Company: DTK
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0000936340-25-000065
Chunk: 127

Company: DTE ENERGY CO
Filing Date: 2025-02-13
Form: 10-K
Item: Item 7
Chunk 127
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 risk and return expectations, as well as inflation assumptions.  Projected returns are based on broad equity, bond, and other markets.  DTE Energy's 2025 expected long-term rate of return on pension plan assets is based on an asset allocation assumption utilizing active and passive investment management of 15% in equity markets, 58% in fixed income markets - including long duration bonds, and 27% invested in other assets.  DTE Energy's 2025 expected long-term rate of return on other postretirement plan assets is based on an asset allocation assumption utilizing active and passive investment management of 7% in equity markets, 63% in fixed income markets - including long duration bonds, and 30% invested in other assets.  Because of market volatility, DTE Energy periodically reviews the asset allocation and rebalances the portfolio when considered appropriate.  DTE Energy is decreasing its long-term rate of return assumption for the pension plans to 7.80% and decreasing the other postretirement plans to 7.50% for 2025.  DTE Energy believes these rates are reasonable assumptions for the long-term rates of return on the plans' assets for 2025 given their respective asset allocations and DTE Energy's capital market expectations.  DTE Energy will continue to evaluate the actuarial assumptions, including its expected rate of return, at least annually.

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DTE Energy calculates the expected return on pension and other postretirement benefit plan assets by multiplying the expected return on plan assets by the market-related value (MRV) of plan assets at the beginning of the year, taking into consideration anticipated contributions and benefit payments that are to be made during the year.  Current accounting rules provide that the MRV of plan assets can be either fair value or a calculated value that recognizes changes in fair value in a systematic and rational manner over not more than five years.  For the pension plans, DTE Energy uses a calculated value when determining the MRV of the pension plan assets and recognizes changes in fair value over a three-year period.  Accordingly, the future value of assets will be impacted as previously deferred gains or losses are recognized.  As of December 31, 2024, DTE Energy had $131 million of cumulative losses related to investment performance in prior years that were not yet recognized in the calculation of the MRV of pension assets.  For other postretirement benefit plans, DTE Energy uses fair value when determining the MRV of plan assets; therefore, all