Employee Retirement Benefits (Tables)

12 Months Ended

Dec. 31, 2020

Plan assets, benefit obligations, and funded status included in the consolidated balance sheets

Pension Plan Assets, Benefit Obligations and Funded Status - The changes in assets, benefit obligations and the funded status of the pension plan are as follows:


	2020		2019
	(millions)
Change in pension plan assets:
Fair value of plan assets at January 1	$	4,800	$	3,806
Actual return on plan assets	723		736
Benefit payments	(209)		(235)
Acquisitions(a)	—		493
Fair value of plan assets at December 31	$	5,314	$	4,800
Change in pension benefit obligation:
Obligation at January 1	$	3,363	$	2,522
Service cost	85		80
Interest cost	92		114
Acquisitions(a)	—		503
Special termination benefits(b)	16		19
Plan amendments	1		3

Actuarial losses - net(c)	259		357
Benefit payments	(209)		(235)
Obligation at December 31(d)	$	3,607	$	3,363
Funded status:
Prepaid pension benefit costs at NEE at December 31	$	1,707	$	1,437
Prepaid pension benefit costs at FPL at December 31(e)	$	1,554	$	1,477

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(a)Relates to substantially funded pension obligations in connection with the acquisition of Gulf Power, see Note 6 - Gulf Power Company.

(b)Reflects enhanced early retirement programs.

(c)Primarily driven by decrease in discount rates.

(d)NEE's accumulated pension benefit obligation, which includes no assumption about future salary levels, at December 31, 2020 and 2019 was approximately $3,521 million and $3,281 million, respectively.

(e)Reflects FPL's allocated benefits under NEE's pension plan.

Unrecognized amounts included in accumulated other comprehensive income (loss)

NEE's unrecognized amounts included in accumulated other comprehensive income (loss) yet to be recognized as components of prepaid pension benefit costs are as follows:


	2020		2019
	(millions)
Unrecognized prior service benefit (net of $1 and $2 tax expense, respectively)	$	2	$	2
Unrecognized losses (net of $24 and $37 tax benefit, respectively)	(60)		(108)
Total	$	(58)	$	(106)

Unrecognized amounts included in regulatory assets (liabilities)

NEE's unrecognized amounts included in regulatory assets yet to be recognized as components of net prepaid pension benefit costs are as follows:


	2020		2019
	(millions)
Unrecognized prior service benefit	$	(1)	$	(2)

Unrecognized losses	163		263
Total	$	162	$	261

Significant assumptions used to determine benefit obligations and net periodic benefit (income) cost

The following table provides the assumptions used to determine the benefit obligation for the pension plan. These rates are used in determining net periodic pension income in the following year.


	2020		2019
Discount rate(a)	2.53	%	3.22	%
Salary increase	4.40	%	4.40	%
Weighted-average interest crediting rate	3.82	%	3.83	%

_________________________

(a)The method of estimating the interest cost component of net periodic benefit costs uses a full yield curve approach by applying a specific spot rate along the yield curve.

The assumptions used to determine net periodic pension income for the pension plan are as follows:


	2020		2019		2018
Discount rate	3.22	%	4.26	%	3.59	%
Salary increase	4.40	%	4.40	%	4.10	%
Expected long-term rate of return, net of investment management fees(a)	7.35	%	7.35	%	7.35	%
Weighted-average interest crediting rate	3.83	%	3.88	%	3.94	%

______________________

(a)In developing the expected long-term rate of return on assets assumption for its pension plan, NEE evaluated input, including other qualitative and quantitative factors, from its actuaries and consultants, as well as information available in the marketplace. NEE considered different models, capital market return assumptions and historical returns for a portfolio with an equity/bond asset mix similar to its pension fund. NEE also considered its pension fund's historical compounded returns.

Fair value measurements of pension plan assets by hierarchy level

The fair value measurements of NEE's pension plan assets by fair value hierarchy level are as follows:


	December 31, 2020(a)
	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(millions)
Equity securities(b)	$	2,017	$	10	$	3	$	2,030
Equity commingled vehicles(c)	—		668		—		668
U.S. Government and municipal bonds	169		8		—		177
Corporate debt securities(d)	—		340		—		340
Asset-backed securities	—		375		—		375
Debt security commingled vehicles(e)	—		201		—		201
Convertible securities(f)	64		453		—		517

Total investments in the fair value hierarchy	$	2,250	$	2,055	$	3	4,308
Total investments measured at net asset value(g)							1,006
Total fair value of plan assets							$	5,314

_____________________

(a)See Notes 3 and 4 for discussion of fair value measurement techniques and inputs.

(b)Includes foreign investments of $881 million.

(c)Includes foreign investments of $156 million.

(d)Includes foreign investments of $93 million.

(e)Includes foreign investments of $5 million.

(f)Includes foreign investments of $35 million.

(g)Includes foreign investments of $153 million.


	December 31, 2019(a)
	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
	(millions)
Equity securities(b)	$	1,593	$	9	$	3	$	1,605
Equity commingled vehicles(c)	—		706		—		706
U.S. Government and municipal bonds	95		7		—		102
Corporate debt securities(d)	—		247		—		247
Asset-backed securities	—		416		—		416
Debt security commingled vehicles(e)	47		143		—		190
Convertible securities(f)	32		372		—		404

Total investments in the fair value hierarchy	$	1,767	$	1,900	$	3	3,670
Total investments measured at net asset value(g)							1,130
Total fair value of plan assets							$	4,800

______________________

(a)See Notes 3 and 4 for discussion of fair value measurement techniques and inputs.

(b)Includes foreign investments of $741 million.

(c)Includes foreign investments of $141 million.

(d)Includes foreign investments of $76 million.

(e)Includes foreign investments of $5 million.

(f)Includes foreign investments of $20 million.

(g)Includes foreign investments of $190 million.

Expected benefit payments, net of government drug subsidy

Expected Cash Flows - The following table provides information about benefit payments expected to be paid by the pension plan for each of the following calendar years (in millions):


2021	$	228
2022	$	200
2023	$	202
2024	$	204
2025	$	206
2026 - 2030	$	1,024

Net periodic benefit (income) cost

Net Periodic Income - The components of net periodic income for the plans are as follows:


	Pension Benefits						Postretirement Benefits
	2020		2019		2018		2020		2019		2018
			(millions)
Service cost	$	85	$	80	$	70	$	1	$	1	$	1
Interest cost	92		114		82		8		9		7
Expected return on plan assets	(321)		(312)		(276)		—		—		—
Amortization of actuarial loss	18		—		—		3		—		—
Amortization of prior service benefit	(1)		(1)		(1)		(16)		(15)		(15)
Special termination benefits	16		19		35		—		—		—

Net periodic income at NEE	$	(111)	$	(100)	$	(90)	$	(4)	$	(5)	$	(7)
Net periodic income allocated to FPL	$	(77)	$	(71)	$	(57)	$	(3)	$	(4)	$	(6)

Components of net periodic benefit income (cost) recognized in OCI

Other Comprehensive Income - The components of net periodic income recognized in OCI for the pension plan are as follows:


	2020		2019		2018
	(millions)

Net gains (losses) (net of $13 tax expense, $10 tax benefit and $4 tax benefit, respectively)	$	42	$	(36)	$	(13)
Amortization of unrecognized losses (net of $1 tax expense)	5		—		—


Total	$	47	$	(36)	$	(13)

Components of net periodic benefit (income) cost recognized in regulatory assets (liabilities)

Regulatory Assets (Liabilities) - The components of net periodic income recognized during the year in regulatory assets (liabilities) for the pension plan are as follows:


	2020		2019
	(millions)
Prior service cost	$	1	$	—
Unrecognized gains	(89)		(113)
Amortization of prior service cost	1		$	1
Amortization of unrecognized losses	(12)		—
Total	$	(99)	$	(112)