Per TVA's 2016 10-K financial statement, the pension funded ratio stayed relatively flat in 2016 primarily due to these three major components:
- gain of $960 million due to pension benefit reductions
- gain of $733 million due to investment returns
- loss of $1.2 billion due primarily to the reduction in the discount rate to 3.65% from 4.50%
Per TVA's sensitivity analysis, a quarter point change in the discount rate can be expected to change the liability by $388 million. While decreasing interest rates worsen the pension funded ratio, increasing interest rates improve it.