North American companies | 123 |  |  | — |  |  | — |  |  | — |  |  | 227 |  |  | — |  |  | — |  |  | — |
Emerging markets companies | 62 |  |  | — |  |  | — |  |  | — |  |  | 209 |  |  | — |  |  | — |  |  | — |
Global Equities | 1,335 |  |  | — |  |  | — |  |  | — |  |  | 466 |  |  | — |  |  | — |  |  | — |
Other | 2,807 |  |  | — |  |  | — |  |  | — |  |  | 2,363 |  |  | — |  |  | — |  |  | — |
Debt Securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.K. corporate bonds | 3 |  |  | — |  |  | 3 |  |  | — |  |  | 2 |  |  | — |  |  | 2 |  |  | — |
U.K. gilts | 3,137 |  |  | — |  |  | 3,137 |  |  | — |  |  | 2,940 |  |  | — |  |  | 2,940 |  |  | — |
Alternative investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate measured at NAV (a) | 492 |  |  | — |  |  | — |  |  | — |  |  | 435 |  |  | — |  |  | — |  |  | — |
Fair value - U.K. pension plans | $ | 8,490 |  |  | $ | 216 |  |  | $ | 3,140 |  |  | $ | — |  |  | $ | 7,211 |  |  | $ | 42 |  |  | $ | 2,942 |  |  | $ | — |
(a) | In accordance with accounting guidance certain investments that are measured at fair value using the net asset value per share (NAV), or its equivalent, practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.
Schedule of Expected Cash Flows - U.S. Defined Benefit Plans - Expected Payments and Related Federal Subsidy | The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid by the plans and the following federal subsidy payments are expected to be received by PPL.
|  |  | Other Postretirement
| Pension |  | Benefit Payment |  | Expected Federal Subsidy
2018 | $ | 260 |  |  | $ | 51 |  |  | $ | 1 |
2019 | 269 |  |  | 51 |  |  | — |
2020 | 268 |  |  | 50 |  |  | 1 |
2021 | 270 |  |  | 49 |  |  | — |
2022 | 272 |  |  | 48 |  |  | — |
2023-2027 | 1,328 |  |  | 218 |  |  | 2 |
Schedule of Expected Cash Flows - U.K. Pension Plans - Expected Payments | The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid by the plans.
| Pension
2018 | $ | 343 |
2019 | 349 |
2020 | 353 |
2021 | 356 |
2022 | 362 |
2023-2027 | 1,843 |
Expected Employer Contributions to U.S. Savings Plans | Substantially all employees of PPL's subsidiaries are eligible to participate in deferred savings plans (401(k)s). Employer contributions to the plans were:
| 2017 |  | 2016 |  | 2015
PPL | $ | 36 |  |  | $ | 35 |  |  | $ | 34 |
PPL Electric | 6 |  |  | 6 |  |  | 6 |
LKE | 18 |  |  | 17 |  |  | 16 |
LG&E | 5 |  |  | 5 |  |  | 5 |
KU | 4 |  |  | 4 |  |  | 4 |
PPL Electric Utilities Corp [Member] |
Defined Benefit Plan Disclosure [Line Items] |
Schedule of Funded Status of Defined Benefit Plans | Allocations to PPL Electric resulted in liabilities at December 31 as follows:
| 2017 |  | 2016
Pension | $ | 246 |  |  | $ | 281 |
Other postretirement benefits | 62 |  |  | 72 |
LG And E And KU Energy LLC [Member] |
Defined Benefit Plan Disclosure [Line Items] |
Schedule Of Net Periodic Defined Benefit Costs (Credits) | The following table provides the components of net periodic defined benefit costs for LKE's pension and other postretirement benefit plans for the years ended December 31.
| Pension Benefits |  | Other Postretirement Benefits
| 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015
Net periodic defined benefit costs (credits): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Service cost | $ | 24 |  |  | $ | 23 |  |  | $ | 26 |  |  | $ | 4 |  |  | $ | 5 |  |  | $ | 5 |
Interest cost | 68 |  |  | 71 |  |  | 68 |  |  | 9 |  |  | 9 |  |  | 9 |
Expected return on plan assets | (92 | ) |  | (91 | ) |  | (88 | ) |  | (7 | ) |  | (6 | ) |  | (6 | )
Amortization of: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Prior service cost | 8 |  |  | 8 |  |  | 7 |  |  | 1 |  |  | 3 |  |  | 3 |
Actuarial (gain) loss (a) | 31 |  |  | 21 |  |  | 37 |  |  | — |  |  | (1 | ) |  | — |
Net periodic defined benefit costs (b) | $ | 39 |  |  | $ | 32 |  |  | $ | 50 |  |  | $ | 7 |  |  | $ | 10 |  |  | $ | 11 |
Other Changes in Plan Assets and Benefit Obligations Recognized in OCI and Regulatory Assets/Liabilities - Gross: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net (gain) loss | $ | 30 |  |  | $ | 119 |  |  | $ | 20 |  |  | $ | (14 | ) |  | $ | 6 |  |  | $ | (15 | )
Prior service cost | 7 |  |  | — |  |  | 19 |  |  | 8 |  |  | — |  |  | — |
Amortization of: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Prior service credit | (8 | ) |  | (8 | ) |  | (7 | ) |  | (1 | ) |  | (3 | ) |  | (3 | )
Actuarial gain (loss) | (32 | ) |  | (21 | ) |  | (37 | ) |  | — |  |  | 1 |  |  | — |
Total recognized in OCI and regulatory assets/liabilities | (3 | ) |  | 90 |  |  | (5 | ) |  | (7 | ) |  | 4 |  |  | (18 | )
Total recognized in net periodic defined benefit costs, OCI and regulatory assets/liabilities | $ | 36 |  |  | $ | 122 |  |  | $ | 45 |  |  | $ | — |  |  | $ | 14 |  |  | $ | (7 | )
(a) | As a result of the 2014 Kentucky rate case settlement that became effective July 1, 2015, the difference between actuarial (gain)/loss calculated in accordance with LKE's pension accounting policy and actuarial (gain)/loss calculated using a 15 year amortization period was $11 million in 2017, $6 million in 2016 and $9 million in 2015.
(b) | Due to the amount of lump sum payment distributions from the LG&E qualified pension plan, a settlement charge of $5 million was incurred. In accordance with existing regulatory accounting treatment, LG&E has maintained the settlement charge in regulatory assets. The amount will be amortized in accordance with existing regulatory practice.
Schedule of Amounts Recognized in Other Comprehensive Income and Regulatory Assets and Liabilities | For LKE's pension and other postretirement benefits, the amounts recognized in OCI and regulatory assets/liabilities for the years ended December 31 were as follows:
| Pension Benefits |  | Other Postretirement Benefits
| 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015
OCI | $ | 33 |  |  | $ | 42 |  |  | $ | 4 |  |  | $ | (2 | ) |  | $ | 2 |  |  | $ | (2 | )
Regulatory assets/liabilities | (36 | ) |  | 48 |  |  | (9 | ) |  | (5 | ) |  | 2 |  |  | (16 | )
Total recognized in OCI and regulatory assets/liabilities | $ | (3 | ) |  | $ | 90 |  |  | $ | (5 | ) |  | $ | (7 | ) |  | $ | 4 |  |  | $ | (18 | )
Schedule of Amounts to be Amortized from AOCI and Regulatory Assets/Liabilities in Next Fiscal Year | The estimated amounts to be amortized from AOCI and regulatory assets/liabilities into net periodic defined benefit costs for LKE in 2018 are as follows.
| Pension Benefits |  | Other Postretirement Benefits
Prior service cost | $ | 9 |  |  | $ | 1 |
Actuarial Loss | 39 |  |  | — |
Total | $ | 48 |  |  | $ | 1 |
Amortization from Balance Sheet: |  |  |  |
AOCI | $ | 11 |  |  | $ | — |
Regulatory assets/liabilities | 37 |  |  | 1 |
Total | $ | 48 |  |  | $ | 1 |
Defined Benefit Plan Assumptions and Impact of One Point Change on Postretirement Plans | The following weighted-average assumptions were used in the valuation of the benefit obligations at December 31. The U.K. pension benefits apply to PPL only.
| Pension Benefits |  |  |  |
| U.S. |  | U.K. |  | Other Postretirement Benefits
| 2017 |  | 2016 |  | 2017 |  | 2016 |  | 2017 |  | 2016
PPL |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate | 3.70 | % |  | 4.21 | % |  | 2.65 | % |  | 2.87 | % |  | 3.64 | % |  | 4.11 | %
Rate of compensation increase | 3.78 | % |  | 3.95 | % |  | 3.50 | % |  | 3.50 | % |  | 3.75 | % |  | 3.92 | %
LKE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate | 3.69 | % |  | 4.19 | % |  |  |  |  |  |  |  | 3.65 | % |  | 4.12 | %
Rate of compensation increase | 3.50 | % |  | 3.50 | % |  |  |  |  |  |  |  | 3.50 | % |  | 3.50 | %
LG&E |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate | 3.65 | % |  | 4.13 | % |  |  |  |  |  |  |  |  |  |  |  |
The following weighted-average assumptions were used to determine the net periodic defined benefit costs for the years ended December 31. The U.K. pension benefits apply to PPL only.
| Pension Benefits |  |  |  |  |  |
| U.S. |  | U.K. |  | Other Postretirement Benefits
| 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015
PPL |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate service cost (b) | 4.21 | % |  | 4.59 | % |  | 4.25 | % |  | 2.99 | % |  | 3.90 | % |  | 3.85 | % |  | 4.11 | % |  | 4.48 | % |  | 4.09 | %
Discount rate interest cost (b) | 4.21 | % |  | 4.59 | % |  | 4.25 | % |  | 2.41 | % |  | 3.14 | % |  | 3.85 | % |  | 4.11 | % |  | 4.48 | % |  | 4.09 | %
Rate of compensation increase | 3.95 | % |  | 3.93 | % |  | 3.91 | % |  | 3.50 | % |  | 4.00 | % |  | 4.00 | % |  | 3.92 | % |  | 3.91 | % |  | 3.86 | %
Expected return on plan assets (a) | 7.00 | % |  | 7.00 | % |  | 7.00 | % |  | 7.22 | % |  | 7.20 | % |  | 7.19 | % |  | 6.21 | % |  | 6.11 | % |  | 6.06 | %
LKE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate | 4.19 | % |  | 4.56 | % |  | 4.25 | % |  |  |  |  |  |  |  |  |  |  | 4.12 | % |  | 4.49 | % |  | 4.06 | %
Rate of compensation increase | 3.50 | % |  | 3.50 | % |  | 3.50 | % |  |  |  |  |  |  |  |  |  |  | 3.50 | % |  | 3.50 | % |  | 3.50 | %
Expected return on plan assets (a) | 7.00 | % |  | 7.00 | % |  | 7.00 | % |  |  |  |  |  |  |  |  |  |  | 6.82 | % |  | 6.82 | % |  | 6.82 | %
| Pension Benefits |  |  |  |  |  |
| U.S. |  | U.K. |  | Other Postretirement Benefits
| 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015
LG&E |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate | 4.13 | % |  | 4.49 | % |  | 4.20 | % |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Expected return on plan assets (a) | 7.00 | % |  | 7.00 | % |  | 7.00 | % |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(a) | The expected long-term rates of return for pension and other postretirement benefits are based on management's projections using a best-estimate of expected returns, volatilities and correlations for each asset class. Each plan's specific current and expected asset allocations are also considered in developing a reasonable return assumption.
(b) | As of January 1, 2016, WPD began using individual spot rates from the yield curve used to discount the benefit obligation to measure service cost and interest cost. PPL's U.S. plans use a single discount rate derived from an individual bond matching model to measure the benefit obligation, service cost and interest cost. See Note 1 for additional details.
(PPL and LKE) The following table provides the assumed health care cost trend rates for the years ended December 31:
| 2017 |  | 2016 |  | 2015
PPL and LKE |  |  |  |  |
Health care cost trend rate assumed for next year |  |  |  |  |
– obligations | 6.6 | % |  | 7.0 | % |  | 6.8 | %
– cost | 7.0 | % |  | 6.8 | % |  | 7.2 | %
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) |  |  |  |  |
– obligations | 5.0 | % |  | 5.0 | % |  | 5.0 | %
– cost | 5.0 | % |  | 5.0 | % |  | 5.0 | %
Year that the rate reaches the ultimate trend rate |  |  |  |  |
– obligations | 2022 |  |  | 2022 |  |  | 2020 |
– cost | 2022 |  |  | 2020 |  |  | 2020 |
A one percentage point change in the assumed health care costs trend rate assumption would have had the following effects on the other postretirement benefit plans in 2017:
| One Percentage Point
| Increase |  | Decrease
Effect on accumulated postretirement benefit obligation |  |  |
PPL | $ | 4 |  |  | $ | (4 | )
LKE | 3 |  |  | (3 | )
Schedule of Funded Status of Defined Benefit Plans | The funded status of LKE's plans at December 31 was as follows:
| Pension Benefits |  | Other Postretirement Benefits
| 2017 |  | 2016 |  | 2017 |  | 2016
Change in Benefit Obligation |  |  |  |  |  |  |  |  |  |  |
Benefit Obligation, beginning of period | $ | 1,669 |  |  | $ | 1,588 |  |  | $ | 220 |  |  | $ | 216 |
Service cost | 24 |  |  | 23 |  |  | 4 |  |  | 5 |
Interest cost | 68 |  |  | 71 |  |  | 9 |  |  | 9 |
Participant contributions | — |  |  | — |  |  | 8 |  |  | 7 |
Plan amendments (a) | 6 |  |  | — |  |  | 8 |  |  | — |
Actuarial (gain) loss | 113 |  |  | 96 |  |  | (7 | ) |  | 4 |
Gross benefits paid (a) | (109 | ) |  | (109 | ) |  | (19 | ) |  | (21 | )
Benefit Obligation, end of period | 1,771 |  |  | 1,669 |  |  | 223 |  |  | 220 |
Change in Plan Assets |  |  |  |  |  |  |  |  |  |  |
Plan assets at fair value, beginning of period | 1,315 |  |  | 1,289 |  |  | 98 |  |  | 88 |
Actual return on plan assets | 175 |  |  | 69 |  |  | 14 |  |  | 4 |
Employer contributions | 21 |  |  | 66 |  |  | 15 |  |  | 20 |
Participant contributions | — |  |  | — |  |  | 8 |  |  | 7 |
Gross benefits paid | (109 | ) |  | (109 | ) |  | (19 | ) |  | (21 | )
Plan assets at fair value, end of period | 1,402 |  |  | 1,315 |  |  | 116 |  |  | 98 |
Funded Status, end of period | $ | (369 | ) |  | $ | (354 | ) |  | $ | (107 | ) |  | $ | (122 | )
Amounts recognized in the Balance Sheets consist of: |  |  |  |  |  |  |  |  |  |  |
Noncurrent asset | $ | — |  |  | $ | — |  |  | $ | 2 |  |  | $ | 2 |
Current liability | (4 | ) |  | (4 | ) |  | (3 | ) |  | (3 | )
Noncurrent liability | (365 | ) |  | (350 | ) |  | (106 | ) |  | (121 | )
Net amount recognized, end of period | $ | (369 | ) |  | $ | (354 | ) |  | $ | (107 | ) |  | $ | (122 | )
Amounts recognized in AOCI and regulatory assets/liabilities (pre-tax) consist of: |  |  |  |  |  |  |  |  |  |  |
Prior service cost | $ | 44 |  |  | $ | 45 |  |  | $ | 13 |  |  | $ | 6 |
Net actuarial (gain) loss | 434 |  |  | 436 |  |  | (26 | ) |  | (13 | )
Total | $ | 478 |  |  | $ | 481 |  |  | $ | (13 | ) |  | $ | (7 | )
Total accumulated benefit obligation for defined benefit pension plans | $ | 1,616 |  |  | $ | 1,531 |  |  |  |  |  |  |
(a) | The pension plans were amended in December 2015 to allow active participants and terminated vested participants who had not previously elected a form of payment of their benefit to elect to receive their accrued pension benefit as a one-time lump-sum payment effective January 1, 2016. The projected benefit obligation at December 31, 2016 increased by $19 million as a result of the amendment. Gross benefits paid by the plans include lump-sum cash payments made to participants during 2017 and 2016 of $50 million and $53 million in connection with these offerings.
The amounts recognized in AOCI and regulatory assets/liabilities at December 31 were as follows:
| Pension Benefits |  | Other Postretirement Benefits
| 2017 |  | 2016 |  | 2017 |  | 2016
AOCI | $ | 144 |  |  | $ | 111 |  |  | $ | 6 |  |  | $ | 8 |
Regulatory assets/liabilities | 334 |  |  | 370 |  |  | (19 | ) |  | (15 | )
Total | $ | 478 |  |  | $ | 481 |  |  | $ | (13 | ) |  | $ | (7 | )
Schedule of Projected or Accumulated Benefit Obligations In Excess of Plan Assets | The following tables provide information on pension plans where the projected benefit obligation (PBO) or accumulated benefit obligations (ABO) exceed the fair value of plan assets:
| PBO in excess of plan assets
| 2017 |  | 2016
Projected benefit obligation | $ | 1,771 |  |  | $ | 1,669 |
Fair value of plan assets | 1,402 |  |  | 1,315 |
| ABO in excess of plan assets
| 2017 |  | 2016
Accumulated benefit obligation | $ | 1,616 |  |  | $ | 1,531 |
Fair value of plan assets | 1,402 |  |  | 1,315 |
Schedules of Asset Allocation of U.S. Pension Trusts Assets | The asset allocation for the trust and the target allocation by portfolio at December 31 are as follows:
| Percentage of trust assets |  | 2017
| 2017 (a) |  | 2016 |  | Target Asset Allocation (a)
Growth Portfolio | 56 | % |  | 52 | % |  | 55 | %
Equity securities | 32 | % |  | 30 | % |  |
Debt securities (b) | 14 | % |  | 12 | % |  |
Alternative investments | 10 | % |  | 10 | % |  |
Immunizing Portfolio | 43 | % |  | 46 | % |  | 43 | %
Debt securities (b) | 39 | % |  | 43 | % |  |
Derivatives | 4 | % |  | 3 | % |  |
Liquidity Portfolio | 1 | % |  | 2 | % |  | 2 | %
Total | 100 | % |  | 100 | % |  | 100 | %
(a) | Allocations exclude consideration of a group annuity contract held by the LG&E and KU Retirement Plan.
(b) | Includes commingled debt funds, which PPL treats as debt securities for asset allocation purposes.
Schedule of Fair Value of Financial Assets for U.S. Pension Plan Assets | The fair value of net assets in the Master Trust by asset class and level within the fair value hierarchy was:
| December 31, 2017 |  | December 31, 2016
|  |  | Fair Value Measurements Using |  |  |  | Fair Value Measurements Using
| Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3
PPL Services Corporation Master Trust |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 301 |  |  | $ | 301 |  |  | $ | — |  |  | $ | — |  |  | $ | 181 |  |  | $ | 181 |  |  | $ | — |  |  | $ | — |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Equity | 229 |  |  | 229 |  |  | — |  |  | — |  |  | 152 |  |  | 152 |  |  | — |  |  | — |
U.S. Equity fund measured at NAV (a) | 364 |  |  | — |  |  | — |  |  | — |  |  | 272 |  |  | — |  |  | — |  |  | — |
International equity fund at NAV (a) | 538 |  |  | — |  |  | — |  |  | — |  |  | 551 |  |  | — |  |  | — |  |  | — |
Commingled debt measured at NAV (a) | 611 |  |  | — |  |  | — |  |  | — |  |  | 546 |  |  | — |  |  | — |  |  | — |
| December 31, 2017 |  | December 31, 2016
|  |  | Fair Value Measurements Using |  |  |  | Fair Value Measurements Using
| Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3
Debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and U.S. government sponsored agency | 186 |  |  | 186 |  |  | — |  |  | — |  |  | 381 |  |  | 381 |  |  | — |  |  | — |
Corporate | 883 |  |  | — |  |  | 870 |  |  | 13 |  |  | 850 |  |  | — |  |  | 837 |  |  | 13 |
Other | 10 |  |  | — |  |  | 10 |  |  | — |  |  | 8 |  |  | — |  |  | 8 |  |  | — |
Alternative investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate measured at NAV (a) | 109 |  |  | — |  |  | — |  |  | — |  |  | 102 |  |  | — |  |  | — |  |  | — |
Private equity measured at NAV (a) | 80 |  |  | — |  |  | — |  |  | — |  |  | 80 |  |  | — |  |  | — |  |  | — |
Hedge funds measured at NAV (a) | 175 |  |  | — |  |  | — |  |  | — |  |  | 167 |  |  | — |  |  | — |  |  | — |
Derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps and swaptions | 50 |  |  | — |  |  | 50 |  |  | — |  |  | 61 |  |  | — |  |  | 61 |  |  | — |
Other | 1 |  |  | — |  |  | 1 |  |  | — |  |  | 3 |  |  | — |  |  | 3 |  |  | — |
Insurance contracts | 24 |  |  | — |  |  | — |  |  | 24 |  |  | 27 |  |  | — |  |  | — |  |  | 27 |
PPL Services Corporation Master Trust assets, at fair value | 3,561 |  |  | $ | 716 |  |  | $ | 931 |  |  | $ | 37 |  |  | 3,381 |  |  | $ | 714 |  |  | $ | 909 |  |  | $ | 40 |
Receivables and payables, net (b) | 72 |  |  |  |  |  |  |  |  |  |  |  | (15 | ) |  |  |  |  |  |  |  |  |
401(h) accounts restricted for other postretirement benefit obligations | (145 | ) |  |  |  |  |  |  |  |  |  |  | (123 | ) |  |  |  |  |  |  |  |  |
Total PPL Services Corporation Master Trust pension assets | $ | 3,488 |  |  |  |  |  |  |  |  |  |  |  | $ | 3,243 |  |  |  |  |  |  |  |  |  |
(a) | In accordance with accounting guidance certain investments that are measured at fair value using the net asset value per share (NAV), or its equivalent, practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.
(b) | Receivables and payables represent amounts for investments sold/purchased but not yet settled along with interest and dividends earned but not yet received.
Reconciliation of U.S. Pension Trust Assets Classified as Level 3 Included in Earnings | A reconciliation of the Master Trust assets classified as Level 3 at December 31, 2017 is as follows:
| Corporate debt |  | Insurance contracts |  | Total
Balance at beginning of period | $ | 13 |  |  | $ | 27 |  |  | $ | 40 |
Actual return on plan assets |  |  |  |  |
Relating to assets still held at the reporting date | — |  |  | 1 |  |  | 1 |
Purchases, sales and settlements | — |  |  | (4 | ) |  | (4 | )
Balance at end of period | $ | 13 |  |  | $ | 24 |  |  | $ | 37 |
A reconciliation of the Master Trust assets classified as Level 3 at December 31, 2016 is as follows:
| Corporate debt |  | Insurance contracts |  | Total
Balance at beginning of period | $ | 10 |  |  | $ | 32 |  |  | $ | 42 |
Actual return on plan assets |  |  |  |  |
Relating to assets still held at the reporting date | — |  |  | 1 |  |  | 1 |
Purchases, sales and settlements | 3 |  |  | (6 | ) |  | (3 | )
Balance at end of period | $ | 13 |  |  | $ | 27 |  |  | $ | 40 |
Schedule of Fair Value of Financial Assets for U.S. Postretirement Benefits | The fair value of assets in the U.S. other postretirement benefit plans by asset class and level within the fair value hierarchy was:
| December 31, 2017 |  | December 31, 2016
|  |  | Fair Value Measurement Using |  |  |  | Fair Value Measurement Using
| Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3
Money market funds | $ | 10 |  |  | $ | 10 |  |  | $ | — |  |  | $ | — |  |  | $ | 5 |  |  | $ | 5 |  |  | $ | — |  |  | $ | — |
U.S. Equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Large-cap equity fund measure at NAV (a) | 123 |  |  | — |  |  | — |  |  | — |  |  | 123 |  |  | — |  |  | — |  |  | — |
Commingled debt fund measured at NAV (a) | 96 |  |  | — |  |  | — |  |  | — |  |  | 114 |  |  | — |  |  | — |  |  | — |
Debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate bonds | 30 |  |  | — |  |  | 30 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Municipalities | — |  |  | — |  |  | — |  |  | — |  |  | 12 |  |  | — |  |  | 12 |  |  | — |
Total VEBA trust assets, at fair value | 259 |  |  | $ | 10 |  |  | $ | 30 |  |  | $ | — |  |  | 254 |  |  | $ | 5 |  |  | $ | 12 |  |  | $ | — |
Receivables and payables, net (b) | 1 |  |  |  |  |  |  |  |  |  |  |  | 1 |  |  |  |  |  |  |  |  |
401(h) account assets | 145 |  |  |  |  |  |  |  |  |  |  |  | 123 |  |  |  |  |  |  |  |  |
Total other postretirement benefit plan assets | $ | 405 |  |  |  |  |  |  |  |  |  |  |  | $ | 378 |  |  |  |  |  |  |  |  |
(a) | In accordance with accounting guidance certain investments that are measured at fair value using the net asset value per share (NAV), or its equivalent, practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.
(b) | Receivables and payables represent amounts for investments sold/purchased but not yet settled along with interest and dividends earned but not yet received.
Schedule of Expected Cash Flows - U.S. Defined Benefit Plans - Expected Payments and Related Federal Subsidy | The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid by the plans and the following federal subsidy payments are expected to be received by LKE.
|  |  | Other Postretirement
| Pension |  | Benefit Payment |  | Expected Federal Subsidy
2018 | $ | 109 |  |  | $ | 14 |  |  | $ | — |
2019 | 113 |  |  | 15 |  |  | — |
2020 | 114 |  |  | 16 |  |  | 1 |
2021 | 115 |  |  | 16 |  |  | — |
2022 | 116 |  |  | 16 |  |  | — |
2023-2027 | 573 |  |  | 79 |  |  | 2 |
Louisville Gas And Electric Co [Member] |
Defined Benefit Plan Disclosure [Line Items] |
Schedule Of Net Periodic Defined Benefit Costs (Credits) | The following table provides the components of net periodic defined benefit costs for LG&E's pension benefit plan for the years ended December 31.
| Pension Benefits
| 2017 |  | 2016 |  | 2015
Net periodic defined benefit costs (credits): |  |  |  |  |  |  |  |
Service cost | $ | 1 |  |  | $ | 1 |  |  | $ | 1 |
Interest cost | 13 |  |  | 15 |  |  | 14 |
Expected return on plan assets | (22 | ) |  | (21 | ) |  | (20 | )
Amortization of: |  |  |  |  |  |  |  |
Prior service cost | 5 |  |  | 4 |  |  | 3 |
Actuarial loss (a) | 9 |  |  | 7 |  |  | 11 |
Net periodic defined benefit costs (b) | $ | 6 |  |  | $ | 6 |  |  | $ | 9 |
Other Changes in Plan Assets and Benefit Obligations Recognized in Regulatory Assets - Gross: |  |  |  |  |  |  |  |
Net (gain) loss | $ | (9 | ) |  | $ | 22 |  |  | $ | 8 |
Prior service cost | 7 |  |  | — |  |  | 10 |
Amortization of: |  |  |  |  |  |  |  |
Prior service credit | (5 | ) |  | (4 | ) |  | (3 | )
Actuarial gain | (9 | ) |  | (7 | ) |  | (11 | )
Total recognized in regulatory assets/liabilities | (16 | ) |  | 11 |  |  | 4 |
Total recognized in net periodic defined benefit costs and regulatory assets | $ | (10 | ) |  | $ | 17 |  |  | $ | 13 |
(a) | As a result of the 2014 Kentucky rate case settlement that became effective July 1, 2015, the difference between actuarial (gain)/loss calculated in accordance with LG&E's pension accounting policy and actuarial (gain)/loss calculated using a 15 year amortization period was $7 million in 2017, $5 million in 2016 and $3 million in 2015.
(b) | Due to the amount of lump sum payment distributions from the LG&E qualified pension plan, a settlement charge of $5 million was incurred. In accordance with existing regulatory accounting treatment, LG&E has maintained the settlement charge in regulatory assets. The amount will be amortized in accordance with existing regulatory practice.
Schedule of Amounts to be Amortized from AOCI and Regulatory Assets/Liabilities in Next Fiscal Year | The estimated amounts to be amortized from regulatory assets into net periodic defined benefit costs for LG&E in 2018 are as follows.
| Pension Benefits
Prior service cost | $ | 5 |
Actuarial loss | 9 |
Total | $ | 14 |
Schedule of Net Periodic Defined Benefit Costs Included in Income Statement | In the table above, LG&E amounts include costs for the specific plans it sponsors and the following allocated costs of defined benefit plans sponsored by LKE. LG&E is also allocated costs of defined benefit plans from LKS for defined benefit plans sponsored by LKE. See Note 14 for additional information on costs allocated to LG&E from LKS. These allocations are based on LG&E's participation in those plans, which management believes are reasonable:
| Pension Benefits |  | Other Postretirement Benefits
| 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015
LG&E Non-Union Only | $ | 5 |  |  | $ | 4 |  |  | $ | 5 |  |  | $ | 3 |  |  | $ | 3 |  |  | $ | 4 |
Defined Benefit Plan Assumptions and Impact of One Point Change on Postretirement Plans | The following weighted-average assumptions were used in the valuation of the benefit obligations at December 31. The U.K. pension benefits apply to PPL only.
| Pension Benefits |  |  |  |
| U.S. |  | U.K. |  | Other Postretirement Benefits
| 2017 |  | 2016 |  | 2017 |  | 2016 |  | 2017 |  | 2016
PPL |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate | 3.70 | % |  | 4.21 | % |  | 2.65 | % |  | 2.87 | % |  | 3.64 | % |  | 4.11 | %
Rate of compensation increase | 3.78 | % |  | 3.95 | % |  | 3.50 | % |  | 3.50 | % |  | 3.75 | % |  | 3.92 | %
LKE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate | 3.69 | % |  | 4.19 | % |  |  |  |  |  |  |  | 3.65 | % |  | 4.12 | %
Rate of compensation increase | 3.50 | % |  | 3.50 | % |  |  |  |  |  |  |  | 3.50 | % |  | 3.50 | %
LG&E |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate | 3.65 | % |  | 4.13 | % |  |  |  |  |  |  |  |  |  |  |  |
The following weighted-average assumptions were used to determine the net periodic defined benefit costs for the years ended December 31. The U.K. pension benefits apply to PPL only.
| Pension Benefits |  |  |  |  |  |
| U.S. |  | U.K. |  | Other Postretirement Benefits
| 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015
PPL |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate service cost (b) | 4.21 | % |  | 4.59 | % |  | 4.25 | % |  | 2.99 | % |  | 3.90 | % |  | 3.85 | % |  | 4.11 | % |  | 4.48 | % |  | 4.09 | %
Discount rate interest cost (b) | 4.21 | % |  | 4.59 | % |  | 4.25 | % |  | 2.41 | % |  | 3.14 | % |  | 3.85 | % |  | 4.11 | % |  | 4.48 | % |  | 4.09 | %
Rate of compensation increase | 3.95 | % |  | 3.93 | % |  | 3.91 | % |  | 3.50 | % |  | 4.00 | % |  | 4.00 | % |  | 3.92 | % |  | 3.91 | % |  | 3.86 | %
Expected return on plan assets (a) | 7.00 | % |  | 7.00 | % |  | 7.00 | % |  | 7.22 | % |  | 7.20 | % |  | 7.19 | % |  | 6.21 | % |  | 6.11 | % |  | 6.06 | %
LKE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate | 4.19 | % |  | 4.56 | % |  | 4.25 | % |  |  |  |  |  |  |  |  |  |  | 4.12 | % |  | 4.49 | % |  | 4.06 | %
Rate of compensation increase | 3.50 | % |  | 3.50 | % |  | 3.50 | % |  |  |  |  |  |  |  |  |  |  | 3.50 | % |  | 3.50 | % |  | 3.50 | %
Expected return on plan assets (a) | 7.00 | % |  | 7.00 | % |  | 7.00 | % |  |  |  |  |  |  |  |  |  |  | 6.82 | % |  | 6.82 | % |  | 6.82 | %
| Pension Benefits |  |  |  |  |  |
| U.S. |  | U.K. |  | Other Postretirement Benefits
| 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015 |  | 2017 |  | 2016 |  | 2015
LG&E |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Discount rate | 4.13 | % |  | 4.49 | % |  | 4.20 | % |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Expected return on plan assets (a) | 7.00 | % |  | 7.00 | % |  | 7.00 | % |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(a) | The expected long-term rates of return for pension and other postretirement benefits are based on management's projections using a best-estimate of expected returns, volatilities and correlations for each asset class. Each plan's specific current and expected asset allocations are also considered in developing a reasonable return assumption.
(b) | As of January 1, 2016, WPD began using individual spot rates from the yield curve used to discount the benefit obligation to measure service cost and interest cost. PPL's U.S. plans use a single discount rate derived from an individual bond matching model to measure the benefit obligation, service cost and interest cost. See Note 1 for additional details.
Schedule of Funded Status of Defined Benefit Plans | (LG&E) The funded status of LG&E's plan at December 31, was as follows:
| Pension Benefits
| 2017 |  | 2016
Change in Benefit Obligation |  |  |  |  |
Benefit Obligation, beginning of period | $ | 329 |  |  | $ | 326 |
Service cost | 1 |  |  | 1 |
Interest cost | 13 |  |  | 15 |
Plan amendments (a) | 6 |  |  | — |
Actuarial (gain) loss | 11 |  |  | 15 |
Gross benefits paid (a) | (34 | ) |  | (28 | )
Benefit Obligation, end of period | 326 |  |  | 329 |
Change in Plan Assets |  |  |  |  |
Plan assets at fair value, beginning of period | 318 |  |  | 297 |
Actual return on plan assets | 41 |  |  | 14 |
Employer contributions | — |  |  | 35 |
Gross benefits paid | (34 | ) |  | (28 | )
Plan assets at fair value, end of period | 325 |  |  | 318 |
Funded Status, end of period | $ | (1 | ) |  | $ | (11 | )
Amounts recognized in the Balance Sheets consist of: |  |  |  |  |
Noncurrent liability | $ | (1 | ) |  | $ | (11 | )
Net amount recognized, end of period | $ | (1 | ) |  | $ | (11 | )
Amounts recognized in regulatory assets (pre-tax) consist of: |  |  |  |  |
Prior service cost | $ | 27 |  |  | $ | 25 |
Net actuarial loss | 92 |  |  | 110 |
Total | $ | 119 |  |  | $ | 135 |
Total accumulated benefit obligation for defined benefit pension plan | $ | 326 |  |  | $ | 329 |
(a) | The pension plan was amended in December 2015 to allow active participants and terminated vested participants who had not previously elected a form of payment of their benefit to elect to receive their accrued pension benefit as a one-time lump-sum payment effective January 1, 2016. The projected benefit obligation at December 31, 2015 increased by $10 million as a result of the amendment. Gross benefits paid by the plan include lump-sum cash payments made to participants during 2017 and 2016 of $19 million and $14 million in connection with this offering.
Allocations to LG&E resulted in liabilities at December 31 as follows:
| 2017 |  | 2016
Pension | $ | 44 |  |  | $ | 42 |
Other postretirement benefits | 74 |  |  | 76 |
Schedules of Asset Allocation of U.S. Pension Trusts Assets | The asset allocation for the trust and the target allocation by portfolio at December 31 are as follows:
| Percentage of trust assets |  | 2017
| 2017 (a) |  | 2016 |  | Target Asset Allocation (a)
Growth Portfolio | 56 | % |  | 52 | % |  | 55 | %
Equity securities | 32 | % |  | 30 | % |  |
Debt securities (b) | 14 | % |  | 12 | % |  |
Alternative investments | 10 | % |  | 10 | % |  |
Immunizing Portfolio | 43 | % |  | 46 | % |  | 43 | %
Debt securities (b) | 39 | % |  | 43 | % |  |
Derivatives | 4 | % |  | 3 | % |  |
Liquidity Portfolio | 1 | % |  | 2 | % |  | 2 | %
Total | 100 | % |  | 100 | % |  | 100 | %
(a) | Allocations exclude consideration of a group annuity contract held by the LG&E and KU Retirement Plan.
(b) | Includes commingled debt funds, which PPL treats as debt securities for asset allocation purposes.
Schedule of Fair Value of Financial Assets for U.S. Pension Plan Assets | The fair value of net assets in the Master Trust by asset class and level within the fair value hierarchy was:
| December 31, 2017 |  | December 31, 2016
|  |  | Fair Value Measurements Using |  |  |  | Fair Value Measurements Using
| Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3
PPL Services Corporation Master Trust |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents | $ | 301 |  |  | $ | 301 |  |  | $ | — |  |  | $ | — |  |  | $ | 181 |  |  | $ | 181 |  |  | $ | — |  |  | $ | — |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Equity | 229 |  |  | 229 |  |  | — |  |  | — |  |  | 152 |  |  | 152 |  |  | — |  |  | — |
U.S. Equity fund measured at NAV (a) | 364 |  |  | — |  |  | — |  |  | — |  |  | 272 |  |  | — |  |  | — |  |  | — |
International equity fund at NAV (a) | 538 |  |  | — |  |  | — |  |  | — |  |  | 551 |  |  | — |  |  | — |  |  | — |
Commingled debt measured at NAV (a) | 611 |  |  | — |  |  | — |  |  | — |  |  | 546 |  |  | — |  |  | — |  |  | — |
| December 31, 2017 |  | December 31, 2016
|  |  | Fair Value Measurements Using |  |  |  | Fair Value Measurements Using
| Total |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Level 1 |  | Level 2 |  | Level 3
Debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and U.S. government sponsored agency | 186 |  |  | 186 |  |  | — |  |  | — |  |  | 381 |  |  | 381 |  |  | — |  |  | — |
Corporate | 883 |  |  | — |  |  | 870 |  |  | 13 |  |  | 850 |  |  | — |  |  | 837 |  |  | 13 |
Other | 10 |  |  | — |  |  | 10 |  |  | — |  |  | 8 |  |  | — |  |  | 8 |  |  | — |
Alternative investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate measured at NAV (a) | 109 |  |  | — |  |  | — |  |  | — |  |  | 102 |  |  | — |  |  | — |  |  | — |
Private equity measured at NAV (a) | 80 |  |  | — |  |  | — |  |  | — |  |  | 80 |  |  | — |  |  | — |  |  | — |
Hedge funds measured at NAV (a) | 175 |  |  | — |  |  | — |  |  | — |  |  | 167 |  |  | — |  |  | — |  |  | — |
Derivatives: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate swaps and swaptions | 50 |  |  | — |  |  | 50 |  |  | — |  |  | 61 |  |  | — |  |  | 61 |  |  | — |
Other | 1 |  |  | — |  |  | 1 |  |  | — |  |  | 3 |  |  | — |  |  | 3 |  |  | — |
Insurance contracts | 24 |  |  | — |  |  | — |  |  | 24 |  |  | 27 |  |  | — |  |  | — |  |  | 27 |
PPL Services Corporation Master Trust assets, at fair value | 3,561 |  |  | $ | 716 |  |  | $ | 931 |  |  | $ | 37 |  |  | 3,381 |  |  | $ | 714 |  |  | $ | 909 |  |  | $ | 40 |
Receivables and payables, net (b) | 72 |  |  |  |  |  |  |  |  |  |  |  | (15 | ) |  |  |  |  |  |  |  |  |
401(h) accounts restricted for other postretirement benefit obligations | (145 | ) |  |  |  |  |  |  |  |  |  |  | (123 | ) |  |  |  |  |  |  |  |  |
Total PPL Services Corporation Master Trust pension assets | $ | 3,488 |  |  |  |  |  |  |  |  |  |  |  | $ | 3,243 |  |  |  |  |  |  |  |  |  |
(a) | In accordance with accounting guidance certain investments that are measured at fair value using the net asset value per share (NAV), or its equivalent, practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in the table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the statement of financial position.
(b) | Receivables and payables represent amounts for investments sold/purchased but not yet settled along with interest and dividends earned but not yet received.
Reconciliation of U.S. Pension Trust Assets Classified as Level 3 Included in Earnings | A reconciliation of the Master Trust assets classified as Level 3 at December 31, 2017 is as follows:
| Corporate debt |  | Insurance contracts |  | Total
Balance at beginning of period | $ | 13 |  |  | $ | 27 |  |  | $ | 40 |
Actual return on plan assets |  |  |  |  |
Relating to assets still held at the reporting date | — |  |  | 1 |  |  | 1 |
Purchases, sales and settlements | — |  |  | (4 | ) |  | (4 | )
Balance at end of period | $ | 13 |  |  | $ | 24 |  |  | $ | 37 |
A reconciliation of the Master Trust assets classified as Level 3 at December 31, 2016 is as follows:
| Corporate debt |  | Insurance contracts |  | Total
Balance at beginning of period | $ | 10 |  |  | $ | 32 |  |  | $ | 42 |
Actual return on plan assets |  |  |  |  |
Relating to assets still held at the reporting date | — |  |  | 1 |  |  | 1 |
Purchases, sales and settlements | 3 |  |  | (6 | ) |  | (3 | )
Balance at end of period | $ | 13 |  |  | $ | 27 |  |  | $ | 40 |
Schedule of Expected Cash Flows - U.S. Defined Benefit Plans - Expected Payments and Related Federal Subsidy | The following benefit payments, which reflect expected future service, as appropriate, are expected to be paid by the plan.
| Pension
2018 | $ | 26 |
2019 | 26 |
2020 | 26 |
2021 | 25 |
2022 | 24 |
2023-2027 | 104 |
Kentucky Utilities Co [Member] |
Defined Benefit Plan Disclosure [Line Items] |
Schedule of Funded Status of Defined Benefit Plans | Allocations to KU resulted in liabilities at December 31 as follows.
| 2017 |  | 2016
Pension | $ | 36 |  |  | $ | 62 |
Other postretirement benefits | 32 |  |  | 40 |

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