XML 31 R13.htm IDEA: XBRL DOCUMENT
v3.23.3

PENSION AND OTHER POST-EMPLOYMENT BENEFITS | 9 Months Ended
--- | ---
Sep. 30, 2023
Retirement Benefits [Abstract] |
PENSION AND OTHER POST-EMPLOYMENT BENEFITS | PENSION AND OTHER POST-EMPLOYMENT BENEFITS The components of FirstEnergy’s net periodic benefit costs (credits) for pension and OPEB were as follows:
Components of Net Periodic Benefit Costs (Credits) |  | Pension | OPEB
For the Three Months Ended September 30, |  | 2023 |  | 2022 |  | 2023 |  | 2022
|  | (In millions)
Service costs |  | $ | 35 |  |  | $ | 46 |  |  | $ | 1 |  |  | $ | 1 |
Interest costs |  | 106 |  |  | 68 |  |  | 5 |  |  | 3 |
Expected return on plan assets |  | (151) |  |  | (164) |  |  | (7) |  |  | (10) |
Amortization of prior service costs (credits) (1) |  | 1 |  |  | 1 |  |  | (3) |  |  | (3) |
Special termination benefits (2) |  | 13 |  |  | — |  |  | 5 |  |  | — |
Net periodic benefit costs (credits) |  | $ | 4 |  |  | $ | (49) |  |  | $ | 1 |  |  | $ | (9) |
Net periodic benefit costs (credits), net of amounts capitalized |  | $ | (15) |  |  | $ | (77) |  |  | $ | 1 |  |  | $ | (9) |
(1) The income tax benefits associated with pension and OPEB prior service costs amortized out of AOCI were $1 million for the three months ended September 30, 2022, and immaterial for the three months ended September 30, 2023. (2) Related to benefits provided in connection with the PEER.
Components of Net Periodic Benefit Costs (Credits) |  | Pension | OPEB
For the Nine Months Ended September 30, |  | 2023 |  | 2022 |  | 2023 |  | 2022
|  | (In millions)
Service costs |  | $ | 104 |  |  | $ | 138 |  |  | $ | 2 |  |  | $ | 3 |
Interest costs |  | 322 |  |  | 204 |  |  | 16 |  |  | 8 |
Expected return on plan assets |  | (421) |  |  | (492) |  |  | (23) |  |  | (30) |
Amortization of prior service costs (credits) (1) |  | 2 |  |  | 2 |  |  | (7) |  |  | (8) |
Special termination benefits (2) |  | 18 |  |  | — |  |  | 7 |  |  | — |
Pension and OPEB mark-to-market adjustment |  | (59) |  |  | — |  |  | — |  |  | — |
Net periodic benefit credits |  | $ | (34) |  |  | $ | (148) |  |  | $ | (5) |  |  | $ | (27) |
Net periodic benefit credits, net of amounts capitalized |  | $ | (88) |  |  | $ | (218) |  |  | $ | (6) |  |  | $ | (28) |
(1) The income tax benefits associated with the pension and OPEB prior service costs amortized out of AOCI were $1 million and $2 million for the nine months ended September 30, 2023 and 2022, respectively. (2) Related to benefits provided in connection with the PEER. On May 9, 2023, FirstEnergy announced a voluntary retirement program for eligible non-bargaining employees, known as the PEER. More than 65% of eligible employees, totaling approximately 450 employees, accepted the PEER, which included lump sum compensation equivalent to severance benefits, healthcare continuation costs and a temporary pension enhancement with most participating employees expected to depart by the end of 2023. The temporary pension enhancement and healthcare continuation costs are classified as special termination costs within net periodic benefit costs (credits). In addition to the PEER, FirstEnergy notified and involuntarily separated approximately 90 employees on May 9, 2023. Management expects the cost savings resulting from these initiatives to support FirstEnergy’s growth plans. FirstEnergy’s pension and OPEB funding policy is based on actuarial computations using the projected unit credit method. On May 12, 2023, FirstEnergy made a $750 million voluntary cash contribution to the qualified pension plan. As a result of this contribution, FirstEnergy does not currently expect to have a required contribution to the pension plan through 2027 based on the 7.7% actual return through April 30, 2023, and various assumptions, including an expected rate of return on assets of 5.3% (8.0% on an annualized basis) for May 1, 2023 through December 31, 2023. However, FirstEnergy may elect to contribute to the pension plan voluntarily. 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. The size of the voluntary contribution made on May 12, 2023, in relation to total pension assets triggered a remeasurement of the pension plan, and as a result, FirstEnergy recognized a non-cash, pre-tax pension mark-to-market adjustment gain of approximately $59 million in the second quarter of 2023. FirstEnergy elected the practical expedient to remeasure pension plan assets and obligations as of April 30, 2023, which is the month-end closest to the date of the voluntary contribution. The pension mark-to-market adjustment primarily reflects higher than expected return on assets, partially offset by a 29 basis points decrease in the discount rate used to measure benefit obligations. The discount rate used to measure pension obligations was 4.94% as of April 30, 2023 and 5.23% as of December 31, 2022. The discount rate used to measure OPEB obligations was 5.16% as of December 31, 2022. Based on the following assumptions, FirstEnergy expects its 2023 pre-tax net periodic costs, including amounts capitalized and the $59 million pension mark-to-market adjustment gain in the second quarter of 2023, to be a credit of approximately $47 million.
Assumptions for 2023 net periodic credits |  | Pension |  | OPEB
Effective rate for interest costs on benefit obligations (1) |  | 5.10%/4.80% |  | 5.06 | %
Effective rate for service costs (1) |  | 5.34%/5.11% |  | 5.41 | %
Effective rate for interest on service costs (1) |  | 5.22%/4.94% |  | 5.33 | %
Annualized expected rate of return on plan assets |  | 8.00% |  | 7.00 | %
(1) Pension rates effective for January 1, 2023 through April 30, 2023 and May 1, 2023 through December 31, 2023, respectively. 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.

X
- References No definition available. + Details
Name: | us-gaap_CompensationAndRetirementDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for retirement benefits. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 715 -SubTopic 70 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480794/715-70-50-1 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 715 -SubTopic 20 -Name Accounting Standards Codification -Section 55 -Paragraph 17 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480482/715-20-55-17 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 715 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (d)(iv)(03) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480506/715-20-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 715 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (d)(i) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480506/715-20-50-1 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 715 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (q) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480506/715-20-50-1 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 715 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (l) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480506/715-20-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 715 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//715/tableOfContent Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 715 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (d)(iii) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480506/715-20-50-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 715 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (o) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480506/715-20-50-1 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 715 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (p) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480506/715-20-50-1 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 715 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (r)(1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480506/715-20-50-1 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 715 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (r)(2) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480506/715-20-50-1 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 715 -SubTopic 20 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480126/715-20-S99-2 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 715 -SubTopic 60 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480266/715-60-50-3 + Details
Name: | us-gaap_PensionAndOtherPostretirementBenefitsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration