v3.24.0.1
Employee Future Benefits
 12 Months Ended
Dec. 31, 2023
Retirement Benefits [Abstract]  
Employee Future Benefits EMPLOYEE FUTURE BENEFITS
For defined benefit pension and OPEB plans, the benefit obligation and fair value of plan assets are measured as at December 31.

For the Corporation's Canadian and Caribbean subsidiaries, actuarial valuations to determine funding contributions for pension plans are required at least every three years. The most recent valuations were as of December 31, 2020 for the Corporation; December 31, 2021 for certain FortisBC Energy and FortisBC Electric plans; December 31, 2022 for the remaining FortisBC Energy and FortisBC Electric plans, Newfoundland Power, FortisAlberta and FortisOntario; and December 31, 2023 for Caribbean Utilities.

ITC, UNS Energy and Central Hudson perform annual actuarial valuations as their funding requirements are based on maintaining minimum annual targets, all of which have been met.

The Corporation's investment policy is to ensure that the defined benefit pension and OPEB plan assets, together with expected contributions, are invested in a prudent and cost-effective manner to optimally meet the liabilities of the plans. The investment objective is to maximize returns in order to manage the funded status of the plans and minimize the Corporation's cost over the long term, as measured by both cash contributions and recognized expense.
Allocation of Plan Assets2023 Target Allocation
(weighted average %)2023 2022 
Equities47 46 48 
Fixed income46 45 43 
Real estate6 8 8 
Cash and other1 1 1 
100 100 100 

Fair Value of Plan Assets
($ millions)
Level 1 (1)
Level 2 (1)
Level 3 (1)
Total
2023
Equities666 1,059 — 1,725 
Fixed income232 1,447 — 1,679 
Real estate— — 291 291 
Cash and other34 14 — 48 
932 2,520 291 3,743 
2022
Equities666 1,005 — 1,671 
Fixed income199 1,289 — 1,488 
Real estate— — 282 282 
Cash and other5 22 — 27 
870 2,316 282 3,468 
(1)    See Note 26 for a description of the fair value hierarchy.

The following table reconciles the changes in the fair value of plan assets that have been measured using Level 3 inputs.
($ millions)2023 2022 
Balance, beginning of year282 256 
Return on plan assets(9)28 
Foreign currency translation (1)3 
Purchases, sales and settlements19 (5)
Balance, end of year291 282 
Funded StatusDefined Benefit
Pension Plans		OPEB Plans
($ millions)2023 2022 2023 2022 
Change in benefit obligation (1)
Balance, beginning of year3,063 3,922 582 747 
Service costs62 106 22 35 
Employee contributions17 18 3 3 
Interest costs159 114 30 21 
Benefits paid(169)(195)(31)(29)
Actuarial losses (gains)255 (1,026)(1)(225)
Foreign currency translation(40)124 (9)30 
Balance, end of year (2)
3,347 3,063 596 582 
Change in value of plan assets
Balance, beginning of year3,079 3,722 389 440 
Actual return on plan assets373 (651)61 (77)
Benefits paid(162)(187)(26)(24)
Employee contributions17 18 3 3 
Employer contributions46 54 13 19 
Foreign currency translation(40)123 (10)28 
Balance, end of year3,313 3,079 430 389 
Funded status(34)16 (166)(193)
Balance sheet presentation
Other assets (Note 9)236 188 119 86 
Other current liabilities (Note 13)(15)(15)(13)(13)
Other liabilities (Note 16)(255)(157)(272)(266)
(34)16 (166)(193)
(1)Amounts reflect projected benefit obligation for defined benefit pension plans and accumulated benefit obligation for OPEB plans.
(2)The accumulated benefit obligation, which excludes assumptions about future salary levels, for defined benefit pension plans was $2,983 million as at December 31, 2023 (2022 - $2,818 million).

For those defined benefit pension plans for which the projected benefit obligation exceeded the fair value of plan assets as at December 31, 2023, the obligation was $1,940 million compared to plan assets of $1,681 million (2022 - $978 million and $790 million, respectively).

For those defined benefit pension plans for which the accumulated benefit obligation exceeded the fair value of plan assets as at December 31, 2023, the obligation was $268 million compared to plan assets of $130 million (2022 - $833 million and $790 million, respectively).

For those OPEB plans for which the accumulated benefit obligation exceeded the fair value of plan assets as at December 31, 2023, the obligation was $320 million compared to plan assets of $36 million (2022 - $310 million and $31 million, respectively).

Net Benefit Cost (1)
Defined Benefit
Pension Plans		OPEB Plans
($ millions)2023 2022 2023 2022 
Service costs62 106 22 35 
Interest costs159 114 30 21 
Expected return on plan assets(202)(194)(22)(23)
Amortization of actuarial (gains) losses(9)4 (19)(10)
Amortization of past service credits/plan amendments(1)(1)(1)(1)
Regulatory adjustments12 (10)5 4 
21 19 15 26 
(1)    The non-service benefit cost components of net periodic benefit cost are included in other income, net in the consolidated statements of earnings.
The following table summarizes the accumulated amounts of net benefit cost that have not yet been recognized in earnings or comprehensive income and shows their classification on the consolidated balance sheets.
Defined Benefit
Pension Plans		OPEB Plans
($ millions)2023 2022 2023 2022 
Unamortized net actuarial losses (gains)
12 9 (10)(11)
Unamortized past service costs
1 1 6 7 
Income tax (recovery) expense(3)(2)1 1 
Accumulated other comprehensive income10 8 (3)(3)
Net actuarial losses (gains)189 103 (215)(195)
Past service credits(2)(4)(3)(4)
Other regulatory deferrals(11)(6)2 7 
176 93 (216)(192)
Regulatory assets (Note 8)254 207 — — 
Regulatory liabilities (Note 8)(78)(114)(216)(192)
Net regulatory assets (liabilities)176 93 (216)(192)

The following table summarizes the components of net benefit cost recognized in comprehensive income or as regulatory assets (liabilities).
Defined Benefit
Pension Plans		OPEB Plans
($ millions)2023 2022 2023 2022 
Current year net actuarial losses (gains)4 (23)1 (6)
Past service cost/plan amendments— — (1)— 
Amortization of actuarial losses— 1 — — 
Foreign currency translation(1)(2)— — 
Income tax (recovery) expense(1)6 — 1 
Total recognized in comprehensive income2 (18)— (5)
Current year net actuarial losses (gains)78 (155)(40)(118)
Past service cost/plan amendments— — — 1 
Amortization of actuarial gains (losses)9 (6)18 10 
Amortization of past service credits2 1 1 1 
Foreign currency translation(1)4 2 (6)
Regulatory adjustments(5)(16)(5)(7)
Total recognized in regulatory assets (liabilities)83 (172)(24)(119)

Significant AssumptionsDefined Benefit
Pension Plans		OPEB Plans
(weighted average %)2023 2022 2023 2022 
Discount rate as at December 31 (1)
4.84 5.27 4.94 5.36 
Expected long-term rate of return on plan assets (2)
6.58 5.87 5.92 5.00 
Rate of compensation increase3.37 3.33 — — 
Health care cost trend increase as at December 31 (3)
— — 4.52 4.48 
(1)The discount rate used during the year was 5.36% for defined benefit pension plans (2022 - 2.97%) and 5.39% for OPEB Plans (2022 - 2.97%). ITC and UNS Energy use the split discount rate methodology for determining current service and interest costs. All other subsidiaries use the single discount rate approach.
(2)Developed by management using best estimates of expected returns, volatilities and correlations for each class of asset. Best estimates are based on historical performance, future expectations and periodic portfolio rebalancing among the diversified asset classes.
(3)The projected 2024 health care cost trend rate is 5.95% and is assumed to decrease over the next 10 years to the ultimate health care cost trend rate of 4.52% in 2033 and thereafter.
Expected Benefit PaymentsDefined BenefitOPEB
($ millions)Pension PaymentsPayments
2024$184 $30 
2025188 31 
2026195 32 
2027200 33 
2028206 34 
2029-20331,113 187 

During 2024, the Corporation expects to contribute $47 million for defined benefit pension plans and $17 million for OPEB plans.

In 2023, the Corporation expensed $53 million (2022 - $47 million) related to defined contribution pension plans.