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Retirement and Postemployment Benefits | 12 Months Ended
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Dec. 31, 2025
Retirement Benefits [Abstract] |
Retirement and Postemployment Benefits | 10. Retirement and Postemployment Benefits (All Registrants) Defined Benefits Certain employees of PPL's subsidiaries are eligible for pension benefits under non-contributory defined benefit pension plans with benefits based on length of service and final average pay, as defined by the plans. Effective January 1, 2012, PPL's primary defined benefit pension plan was closed to all newly hired salaried employees. Effective July 1, 2014, PPL's primary defined benefit pension plan was closed to all newly hired bargaining unit employees. Newly hired employees are eligible to participate in the PPL Retirement Savings Plan, a 401(k) savings plan with enhanced employer contributions. The defined benefit pension plans of LKE and its subsidiaries were closed to new salaried and bargaining unit employees hired after December 31, 2005. Employees hired after December 31, 2005 receive additional company contributions above the standard matching contributions to their savings plans. The pension plans sponsored by LKE and LG&E were merged effective January 1, 2020 into the LG&E and KU Pension Plan. The merged plan is sponsored by LKE. LG&E and KU participate in this plan. The RIE defined benefit plans were closed to new salaried employees in 2012 and bargaining unit employees in 2013. Employees hired after the defined benefit plans were closed receive additional company contributions above the standard matching contributions to their savings plans. PPL and certain of its subsidiaries also provide supplemental retirement benefits to executives and other key management employees through unfunded nonqualified retirement plans. Certain employees of PPL's subsidiaries are eligible for certain health care and life insurance benefits upon retirement through contributory plans. Effective January 1, 2014, the PPL Postretirement Medical Plan was closed to all newly hired salaried employees. Effective July 1, 2014, the PPL Postretirement Medical Plan was closed to all newly hired bargaining unit employees. Effective January 1, 2024, newly hired salaried employees and certain bargaining unit employees of LKE will no longer be eligible for postretirement medical benefits under the LKE Postretirement Plan. Postretirement health benefits may be paid from 401(h) accounts established as part of the PPL Retirement Plan and the LG&E and KU Pension Plan within the PPL Services Corporation Master Trust, funded VEBA trusts and company funds. The Rhode Island postretirement benefit plans provide health care and life insurance coverage to eligible retired employees. Eligibility is based on age and length of service requirements and, in most cases, retirees must contribute to the cost of their coverage. (PPL) The following table provides the components of net periodic defined benefit costs (credits) for PPL's pension and other postretirement benefit plans for the years ended December 31.
| Pension Benefits |  | Other Postretirement Benefits
| 2025 |  | 2024 |  | 2023 |  | 2025 |  | 2024 |  | 2023
Net periodic defined benefit costs (credits): |  |  |  |  |  |  |  |  |  |  |
Service cost | $ | 31 |  |  | $ | 35 |  |  | $ | 34 |  |  | $ | 6 |  |  | $ | 6 |  |  | $ | 6 |
Interest cost | 185 |  |  | 183 |  |  | 188 |  |  | 30 |  |  | 29 |  |  | 30 |
Expected return on plan assets | (287) |  |  | (299) |  |  | (309) |  |  | (30) |  |  | (30) |  |  | (30) |
Amortization of: |  |  |  |  |  |  |  |  |  |  |
Prior service cost (credit) | — |  |  | 3 |  |  | 6 |  |  | 2 |  |  | 1 |  |  | 1 |
Actuarial (gain) loss | 18 |  |  | 10 |  |  | 2 |  |  | (4) |  |  | (5) |  |  | (5) |
Net periodic defined benefit costs (credits) | $ | (53) |  |  | $ | (68) |  |  | $ | (79) |  |  | $ | 4 |  |  | $ | 1 |  |  | $ | 2 |
Other Changes in Plan Assets and Benefit Obligations Recognized in OCI and Regulatory Assets/Liabilities - Gross: |  |  |  |  |  |  |  |  |  |  |
Net (gain) loss | $ | 27 |  |  | $ | 134 |  |  | $ | 193 |  |  | $ | — |  |  | $ | 1 |  |  | $ | (6) |
Prior service cost (credit) | (5) |  |  | (13) |  |  | 2 |  |  | 2 |  |  | — |  |  | — |
Amortization of: |  |  |  |  |  |  |  |  |  |  |
Prior service (cost) credit | — |  |  | (3) |  |  | (6) |  |  | (2) |  |  | (1) |  |  | (1) |
Actuarial gain (loss) | (18) |  |  | (10) |  |  | (2) |  |  | 4 |  |  | 5 |  |  | 5 |
Total recognized in OCI and regulatory assets/liabilities | 4 |  |  | 108 |  |  | 187 |  |  | 4 |  |  | 5 |  |  | (2) |
Total recognized in net periodic defined benefit costs, OCI and regulatory assets/liabilities | $ | (49) |  |  | $ | 40 |  |  | $ | 108 |  |  | $ | 8 |  |  | $ | 6 |  |  | $ | — |
For PPL's pension and 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
| 2025 |  | 2024 |  | 2023 |  | 2025 |  | 2024 |  | 2023
OCI | $ | 21 |  |  | $ | 25 |  |  | $ | 52 |  |  | $ | 2 |  |  | $ | 2 |  |  | $ | — |
Regulatory assets/liabilities | (17) |  |  | 83 |  |  | 135 |  |  | 2 |  |  | 3 |  |  | (2) |
Total recognized in OCI and regulatory assets/liabilities | $ | 4 |  |  | $ | 108 |  |  | $ | 187 |  |  | $ | 4 |  |  | $ | 5 |  |  | $ | (2) |
(PPL) PPL uses base mortality tables issued by the Society of Actuaries for all defined benefit pension and other postretirement benefit plans. The Pri-2012 base table and the MP-2020 projection scale with varying adjustment factors based on the underlying demographic and geographic differences and experience of the plan participants was used for all periods. The following weighted-average assumptions were used in the valuation of the benefit obligations at December 31.
| Pension Benefits |  | Other Postretirement Benefits
| 2025 |  | 2024 |  | 2025 |  | 2024
PPL |  |  |  |  |  |  |
Discount rate | 5.72 | % |  | 5.93 | % |  | 5.74 | % |  | 5.91 | %
Rate of compensation increase | 3.43 | % |  | 3.43 | % |  | 3.43 | % |  | 3.44 | %
The following weighted-average assumptions were used to determine the net periodic defined benefit costs for the years ended December 31.
| Pension Benefits |  | Other Postretirement Benefits
| 2025 |  | 2024 |  | 2023 |  | 2025 |  | 2024 |  | 2023
PPL |  |  |  |  |  |  |  |  |  |  |
Discount rate | 5.93 | % |  | 5.52 | % |  | 5.52 | % |  | 5.91 | % |  | 5.54 | % |  | 5.54 | %
Rate of compensation increase | 3.43 | % |  | 3.43 | % |  | 3.43 | % |  | 3.44 | % |  | 3.43 | % |  | 3.43 | %
Expected return on plan assets (a) | 8.25 | % |  | 8.25 | % |  | 8.25 | % |  | 7.27 | % |  | 7.28 | % |  | 7.38 | %
(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. The following table provides the assumed health care cost trend rates for the years ended December 31:
| 2025 |  | 2024 |  | 2023
PPL |  |  |  |  |
Health care cost trend rate assumed for next year |  |  |  |  |
– obligations | 7.50 | % |  | 7.00 | % |  | 6.25 | %
– cost | 7.00 | % |  | 6.25 | % |  | 6.50 | %
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) |  |  |  |  |
– obligations | 4.50 | % |  | 5.00 | % |  | 5.00 | %
– cost | 5.00 | % |  | 5.00 | % |  | 5.00 | %
Year that the rate reaches the ultimate trend rate |  |  |  |  |
– obligations | 2038 |  | 2033 |  | 2029
– cost | 2033 |  | 2029 |  | 2029
The funded status of PPL's plans at December 31 was as follows:
| Pension Benefits |  | Other Postretirement Benefits
| 2025 |  | 2024 |  | 2025 |  | 2024
Change in Benefit Obligation |  |  |  |  |  |  |
Benefit Obligation, beginning of period | $ | 3,244 |  |  | $ | 3,454 |  |  | $ | 523 |  |  | $ | 538 |
Service cost | 31 |  |  | 35 |  |  | 6 |  |  | 6 |
Interest cost | 185 |  |  | 183 |  |  | 30 |  |  | 29 |
Participant contributions | — |  |  | — |  |  | 8 |  |  | 8 |
Plan amendments | (5) |  |  | (13) |  |  | 1 |  |  | — |
Actuarial (gain) loss | 77 |  |  | (131) |  |  | 20 |  |  | (4) |
Gross benefits paid | (297) |  |  | (284) |  |  | (51) |  |  | (56) |
Federal subsidy | — |  |  | — |  |  | — |  |  | 2 |
Benefit Obligation, end of period | 3,235 |  |  | 3,244 |  |  | 537 |  |  | 523 |
Change in Plan Assets |  |  |  |  |  |  |
Plan assets at fair value, beginning of period | 2,936 |  |  | 3,176 |  |  | 417 |  |  | 438 |
Actual return on plan assets | 338 |  |  | 34 |  |  | 51 |  |  | 25 |
Employer contributions | 10 |  |  | 10 |  |  | 11 |  |  | 14 |
Participant contributions | — |  |  | — |  |  | 7 |  |  | 7 |
Transfer out (a) | — |  |  | — |  |  | — |  |  | (13) |
Gross benefits paid | (297) |  |  | (284) |  |  | (54) |  |  | (54) |
Plan assets at fair value, end of period | 2,987 |  |  | 2,936 |  |  | 432 |  |  | 417 |
Funded Status, end of period | $ | (248) |  |  | $ | (308) |  |  | $ | (105) |  |  | $ | (106) |
Amounts recognized in the Balance Sheets consist of: |  |  |  |  |  |  |
Noncurrent asset | $ | 44 |  |  | $ | 19 |  |  | $ | 9 |  |  | $ | 8 |
Current liability | (11) |  |  | (10) |  |  | (10) |  |  | (13) |
Noncurrent liability | (281) |  |  | (317) |  |  | (104) |  |  | (101) |
Net amount recognized, end of period | $ | (248) |  |  | $ | (308) |  |  | $ | (105) |  |  | $ | (106) |
Amounts recognized in AOCI and regulatory assets/liabilities (pre-tax) consist of: |  |  |  |  |  |  |
Prior service cost (credit) | $ | (11) |  |  | $ | (6) |  |  | $ | 8 |  |  | $ | 9 |
Net actuarial (gain) loss | 1,173 |  |  | 1,164 |  |  | (86) |  |  | (90) |
Total | $ | 1,162 |  |  | $ | 1,158 |  |  | $ | (78) |  |  | $ | (81) |
Total accumulated benefit obligation for defined benefit pension plans | $ | 3,105 |  |  | $ | 3,116 |  |  |  |  |
(a)Transfer of excess funds from the PPL Bargaining Unit Retiree Health Plan VEBA to be used to pay medical claims of active bargaining unit employees. For PPL's pension and other postretirement benefit plans, the amounts recognized in AOCI and regulatory assets/liabilities at December 31 were as follows:
| Pension Benefits |  | Other Postretirement Benefits
| 2025 |  | 2024 |  | 2025 |  | 2024
AOCI | $ | 304 |  |  | $ | 283 |  |  | $ | 18 |  |  | $ | 16 |
Regulatory assets/liabilities | 858 |  |  | 875 |  |  | (96) |  |  | (97) |
Total | $ | 1,162 |  |  | $ | 1,158 |  |  | $ | (78) |  |  | $ | (81) |
The actuarial loss for pension plans in 2025 was primarily related to a change in the discount rate used to measure the benefit obligations of those plans. The actuarial gain for pension plans in 2024 was related to a change in the discount rate used to measure the benefit obligations of those plans. 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:
| PBO in excess of plan assets
| 2025 |  | 2024
Projected benefit obligation | $ | 2,704 |  |  | $ | 2,719 |
Fair value of plan assets | 2,412 |  |  | 2,392 |
| ABO in excess of plan assets
| 2025 |  | 2024
Accumulated benefit obligation | $ | 2,600 |  |  | $ | 2,618 |
Fair value of plan assets | 2,412 |  |  | 2,392 |
(PPL Electric) Although PPL Electric does not directly sponsor any defined benefit plans, it is allocated a portion of the funded status and costs of plans sponsored by PPL Services based on its participation in those plans, which management believes are reasonable. The actuarially determined obligations of current active employees and retirees are used as a basis to allocate total plan activity, including active and retiree costs and obligations. Allocations to PPL Electric resulted in assets/(liabilities) at December 31 as follows:
| 2025 |  | 2024
Pension | $ | (62) |  |  | $ | (83) |
Other postretirement benefits | (53) |  |  | (60) |
(LG&E) Although LG&E does not directly sponsor any defined benefit plans, it is allocated a portion of the funded status and costs of plans sponsored by LKE. LG&E is also allocated costs of defined benefits plans from LKS for defined benefit plans sponsored by LKE. See Note 13 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. The actuarially determined obligations of current active employees and retired employees of LG&E are used as a basis to allocate total plan activity, including active and retiree costs and obligations. Allocations to LG&E resulted in assets/(liabilities) at December 31 as follows:
| 2025 |  | 2024
Pension | $ | 46 |  |  | $ | 29 |
Other postretirement benefits | (46) |  |  | (44) |
(KU) Although KU does not directly sponsor any defined benefit plans, it is allocated a portion of the funded status and costs of plans sponsored by LKE. KU is also allocated costs of defined benefit plans from LKS for defined benefit plans sponsored by LKE. See Note 13 for additional information on costs allocated to KU from LKS. These allocations are based on KU's participation in those plans, which management believes are reasonable. The actuarially determined obligations of current active employees and retired employees of KU are used as a basis to allocate total plan activity, including active and retiree costs and obligations. Allocations to KU resulted in assets/(liabilities) at December 31 as follows.
| 2025 |  | 2024
Pension | $ | 56 |  |  | $ | 46 |
Other postretirement benefits | (10) |  |  | (8) |
Plan Assets - Pension Plans (PPL) All of PPL's qualified pension plans are invested in the PPL Services Corporation Master Trust (the Master Trust) that also includes 401(h) accounts that are restricted for certain other postretirement benefit obligations of PPL, RIE and LKE. The investment strategy for the Master Trust is to achieve a risk-adjusted return on a mix of assets that, in combination with PPL's funding policy, will ensure that sufficient assets are available to provide long-term growth and liquidity for benefit payments, while also managing the duration of the assets to complement the duration of the liabilities. The Master Trust benefits from a wide diversification of asset types, investment fund strategies and external investment fund managers, and therefore has no significant concentration of risk. The investment policy of the Master Trust outlines investment objectives and defines the responsibilities of the EBPB, external investment managers, investment advisor and trustee and custodian. The investment policy is reviewed annually by PPL's Board of Directors. The EBPB created a risk management framework around the trust assets and pension liabilities. This framework considers the trust assets as being composed of three sub-portfolios: growth, immunizing and liquidity portfolios. The growth portfolio is comprised of investments that generate a return at a reasonable risk, including equity securities, certain debt securities and alternative investments. The immunizing portfolio consists of debt securities, generally with long durations, and derivative positions. The immunizing portfolio is designed to offset a portion of the change in the pension liabilities due to changes in interest rates. The liquidity portfolio consists primarily of cash and cash equivalents. Target allocation ranges have been developed for each portfolio based on input from external consultants with a goal of limiting funded status volatility. The EBPB monitors the investments in each portfolio and seeks to obtain a target portfolio that emphasizes reduction of risk of loss from market volatility. In pursuing that goal, the EBPB establishes revised guidelines from time to time. EBPB investment guidelines as of the end of 2025 are presented below. The asset allocation for the trust and the target allocation by portfolio at December 31 are as follows:
| Percentage of trust assets |  | 2025
| 2025 |  | 2024 |  | Target Asset Allocation
Growth Portfolio | 55 | % |  | 55 | % |  | 55 | %
Equity securities | 30 | % |  | 30 | % |  |
Debt securities (a) | 13 | % |  | 13 | % |  |
Alternative investments | 12 | % |  | 12 | % |  |
Immunizing Portfolio | 43 | % |  | 43 | % |  | 43 | %
Debt securities (a) | 31 | % |  | 35 | % |  |
Derivatives (b) | 12 | % |  | 8 | % |  |
Liquidity Portfolio | 2 | % |  | 2 | % |  | 2 | %
Total | 100 | % |  | 100 | % |  | 100 | %
(a)Includes commingled debt funds, which PPL treats as debt securities for asset allocation purposes. (b)Includes posted collateral to support derivative instruments subject to counterparty risk. (PPL) The fair value of net assets in the Master Trust by asset class and level within the fair value hierarchy was:
| December 31, 2025 |  | December 31, 2024
| 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 | $ | 239 |  |  | $ | 239 |  |  | $ | — |  |  | $ | — |  |  | $ | 212 |  |  | $ | 212 |  |  | $ | — |  |  | $ | — |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Equity | 69 |  |  | 69 |  |  | — |  |  | — |  |  | 63 |  |  | 63 |  |  | — |  |  | — |
U.S. Equity fund measured at NAV (a) | 469 |  |  | — |  |  | — |  |  | — |  |  | 461 |  |  | — |  |  | — |  |  | — |
International equity fund measured at NAV (a) | 375 |  |  | — |  |  | — |  |  | — |  |  | 376 |  |  | — |  |  | — |  |  | — |
Commingled debt measured at NAV (a) | 464 |  |  | — |  |  | — |  |  | — |  |  | 461 |  |  | — |  |  | — |  |  | — |
Debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
U.S. Treasury and U.S. government sponsored agency | 273 |  |  | 273 |  |  | — |  |  | — |  |  | 150 |  |  | 149 |  |  | 1 |  |  | — |
Corporate | 753 |  |  | — |  |  | 742 |  |  | 11 |  |  | 867 |  |  | — |  |  | 848 |  |  | 19 |
Other | 7 |  |  | — |  |  | 7 |  |  | — |  |  | 13 |  |  | — |  |  | 13 |  |  | — |
Alternative investments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate measured at NAV (a) | 71 |  |  | — |  |  | — |  |  | — |  |  | 72 |  |  | — |  |  | — |  |  | — |
Private equity measured at NAV (a) | 122 |  |  | — |  |  | — |  |  | — |  |  | 114 |  |  | — |  |  | — |  |  | — |
Private credit partnerships measured at NAV (a) | 20 |  |  | — |  |  | — |  |  | — |  |  | 16 |  |  | — |  |  | — |  |  | — |
Hedge funds measured at NAV (a) | 179 |  |  | — |  |  | — |  |  | — |  |  | 181 |  |  | — |  |  | — |  |  | — |
Derivatives | (7) |  |  | — |  |  | (7) |  |  | — |  |  | (38) |  |  | — |  |  | (38) |  |  | — |
PPL Services Corporation Master Trust assets, at fair value | 3,034 |  |  | $ | 581 |  |  | $ | 742 |  |  | $ | 11 |  |  | 2,948 |  |  | $ | 424 |  |  | $ | 824 |  |  | $ | 19 |
Receivables and payables, net (b) | 69 |  |  |  |  |  |  |  |  | 102 |  |  |  |  |  |  |
401(h) accounts restricted for other postretirement benefit obligations | (116) |  |  |  |  |  |  |  |  | (114) |  |  |  |  |  |  |
Total PPL Services Corporation Master Trust pension assets | $ | 2,987 |  |  |  |  |  |  |  |  | $ | 2,936 |  |  |  |  |  |  |
(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, 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, net represents amounts for investments sold/purchased but not yet settled along with interest and dividends earned but not yet received. A reconciliation of the Master Trust assets classified as Level 3 at December 31, 2025 is as follows:
| Corporate debt |  |  |  |  |  |
Balance at beginning of period | $ | 19 |  |  |  |  |  |  |
Actual return on plan assets: |  |  |  |  |  |  |
Relating to assets sold during the period | (1) |  |  |  |  |  |  |
Purchases, sales and settlements | (7) |  |  |  |  |  |  |
Balance at end of period | $ | 11 |  |  |  |  |  |  |
A reconciliation of the Master Trust assets classified as Level 3 at December 31, 2024 is as follows:
| Corporate debt |  |  |  |  |  |
Balance at beginning of period | $ | 10 |  |  |  |  |  |  |
Actual return on plan assets: |  |  |  |  |  |  |
Relating to assets still held at the reporting date | (2) |  |  |  |  |  |  |
Relating to assets sold during the period | 7 |  |  |  |  |  |  |
Purchases, sales and settlements | 4 |  |  |  |  |  |  |
Balance at end of period | $ | 19 |  |  |  |  |  |  |
Cash and cash equivalents include deposits in banks, collateral accounts with brokers, and short-term investment funds, for which the carrying amounts disclosed approximate fair value based on their short-term nature. The market approach is used to measure fair value of equity securities. The fair value measurements of equity securities (excluding commingled funds), which are generally classified as Level 1, are based on quoted prices in active markets. These securities represent actively and passively managed investments that are managed against various equity indices. Investments in commingled equity and debt funds are categorized as equity securities within the fair value hierarchy, however, the debt funds are treated as fixed income for asset allocation and target allocation purposes. Investments in commingled equity funds include funds that invest in U.S. and international equity securities. Investments in commingled debt funds include funds that invest in a diversified portfolio of emerging market debt obligations, as well as funds that invest in investment grade long-duration fixed-income securities. The fair value measurements of debt securities are generally based on evaluations that reflect observable market information, such as actual trade information for identical securities or for similar securities, adjusted for observable differences. The fair value of debt securities is generally measured using a market approach, including the use of pricing models, which incorporate observable inputs. Common inputs include benchmark yields, relevant trade data, broker/dealer bid/ask prices, benchmark securities and credit valuation adjustments. When necessary, the fair value of debt securities is measured using the income approach, which incorporates similar observable inputs as well as payment data, future predicted cash flows, collateral performance and new issue data. For the Master Trust, these securities represent investments in securities issued by U.S. Treasury and U.S. government sponsored agencies; investments securitized by residential mortgages, auto loans, credit cards and other pooled loans; investments in investment grade and non-investment grade bonds issued by U.S. companies across several industries; investments in debt securities issued by foreign governments and corporations. Investments in real estate represent an investment in a partnership whose purpose is to manage investments in U.S. real estate properties diversified geographically and across major property types (e.g., office, industrial, retail, etc.). The partnership has limitations on the amounts that may be redeemed based on available cash to fund redemptions. Additionally, the general partner may decline to accept redemptions when necessary to avoid adverse consequences for the partnership, including legal and tax implications, among others. The fair value of the investment is based upon a partnership unit value. Investments in private equity represent interests in partnerships in multiple early-stage venture capital funds and private equity fund of funds that use a number of diverse investment strategies. The partnerships have limited lives of at least 10 years, after which liquidating distributions will be received. Prior to the end of each partnership's life, the investment cannot be redeemed with the partnership; however, the interest may be sold to other parties, subject to the general partner's approval. Fair value is based on an ownership interest in partners' capital to which a proportionate share of net assets is attributed. Investments in private credit represent pools of actively managed loans that span capital structure and borrower type. Strategies carry different types and levels of risk. Returns from those strategies will vary in terms of yield, fees generated, loan loss rates and the pace of principal repayment. Investments have limited lives of approximately 2-8 years. The investment cannot be redeemed with the general partner; however, the interest may be sold to other parties, subject to the general partner's approval. Fair value is based on an ownership interest in partners' capital to which a proportionate share of net assets is attributed. At December 31, 2025, the Master Trust had unfunded commitments of $49 million that may be required during the lives of the real estate, private equity and private credit partnerships. Investments in hedge funds represent investments in a fund of hedge funds. Hedge funds seek a return utilizing a number of diverse investment strategies. The strategies, when combined, aim to reduce volatility and risk while attempting to deliver positive returns under most market conditions. Major investment strategies for the fund of hedge funds include long/short equity, tactical trading, event driven, and relative value. Shares may be redeemed with 45 days prior written notice. The fund is subject to short term lockups and other restrictions. The fair value for the fund has been estimated using the net asset value per share. The fair value measurements of derivative instruments utilize various inputs that include quoted prices for similar contracts or market-corroborated inputs. In certain instances, these instruments may be valued using models, including standard option valuation models and standard industry models. These securities primarily represent investments in treasury futures, total return swaps, interest rate swaps and swaptions (the option to enter into an interest rate swap), which are valued based on quoted prices, changes in the value of the underlying exposure or on the swap details, such as swap curves, notional amount, index and term of index, reset frequency, volatility and payer/receiver credit ratings. Plan Assets - Other Postretirement Benefit Plans The investment strategy with respect to other postretirement benefit obligations is to fund VEBA trusts and/or 401(h) accounts with voluntary contributions and to invest in a tax efficient manner. Excluding the 401(h) accounts included in the Master Trust, other postretirement benefit plans are invested in a mix of assets for long-term growth with an objective of earning returns that provide liquidity as required for benefit payments. These plans benefit from diversification of asset types, investment fund strategies and investment fund managers and, therefore, have no significant concentration of risk. Equity securities include investments in a large-cap commingled fund and a global equity exchange-traded fund. Ownership interests in commingled funds that invest entirely in debt securities are classified as equity securities within the fair value hierarchy, but treated as debt securities for asset allocation and target allocation purposes. Ownership interests in money market funds are treated as cash and cash equivalents for asset allocation and target allocation purposes. The asset allocation for the PPL VEBA trusts and the target allocation, by asset class, at December 31 are detailed below.
| Percentage of plan assets |  | Target Asset Allocation
| 2025 |  | 2024 |  | 2025
Asset Class |  |  |  |  |
Equity securities | 46 | % |  | 45 | % |  | 45 | %
Debt securities (a) | 48 | % |  | 49 | % |  | 49 | %
Cash and cash equivalents (b) | 6 | % |  | 6 | % |  | 6 | %
Total | 100 | % |  | 100 | % |  | 100 | %
(a)Includes commingled debt funds and debt securities. (b)Includes money market funds. The fair value of assets in the other postretirement benefit plans by asset class and level within the fair value hierarchy was:
| December 31, 2025 |  | December 31, 2024
| 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 | $ | 19 |  |  | $ | 19 |  |  | $ | — |  |  | $ | — |  |  | $ | 19 |  |  | $ | 19 |  |  | $ | — |  |  | $ | — |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Large-cap equity fund measure at NAV (a) | 75 |  |  | — |  |  | — |  |  | — |  |  | 71 |  |  | — |  |  | — |  |  | — |
Commingled debt fund measured at NAV (a) | 82 |  |  | — |  |  | — |  |  | — |  |  | 78 |  |  | — |  |  | — |  |  | — |
Global equity exchange-traded fund | 74 |  |  | 74 |  |  | — |  |  | — |  |  | 70 |  |  | 70 |  |  | — |  |  | — |
Long-term bond exchange-traded fund | 75 |  |  | 75 |  |  | — |  |  | — |  |  | 74 |  |  | 74 |  |  | — |  |  | — |
Total VEBA trust assets, at fair value | 325 |  |  | $ | 168 |  |  | $ | — |  |  | $ | — |  |  | 312 |  |  | $ | 163 |  |  | $ | — |  |  | $ | — |
Receivables and payables, net (b) | (9) |  |  |  |  |  |  |  |  | (9) |  |  |  |  |  |  |
401(h) account assets | 116 |  |  |  |  |  |  |  |  | 114 |  |  |  |  |  |  |
Total other postretirement benefit plan assets | $ | 432 |  |  |  |  |  |  |  |  | $ | 417 |  |  |  |  |  |  |
(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, 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. Investments in money market funds represent investments in funds that invest primarily in a diversified portfolio of investment grade money market instruments, including, but not limited to, commercial paper, notes, repurchase agreements and other evidences of indebtedness with a maturity not exceeding 13 months from the date of purchase. The primary objective of the fund is a level of current income consistent with stability of principal and liquidity. Redemptions can be made daily on this fund. Investments in large-cap equity securities represent investments in a passively managed equity index fund that invests in securities and a combination of other collective funds. Fair value measurements are not obtained from a quoted price in an active market but are based on firm quotes of net asset values per share as provided by the trustee of the fund. Redemptions can be made daily on this fund. Investments in commingled debt securities represent investments in a fund that invests in a diversified portfolio of investment grade long-duration fixed income securities. Redemptions can be made daily on these funds. Investments in global equity exchange-traded fund represents a passively-managed pooled investment vehicle that invests in developed market equities and is designed to track the performance of the MSCI World Index. Fair value measurements can be obtained from a quoted price on the exchange. Redemptions can be made daily on this fund. Investments in long-term bond exchange-traded fund represents a passively-managed pooled investment vehicle that is designed to track the performance of the Bloomberg U.S. Long Government/Credit Float Adjusted Index, which includes all medium and larger issues of U.S. Government, investment-grade corporate and investment-grade international dollar-denominated bonds that have maturities of greater than 10 years. Fair value measurements can be obtained from a quoted price on the exchange. Redemptions can be made daily on this fund. Expected Cash Flows - Defined Benefit Plans (PPL) PPL does not plan to contribute to its pension plans in 2026, as PPL's defined benefit pension plans have the option to utilize available prior year credit balances to meet current and future contribution requirements. PPL sponsors various non-qualified supplemental pension plans for which no assets are segregated from corporate assets. PPL expects to make approximately $11 million of benefit payments under these plans in 2026. PPL is not required to make contributions to its other postretirement benefit plans that are funded through VEBA trusts and 401(h) accounts. However, postretirement benefits for certain non-union employees are not funded in such trusts. PPL pays for these benefits from its general assets and expects to make $10 million of postretirement benefit plan payments for these employees in 2025. 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
2026 | $ | 307 |  |  | $ | 50 |  |  | $ | — |
2027 | 294 |  |  | 49 |  |  | — |
2028 | 287 |  |  | 49 |  |  | — |
2029 | 279 |  |  | 48 |  |  | — |
2030 | 272 |  |  | 48 |  |  | — |
2031-2035 | 1,271 |  |  | 224 |  |  | — |
Savings Plans (All Registrants) Substantially all employees of PPL's subsidiaries are eligible to participate in deferred savings plans (401(k)s). Employer contributions to the plans were:
| 2025 |  | 2024 |  | 2023
PPL | $ | 60 |  |  | $ | 53 |  |  | $ | 48 |
PPL Electric | 10 |  |  | 9 |  |  | 8 |
LG&E | 10 |  |  | 8 |  |  | 8 |
KU | 8 |  |  | 6 |  |  | 6 |

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