Compensation and Benefit Plans | Compensation and Benefit Plans Employee Savings Plan The 401(k) defined contribution savings plan is designed to supplement employees' retirement income. The following employer contributions were made for continuing operations: Edison International SCE (in millions) Years ended December 31, 2015 $ 73 $ 72 2014 71 70 2013 76 76 Pension Plans and Postretirement Benefits Other Than Pensions Pension Plans Noncontributory defined benefit pension plans (some with cash balance features) cover most employees meeting minimum service requirements. SCE recognizes pension expense for its nonexecutive plan as calculated by the actuarial method used for ratemaking. The expected contributions (all by the employer) for Edison International and SCE are approximately $123 million and $94 million , respectively, for the year ending December 31, 2016 . 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. The funded position of Edison International's pension is sensitive to changes in market conditions. Changes in overall interest rate levels significantly affect the company's liabilities, while assets held in the various trusts established to fund Edison International's pension are affected by movements in the equity and bond markets. Due to SCE's regulatory recovery treatment, a regulatory asset has been recorded equal to the unfunded status (See Note 1). Information on pension plan assets and benefit obligations for continuing and discontinued operations is shown below. Edison International SCE Years ended December 31, (in millions) 2015 2014 2015 2014 Change in projected benefit obligation Projected benefit obligation at beginning of year $ 4,517 $ 4,178 $ 3,999 $ 3,721 Service cost 142 133 133 124 Interest cost 170 181 150 159 Actuarial (gain) loss (149 ) 469 (143 ) 386 Curtailment gain — (5 ) — — Benefits paid (305 ) (449 ) (261 ) (391 ) Other (1 ) 10 — — Projected benefit obligation at end of year $ 4,374 $ 4,517 $ 3,878 $ 3,999 Change in plan assets Fair value of plan assets at beginning of year $ 3,454 $ 3,477 $ 3,217 $ 3,236 Actual return on plan assets 30 257 27 240 Employer contributions 119 169 97 132 Benefits paid (305 ) (449 ) (261 ) (391 ) Fair value of plan assets at end of year $ 3,298 $ 3,454 $ 3,080 $ 3,217 Funded status at end of year $ (1,076 ) $ (1,063 ) $ (798 ) $ (782 ) Amounts recognized in the consolidated balance sheets consist of 1 : Current liabilities $ (27 ) $ (27 ) $ (4 ) $ (5 ) Long-term liabilities (1,049 ) (1,036 ) (794 ) (777 ) $ (1,076 ) $ (1,063 ) $ (798 ) $ (782 ) Amounts recognized in accumulated other comprehensive loss consist of: Net loss 1 $ 96 $ 102 $ 27 $ 31 Amounts recognized as a regulatory asset: Prior service cost $ 15 $ 20 $ 15 $ 20 Net loss 660 640 660 640 $ 675 $ 660 $ 675 $ 660 Total not yet recognized as expense $ 771 $ 762 $ 702 $ 691 Accumulated benefit obligation at end of year $ 4,200 $ 4,356 $ 3,744 $ 3,881 Pension plans with an accumulated benefit obligation in excess of plan assets: Projected benefit obligation $ 4,374 $ 4,517 $ 3,878 $ 3,999 Accumulated benefit obligation 4,200 4,356 3,744 3,881 Fair value of plan assets 3,298 3,454 3,080 3,217 Weighted-average assumptions used to determine obligations at end of year: Discount rate 4.18 % 3.85 % 4.18 % 3.85 % Rate of compensation increase 4.00 % 4.00 % 4.00 % 4.00 % 1 The SCE liability excludes a long-term payable due to Edison International Parent of $123 million and $121 million at December 31, 2015 and 2014 , respectively, related to certain SCE postretirement benefit obligations transferred to Edison International Parent. SCE's accumulated other comprehensive loss of $27 million and $31 million at December 31, 2015 and 2014 , respectively, excludes net loss of $ 18 million and $22 million related to these benefits. In 2015 and 2014, Edison International and SCE adopted new mortality tables that the Society of Actuaries released in October each year that reflect changes in life expectancy. At December 31, 2015 and 2014, this adoption resulted in a change in Edison International's pension plans' projected benefit obligation of $(34) million and $214 million , respectively, including $(31) million and $199 million , respectively, for SCE. Pension expense components for continuing operations are: Edison International SCE Years ended December 31, (in millions) 2015 2014 2013 2015 2014 2013 Service cost $ 142 $ 133 $ 162 $ 139 $ 128 $ 159 Interest cost 170 181 170 155 164 167 Expected return on plan assets (233 ) (229 ) (222 ) (217 ) (213 ) (222 ) Settlement costs 1 — 45 87 — 42 85 Curtailment gain — (4 ) — — — — Amortization of prior service cost 5 5 5 5 5 5 Amortization of net loss 2 40 12 39 35 7 35 Expense under accounting standards 124 143 241 117 133 229 Regulatory adjustment (deferred) (6 ) 8 (53 ) (6 ) 8 (53 ) Total expense recognized $ 118 $ 151 $ 188 $ 111 $ 141 $ 176 1 Includes the amount of net loss reclassified from other comprehensive loss. The amount reclassified for Edison International was zero for the year ended December 31, 2015 and $3 million for the year ended December 31, 2014 . 2 Includes the amount of net loss reclassified from other comprehensive loss. The amount reclassified for Edison International and SCE was $14 million and $8 million , respectively, for the year ended December 31, 2015 . The amount reclassified for Edison International and SCE was $9 million and $4 million , respectively, for the year ended December 31, 2014 . Under GAAP, a settlement is recorded when lump-sum payments exceed estimated annual service and interest costs. Lump-sum payments to employees retiring in 2014 and 2013 from the SCE Retirement Plan (primarily due to workforce reductions described below) exceeded the estimated service and interest costs for those years. A settlement requires re-measurement of both the plan pension obligations and plan assets as of the date of the settlement. Re-measurement assumption changes result in actuarial gains and losses which are combined with previous unrecognized gains and losses. 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 SCE Retirement Plan experienced total actuarial losses of $374 million , including $357 million for SCE during 2014. The actuarial losses in 2014 were primarily due to a decrease in the discount rate (from 4.75% at December 31, 2013 to 4.00% as of August 31, 2014 and 3.85% as of December 31, 2014) due to lower interest rates. Other changes in pension plan assets and benefit obligations recognized in other comprehensive loss for continuing operations: Edison International SCE Years ended December 31, (in millions) 2015 2014 2013 2015 2014 2013 Net loss (gain) $ 7 $ 85 $ (33 ) $ (9 ) $ 37 $ (24 ) Amortization of net loss and other (15 ) (13 ) (13 ) (9 ) (4 ) (7 ) Total recognized in other comprehensive loss $ (8 ) $ 72 $ (46 ) $ (18 ) $ 33 $ (31 ) Total recognized in expense and other comprehensive loss $ 110 $ 223 $ 142 $ 93 $ 174 $ 145 In accordance with authoritative guidance on rate-regulated enterprises, SCE records regulatory assets and liabilities instead of charges and credits to other comprehensive income (loss) for the portion of SCE's postretirement benefit plans that are recoverable in utility rates. The estimated pension amounts that will be amortized to expense in 2016 for continuing operations are as follows: (in millions) Edison International SCE Unrecognized net loss to be amortized 1 $ 36 $ 32 Unrecognized prior service cost to be amortized 4 4 1 The amount of net loss expected to be reclassified from other comprehensive loss for Edison International's continuing operations and SCE is $11 million and $6 million , respectively. Edison International and SCE used the following weighted-average assumptions to determine pension expense for continuing operations: Years ended December 31, 2015 2014 2013 Discount rate 3.85 % 4.50 % 4.13 % Rate of compensation increase 4.00 % 4.00 % 4.50 % Expected long-term return on plan assets 7.00 % 7.00 % 7.00 % The following benefit payments, which reflect expected future service, are expected to be paid: Edison International SCE (in millions) Years ended December 31, 2016 $ 311 $ 265 2017 310 270 2018 314 280 2019 327 286 2020 327 290 2021 – 2025 1,590 1,447 Postretirement Benefits Other Than Pensions ("PBOP(s)") Most employees retiring at or after age 55 with at least 10 years of service may be eligible for postretirement medical, dental, vision and life insurance benefits. Eligibility for a company contribution toward the cost of these benefits in retirement depends on a number of factors, including the employee's years of service, hire date, and retirement date. 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. The expected contributions (substantially all of which are expected to be made by SCE) for PBOP benefits are $33 million for the year ended December 31, 2016 . Annual contributions related to SCE employees 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. SCE has established three voluntary employee beneficiary associations trusts ("VEBA Trusts") that can only be used to pay for retiree health care benefits of SCE. Once funded into the VEBA Trusts, neither SCE nor Edison International can subsequently terminate benefits and recover remaining amounts in the VEBA Trusts. Participants of the PBOP Plan do not have a beneficial interest in the VEBA Trusts. The VEBA Trust assets are sensitive to changes in market conditions. Changes in overall interest rate levels significantly affect the company's liabilities, while assets held in the various trusts established to fund Edison International's other postretirement benefits are affected by movements in the equity and bond markets. Due to SCE's regulatory recovery treatment, the unfunded status is offset by a regulatory asset. Information on PBOP Plan assets and benefit obligations is shown below: Edison International SCE Years ended December 31, (in millions) 2015 2014 2015 2014 Change in benefit obligation Benefit obligation at beginning of year $ 2,784 $ 2,220 $ 2,775 $ 2,211 Service cost 46 40 46 40 Interest cost 102 117 102 117 Special termination benefits (2 ) 3 (2 ) 3 Actuarial (gain) loss (500 ) 582 (500 ) 582 Plan participants' contributions 20 19 20 19 Benefits paid (100 ) (197 ) (100 ) (197 ) Benefit obligation at end of year $ 2,350 $ 2,784 $ 2,341 $ 2,775 Change in plan assets Fair value of plan assets at beginning of year $ 2,086 $ 2,065 $ 2,086 $ 2,065 Actual return on assets 6 180 6 180 Employer contributions 24 19 24 19 Plan participants' contributions 20 19 20 19 Benefits paid (100 ) (197 ) (100 ) (197 ) Fair value of plan assets at end of year $ 2,036 $ 2,086 $ 2,036 $ 2,086 Funded status at end of year $ (314 ) $ (698 ) $ (305 ) $ (689 ) Amounts recognized in the consolidated balance sheets consist of: Current liabilities $ (15 ) $ (15 ) $ (15 ) $ (15 ) Long-term liabilities (299 ) (683 ) (290 ) (674 ) $ (314 ) $ (698 ) $ (305 ) $ (689 ) Amounts recognized in accumulated other comprehensive loss consist of: Net loss $ 4 $ 4 $ — $ — Amounts recognized as a regulatory (liability) asset: Prior service credit $ (9 ) $ (19 ) $ (9 ) $ (19 ) Net loss 183 577 183 577 $ 174 $ 558 $ 174 $ 558 Total not yet recognized as expense $ 178 $ 562 $ 174 $ 558 Weighted-average assumptions used to determine obligations at end of year: Discount rate 4.55 % 4.16 % 4.55 % 4.16 % Assumed health care cost trend rates: Rate assumed for following year 7.50 % 7.75 % 7.50 % 7.75 % Ultimate rate 5.00 % 5.00 % 5.00 % 5.00 % Year ultimate rate reached 2022 2021 2022 2021 During 2015, the PBOP plan had actuarial gains of $500 million primarily related to $300 million in experience gains, $140 million of income from an increase in the discount rate (from 4.16% at December 31, 2014 to 4.55% as of December 31, 2015) due to higher interest rates, and the adoption of new mortality tables, as discussed below. In 2015 and 2014, Edison International and SCE adopted new mortality tables that the Society of Actuaries released in October each year that reflect changes in life expectancy. At December 31, 2015 and 2014, this adoption resulted in a change in Edison International's PBOP plans' accumulated postretirement benefit obligation of $(62) million and $308 million , respectively, including $(61) million and $307 million , respectively, for SCE. PBOP expense components for continuing operations are: Edison International SCE Years ended December 31, (in millions) 2015 2014 2013 2015 2014 2013 Service cost $ 46 $ 40 $ 49 $ 46 $ 40 $ 48 Interest cost 102 117 98 102 117 97 Expected return on plan assets (116 ) (108 ) (114 ) (116 ) (108 ) (114 ) Special termination benefits 1 1 3 11 1 3 11 Amortization of prior service credit (12 ) (36 ) (36 ) (12 ) (35 ) (35 ) Amortization of net loss 3 6 24 2 5 24 Total expense $ 24 $ 22 $ 32 $ 23 $ 22 $ 31 1 Due to the reduction in workforce, SCE has incurred costs for extended retiree health care coverage. In accordance with authoritative guidance on rate-regulated enterprises, SCE records regulatory assets and liabilities instead of charges and credits to other comprehensive income (loss) for the portion of SCE's postretirement benefit plans that are recoverable in utility rates. The estimated PBOP amounts that will be amortized to expense in 2016 for continuing operations are as follows: Edison International SCE Unrecognized prior service credit to be amortized $ (3 ) $ (3 ) Edison International and SCE used the following weighted-average assumptions to determine PBOP expense for continuing operations: Years ended December 31, 2015 2014 2013 Discount rate 4.16 % 5.00 % 4.25 % Expected long-term return on plan assets 5.50 % 5.50 % 6.70 % Assumed health care cost trend rates: Current year 7.75 % 7.75 % 8.50 % Ultimate rate 5.00 % 5.00 % 5.00 % Year ultimate rate reached 2021 2020 2020 A one-percentage-point change in assumed health care cost trend rate would have the following effects on continuing operations: Edison International SCE (in millions) One-Percentage-Point Increase One-Percentage-Point Decrease One-Percentage-Point Increase One-Percentage-Point Decrease Effect on accumulated benefit obligation as of December 31, 2015 $ 251 $ (206 ) $ 250 $ (205 ) Effect on annual aggregate service and interest costs 12 (9 ) 12 (9 ) The following benefit payments are expected to be paid: Edison International SCE (in millions) Years ended December 31, 2016 $ 101 $ 101 2017 106 106 2018 111 110 2019 115 114 2020 119 118 2021 – 2025 649 646 Plan Assets Description of Pension and Postretirement Benefits Other than Pensions Investment Strategies The investment of plan assets is overseen by a fiduciary investment committee. Plan assets are invested using a combination of asset classes, and may have active and passive investment strategies within asset classes. Target allocations for 2015 pension plan assets were 29% for U.S. equities, 17% for non-U.S. equities, 35% for fixed income, 15% for opportunistic and/or alternative investments and 4% for other investments. Target allocations for 2015 PBOP plan assets (except for Represented VEBA which is 85% for fixed income, 10% for opportunistic/private equities, and 5% global equities) are 41% for U.S. equities, 17% for non-U.S. equities, 34% for fixed income, 7% for opportunistic and/or alternative investments, and 1% for other investments. Edison International employs multiple investment management firms. Investment managers within each asset class cover a range of investment styles and approaches. Risk is managed through diversification among multiple asset classes, managers, styles and securities. Plan asset classes and individual manager performances are measured against targets. Edison International also monitors the stability of its investment managers' organizations. Allowable investment types include: • United States Equities: Common and preferred stocks of large, medium, and small companies which are predominantly United States-based. • Non-United States Equities: Equity securities issued by companies domiciled outside the United States and in depository receipts which represent ownership of securities of non-United States companies. • Fixed Income: Fixed income securities issued or guaranteed by the United States government, non-United States governments, government agencies and instrumentalities including municipal bonds, mortgage backed securities and corporate debt obligations. A portion of the fixed income positions may be held in debt securities that are below investment grade. Opportunistic, Alternative and Other Investments: • Opportunistic: Investments in short to intermediate term market opportunities. Investments may have fixed income and/or equity characteristics and may be either liquid or illiquid. • Alternative: Limited partnerships that invest in non-publicly traded entities. • Other: Investments diversified among multiple asset classes such as global equity, fixed income currency and commodities markets. Investments are made in liquid instruments within and across markets. The investment returns are expected to approximate the plans' expected investment returns. Asset class portfolio weights are permitted to range within plus or minus 3% . Where approved by the fiduciary investment committee, futures contracts are used for portfolio rebalancing and to reallocate portfolio cash positions. Where authorized, a few of the plans' investment managers employ limited use of derivatives, including futures contracts, options, options on futures and interest rate swaps in place of direct investment in securities to gain efficient exposure to markets. Derivatives are not used to leverage the plans or any portfolios. Determination of the Expected Long-Term Rate of Return on Assets The overall expected long-term rate of return on assets assumption is based on the long-term target asset allocation for plan assets and capital markets return forecasts for asset classes employed. A portion of the PBOP trust asset returns are subject to taxation, so the expected long-term rate of return for these assets is determined on an after-tax basis. Capital Markets Return Forecasts SCE's capital markets return forecast methodologies primarily use a combination of historical market data, current market conditions, proprietary forecasting expertise, complex models to develop asset class return forecasts and a building block approach. The forecasts are developed using variables such as real risk-free interest, inflation, and asset class specific risk premiums. For equities, the risk premium is based on an assumed average equity risk premium of 5% over cash. The forecasted return on private equity and opportunistic investments are estimated at a 2% premium above public equity, reflecting a premium for higher volatility and lower liquidity. For fixed income, the risk premium is based off of a comprehensive modeling of credit spreads. Fair Value of Plan Assets The PBOP Plan and the Southern California Edison Company Retirement Plan Trust (Master Trust) assets include investments in equity securities, U.S. treasury securities, other fixed-income securities, common/collective funds, mutual funds, other investment entities, foreign exchange and interest rate contracts, and partnership/joint ventures. Equity securities, U.S. treasury securities, mutual and money market funds are classified as Level 1 as fair value is determined by observable, unadjusted quoted market prices in active or highly liquid and transparent markets. Common/collective funds are valued at the net asset value ("NAV") of shares held. Although common/collective funds are determined by observable prices, they are classified as Level 2 because they trade in markets that are less active and transparent. The fair value of the underlying investments in equity mutual funds and equity common/collective funds are based upon stock-exchange prices. The fair value of the underlying investments in fixed-income common/collective funds, fixed-income mutual funds and other fixed income securities including municipal bonds are based on evaluated prices that reflect significant observable market information such as reported trades, actual trade information of similar securities, benchmark yields, broker/dealer quotes, issuer spreads, bids, offers and relevant credit information. Foreign exchange and interest rate contracts are classified as Level 2 because the values are based on observable prices but are not traded on an exchange. Futures contracts trade on an exchange and therefore are classified as Level 1. The partnerships classified as Level 2 can be readily redeemed at NAV and the underlying investments are liquid, publicly traded fixed-income securities which have observable prices. The remaining partnerships/joint ventures are classified as Level 3 because fair value is determined primarily based upon management estimates of future cash flows. Other investment entities are valued similarly to common/collective funds and are therefore classified as Level 2. The Level 1 registered investment companies are either mutual or money market funds. The remaining funds in this category are readily redeemable at NAV and classified as Level 2 and are discussed further at footnote 7 to the pension plan master trust investments table below. Edison International reviews the process/procedures of both the pricing services and the trustee to gain an understanding of the inputs/assumptions and valuation techniques used to price each asset type/class. The trustee and Edison International's validation procedures for pension and PBOP equity and fixed income securities are the same as the nuclear decommissioning trusts. For further discussion see Note 4. The values of Level 1 mutual and money market funds are publicly quoted. The trustees obtain the values of common/collective and other investment funds from the fund managers. The values of partnerships are based on partnership valuation statements updated for cash flows. SCE's investment managers corroborate the trustee fair values. Pension Plan The following table sets forth the Master Trust investments for Edison International and SCE that were accounted for at fair value as of December 31, 2015 by asset class and level within the fair value hierarchy: (in millions) Level 1 Level 2 Level 3 Total U.S. government and agency securities 1 $ 127 $ 298 $ — $ 425 Corporate stocks 2 720 16 — 736 Corporate bonds 3 — 755 — 755 Common/collective funds 4 — 640 — 640 Partnerships/joint ventures 5 — 111 214 325 Other investment entities 6 — 263 — 263 Registered investment companies 7 117 4 — 121 Interest-bearing cash 6 — — 6 Other 1 96 — 97 Total $ 971 $ 2,183 $ 214 $ 3,368 Receivables and payables, net (70 ) Net plan assets available for benefits $ 3,298 SCE's share of net plan assets $ 3,080 The following table sets forth the Master Trust investments that were accounted for at fair value as of December 31, 2014 by asset class and level within the fair value hierarchy: (in millions) Level 1 Level 2 Level 3 Total U.S. government and agency securities 1 $ 140 $ 329 $ — $ 469 Corporate stocks 2 716 14 — 730 Corporate bonds 3 — 801 — 801 Common/collective funds 4 — 524 — 524 Partnerships/joint ventures 5 — 110 289 399 Other investment entities 6 — 278 — 278 Registered investment companies 7 113 30 — 143 Interest-bearing cash 10 — — 10 Other 5 100 — 105 Total $ 984 $ 2,186 $ 289 $ 3,459 Receivables and payables, net (5 ) Net plan assets available for benefits $ 3,454 SCE's share of net plan assets $ 3,217 1 Level 1 U.S. government and agency securities are U.S. treasury bonds and notes. Level 2 primarily relates to the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. 2 Corporate stocks are diversified. For both 2015 and 2014 , performance for actively managed separate accounts is primarily benchmarked against the Russell Indexes ( 59% ) and Morgan Stanley Capital International (MSCI) index ( 41% ). 3 Corporate bonds are diversified. At December 31, 2015 and 2014 , respectively, this category includes $123 million and $102 million for collateralized mortgage obligations and other asset backed securities of which $25 million and $15 million are below investment grade. 4 At December 31, 2015 and 2014 , respectively, the common/collective assets were invested in equity index funds that seek to track performance of the Standard and Poor's (S&P 500) Index ( 46% and 32% ), Russell 1000 indexes ( 14% and 18% ) and the MSCI Europe, Australasia and Far East (EAFE) Index ( 16% and 20% ). A non-index U.S. equity fund representing 22% and 27% of this category for 2015 and 2014 , respectively, is actively managed. 5 Partnerships/joint venture Level 2 investments consist primarily of a partnership which invests in publicly traded fixed income securities. At December 31, 2015 and 2014 , respectively, 22% and 55% of the Level 3 partnerships are invested in (1) asset backed securities, including distressed mortgages and (2) commercial and residential loans and debt and equity of banks. At December 31, 2015 and 2014 , respectively, 78% and 45% of the Level 3 partnerships are invested in private equity funds with investment strategies that include branded consumer products, clean technology and California geographic focus companies. 6 Other investment entities were primarily invested in (1) emerging market equity securities, (2) a hedge fund that invests through liquid instruments in a global diversified portfolio of equity, fixed income, interest rate, foreign currency and commodities markets, and (3) domestic mortgage backed securities. 7 Level 1 of registered investment companies primarily consisted of a global equity mutual fund which seeks to outperform the MSCI World Total Return Index. Level 2 primarily consisted of a short-term bond fund. At December 31, 2015 and 2014 , approximately 63% and 65% , respectively, of the publicly traded equity investments, including equities in the common/collective funds, were located in the United States. The following table sets forth a summary of changes in the fair value of Edison International's and SCE's Level 3 investments: (in millions) 2015 2014 Fair value, net at beginning of period $ 289 $ 390 Actual return on plan assets: Relating to assets still held at end of period 47 114 Relating to assets sold during the period (17 ) (44 ) Purchases 38 13 Dispositions (143 ) (184 ) Transfers in and/or out of Level 3 — — Fair value, net at end of period $ 214 $ 289 Postretirement Benefits Other than Pensions The following table sets forth the VEBA Trust assets for SCE that were accounted for at fair value as of December 31, 2015 by asset class and level within the fair value hierarchy: (in millions) Level 1 Level 2 Level 3 Total Common/collective funds 1 $ — $ 424 $ — $ 424 Corporate stocks 2 222 — — 222 Corporate notes and bonds 3 — 867 — 867 Partnerships 4 — 20 73 93 U.S. government and agency securities 5 200 42 — 242 Registered investment companies 6 60 3 — 63 Interest bearing cash 31 — — 31 Other 7 5 113 — 118 Total $ 518 $ 1,469 $ 73 $ 2,060 Receivables and payables, net (24 ) Combined net plan assets available for benefits $ 2,036 The following table sets forth the VEBA Trust assets for SCE that were accounted for at fair value as of December 31, 2014 by asset class and level within the fair value hierarchy: (in millions) Level 1 Level 2 Level 3 Total Common/collective funds 1 $ — $ 431 $ — $ 431 Corporate stocks 2 250 — — 250 Corporate notes and bonds 3 — 883 — 883 Partnerships 4 — 19 105 124 U.S. government and agency securities 5 207 36 — 243 Registered investment companies 6 64 5 — 69 Interest bearing cash 29 — — 29 Other 7 5 125 — 130 Total $ 555 $ 1,499 $ 105 $ 2,159 Receivables and payables, net (73 ) Combined net plan assets available for benefits $ 2,086 1 At both December 31, 2015 and 2014 , 38% of the common/collective assets are invested in a large cap index fund which seeks to track performance of the Russell 1000 index. 41% of the assets in this category are in index funds which seek to track performance in the MSCI All Country World Index Investable Market Index and MSCI Europe, Australasia and Far East (EAFE) Index. 17% in a non-index U.S. equity fund which is actively managed. 2 Corporate stock performance for actively managed separate accounts is primarily benchmarked against the Russell Indexes ( 47% ) and the MSCI All Country World Index ( 53% ) for both 2015 and 2014 . 3 Corporate notes and bonds are diversified and include approximately $27 million and $31 million for commercial collateralized mortgage obligations and other asset backed securities at December 31, 2015 and 2014 , respectively. 4 At December 31, 2015 and 2014 , respectively, 29% and 50% of the Level 3 partnerships category is invested in (1) asset backed securities including distressed mortgages, (2) distressed companies and (3) commercial and residential loans and debt and equity of banks. At December 31, 2015 and 2014 , respectively, 71% and 50% of the Level 3 partnerships are invested in private equity and venture capital funds. Investment strategies for these funds include branded consumer products, clean and information technology and healthcare. 5 Level 1 U.S. government and agency securities are U.S. treasury bonds and notes. Level 2 primarily relates to the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association. 6 Level 1 registered investment companies consist of a money market fund. 7 Other includes $97 million and $111 million of municipal securities at December 31, 2015 and 2014 , respectively. At both December 31, 2015 and 2014 , approximately 71% of the publicly traded equity investments, including equities in the common/collective funds, were located in the United States. The following table sets forth a summary of changes in the fair value of PBOP Level 3 investments: (in millions) 2015 2014 Fair value, net at beginning of period $ 105 $ 164 Actual return on plan assets Relating to assets still held at end of period (6 ) 18 Relating to assets sold during the period 15 (1 ) Purchases 7 9 Dispositions (47 ) (85 ) Transfers in and/or out of Level 3 — — Fair value, net at end of period $ 74 $ 105 Stock-Based Compensation Edison International maintains a shareholder approved incentive plan (the 2007 Performance Incentive Plan) that includes stock-based compensation. The maximum number of shares of Edison International's common stock authorized to be issued or transferred pursuant to awards under the 2007 Performance Incentive Plan, as amended, is 49.5 million shares, plus the number of any shares subject to awards issued under Edison International's prior plans and outstanding as of April 26, 2007, which expire, cancel or terminate without being exercised or shares being issued ("carry-over shares"). As of December 31, 2015 , Edison International had approximately 18 million shares remaining for future issuance under its stock-based compensation plans. The following table summarizes total expense and tax benefits (expense) associated with stock based compensation: Edison International SCE Years ended December 31, (in millions) 2015 2014 2013 2015 2014 2013 Stock-based compensation expense 1 : Stock options $ 14 $ 16 $ 15 $ 8 $ 8 $ 11 Performance shares 7 16 4 4 8 2 Restricted stock units 7 7 7 4 4 4 Other 1 1 1 — — — Total stock-based compensation expense $ 29 $ 40 $ 27 $ 16 $ 20 $ 17 Income tax benefits related to stock compensation expense $ 12 $ 16 $ 11 $ 7 $ 8 $ 7 Excess tax benefits 2 15 15 5 23 20 2 1 Reflected in "Operation and maintenance" on Edison International's and SCE's consolidated statements of income. 2 Reflected in "Settl |