DTE Energy 2008 Annual Report Download - page 32

The process used in determining the long-term rate of return for assets and the investment approach for our other postretirement benefits plans
is similar to those previously described for our pension plans.
Our plan’s weighted-average asset allocations and related targets by asset category at December 31 were as follows:
In December 2003, the Medicare Act was signed into law which provides for a non-taxable federal subsidy to sponsors of retiree health care
benefit plans that provide a benefit that is at least “actuarially equivalent” to the benefit established by law. The effects of the subsidy reduced
net periodic postretirement benefit costs by $3 million in 2008, $9 million in 2007, and $2 million in 2006.
At December 31, 2008, the gross amount of federal subsidies expected to be received in each of the next five years and in the aggregate for the
five fiscal years thereafter was as follows:
Grantor Trust
We maintain a Grantor Trust to fund other postretirement benefit obligations that invests in life insurance contracts and income securities.
Employees and retirees have no right, title or interest in the assets of the Grantor Trust, and we can revoke the trust subject to providing the
MPSC with prior notification. We account for our investment at fair value with unrealized gains and losses recorded to earnings.
NOTE 13 — RELATED PARTY TRANSACTIONS
We have agreements with affiliated companies to provide transportation and storage services and for the purchase of natural gas. We have an
agreement with a DTE Energy affiliate where we are charged for our use of their shared capital assets. Prior to March 31, 2007, under a service
agreement with DTE Energy, various DTE Energy affiliates, including MichCon, provide corporate support services inclusive of various
financial, auditing, tax, legal, treasury and cash management, human resources, information technology, and regulatory services, which were
billed to DTE Energy corporate. As these functions essentially support the entire DTE Energy Company, total administrative and general
expenses billed to DTE Energy corporate by MichCon and the other affiliates, along with certain interest and financing costs were then billed
to various subsidiaries of DTE Energy, including MichCon. Subsequent to March 31, 2007, a new affiliate company was formed, DTE Energy
Corporate Services, LLC, to accumulate the aforementioned corporate support services type expenses, which previously had been recorded on
the various operating units of DTE Energy Company, including MichCon. These administrative and general expenses incurred by DTE Energy
Corporate Services, LLC were then billed to various subsidiaries of DTE Energy, including MichCon. MichCon participates in a defined
benefit retirement plan sponsored by another affiliate of DTE Energy.
The following is a summary of transactions with affiliated companies:
30
2008 2007 Target
U.S. equity securities 39% 50%27%
Non U.S. equity securities 17 18 24
Debt securities 26 20 16
Hedge funds and similar 13 11 28
Private equity and other 5 1 5
100% 100% 100%
2014 &
(in Millions) 2009 2010 2011 2012 2013 thereafter Total
Amount to be paid $2 $ — $2 $2 $2 $6 $14
(in Millions) 2008 2007 2006
Revenues
Transportation and storage services $2 $4 $9
Other services 3 2 4
Costs
Gas purchases 28 — —
Other services and interest 22 17 13
Corporate expenses 134 132 68
Other
Dividends declared 37 50 50
Dividends paid 50 50 50
Capital contribution (1) 62 5
—