v3.25.4
PENSION AND POST-RETIREMENT AND POST-EMPLOYMENT BENEFITS (Tables)
 12 Months Ended
Dec. 31, 2025
Defined Benefit Plan Disclosure [Line Items]  
Summary of Change in Projected Benefit Obligation and Change in Plan Assets
The following tables provide the components of the funded status of the Company's Pension Plans and Benefit Plans as at December 31, 2025 and 2024:

Pension Benefits
Post-Retirement and
Post-Employment Benefits
Year ended December 31 (millions of dollars)
2025202420252024
Change in PBO
PBO, beginning of year8,686 8,665 1,666 1,603 
Current service cost146 134 61 57 
Employee contributions81 74 — — 
Interest cost411 401 80 75 
Benefits paid(457)(427)(76)(71)
Net actuarial loss (gain)40 (161)19 2 
PBO, end of year8,907 8,686 1,750 1,666 
Change in plan assets
Fair value of plan assets, beginning of year9,333 8,764 — — 
Actual return on plan assets513 869 — — 
Benefits paid(457)(427)(76)(71)
Employer contributions68 75 76 71 
Employee contributions81 74 — — 
Administrative expenses(21)(22)— — 
Fair value of plan assets, end of year9,517 9,333 — — 
(Funded) unfunded status(610)(647)1,750 1,666 
Summary of Benefit Obligations and Plan Assets
Hydro One presents its benefit obligations and plan assets net on its consolidated balance sheets as follows:

Pension Benefits		Post-Retirement and
Post-Employment Benefits
As at December 31 (millions of dollars)
2025202420252024
Other assets1
11 12 — — 
Deferred pension assets610 647 — — 
Accrued liabilities— — 78 76 
Post-retirement and post-employment benefit liability— — 1,672 1,590 
Net (funded) unfunded status(621)(659)1,750 1,666 
1 Represents the funded status of HOSSM defined benefit pension plan.
Summary of Projected Benefit Obligation (PBO), Accumulated Benefit Obligation (ABO) and Fair Value of Plan Assets
The following table provides the PBO, accumulated benefit obligation (ABO) and fair value of plan assets for the Pension Plan:
As at December 31 (millions of dollars)
20252024
PBO8,907 8,686 
ABO8,004 7,848 
Fair value of plan assets9,517 9,333 
Summary of Weighted Average Assumptions Used to Determine Benefit Obligations
The following weighted average assumptions were used to determine the benefit obligations as at December 31, 2025 and 2024:

Pension Benefits		Post-Retirement and
Post-Employment Benefits
Year ended December 312025202420252024
Significant assumptions:
    Weighted average discount rate5.02 %4.73 %5.05 %4.75 %
    Rate of compensation scale escalation (long-term)2.50 %2.50 %2.50 %2.50 %
    Rate of cost of living increase2.00 %2.00 %2.00 %2.00 %
    Rate of increase in health care cost trends1
— — 4.25 %4.23 %
1 4.79% per annum in 2026, grading down to 4.25% per annum in and after 2032 (2024 - 4.85% per annum in 2025, grading down to 4.23% per annum in and after 2032).
Summary of Weighted Average Assumptions Used to Determine Net Periodic Benefit Costs
The following weighted average assumptions were used to determine the net periodic benefit costs for the years ended December 31, 2025 and 2024. Assumptions used to determine current year-end benefit obligations are the assumptions used to estimate the subsequent year’s net periodic benefit costs.
Year ended December 3120252024
Pension Benefits:
    Weighted average expected rate of return on plan assets7.20 %7.00 %
    Weighted average discount rate4.73 %4.63 %
    Rate of compensation scale escalation (long-term)2.50 %2.50 %
    Rate of cost of living increase2.00 %2.00 %
    Average remaining service life of employees (years)
1515
Post-Retirement and Post-Employment Benefits:
    Weighted average discount rate4.75 %4.63 %
    Rate of compensation scale escalation (long-term)2.50 %2.50 %
    Rate of cost of living increase2.00 %2.00 %
    Average remaining service life of employees (years)
16.516.1
    Rate of increase in health care cost trends1
4.23 %4.23 %
1 4.85% per annum in 2025, grading down to 4.23% per annum in and after 2032 (2024 - 4.92% per annum in 2024, grading down to 4.23% per annum in and after 2032).
Summary of Approximate Life Expectancies Used to Determine Projected Benefit Obligations for Pension, Post-Retirement and Post-Employment Plans
The following approximate life expectancies were used in the mortality assumptions to determine the PBO for the Pension Plan and Benefit Plans as at December 31, 2025 and 2024:
As at December 3120252024
Life expectancy at age 65 for a member currently at:(years)(years)
    Age 65 - male2423
    Age 65 - female2725
    Age 45 - male2624
    Age 45 - female2826
Summary of Estimated Future Benefit Payments
As at December 31, 2025, estimated future benefit payments to the participants of the Benefit Plans were:

(millions of dollars)
Pension Benefits		Post-Retirement and
Post-Employment Benefits
2026427 78 
2027433 78 
2028439 78 
2029445 79 
2030452 80 
2031 through to 20352,397 423 
Total estimated future benefit payments through to 20354,593 816 
Summary of Actuarial Gains and Losses and Prior Service Costs Recorded Within Regulatory Assets
A portion of actuarial gains and losses and prior service costs is recorded within regulatory accounts on Hydro One’s consolidated balance sheets to reflect the expected regulatory inclusion of these amounts in future rates, which would otherwise be recorded in OCI. These amounts are reflected in the following table:
Year ended December 31 (millions of dollars)
20252024
Pension Benefits:
    Net actuarial loss (gain) for the year210 (405)
    Amortization of actuarial gain (loss)15 (14)
    Amortization of prior service credit3 3 
    228 (416)
Post-Retirement and Post-Employment Benefits:
    Actuarial loss for the year28 4 
    Amortization of actuarial loss15 18 
    43 22 
Summary of Components of Regulatory Assets That Have Not Been Recognized as Components of Net Periodic Benefit Costs
The following table provides the components of regulatory accounts that have not been recognized as components of net periodic benefit costs for the years ended December 31, 2025 and 2024:
Year ended December 31 (millions of dollars)
20252024
Pension Benefits:
    Actuarial gain(610)(647)
Post-Retirement and Post-Employment Benefits:
    Actuarial gain(336)(376)
Summary of Pension Plan Target Asset and Weighted Average Asset Allocations
As at December 31, 2025, the Pension Plan actual weighted average, target, and range asset allocations were as follows:
Actual (%)Target Allocation (%)Range Allocation (%)
Equity securities41 40 
20 - 55
Debt securities37 35 
30 - 40
Real Estate and Infrastructure22 25 
0 - 35
100 100 
Summary of Pension Plan Assets Measured and Recorded at Fair Value on Recurring Basis
The following tables present the Pension Plan assets and liabilities measured and recorded at fair value on a recurring basis and their level within the fair value hierarchy as at December 31, 2025 and 2024:
As at December 31, 2025 (millions of dollars)
Level 1Level 2Level 3Total
Pooled funds— — 3,277 3,277 
Cash and cash equivalents124 — — 124 
Short-term securities— 182 — 182 
Derivative instruments— 2 — 2 
Corporate shares - Canadian102 — — 102 
Corporate shares - Foreign2,736 255 — 2,991 
Bonds and debentures - Canadian — 2,677 — 2,677 
Bonds and debentures - Foreign— 106 — 106 
Total fair value of plan assets1
2,962 3,222 3,277 9,461 
Derivative instruments— 1 — 1 
Total fair value of plan liabilities1
— 1 — 1 
1 As at December 31, 2025, the total fair value of Pension Plan assets and liabilities excludes $62 million of interest and dividends receivable, $4 million of sold investments receivable, $5 million of pension administration expenses payable, $2 million of taxes payable, $nil payable to participants, and $2 million of purchased investments payable.
As at December 31, 2024 (millions of dollars)
Level 1Level 2Level 3Total
Pooled funds— — 3,142 3,142 
Cash and cash equivalents106 — — 106 
Short-term securities— 171 — 171 
Derivative instruments— 1 — 1 
Corporate shares - Canadian116 — — 116 
Corporate shares - Foreign2,695 247 — 2,942 
Bonds and debentures - Canadian— 2,717 — 2,717 
Bonds and debentures - Foreign— 95 — 95 
Total fair value of plan assets1
2,917 3,231 3,142 9,290 
Derivative instruments— 3 — 3 
Total fair value of plan liabilities1
— 3 — 3 
1 As at December 31, 2024, the total fair value of Pension Plan assets and liabilities excludes $57 million of interest and dividends receivable, $1 million of sold investments receivable, $6 million of pension administration expenses payable, $2 million of taxes payable, $3 million payable to participants, and $1 million of purchased investments payable.
Summary of Changes in Fair Value of Financial Instruments Classified in Level 3
The following table summarizes the changes in fair value of financial instruments classified in Level 3 for the years ended December 31, 2025 and 2024. The Pension Plan classifies financial instruments as Level 3 when the fair value is measured based on at least one significant input that is not observable in the markets or due to lack of liquidity in certain markets. The gains and losses presented in the table below could, therefore, include changes in fair value based on both observable and unobservable inputs. The Level 3 financial instruments are comprised of pooled funds whose valuations are provided by the investment managers. Sensitivity analysis is not provided as the underlying assumptions used by the investment managers are not available.
Year ended December 31 (millions of dollars)
20252024
Fair value, beginning of year3,142 2,769 
Realized and unrealized gains 136 262 
Purchases138 203 
Sales and disbursements(139)(92)
Fair value, end of year3,277 3,142 
Pension Benefits  
Defined Benefit Plan Disclosure [Line Items]  
Summary of Components of Net Periodic Benefit Costs
The following table provides the components of the net periodic benefit costs of the Pension Plan for the years ended December 31, 2025 and 2024:
Year ended December 31 (millions of dollars)
20252024
Current service cost146 134 
Interest cost411 401 
Expected return on plan assets, net of expenses(663)(603)
Amortization of prior service credit(3)(3)
Amortization of actuarial (gains) losses(15)14 
Net periodic benefit credit(124)(57)
Charged to results of operations1
21 23 
1    The Company accounts for pension costs consistent with their inclusion in OEB-approved rates. During the year ended December 31, 2025, pension costs of $68 million (2024 - $75 million) comprised of $21 million (2024 - $23 million) charged to operations, and $47 million (2024 - $52 million) capitalized as part of the cost of property, plant and equipment and intangible assets.
Post-Retirement and Post-Employment Benefits  
Defined Benefit Plan Disclosure [Line Items]  
Summary of Components of Net Periodic Benefit Costs
The following table provides the components of the net periodic benefit costs for the years ended December 31, 2025 and 2024 for the post-retirement and post-employment benefit plans:
Year ended December 31 (millions of dollars)
20252024
Current service cost61 57 
Interest cost80 75 
Amortization of prior service cost10 10 
Amortization of actuarial gains(23)(29)
Net periodic benefit costs128 113 
Charged to results of operations1
86 74 
1    The Company accounts for post-retirement and post-employment costs consistent with their inclusion in OEB-approved rates. During the year ended December 31, 2025, post-retirement and post-employment costs of $128 million (2024 - $113 million) were attributed to labour, of which $86 million (2024 - $74 million) was charged to operations, and $42 million (2024 - $39 million) was capitalized as part of the cost of property, plant and equipment and intangible assets.