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Pension and Other Post-Employment Benefits
 3 Months Ended
Mar. 31, 2020
Retirement Benefits [Abstract]  
PENSIONS AND OTHER POST-EMPLOYMENT BENEFITS PENSION AND OTHER POST-EMPLOYMENT BENEFITS
The components of the consolidated net periodic costs (credits) for pension and OPEB were as follows:
Components of Net Periodic Benefit Costs (Credits)
 
Pension
OPEB
For the Three Months Ended March 31,
 
2020
 
2019
 
2020
 
2019
 
 
(In millions)
Service costs
 
$
52

 
$
48

 
$
1

 
$
1

Interest costs
 
75

 
93

 
4

 
5

Expected return on plan assets
 
(153
)
 
(135
)
 
(8
)
 
(7
)
Amortization of prior service costs (credits) (1)
 
10

 
2

 
(33
)
 
(9
)
Special termination costs (2)
 
—

 
15

 
—

 
—

One-time termination benefit (3)
 
8

 
—

 
—

 
—

Pension and OPEB mark-to-market adjustment
 
386

 
—

 
37

 
—

Net periodic costs (credits), including amounts capitalized
 
$
378

 
$
23

 
$
1

 
$
(10
)
Net periodic costs (credits), recognized in earnings
 
$
358

 
$
6

 
$
1

 
$
(10
)
 
 
 
 
 
 
 
 
 

(1) 2020 includes the acceleration of $18 million in net credits as a result of the FES Debtors’ emergence and is a component of discontinued operations in FirstEnergy’s Consolidated Statements of Income.
(2) Subject to a cap, FirstEnergy agreed to fund a pension enhancement through its pension plan, for voluntary enhanced retirement packages offered to certain FES employees, as well as offer certain other employee benefits. The costs are a component of discontinued operations in FirstEnergy’s Consolidated Statements of Income.
(3) Costs represent additional benefits provided to FES and FENOC employees under the approved settlement agreement and are a component of discontinued operations in FirstEnergy’s Consolidated Statements of Income.

FirstEnergy recognizes a pension and OPEB mark-to-market adjustment for the change in fair value of plan assets and net actuarial gains and losses annually in the fourth quarter of each fiscal year and whenever a plan is determined to qualify for remeasurement. Under the approved bankruptcy settlement agreement discussed above, upon emergence, FES and FENOC employees ceased earning years of service under the FirstEnergy pension and OPEB plans. The emergence on February 27, 2020, triggered a remeasurement of the affected pension and OPEB plans and as a result, FirstEnergy recognized a non-cash, pre-tax pension and OPEB mark-to-market adjustment of approximately $423 million in the first quarter of 2020. The pension and OPEB mark-to-market adjustment primarily reflects a 38 bps decrease in the discount rate used to measure benefit obligations from December 31, 2019, partially offset by a slightly higher than expected return on assets.

Based on discount rates of 2.96% for pension and 2.80% for OPEB as well as an estimated return on assets of 7.50% for pension and OPEB, FirstEnergy expects its 2020 pre-tax net periodic benefit cost to be approximately $246 million, including the $423 million pension and OPEB mark-to-market adjustment in the first quarter of 2020.

Prior to emergence, FirstEnergy billed the FES Debtors approximately $6 million and $10 million for their share of pension and OPEB service costs for the three months ended March 31, 2020 and 2019, respectively.
On February 1, 2019, FirstEnergy made a $500 million voluntary cash contribution to the qualified pension plan. FirstEnergy expects no required contributions through 2021.

Service costs, net of capitalization, are reported within Other operating expenses on FirstEnergy’s Consolidated Statements of Income. Non-service costs, other than the pension and OPEB mark-to-market adjustment, which is separately shown, are reported within Miscellaneous income, net, within Other Income (Expense) on FirstEnergy’s Consolidated Statements of Income.