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Nominations for Annual TVARS Election

TVARS will accept nominations through Monday, July 10, for a three-year term as an elected member of the TVARS Board of Directors. The term will run from November 1, 2017, through October 31, 2020. Any employee who is a TVARS member is eligible to run for election. The TVARS Board consists of seven members:  three appointed by TVA, three elected by employees who are TVARS members, and one who is selected by the other six. The TVARS Board is responsible for the administration of the System and the 401(k) Plan. The board holds quarterly meetings and other special-called meetings, as necessary, throughout the year in order to conduct business, and each director serves on various board committees. For more information on the duties and responsibilities of directors of the TVARS Board, please see the TVARS Governance Policy. Nominations are made by petition. Signatures of 25 employees who are TVARS members are required. The required form of the nominating petition must be used. Nominating p…
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TVARS Board Blocks Vote on Financial Reform

I made the following motion at the June 15, 2017 TVA Retirement System (TVARS) Board meeting: Whereas the TVARS Board wishes to amend its rules and regulations to meet the funding recommendations in the March 2017 GAO Report to Congress, the TVARS Board hereby approves amending the system’s rules and regulations to specify that the annual “accrued liability contribution” be determined using a fixed amortization period of 20 years beginning in fiscal year 2018 instead of the currently specified 30-year rolling amortization period.
I then stated the following in support of the motion: This amendment would eliminate TVARS’ funding shortfall in 20 years. Per the GAO's report, 15 to 20 years is the maximum period recommended by a Blue Ribbon Panel commissioned by the Society of Actuaries. The GAO report indicates that TVA officials have stated a goal to fully fund the pension within 20 years, but that TVA has not identified such a goal or milestones in its performance plan or report.…

TVA Retirement System Financial Reform Efforts Continue

TVA Retirement System (TVARS) Board members Jim Hovious and I continue working towards the reform needed to secure the stable financial futures of both TVA and TVARS.  We are again urging the TVARS Board to approve an amendment to the rules which will ensure the pension plan achieves full funding.

We are now supported in our efforts by the recommendations of the March 2017 GAO Report to Congress on TVA.  Our proposed amendment would eliminate the funding shortfall in 20 years.  Per the GAO's report, 15 to 20 years is the maximum period recommended by a Blue Ribbon Panel commissioned by the Society of Actuaries.  The GAO report indicates that TVA officials have stated a goal to fully fund the pension within 20 years, but that TVA has not identified such a goal or milestones in its performance plan or report.  In contrast to TVA's stated goal, TVA officials told the GAO that TVA does not plan to contribute more than the TVARS Rules require.  This will essentially pass today'…

TVARC Action Alert: GAO Says Fully Fund TVA Pension Plan

ACTION ALERT-PLEASE PARTICIPATE 
From: Mike Moseley, President, TVARC
Subject: TVARC Action Alert: GAO Says Fully Fund TVA Pension Plan

The Tennessee Valley Authority Retirees Coalition (TVARC) requests support from TVARC members, members of TVA Retiree Chapters, our Unions, readers and senders of Facebook and Twitter messages and other contacts to send a message to our Tennessee Valley members of Congress. Please read this message and then go to http://www.nrln.org/congress.html#/54 to respond to this important Action Alert.

Background  The U.S. Government Accountability Office (GAO) was asked by Congress to review the Tennessee Valley Authority’s (TVA) plan for debt reduction and to make recommendations: the first was that TVA must better communicate its plans for overall debt reduction and second, the GOA specifically recommends that TVA take steps to have its retirement system adopt funding rules designed to ensure the pension plan’s full funding. (See the GAO’s Report here.)

The Te…

GAO to TVA: Work with TVARS Board to Adopt Proper Funding Rules

Recommendations for Executive Action  We recommend that the Board of Directors ensure that TVA take the following two actions:

better document and communicate its goals to reduce its debt and unfunded pension liabilities in its performance plans and reports, including detailed strategies for achieving these goals.propose, and work with the TVARS board to adopt, funding rules designed to ensure the plan’s full funding.
Click here to read the full GAO report publicly released on April 24, 2017.

Additional Excerpts TVA agreed with the first recommendation and neither agreed nor disagreed with the second. GAO believes that action is needed as discussed in the report.

TVA officials told us that the agency does not plan to contribute more than the TVARS Rules require and that it plans to continue to treat its unfunded pension liabilities as regulatory assets, deferring pension costs for recovery through rates in the future. However, the TVARS Rules do not provide for fully funding pension be…

TVA's 2016 Pension Funded Status

Per TVA's 2016 10-K financial statement, the pension funded ratio improved slightly in 2016 primarily due to these three major components:
gain of $960 million due to pension benefit reductionsgain of $733 million due to investment returnsloss of $1.2 billion due primarily to the reduction in the discount rate from 4.50% to 3.65%
Per TVA's sensitivity analysis, a quarter point change in the discount rate can be expected to change the pension liability by $388 million. While a reduction in the discount rate works to worsen the pension funded ratio, an increase in the discount rate would work to improve it.