Retirement Benefits and Trusteed Assets | RETIREMENT BENEFITS AND TRUSTEED ASSETS Pension Plan Benefits DTE Energy has qualified defined benefit retirement plans for eligible represented and non-represented employees. The plans are noncontributory and provide traditional retirement benefits based on the employees’ years of benefit service, average final compensation, and age at retirement. In addition, certain represented and non-represented employees are covered under cash balance provisions that determine benefits on annual employer contributions and interest credits. DTE Energy also maintains supplemental nonqualified, noncontributory, retirement benefit plans for selected management employees. These plans provide for benefits that supplement those provided by DTE Energy’s other retirement plans. DTE Electric participates in various plans that provide pension and other postretirement benefits for DTE Energy and its affiliates. The plans are sponsored by DTE Energy Corporate Services, LLC (LLC), a subsidiary of DTE Energy. DTE Electric is allocated net periodic benefit costs for its share of the amounts of the combined plans. Effective January 1, 2012 for the Registrants' non-represented employees, and in June 2011 for certain DTE Energy represented employees and March 2013 for the majority of DTE Electric represented employees, the Registrants discontinued offering a defined benefit retirement plan to newly hired employees. In its place, the Registrants will annually contribute an amount equivalent to 4% ( 8% for certain DTE Gas represented employees) of an employee's eligible pay to the employee's defined contribution retirement savings plan. The Registrants' policy is to fund pension costs by contributing amounts consistent with the provisions of the Pension Protection Act of 2006 and additional amounts when it deems appropriate. DTE Energy contributed $177 million , including $145 million of DTE Electric contributions, to the qualified pension plans in 2015 . At the discretion of management, and depending upon financial market conditions, DTE Energy anticipates making up to $180 million in contributions, including $145 million of DTE Electric contributions, to the pension plans in 2016 . Net pension cost for DTE Energy includes the following components: 2015 2014 2013 (In millions) Service cost $ 100 $ 83 $ 94 Interest cost 210 212 192 Expected return on plan assets (296 ) (273 ) (266 ) Amortization of net actuarial loss 205 157 208 Special termination benefits 2 — — Net pension cost $ 221 $ 179 $ 228 2015 2014 (In millions) Other changes in plan assets and benefit obligations recognized in Regulatory assets and Other comprehensive income (loss) Net actuarial loss $ 19 $ 805 Amortization of net actuarial loss (205 ) (157 ) Prior service credit — (7 ) Total recognized in Regulatory assets and Other comprehensive income (loss) $ (186 ) $ 641 Total recognized in net periodic pension cost, Regulatory assets, and Other comprehensive income (loss) $ 35 $ 820 Estimated amounts to be amortized from Regulatory assets and Accumulated other comprehensive income (loss) into net periodic benefit cost during next fiscal year Net actuarial loss $ 162 $ 206 Net pension cost for DTE Electric includes the following components: 2015 2014 2013 (In millions) Service cost $ 77 $ 64 $ 73 Interest cost 160 162 146 Expected return on plan assets (210 ) (194 ) (184 ) Amortization of: Net actuarial loss 147 110 148 Prior service cost 1 2 1 Special termination benefits 1 — — Net pension cost $ 176 $ 144 $ 184 2015 2014 (In millions) Other changes in plan assets and benefit obligations recognized in Regulatory assets and Other comprehensive income (loss) Net actuarial (gain) loss $ (13 ) $ 614 Amortization of net actuarial loss (147 ) (110 ) Prior service credit — (2 ) Amortization of prior service cost (1 ) (2 ) Total recognized in Regulatory assets and Other comprehensive income (loss) $ (161 ) $ 500 Total recognized in net periodic pension cost, Regulatory assets, and Other comprehensive income (loss) $ 15 $ 644 Estimated amounts to be amortized from Regulatory assets and Accumulated other comprehensive income (loss) into net periodic benefit cost during next fiscal year Net actuarial loss $ 115 $ 149 Prior service cost $ 1 $ 1 The following table reconciles the obligations, assets, and funded status of the plans as well as the amounts recognized as prepaid pension cost or pension liability in the Registrants' Consolidated Statements of Financial Position at December 31: DTE Energy DTE Electric 2015 2014 2015 2014 (In millions) Accumulated benefit obligation, end of year $ 4,569 $ 4,853 $ 3,401 $ 3,712 Change in projected benefit obligation Projected benefit obligation, beginning of year $ 5,269 $ 4,380 $ 4,018 $ 3,341 Service cost 100 83 75 64 Interest cost 210 212 156 162 Plan amendments — (7 ) — (2 ) Actuarial (gain) loss (357 ) 836 (273 ) 634 Transfer due to plan sponsorship change — — (99 ) — Special termination benefits 2 — — — Benefits paid (253 ) (235 ) (192 ) (181 ) Projected benefit obligation, end of year $ 4,971 $ 5,269 $ 3,685 $ 4,018 Change in plan assets Plan assets at fair value, beginning of year $ 3,981 $ 3,720 $ 2,812 $ 2,632 Actual return on plan assets (79 ) 301 (56 ) 212 Company contributions 183 195 145 149 Benefits paid (253 ) (235 ) (192 ) (181 ) Plan assets at fair value, end of year $ 3,832 $ 3,981 $ 2,709 $ 2,812 Funded status of the plans $ (1,139 ) $ (1,288 ) $ (976 ) $ (1,206 ) Amount recorded as: Current liabilities $ (6 ) $ (8 ) $ — $ (6 ) Noncurrent liabilities (1,133 ) (1,280 ) (976 ) (1,200 ) $ (1,139 ) $ (1,288 ) $ (976 ) $ (1,206 ) Amounts recognized in Accumulated other comprehensive income (loss), pre-tax Net actuarial loss $ 180 $ 194 $ — $ 44 Prior service credit (1 ) (1 ) — — $ 179 $ 193 $ — $ 44 Amounts recognized in Regulatory assets (see Note 8 - "Regulatory Matters") Net actuarial loss $ 2,113 $ 2,285 $ 1,588 $ 1,738 Prior service cost (credit) (1 ) (1 ) 4 5 $ 2,112 $ 2,284 $ 1,592 $ 1,743 At December 31, 2015 , the benefits related to the Registrants' qualified and nonqualified pension plans expected to be paid in each of the next five years and in the aggregate for the five fiscal years thereafter are as follows: DTE Energy DTE Electric (In millions) 2016 $ 274 $ 213 2017 285 221 2018 297 231 2019 306 238 2020 314 244 2021-2025 1,662 1,279 Total $ 3,138 $ 2,426 Assumptions used in determining the projected benefit obligation and net pension costs of the Registrants are: 2015 2014 2013 Projected benefit obligation Discount rate 4.50% 4.12% 4.95% Rate of compensation increase 4.65% 4.65% 4.20% Net pension costs Discount rate 4.12% 4.95% 4.15% Rate of compensation increase 4.65% 4.20% 4.20% Expected long-term rate of return on plan assets 7.75% 7.75% 8.25% The Registrants employ a formal process in determining the long-term rate of return for various asset classes. Management reviews historic financial market risks and returns and long-term historic relationships between the asset classes of equities, fixed income, and other assets, consistent with the widely accepted capital market principle that asset classes with higher volatility generate a greater return over the long-term. Current market factors such as inflation, interest rates, asset class risks, and asset class returns are evaluated and considered before long-term capital market assumptions are determined. The long-term portfolio return is also established employing a consistent formal process, with due consideration of diversification, active investment management, and rebalancing. Peer data is reviewed to check for reasonableness. As a result of this process, the Registrants have long-term rate of return assumptions for the pension plans of 7.75% and other postretirement benefit plans of 8.00% for 2016 . The Registrants believe these rates are a reasonable assumption for the long-term rate of return on plan assets for 2016 given the current investment strategy. The Registrants employ a total return investment approach whereby a mix of equities, fixed income, and other investments are used to maximize the long-term return on plan assets consistent with prudent levels of risk, with consideration given to the liquidity needs of the plan. Risk tolerance is established through consideration of future plan cash flows, plan funded status, and corporate financial considerations. The investment portfolio contains a diversified blend of equity, fixed income, and other investments. Furthermore, equity investments are diversified across U.S. and non-U.S. stocks, growth and value stocks, and large and small market capitalizations. Fixed income securities generally include market duration bonds of companies from diversified industries, mortgage-backed securities, non-U.S. securities, bank loans, and U.S. Treasuries. Pension assets include long duration U.S. government and diversified corporate bonds intended to partially mitigate liability volatility caused by changes in discount rates. Other assets, such as private markets and hedge funds, are used to enhance long-term returns while improving portfolio diversification. Derivatives may be utilized in a risk controlled manner, to potentially increase the portfolio beyond the market value of invested assets and/or reduce portfolio investment risk. Investment risk is measured and monitored on an ongoing basis through annual liability measurements, periodic asset/liability studies, and quarterly investment portfolio reviews. Target allocations for the Registrants' pension plan assets as of December 31, 2015 are listed below: U.S. Large Capitalization (Cap) Equity Securities 22 % U.S. Small Cap and Mid Cap Equity Securities 5 Non-U.S. Equity Securities 20 Fixed Income Securities 25 Hedge Funds and Similar Investments 20 Private Equity and Other 8 100 % The following tables provide the fair value measurement amounts for the Registrants' pension plan assets at December 31, 2015 and 2014 (a): December 31, 2015 December 31, 2014 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total (In millions) DTE Energy asset category: Short-term Investments (b) $ 23 $ — $ — $ 23 $ 46 $ — $ — $ 46 Equity Securities U.S. Large Cap (c) 842 — — 842 899 — — 899 U.S. Small Cap and Mid Cap (d) 219 — — 219 225 — — 225 Non-U.S. (e) 510 251 — 761 526 219 — 745 Fixed Income Securities (f) 5 1,024 — 1,029 7 1,113 — 1,120 Hedge Funds and Similar Investments (g) 220 96 452 768 226 95 438 759 Private Equity and Other (h) — — 190 190 — — 187 187 Securities Lending (i) (129 ) (25 ) — (154 ) (189 ) (50 ) — (239 ) Securities Lending Collateral (i) 129 25 — 154 189 50 — 239 DTE Energy Total $ 1,819 $ 1,371 $ 642 $ 3,832 $ 1,929 $ 1,427 $ 625 $ 3,981 DTE Electric asset category: Short-term Investments (b) $ 16 $ — $ — $ 16 $ 33 $ — $ — $ 33 Equity Securities U.S. Large Cap (c) 599 — — 599 638 — — 638 U.S. Small Cap and Mid Cap (d) 157 — — 157 162 — — 162 Non-U.S. (e) 367 178 — 545 378 157 — 535 Fixed Income Securities (f) 4 699 — 703 5 758 — 763 Hedge Funds and Similar Investments (g) 158 69 325 552 163 68 315 546 Private Equity and Other (h) — — 137 137 — — 135 135 Securities Lending (i) (93 ) (18 ) — (111 ) (136 ) (36 ) — (172 ) Securities Lending Collateral (i) 93 18 — 111 136 36 — 172 DTE Electric Total $ 1,301 $ 946 $ 462 $ 2,709 $ 1,379 $ 983 $ 450 $ 2,812 _______________________________________ (a) For a description of levels within the fair value hierarchy, see Note 11 to the Consolidated Financial Statements, " Fair Value ". (b) This category predominantly represents certain short-term fixed income securities and money market investments that are managed in separate accounts or commingled funds. Pricing for investments in this category are obtained from quoted prices in actively traded markets or valuations from brokers or pricing services. (c) This category comprises both actively and not actively managed portfolios that track the S&P 500 low cost equity index funds. Investments in this category are exchange-traded securities whereby unadjusted quote prices can be obtained. Exchange-traded securities held in a commingled fund are classified as Level 2 assets. (d) This category represents portfolios of small and medium capitalization domestic equities. Investments in this category are exchange-traded securities whereby unadjusted quote prices can be obtained. Exchange-traded securities held in a commingled fund are classified as Level 2 assets. (e) This category primarily consists of portfolios of non-U.S. developed and emerging market equities. Investments in this category are exchange-traded securities whereby unadjusted quote prices can be obtained. Exchange-traded securities held in a commingled fund are classified as Level 2 assets. (f) This category includes corporate bonds from diversified industries, U.S. Treasuries, and mortgage-backed securities. Pricing for investments in this category is obtained from quoted prices in actively traded markets and quotations from broker or pricing services. Non-exchange traded securities and exchange-traded securities held in commingled funds are classified as Level 2 assets. (g) This category utilizes a diversified group of strategies that attempt to capture financial market inefficiencies and includes publicly traded debt and equity, publicly traded mutual funds, commingled and limited partnership funds, and non-exchange traded securities. Pricing for Level 1 and Level 2 assets in this category is obtained from quoted prices in actively traded markets and quoted prices from broker or pricing services. Non-exchange traded securities held in commingled funds are classified as Level 2 assets. Valuations for some Level 3 assets in this category may be based on limited observable inputs as there may be little, if any, publicly available pricing. (h) This category includes a diversified group of funds and strategies that primarily invests in private equity partnerships. This category also includes investments in timber and private mezzanine debt. Pricing for investments in this category is based on limited observable inputs as there is little, if any, publicly available pricing. Valuations for assets in this category may be based on discounted cash flow analyses, relevant publicly-traded comparables, and comparable transactions. (i) In 2014, the Registrants began a securities lending program with a third-party agent. The program allows the agent to lend certain securities from the Registrants' pension trusts to selected entities against receipt of collateral (in the form of cash) as provided for and determined in accordance with their securities lending agency agreements. The pension trust holds debt and equity securities directly and indirectly through commingled funds and institutional mutual funds. Exchange-traded debt and equity securities held directly are valued using quoted market prices in actively traded markets. The commingled funds and institutional mutual funds hold exchange-traded equity or debt securities and are valued based on stated NAVs. Non-exchange traded fixed income securities are valued by the trustee based upon quotations available from brokers or pricing services. A primary price source is identified by asset type, class, or issue for each security. The trustee monitors prices supplied by pricing services and may use a supplemental price source or change the primary price source of a given security if the trustee challenges an assigned price and determines that another price source is considered to be preferable. The Registrants have obtained an understanding of how these prices are derived, including the nature and observability of the inputs used in deriving such prices. Additionally, the Registrants selectively corroborate the fair values of securities by comparison of market-based price sources. The following table provides a reconciliation of beginning and ending balances of DTE Energy's pension plan assets measured at fair value on a recurring basis where the determination of fair value includes significant unobservable inputs (Level 3): Year Ended December 31, 2015 Year Ended December 31, 2014 Hedge Funds Private Equity Total Hedge Funds Private Equity Total (In millions) Beginning Balance at January 1 $ 438 $ 187 $ 625 $ 395 $ 170 $ 565 Total realized/unrealized gains (losses) 10 10 20 22 16 38 Purchases, sales, and settlements: Purchases 4 32 36 22 31 53 Sales — (39 ) (39 ) (1 ) (30 ) (31 ) Ending Balance at December 31 $ 452 $ 190 $ 642 $ 438 $ 187 $ 625 The amount of total gains for the period attributable to the change in unrealized gains or losses related to assets still held at the end of the period $ 10 $ (3 ) $ 7 $ 21 $ 11 $ 32 The following table provides a reconciliation of beginning and ending balances of DTE Electric's pension plan assets measured at fair value on a recurring basis where the determination of fair value includes significant unobservable inputs (Level 3): Year Ended December 31, 2015 Year Ended December 31, 2014 Hedge Funds Private Equity Total Hedge Funds Private Equity Total (In millions) Beginning Balance at January 1 $ 315 $ 135 $ 450 $ 285 $ 122 407 Total realized/unrealized gains (losses) 7 7 14 15 12 27 Purchases, sales, and settlements: Purchases 3 23 26 16 22 38 Sales — (28 ) (28 ) (1 ) (21 ) (22 ) Ending Balance at December 31 $ 325 $ 137 $ 462 $ 315 $ 135 $ 450 The amount of total gains for the period attributable to the change in unrealized gains or losses related to assets still held at the end of the period $ 7 $ (2 ) $ 5 $ 15 $ 8 $ 23 There were no transfers from or into Level 3 and there were no significant transfers between Level 2 and Level 1 in the years ended December 31, 2015 and 2014 for either of the Registrants. Other Postretirement Benefits The Registrants participate in defined benefit plans sponsored by the LLC that provide certain other postretirement health care and life insurance benefits for employees who are eligible for these benefits. The Registrants' policy is to fund certain trusts to meet its other postretirement benefit obligations. Separate qualified VEBA and other benefit trusts exist. DTE Energy contributed $199 million to these trusts, including $175 million of DTE Electric contributions, for the defined benefit other postretirement medical and life insurance benefit plans during 2015 . At the discretion of management, DTE Energy anticipates making up to $20 million of contributions, through contributions from DTE Gas, to the trusts in 2016 . Starting in 2012, in lieu of offering future employees defined benefit post-employment health care and life insurance benefits, the Registrants allocate a fixed amount per year to an account in a defined contribution VEBA for each employee. These accounts are managed either by the Registrant (for non-represented and certain represented groups) or by the Utility Workers of America (UWUA) for Local 223 employees. DTE Energy contributions to the VEBA for these accounts were $5 million in 2015 , $4 million in 2014 , and $2 million in 2013 , including DTE Electric contributions of $3 million in 2015 , $2 million in 2014 , and $1 million in 2013 . Beginning in 2013, the Registrants replaced the defined benefit employer-sponsored retiree medical, prescription drug, and dental coverage with a notional allocation to a Retiree Reimbursement Account. This change applies to both current and future Medicare eligible non-represented and future represented retirees, spouses, surviving spouses, or same sex domestic partners when the youngest of the retiree's covered household turns age 65 . The amount of the annual allocation to each participant is determined by the employee's retirement date, and increases each year for each eligible participant at the lower of the rate of medical inflation or 2% . Net other postretirement credit for DTE Energy includes the following components: 2015 2014 2013 (In millions) Service cost $ 34 $ 34 $ 47 Interest cost 81 89 88 Expected return on plan assets (131 ) (122 ) (110 ) Amortization of: Net actuarial loss 43 20 64 Prior service credit (126 ) (144 ) (131 ) Net other postretirement credit $ (99 ) $ (123 ) $ (42 ) 2015 2014 (In millions) Other changes in plan assets and accumulated postretirement benefit obligation recognized in Regulatory assets and Other comprehensive income (loss) Net actuarial (gain) loss $ (68 ) $ 192 Amortization of net actuarial loss (43 ) (20 ) Amortization of prior service credit 126 144 Total recognized in Regulatory assets and Other comprehensive income (loss) $ 15 $ 316 Total recognized in net periodic benefit cost, Regulatory assets, and Other comprehensive income (loss) $ (84 ) $ 193 Estimated amounts to be amortized from Regulatory assets and Accumulated other comprehensive income (loss) into net periodic benefit cost during next fiscal year Net actuarial loss $ 32 $ 43 Prior service credit $ (118 ) $ (126 ) Net other postretirement credit for DTE Electric includes the following components: 2015 2014 2013 (In millions) Service cost $ 25 $ 26 $ 35 Interest cost 62 68 67 Expected return on plan assets (90 ) (85 ) (74 ) Amortization of: Net actuarial loss 31 14 47 Prior service credit (95 ) (109 ) (100 ) Net other postretirement credit $ (67 ) $ (86 ) $ (25 ) 2015 2014 (In millions) Other changes in plan assets and accumulated postretirement benefit obligation recognized in Regulatory assets and Other comprehensive income (loss) Net actuarial (gain) loss $ (57 ) $ 144 Amortization of net actuarial loss (31 ) (14 ) Amortization of prior service credit 95 109 Total recognized in Regulatory assets and Other comprehensive income (loss) $ 7 $ 239 Total recognized in net periodic benefit cost, Regulatory assets, and Other comprehensive income (loss) $ (60 ) $ 153 Estimated amounts to be amortized from Regulatory assets and Accumulated other comprehensive income (loss) into net periodic benefit cost during next fiscal year Net actuarial loss $ 22 $ 31 Prior service credit $ (89 ) $ (94 ) The following table reconciles the obligations, assets, and funded status of the plans including amounts recorded as Accrued postretirement liability in the Registrants' Consolidated Statements of Financial Position at December 31: DTE Energy DTE Electric 2015 2014 2015 2014 (In millions) Change in accumulated postretirement benefit obligation Accumulated postretirement benefit obligation, beginning of year $ 2,044 $ 1,878 $ 1,558 $ 1,430 Service cost 34 34 25 26 Interest cost 81 89 62 68 Actuarial (gain) loss (224 ) 131 (166 ) 100 Benefits paid (89 ) (88 ) (65 ) (66 ) Accumulated postretirement benefit obligation, end of year $ 1,846 $ 2,044 $ 1,414 $ 1,558 Change in plan assets Plan assets at fair value, beginning of year $ 1,528 $ 1,527 $ 1,038 $ 1,061 Actual return on plan assets (25 ) 62 (19 ) 41 Company contributions 199 24 175 — Benefits paid (85 ) (85 ) (63 ) (64 ) Plan assets at fair value, end of year $ 1,617 $ 1,528 $ 1,131 $ 1,038 Funded status, end of year $ (229 ) $ (516 ) $ (283 ) $ (520 ) Amount recorded as: Noncurrent assets $ — $ — $ 24 $ — Current liabilities (1 ) (1 ) — — Noncurrent liabilities (228 ) (515 ) (307 ) (520 ) $ (229 ) $ (516 ) $ (283 ) $ (520 ) Amounts recognized in Accumulated other comprehensive income (loss), pre-tax Net actuarial loss $ 24 $ 34 $ — $ — Prior service credit (2 ) (5 ) — — $ 22 $ 29 $ — $ — Amounts recognized in Regulatory assets (see Note 8 - "Regulatory Matters") Net actuarial loss $ 387 $ 488 $ 297 $ 385 Prior service credit (131 ) (254 ) (99 ) (194 ) $ 256 $ 234 $ 198 $ 191 At December 31, 2015 , the benefits expected to be paid, including prescription drug benefits, in each of the next five years and in the aggregate for the five fiscal years thereafter for the Registrants are as follows: DTE Energy DTE Electric (In millions) 2016 $ 100 $ 77 2017 105 81 2018 108 84 2019 113 88 2020 116 90 2021-2025 621 476 Total $ 1,163 $ 896 Assumptions used in determining the accumulated postretirement benefit obligation and net other postretirement benefit costs of the Registrants are: 2015 2014 2013 Accumulated postretirement benefit obligation Discount rate 4.50% 4.10% 4.95% Health care trend rate pre- and post- 65 6.25 / 6.75% 7.50 / 6.50% 7.50 / 6.50% Ultimate health care trend rate 4.50% 4.50% 4.50% Year in which ultimate reached pre- and post- 65 2027 2025 / 2024 2025 / 2024 Other postretirement benefit costs Discount rate (prior to interim remeasurement) 4.10% 4.95% 4.15% Discount rate (post interim remeasurement) N/A N/A 4.30% Expected long-term rate of return on plan assets 8.00% 8.00% 8.25% Health care trend rate pre- and post- 65 7.50 / 6.50% 7.50 / 6.50% 7.00% Ultimate health care trend rate 4.50% 4.50% 5.00% Year in which ultimate reached pre- and post- 65 2025 / 2024 2025 / 2024 2021 A one percentage point increase in health care cost trend rates would have increased the total service cost and interest cost components of benefit costs for DTE Energy by $6 million , including $4 million for DTE Electric, in 2015 and would have increased the accumulated benefit obligation for DTE Energy by $100 million , including $74 million for DTE Electric, at December 31, 2015 . A one percentage point decrease in the health care cost trend rates would have decreased the total service and interest cost components of benefit costs for DTE Energy by $5 million , including $4 million for DTE Electric, in 2015 and would have decreased the accumulated benefit obligation for DTE Energy by $86 million , including $64 million for DTE Electric, at December 31, 2015 . The process used in determining the long-term rate of return for assets and the investment approach for the other postretirement benefit plans is similar to those previously described for the pension plans. Target allocations for the Registrants' other postretirement benefit plan assets as of December 31, 2015 are listed below: U.S. Large Cap Equity Securities 17 % U.S. Small Cap and Mid Cap Equity Securities 4 Non-U.S. Equity Securities 20 Fixed Income Securities 25 Hedge Funds and Similar Investments 20 Private Equity and Other 14 100 % The following tables provide the fair value measurement amounts for the Registrants' other postretirement benefit plan assets at December 31, 2015 and 2014 (a): December 31, 2015 December 31, 2014 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total DTE Energy asset category: (In millions) Short-term Investments (b) $ 7 $ — $ — $ 7 $ 6 $ — $ — $ 6 Equity Securities U.S. Large Cap (c) 264 — — 264 266 — — 266 U.S. Small Cap and Mid Cap (d) 138 — — 138 149 — — 149 Non-U.S. (e) 262 55 — 317 222 59 — 281 Fixed Income Securities (f) 23 390 — 413 15 360 — 375 Hedge Funds and Similar Investments (g) 109 45 171 325 107 45 168 320 Private Equity and Other (h) — — 153 153 — — 131 131 Securities Lending (i) (122 ) (6 ) — (128 ) (141 ) (17 ) — (158 ) Securities Lending Collateral (i) 122 6 — 128 141 17 — 158 DTE Energy Total $ 803 $ 490 $ 324 $ 1,617 $ 765 $ 464 $ 299 $ 1,528 DTE Electric asset category: Short-term Investments (b) $ 5 $ — $ — $ 5 $ 4 $ — $ — $ 4 Equity Securities U.S. Large Cap (c) 183 — — 183 179 — — 179 U.S. Small Cap and Mid Cap (d) 97 — — 97 102 — — 102 Non-U.S. (e) 184 37 — 221 151 39 — 190 Fixed Income Securities (f) 17 272 — 289 11 243 — 254 Hedge Funds and Similar Investments (g) 76 32 119 227 73 31 114 218 Private Equity and Other (h) — — 109 109 — — 91 91 Securities Lending (i) (87 ) (4 ) — (91 ) (98 ) (11 ) — (109 ) Securities Lending Collateral (i) 87 4 — 91 98 11 — 109 DTE Electric Total $ 562 $ 341 $ 228 $ 1,131 $ 520 $ 313 $ 205 $ 1,038 _______________________________________ (a) For a description of levels within the fair value hierarchy see Note 11 to the Consolidated Financial Statements, " Fair Value ". (b) This category predominantly represents certain short-term fixed income securities and money market investments that are managed in separate accounts or commingled funds. Pricing for investments in this category are obtained from quoted prices in actively traded markets or valuations from brokers or pricing services. (c) This category comprises both actively and not actively managed portfolios that track the S&P 500 low cost equity index funds. Investments in this category are exchange-traded securities whereby unadjusted quote prices can be obtained. Exchange-traded securities held in a commingled fund are classified as Level 2 assets. (d) This category represents portfolios of small and medium capitalization domestic equities. Investments in this category are exchange-traded securities whereby unadjusted quote prices can be obtained. Exchange-traded securities held in a commingled fund are classified as Level 2 assets. (e) This category primarily consists of portfolios of non-U.S. developed and emerging market equities. Investments in this category are exchange-traded securities whereby unadjusted quote prices can be obtained. Exchange-traded securities held in a commingled fund are classified as Level 2 assets. (f) This category includes corporate bonds from diversified industries, U.S. Treasuries, bank loans, and mortgage backed securities. Pricing for investments in this category is obtained from quoted prices in actively traded markets and quotations from broker or pricing services. Non-exchange traded securities and exchange-traded securities held in commingled funds are classified as Level 2 assets. (g) This category utilizes a diversified group of strategies that attempt to capture financial market inefficiencies and includes publicly traded debt and equity, publicly traded mutual funds, commingled and limited partnership funds, and non-exchange traded securities. Pricing for Level 1 and Level 2 assets in this category is obtained from quoted prices in actively traded markets and quoted prices from broker or pricing services. Non-exchange traded securities held in commingled funds are classified as Level 2 assets. Valuations for some Level 3 assets in this category may be based on limited observable inputs as there may be little, if any, publicly available pricing. (h) This category includes a diversified group of funds and strategies that primarily invests in private equity partnerships. This category also includes investments in timber and private mezzanine debt. Pricing for investments in this category is based on limited observable inputs as there is little, if any, publicly available pricing. Valuations for assets in this category may be based on discounted cash flow analyses, relevant publicly-traded comparables, and comparable transactions. (i) In 2014, the Registrants began a securities lending program with a third-party agent. The program allows the agent to lend certain securities from the Registrants' VEBA trust to selected entities against receipt of collateral (in the form of cash) as provided for and determined in accordance with their securities lending agency agreements. The DTE Energy Company Master VEBA Trust holds debt and equity securities directly and indirectly through commingled funds and institutional mutual funds. Exchange-traded debt and equity securities held directly are valued using quoted market prices in actively traded markets. The commingled funds and institutional mutual funds hold exchange-traded equity or debt securities and are valued based on NAVs. Non-exchange traded fixed income securities are valued by the trustee based upon quotations available from brokers or pricing services. A primary price source is identified by asset type, class, or issue for each security. The trustee monitors prices supplied by pricing services and may use a supplemental price source or change the primary price source of a given security if the trustee challenges an assigned price and determines that another price source is considered to be preferable. The Registrants have obtained an understanding of how these prices are derived, including the nature and observability of the inputs used in deriving such prices. Additionally, the Registrants selectively corroborate the fair values of securities by comparison of market-based price sources. The following table provides a reconciliation of beginning and ending balances of DTE Energy's other postretirement benefit plan assets measured at fair value on a recurring basis where the determination of fair value includes significant unobservable inputs (Level 3): Year Ended December 31, 2015 Year Ended December 31, 2014 Hedge Funds Private Total Hedge Funds Private Total (In millions) Beginning Balance at January 1 $ 168 $ 131 $ 299 $ 159 $ 101 $ 260 Total realized/unrealized gains (losses) 4 9 13 8 9 17 Purchases, sales, and settlements: Purchases 11 34 45 9 33 42 Sales (12 ) (21 ) (33 ) (8 ) (12 ) (20 ) Ending Balance at December 31 $ 171 $ 153 $ |