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Compensation and Benefit Plans | 9 Months Ended
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Sep. 30, 2014
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract] |
Compensation and Benefit Plans | Compensation and Benefit Plans Pension Plans Edison International made contributions of $155 million during the nine months ended September 30, 2014, which includes contributions of $131 million by SCE. Edison International expects to make contributions of $7 million during the remainder of 2014, which includes $2 million from SCE. SCE's future contributions are expected to decline due to the passage of the Highway Transportation Funding Act of 2014 although such decreases may be offset by higher funding levels in future years. Annual contributions made by SCE to most of SCE's pension plans are anticipated to be recovered through CPUC-approved regulatory mechanisms. Annual contributions to these plans are expected to be, at a minimum, equal to the related annual expense. Pension expense components for continuing operations are:
| Three months ended September 30, |  | Nine months ended September 30,
(in millions) | 2014 |  | 2013 |  | 2014 |  | 2013
Edison International: |  |  |  |  |  |  |
Service cost | $ | 30 |  |  | $ | 38 |  |  | $ | 89 |  |  | $ | 114 |
Interest cost | 48 |  |  | 42 |  |  | 141 |  |  | 126 |
Expected return on plan assets | (61 | ) |  | (58 | ) |  | (178 | ) |  | (172 | )
Settlement costs 1 | 35 |  |  | 24 |  |  | 35 |  |  | 73 |
Amortization of prior service cost | 1 |  |  | 1 |  |  | 4 |  |  | 3 |
Amortization of net loss 2 | 1 |  |  | 15 |  |  | 3 |  |  | 45 |
Expense under accounting standards | $ | 54 |  |  | $ | 62 |  |  | $ | 94 |  |  | $ | 189 |
Regulatory adjustment (deferred) | (2 | ) |  | (7 | ) |  | 59 |  |  | (21 | )
Total expense recognized | $ | 52 |  |  | $ | 55 |  |  | $ | 153 |  |  | $ | 168 |
SCE: |  |  |  |  |  |  |
Service cost | $ | 29 |  |  | $ | 37 |  |  | $ | 87 |  |  | $ | 111 |
Interest cost | 44 |  |  | 41 |  |  | 132 |  |  | 123 |
Expected return on plan assets | (56 | ) |  | (57 | ) |  | (168 | ) |  | (171 | )
Settlement costs 1 | 33 |  |  | 24 |  |  | 33 |  |  | 72 |
Amortization of prior service cost | 1 |  |  | 1 |  |  | 3 |  |  | 3 |
Amortization of net loss 2 | — |  |  | 14 |  |  | 1 |  |  | 42 |
Expense under accounting standards | $ | 51 |  |  | $ | 60 |  |  | $ | 88 |  |  | $ | 180 |
Regulatory adjustment (deferred) | (2 | ) |  | (7 | ) |  | 59 |  |  | (21 | )
Total expense recognized | $ | 49 |  |  | $ | 53 |  |  | $ | 147 |  |  | $ | 159 |
1 | Relates to lump-sum payments made to employees who retired from the SCE Retirement Plan (primarily due to workforce reductions described below). Includes the amount of net loss reclassified from other comprehensive loss. The amount reclassified for Edison International was $2 million for the three and nine months ended September 30, 2014 and zero and $2 million for the three and nine months ended September 30, 2013, respectively.
2 | Includes the amount of net loss reclassified from other comprehensive loss. The amount reclassified for Edison International and SCE was $2 million and $1 million, respectively, for the three months ended September 30, 2014, and $5 million and $3 million, respectively, for the nine months ended September 30, 2014. The amount reclassified for Edison International and SCE was $4 million and $3 million, respectively, for the three months ended September 30, 2013, and $11 million and $8 million, respectively, for the nine months ended September 30, 2013.
Under generally accepted accounting principles (“GAAP”), a settlement is recorded when lump-sum payments exceed estimated annual service and interest costs. As of August 31, 2014, lump-sum payments to employees retiring in 2014 from the SCE Retirement Plan (primarily due to workforce reductions described below) exceeded the estimated service and interest costs for the year. A settlement requires re-measurement of both the plan pension obligations and plan assets as of the date of the settlement. The re-measurement of the SCE Retirement Plan as of August 31, 2014 resulted in total actuarial losses of $158 million, including $146 million for SCE. The actuarial losses are primarily due to a decrease in the discount rate (from 4.75% at December 31, 2013 to 4.00% as of August 31, 2014) due to lower interest rates, partially offset by performance of the plan assets. After re-measurement, GAAP requires an acceleration of a portion of unrecognized net losses attributable to such lump-sum payments as additional pension expense as reflected in the above table. The additional pension expense related to SCE did not impact net income as such amounts are probable of recovery through future rates. The projected benefit obligations exceeded the fair value of the SCE Retirement Plan assets by $559 million, including $518 million for SCE, at August 31, 2014 compared to $478 million, including $449 million for SCE, at December 31, 2013. Postretirement Benefits Other Than Pensions Edison International made contributions of $11 million during the nine months ended September 30, 2014 and expects to make contributions of $4 million during the remainder of 2014, substantially all of which are expected to be made by SCE. Annual contributions made to SCE plans are anticipated to be recovered through CPUC-approved regulatory mechanisms and are expected to be, at a minimum, equal to the total annual expense for these plans. Benefits under these plans, with some exceptions, are generally unvested and subject to change. Under the terms of the Edison International Health and Welfare Plan ("PBOP Plan") each participating employer (Edison International or its participating subsidiaries) is responsible for the costs and expenses of all PBOP benefits with respect to its employees and former employees. A participating employer may terminate the PBOP benefits with respect to its employees and former employees, as may SCE (as Plan sponsor), and, accordingly, the participants' PBOP benefits are not vested benefits. PBOP expense components for continuing operations are:
| Three months ended September 30, |  | Nine months ended September 30,
(in millions) | 2014 |  | 2013 |  | 2014 |  | 2013
Edison International: |  |  |  |  |  |  |
Service cost | $ | 10 |  |  | $ | 14 |  |  | $ | 32 |  |  | $ | 42 |
Interest cost | 28 |  |  | 26 |  |  | 82 |  |  | 78 |
Expected return on plan assets | (28 | ) |  | (30 | ) |  | (84 | ) |  | (90 | )
Special termination benefits 1 | — |  |  | — |  |  | — |  |  | 10 |
Amortization of prior service credit | (9 | ) |  | (9 | ) |  | (27 | ) |  | (27 | )
Amortization of net loss | — |  |  | 7 |  |  | — |  |  | 21 |
Total expense | $ | 1 |  |  | $ | 8 |  |  | $ | 3 |  |  | $ | 34 |
SCE: |  |  |  |  |  |  |
Service cost | $ | 10 |  |  | $ | 14 |  |  | $ | 32 |  |  | $ | 41 |
Interest cost | 27 |  |  | 26 |  |  | 81 |  |  | 78 |
Expected return on plan assets | (28 | ) |  | (30 | ) |  | (84 | ) |  | (90 | )
Special termination benefits 1 | — |  |  | — |  |  | — |  |  | 10 |
Amortization of prior service credit | (9 | ) |  | (9 | ) |  | (27 | ) |  | (27 | )
Amortization of net loss | — |  |  | 7 |  |  | — |  |  | 21 |
Total expense | $ | — |  |  | $ | 8 |  |  | $ | 2 |  |  | $ | 33 |
1 | Due to the reduction in workforce, SCE has incurred costs for extended retiree health care coverage.
Workforce Reductions In 2012, SCE commenced multiple efforts to reduce its workforce in order to reflect SCE's strategic direction to optimize its cost structure, moderate customer rate increases and align its cost structure with its peers. In addition, in June 2013, SCE announced plans to permanently retire San Onofre, which resulted in additional workforce reductions. See Note 9 for further information. During the second quarter of 2014, SCE increased the estimated impact for workforce reductions related to transferring certain information technology activities to third parties. Through September 30, 2014, SCE's share of estimated cash severance for these efforts totaled $222 million. The following table provides a summary of changes in the accrued severance liability associated with these reductions:
(in millions) |  |
Balance at January 1, 2014 |  | $ | 54 |
Additions |  | 9 |
Payments |  | (17 | )
Other |  | (1 | )
Balance at September 30, 2014 |  | $ | 45 |
The liability presented in the table above is reflected in "Other current liabilities" on the consolidated balance sheets. The severance costs are included in "Operation and maintenance" on the consolidated income statements.

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- Definition The entire disclosure for pension and other postretirement benefits. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 715 -URI http://asc.fasb.org/topic&trid=2235017 + Details
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