DTE Energy 2007 Annual Report Download - page 25

The requirement to recognize the funded status of a postretirement benefit plan and the related disclosure requirements is effective for
fiscal years ending after December 15, 2006. We adopted this requirement as of December 31, 2006. The requirement to measure plan
assets and benefit obligations as of the date of the employer’ s fiscal year-end statement of financial position is effective for fiscal
years ending after December 15, 2008. We plan to adopt this requirement as of December 31, 2008.
MichCon received approval from the MPSC to record the charge related to the additional liability as a regulatory asset since the
traditional rate setting process allows for the recovery of pension and other postretirement plan costs. Retrospective application of the
changes required by SFAS No. 158 is prohibited; therefore certain disclosures below are not comparable.
Measurement Date
All amounts and balances reported in the following tables as of December 31, 2007 and December 31, 2006 are based on
measurement dates of November 30, 2007 and November 30, 2006, respectively.
Pension Plan Benefits
We sponsor a qualified defined benefit retirement plan for MichCon represented employees (the “MichCon Plan”). The Plan is
noncontributory, covers substantially all represented employees and provides retirement benefits to these MichCon employees based
on the employee’ s years of benefit service, average final compensation and age at retirement. Currently this Plan meets the full
funding requirements of the Internal Revenue Code. We did not make a contribution to the MichCon Plan in 2007.
MichCon also participates in a qualified defined benefit retirement plan for its non-represented employees. This Plan is sponsored by
Detroit Edison and is for represented and non-represented employees of Detroit Edison. It is the DTE Energy Company Retirement
Plan (“DTE Plan”). The DTE Plan is noncontributory, covers substantially all employees not covered by the MichCon Plan and
provides traditional retirement benefits to employees based on the employee’ s years of benefit service, average final compensation and
age at retirement. In addition, certain non-represented employees are covered under a cash balance provision that bases benefits on
annual employer contributions and interest credits. Currently the DTE Plan meets the full funding requirements of the Internal
Revenue Code. The DTE Plan is treated as a plan covering employees of various affiliates of DTE Energy from the affiliates’
perspective. Accordingly, the liabilities and assets associated with the DTE Plan are not reflected in the tables below, and the
associated prepaid pension asset of $325 million and $294 million at December 31, 2007 and December 31, 2006, respectively, are
reflected as an amount due from affiliate. We are allocated income or expense each year as a result of our participation in the DTE
Plan. The annual income for 2007, 2006, and 2005 was $31 million, $22 million, and $26 million, respectively, and is not reflected in
the following table.
In its April 2005 final rate order, the MPSC approved the deferral of the non-capitalized portion of our negative pension expense. In
2007 and 2006, we deferred $32 million and $27 million, respectively, as a regulatory liability.
Net pension cost (credit) includes the following components:
(in Millions) 2007 2006 2005
Service cost $ 7 $ 7 $ 5
Interest cost 16 16 15
Expected return on Plan assets (31) (30) (28)
Amortization of:
Net loss 2 2 1
Prior service cost 1 1 1
Special termination benefits — 6 —
Net pension cost (credit) $ (5) $ 2 $ (6)
Special termination benefits in the above table represent cost associated with our Performance Excellence Process.
Retrospective application of the changes required by SFAS No. 158 is prohibited; therefore certain disclosures below are not
comparable.
(in Millions) 2007 2006
Other changes in plan assets and benefit obligations recognized in regulatory assets
Net actuarial (gain) $ (28) $ N/A
Amortization of net actuarial (gain) (2) N/A
Amortization of prior service cost (1) N/A
Total recognized in regulatory assets $ (31) $ N/A
Total recognized in net periodic pension cost and regulatory assets $ (36) $ N/A
Estimated amounts to be amortized from regulatory assets into net periodic benefit cost during next fiscal
year
Net actuarial loss $ — $ 2
Prior service cost $ 1 $ 1
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