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Pension and Other Postretirement Benefits
 12 Months Ended
Dec. 31, 2020
Pension and Other Postretirement Benefits Cost (Reversal of Cost) [Abstract]  
Pension and Other Postretirement Benefits Pension and Other Postretirement Benefits
We provide defined contribution plans and noncontributory defined benefit retirement plans that cover certain of our employees. Benefits under the defined benefit retirement plans reflect the employees’ compensation, years of service and age at retirement. Additionally, we provide health care and life insurance benefits for certain retired employees. The majority of employees may become eligible for these benefits if they reach retirement age while working for us. The expected cost of such benefits is accrued during the employees’ years of service. Current rates of rate-regulated companies include postretirement benefit costs, including amortization of the regulatory assets that arose prior to inclusion of these costs in rates. For most plans, cash contributions are remitted to grantor trusts.
Our Pension and Other Postretirement Benefit Plans’ Asset Management. The Board has delegated oversight of the pension and other postretirement benefit plans’ assets to an Administrative & Investment Management Committee (“the Committee”). The Committee has adopted investment policy statements for the pension and other postretirement benefit plans’ assets. For the pension plans, we employ a liability-driven investing strategy. A total return approach is utilized for the other postretirement benefit plans’ assets. A mix of diversified investments are used to maximize the long-term return of plan assets and hedge the liabilities at a prudent level of risk. The investment portfolio includes U.S. and non-U.S. equities, real estate, long-term and intermediate-term fixed income and alternative investments. Risk tolerance is established through careful consideration of plan liabilities, funded status, and asset class volatility. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews, annual liability measurements, and periodic asset/liability studies.
In determining the expected long-term rate of return on plan assets, historical markets are studied, relationships between equities and fixed income are analyzed and current market factors, such as inflation and interest rates are evaluated with consideration of diversification and rebalancing. Our expected long-term rate of return on assets is based on assumptions regarding target asset allocations and corresponding long-term capital market assumptions for each asset class. The pension plans’ investment policy calls for a gradual reduction in the allocation of return-seeking assets (equities, real estate and private equity) and a corresponding increase in the allocation of liability-hedging assets (fixed income) as the funded status of the plans’ increase.
As of December 31, 2020, the asset mix and acceptable minimum and maximum ranges established by the policy for the pension and other postretirement benefit plans are as follows:
Asset Mix Policy of Funds:
 Defined Benefit Pension PlanPostretirement Benefit Plan
Asset CategoryMinimumMaximumMinimumMaximum
Domestic Equities12%32%0%55%
International Equities6%16%0%25%
Fixed Income59%71%20%100%
Real Estate0%7%0%0%
Private Equity0%5%0%0%
Short-Term Investments0%10%0%10%
As of December 31, 2019, the asset mix and acceptable minimum and maximum ranges established by the policy for the pension and other postretirement benefit plans were as follows:
Asset Mix Policy of Funds:
 Defined Benefit Pension PlanPostretirement Benefit Plan
Asset CategoryMinimumMaximumMinimumMaximum
Domestic Equities12%32%0%55%
International Equities6%16%0%25%
Fixed Income59%71%20%100%
Real Estate0%7%0%0%
Private Equity0%5%0%0%
Short-Term Investments0%10%0%10%
Pension Plan and Postretirement Plan Asset Mix at December 31, 2020 and December 31, 2019:
Defined Benefit
Pension Assets		December 31,
2020		Postretirement
Benefit Plan Assets		December 31,
2020
Asset Class (in millions)
Asset Value% of Total AssetsAsset Value% of Total Assets
Domestic Equities$446.3 21.0 %$108.8 38.0 %
International Equities230.1 10.9 %48.2 16.8 %
Fixed Income1,291.2 61.0 %122.0 42.6 %
Real Estate52.9 2.5 %— — 
Cash/Other97.2 4.6 %7.4 2.6 %
Total$2,117.7 100.0 %$286.4 100.0 %
    
Defined Benefit Pension AssetsDecember 31,
2019		Postretirement Benefit Plan AssetsDecember 31,
2019
Asset Class (in millions)
Asset Value% of Total AssetsAsset Value% of Total Assets
Domestic Equities$446.4 21.5 %$93.8 35.9 %
International Equities205.0 9.9 %40.7 15.6 %
Fixed Income1,337.2 64.2 %119.5 45.7 %
Real Estate53.9 2.6 %— — 
Cash/Other38.4 1.8 %7.4 2.8 %
Total$2,080.9 100.0 %$261.4 100.0 %
The categorization of investments into the asset classes in the tables above are based on definitions established by our Benefits Committee.
Fair Value Measurements. The following table sets forth, by level within the fair value hierarchy, the pension and other postretirement benefits investment assets at fair value as of December 31, 2020 and 2019. Assets are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. There were no investment assets in the pension and other postretirement benefits trusts classified within Level 3 for the years ended December 31, 2020 and 2019.
Valuation Techniques Used to Determine Fair Value:
Level 1 Measurements
Most common and preferred stocks are traded in active markets on national and international securities exchanges and are valued at closing prices on the last business day of each period presented. Cash is stated at cost which approximates fair value, with the exception of cash held in foreign currencies which fluctuates with changes in the exchange rates. Short-term bills and notes are priced based on quoted market values.
Level 2 Measurements
Most U.S. Government Agency obligations, mortgage/asset-backed securities, and corporate fixed income securities are generally valued by benchmarking model-derived prices to quoted market prices and trade data for identical or comparable securities. To the extent that quoted prices are not available, fair value is determined based on a valuation model that includes inputs such as interest rate yield curves and credit spreads. Securities traded in markets that are not considered active are valued based on quoted market prices, broker or dealer quotations, or alternative pricing sources with reasonable levels of price transparency. Other fixed income includes futures and options which are priced on bid valuation or settlement pricing.
Level 3 Measurements
Investments with unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities are classified as level 3 investments.
Not Classified
Commingled funds, private equity limited partnerships and real estate partnerships hold underlying investments that have prices derived from quoted prices in active markets and are not classified within the fair value hierarchy. Instead, these assets are measured at estimated fair value using the net asset value per share of the investments. Commingled funds' underlying assets are principally marketable equity and fixed income securities. Units held in commingled funds are valued at the unit value as reported by the investment managers. Private equity and real estate funds invest in natural resources, commercial real estate and distressed real estate. The fair value of these investments is determined by reference to the funds’ underlying assets.
For the year ended December 31, 2020, there were no significant changes to valuation techniques to determine the fair value of our pension and other postretirement benefits' assets.
Fair Value Measurements at December 31, 2020: 
(in millions)December 31,
2020		Quoted Prices in  Active Markets for
Identical Assets
(Level 1)		Significant Other
Observable Inputs (Level 2)		Significant
Unobservable Inputs
 (Level 3)
Pension plan assets:
Cash$11.9 $11.9 $— $— 
Equity securities
U.S. equities2.4 2.4 — — 
Fixed income securities
Government243.4 — 243.4 — 
Corporate692.6 — 692.6 — 
Mutual Funds
U.S. multi-strategy161.3 161.3 — — 
International equities55.4 55.4 — — 
Fixed income0.1 0.1 — — 
Private equity limited partnerships(3)
U.S. multi-strategy(1)
10.9 — — — 
International multi-strategy(2)
6.6 — — — 
Distressed opportunities0.3 — — — 
Real estate52.9 — — — 
Commingled funds(3)
Short-term money markets78.8 — — — 
U.S. equities279.7 — — — 
International equities176.8 — — — 
Fixed income337.6 — — — 
Pension plan assets subtotal2,110.7 231.1 936.0 — 
Other postretirement benefit plan assets:
Mutual funds
U.S. multi-strategy94.8 94.8 — — 
International equities24.1 24.1 — — 
Fixed income121.8 121.8 — — 
Commingled funds(3)
Short-term money markets7.6 — — — 
U.S. equities14.0 — — — 
International equities24.1 — — — 
Other postretirement benefit plan assets subtotal286.4 240.7 — — 
Due to brokers, net(4)
(1.6)— (1.6)— 
Accrued income/dividends8.6 8.6 — — 
Total pension and other postretirement benefit plan assets$2,404.1 $480.4 $934.4 $— 
(1)This class includes limited partnerships/fund of funds that invest in a diverse portfolio of private equity strategies, including buy-outs, venture capital, growth capital, special situations and secondary markets, primarily inside the United States. 
(2)This class includes limited partnerships/fund of funds that invest in diverse portfolio of private equity strategies, including buy-outs, venture capital, growth capital, special situations and secondary markets, primarily outside the United States.
(3)This class of investments is measured at fair value using the net asset value per share and has not been classified in the fair value hierarchy.
(4)This class represents pending trades with brokers.
The table below sets forth a summary of unfunded commitments, redemption frequency and redemption notice periods for certain investments that are measured at fair value using the net asset value per share for the year ended December 31, 2020:
(in millions)Fair ValueRedemption FrequencyRedemption Notice Period
Commingled Funds
Short-term money markets$86.4 Daily1 day
U.S. equities293.7 Daily1-5 days
International equities200.9 Monthly10-30 days
Fixed income337.6 Daily3 days
Total$918.6 
Fair Value Measurements at December 31, 2019: 
(in millions)December 31,
2019		Quoted Prices in Active Markets for Identical Assets (Level 1)Significant Other
Observable Inputs (Level 2)		Significant
Unobservable Inputs 
(Level 3)
Pension plan assets:
Cash$6.7 $6.7 $— $— 
Fixed income securities
Government319.6 — 319.6 — 
Corporate651.8 — 651.8 — 
Mutual Funds
U.S. multi-strategy140.5 140.5 — — 
International equities56.9 56.9 — — 
Private equity limited partnerships(3)
U.S. multi-strategy(1)
14.0 — — — 
International multi-strategy(2)
8.5 — — — 
Distressed opportunities0.5 — — — 
Real Estate53.9 — — — 
Commingled funds(3)
Short-term money markets14.8 — — — 
U.S. equities305.9 — — — 
International equities148.1 — — — 
Fixed income351.8 — — — 
Pension plan assets subtotal2,073.0 204.1 971.4 — 
Other postretirement benefit plan assets:
Mutual funds
U.S. multi-strategy81.7 81.7 — — 
International equities20.6 20.6 — — 
Fixed income119.2 119.2 — — 
Commingled funds(3)
Short-term money markets7.7 — — — 
U.S. equities12.1 — — — 
International equities20.1 — — — 
Other postretirement benefit plan assets subtotal261.4 221.5 — — 
Due to brokers, net(4)
(2.8)— (2.8)— 
Accrued income/dividends10.7 10.7 — — 
Total pension and other postretirement benefit plan assets$2,342.3 $436.3 $968.6 $— 
(1)This class includes limited partnerships/fund of funds that invest in a diverse portfolio of private equity strategies, including buy-outs, venture capital, growth capital, special situations and secondary markets, primarily inside the United States. 
(2)This class includes limited partnerships/fund of funds that invest in diverse portfolio of private equity strategies, including buy-outs, venture capital, growth capital, special situations and secondary markets, primarily outside the United States.
(3)This class of investments is measured at fair value using the net asset value per share and has not been classified in the fair value hierarchy.
(4)This class represents pending trades with brokers.
The table below sets forth a summary of changes in the fair value of the Plan’s Level 3 assets for the year ended December 31, 2019:
Balance at
January 1, 2019
Transfers out
(Level 3)(1)
Balance at
December 31, 2019
Private equity limited partnerships
U.S. multi-strategy18.5 (18.5)— 
International multi-strategy12.5 (12.5)— 
Distress opportunities2.4 (2.4)— 
Real estate52.7 (52.7)— 
Total$86.1 $(86.1)$— 
(1)Level 3 assets from 2018 were reclassified in the 2019 presentation and included within the fair value hierarchy table as of December 31, 2019 as "Not Classified" investments for which fair value is measured using net asset value per share, consistent with the definitions described above.
The table below sets forth a summary of unfunded commitments, redemption frequency and redemption notice periods for certain investments that are measured at fair value using the net asset value per share for the year ended December 31, 2019:
(in millions)Fair ValueRedemption FrequencyRedemption Notice Period
Commingled Funds
Short-term money markets$22.5 Daily1 day
U.S. equities318.0 Monthly3 days
International equities168.2 Monthly10-30 days
Fixed income351.8 Daily3 days
Total$860.5 
 
Our Pension and Other Postretirement Benefit Plans’ Funded Status and Related Disclosure. The following table provides a reconciliation of the plans’ funded status and amounts reflected in our Consolidated Balance Sheets at December 31 based on a December 31 measurement date:
 Pension BenefitsOther Postretirement Benefits
(in millions)2020201920202019
Change in projected benefit obligation(1)
Benefit obligation at beginning of year$2,130.5 $1,981.3 $576.5 $492.5 
Service cost32.0 29.2 6.6 5.1 
Interest cost51.6 72.3 15.4 19.2 
Plan participants’ contributions— — 4.1 4.8 
Plan amendments— — — 5.1 
Actuarial loss(2)
140.1 204.3 24.8 88.8 
Benefits paid(174.5)(156.6)(37.0)(39.5)
Estimated benefits paid by incurred subsidy— — 0.4 0.5 
Spinoff to Eversource(121.3)— — — 
Projected benefit obligation at end of year$2,058.4 $2,130.5 $590.8 $576.5 
Change in plan assets
Fair value of plan assets at beginning of year$2,080.9 $1,867.7 $261.4 $216.3 
Actual return on plan assets329.9 366.8 36.3 56.9 
Employer contributions2.9 2.9 21.6 23.0 
Plan participants’ contributions— — 4.1 4.7 
Benefits paid(174.6)(156.5)(37.0)(39.5)
Spinoff to Eversource(121.4)— — — 
Fair value of plan assets at end of year$2,117.7 $2,080.9 $286.4 $261.4 
Funded Status at end of year$59.3 $(49.6)$(304.4)$(315.1)
Amounts recognized in the statement of financial position consist of:
Noncurrent assets91.4 8.2 — — 
Current liabilities(2.9)(3.0)(0.9)(0.8)
Noncurrent liabilities(29.2)(54.8)(303.5)(314.3)
Net amount recognized at end of year(3)
$59.3 $(49.6)$(304.4)$(315.1)
Amounts recognized in accumulated other comprehensive income or regulatory asset/liability(4)
Unrecognized prior service credit$0.3 $3.0 $(10.1)$(10.7)
Unrecognized actuarial loss497.2 652.8 116.4 118.4 
 Net amount recognized at end of year$497.5 $655.8 $106.3 $107.7 
(1)The change in benefit obligation for Pension Benefits represents the change in Projected Benefit Obligation while the change in benefit obligation for Other Postretirement Benefits represents the change in accumulated postretirement benefit obligation.
(2)The pension actuarial loss was primarily driven by the decrease in the discount rate, offset by the change in mortality assumptions. The other postretirement benefits loss was also primarily driven by a decrease in discount rates, offset by favorable claims experienced and a change in the mortality assumptions.
(3)We recognize our Consolidated Balance Sheets underfunded and overfunded status of our various defined benefit postretirement plans, measured as the difference between the fair value of the plan assets and the benefit obligation.
(3)We determined that for certain rate-regulated subsidiaries the future recovery of pension and other postretirement benefits costs is probable. These rate-regulated subsidiaries recorded regulatory assets and liabilities of $583.3 million and zero, respectively, as of December 31, 2020, and $739.1 million and $0.1 million, respectively, as of December 31, 2019 that would otherwise have been recorded to accumulated other comprehensive loss.
Our accumulated benefit obligation for our pension plans was $2,036.8 million and $2,111.5 million as of December 31, 2020 and 2019, respectively. The accumulated benefit obligation at each date is the actuarial present value of benefits attributed by the pension benefit formula to employee service rendered prior to that date and based on current and past compensation levels. The accumulated benefit obligation differs from the projected benefit obligation disclosed in the table above in that it includes no assumptions about future compensation levels. 
We are required to reflect the funded status of our pension and postretirement benefit plans on the Consolidated Balance Sheet. The funded status of the plans is measured as the difference between the plan assets' fair value and the projected benefit
obligation. We present the noncurrent aggregate of all underfunded plans within "Accrued liability for postretirement and postemployment benefits." The portion of the amount by which the actuarial present value of benefits included in the projected benefit obligation exceeds the fair value of plan assets, payable in the next 12 months, is reflected in "Accrued compensation and other benefits." We present the aggregate of all overfunded plans within "Deferred charges and other."
Information for pension plans with a projected benefit obligation in excess of plan assets:
December 31,
2020(1)
2019
Accumulated Benefit Obligation$32.1 $1,473.9 
Funded Status
Projected Benefit Obligation32.1 1,492.9 
Fair Value of Plan Assets— 1,435.1 
Funded Status of Underfunded Pension Plans at End of Year$(32.1)$(57.8)
(1)As of December 31, 2020, only our nonqualified plans were underfunded. These plans have no assets as they are not funded until benefits are paid.
Information for pension plans with plan assets in excess of the projected benefit obligation:
December 31,
20202019
Accumulated Benefit Obligation$2,004.7 $637.6 
Funded Status
Projected Benefit Obligation2,026.3 637.6 
Fair Value of Plan Assets2,117.7 645.8 
Funded Status of Overfunded Pension Plans at End of Year$91.4 $8.2 
Our pension plans were overfunded, in aggregate, by $59.3 million at December 31, 2020 compared to being underfunded by $49.6 million at December 31, 2019. The improvement in the funded status was due primarily to favorable asset returns offset by a decrease in discount rates. We contributed $2.9 million to our pension plans in both 2020 and 2019.
Our other postretirement benefit plans were underfunded by $304.4 million at December 31, 2020 compared to being underfunded by $315.1 million at December 31, 2019. The change in funded status was primarily due to favorable asset returns offset by a decrease in discount rates. We contributed $21.6 million and $23.0 million to our other postretirement benefit plans in 2020 and 2019, respectively.
In 2020 and 2019, some of our qualified pension plans paid lump sum payouts in excess of the respective plan's service cost plus interest cost, thereby meeting the requirement for settlement accounting. We recorded settlement charges of $10.5 million and $9.5 million in 2020 and 2019, respectively. Net periodic pension benefit cost for 2020 was decreased by $1.4 million as a result of the interim remeasurement.
The following table provides the key assumptions that were used to calculate the pension and other postretirement benefits obligations for our various plans as of December 31:
 Pension BenefitsOther Postretirement  Benefits
  
2020201920202019
Weighted-average assumptions to Determine Benefit Obligation
Discount Rate2.38 %3.12 %2.49 %3.21 %
Rate of Compensation Increases4.00 %4.00 %— — 
Interest Crediting Rates4.00 %4.00 %— — 
Health Care Trend Rates
Trend for Next Year— — 6.69 %6.68 %
Ultimate Trend— — 4.50 %4.50 %
Year Ultimate Trend Reached— — 20292028
We expect to make contributions of approximately $2.9 million to our pension plans and approximately $21.8 million to our postretirement medical and life plans in 2021.
The following table provides benefits expected to be paid in each of the next five fiscal years, and in the aggregate for the five fiscal years thereafter. The expected benefits are estimated based on the same assumptions used to measure our benefit obligation at the end of the year and include benefits attributable to the estimated future service of employees:
(in millions)Pension BenefitsOther
Postretirement Benefits		Federal
Subsidy Receipts
Year(s)
2021$218.8 $38.4 $0.4 
2022154.5 37.8 0.4 
2023149.2 37.3 0.4 
2024145.9 37.0 0.4 
2025141.3 36.6 0.3 
2026-2030621.9 172.1 1.2 
The following table provides the components of the plans’ actuarially determined net periodic benefits cost for each of the three years ended December 31, 2020, 2019 and 2018:
 Pension BenefitsOther Postretirement
Benefits
(in millions)202020192018202020192018
Components of Net Periodic Benefit Cost(1)
Service cost$32.0 $29.2 $31.3 $6.6 $5.1 $5.0 
Interest cost51.6 72.3 67.1 15.4 19.2 17.6 
Expected return on assets(111.6)(108.8)(142.3)(14.4)(13.1)(14.9)
Amortization of prior service cost (credit)0.7 0.2 (0.4)(2.1)(3.2)(4.0)
Recognized actuarial loss33.8 45.2 40.6 4.9 2.0 3.8 
Settlement/curtailment loss10.5 9.5 18.5 1.5 — — 
Total Net Periodic Benefits Cost$17.0 $47.6 $14.8 $11.9 $10.0 $7.5 
(1)Service cost is presented in "Operation and maintenance" on the Statements of Consolidated Income (Loss). Non-service cost components are presented within "Other, net."
The following table provides the key assumptions that were used to calculate the net periodic benefits cost for our various plans:
 Pension Benefits Other Postretirement
Benefits
  
202020192018202020192018
Weighted-average Assumptions to Determine Net Periodic Benefit Cost
Discount rate - service cost3.39 %4.48 %3.79 %3.52 %4.59 %3.89 %
Discount rate - interest cost2.65 %3.84 %3.15 %2.76 %3.94 %3.27 %
Expected Long-Term Rate of Return on Plan Assets5.70 %6.10 %7.00 %5.67 %5.83 %5.80 %
Rate of Compensation Increases4.00 %4.00 %4.00 %— — — 
Interest Crediting Rates4.00 %4.00 %4.00 %— — — 
We assumed a 5.70% and 5.67% rate of return on pension and other postretirement plan assets, respectively, for our calculation of 2020 pension benefits cost. These rates were primarily based on asset mix and historical rates of return and were adjusted in 2020 due to anticipated changes in asset allocation and projected market returns.
The following table provides other changes in plan assets and projected benefit obligations recognized in other comprehensive income or regulatory asset or liability:
  
Pension BenefitsOther Postretirement
Benefits
(in millions)2020201920202019
Other Changes in Plan Assets and Projected Benefit Obligations Recognized in Other Comprehensive Income or Regulatory Asset or Liability
Net prior service cost $— $— $— $5.1 
Net actuarial loss (gain) (78.2)(53.8)2.9 45.1 
Settlements/curtailments(10.5)(9.5)(1.5)— 
Less: amortization of prior service cost(0.7)(0.2)2.1 3.2 
Less: amortization of net actuarial loss(33.8)(45.2)(4.9)(2.0)
Less: gain attributable to spinoff to Eversource(33.1)— — — 
Less: prior service cost attributable to spinoff to Eversource(2.0)— — — 
Total Recognized in Other Comprehensive Income or Regulatory Asset or  Liability$(158.3)$(108.7)$(1.4)$51.4 
Amount Recognized in Net Periodic Benefits Cost and Other Comprehensive Income or Regulatory Asset or Liability$(141.3)$(61.1)$10.5 $61.4