Monday, September 19, 2016

Hovious Wins TVARS Board Election

In the recent election for a director vacancy on the TVA Retirement System Board, employees voted to re-elect James W. Hovious.  His new three-year term will run from Nov. 1, 2016, to Oct. 31, 2019.
Of the 2,975 votes cast, Hovious received 2,197 (73.85 percent). Jennifer Weber received 778 votes (26.15 percent).

Click here to see Jim Hovious’ candidate information.

Sunday, September 11, 2016

Amendments Effective October 1, 2016

As indicated in TVA's presentation at the August 25, 2016 TVA Board meeting, TVA did not veto the amendments approved by the TVARS Board on August 8, 2016.  The 30-day period in which TVA could have vetoed them has now passed.

Links to Summary Tables of Benefit Changes

Changes for employees who first became TVARS members on or after 01/01/1996 and have less than 10 years of TVARS service as of 10/01/2016

Changes for employees who first became TVARS members on or after 01/01/1996 and have 10 or more years of TVARS service as of 10/01/2016

Changes for employees who first became TVARS members before 01/01/1996 and elected to be in the Cash Balance Benefit Structure

Changes for employees in the Original Benefit Structure

Changes for Retirees

Twenty-Year Limit on TVA's Funding Obligations

For the next twenty years, TVA's annual funding obligation is limited to the larger of $300 million or the normal cost (1) plus an amount that, if paid 30 years in a row, would eliminate the accumulated funding shortfall.  I understand that it is now virtually unheard of for any plan to use a period longer than 20 years.  Corporate utility plans, TVA's competitors, must use a period of 7 years.  The shorter the period, the greater the required contribution.  The accumulated funding shortfall was $5.4 billion at the end of the last fiscal year.  

Increased TVA Control of TVARS Board

Beginning October 1, 2016, five of the seven TVARS board members will be able to remove one of its members.  Given that TVA can remove any of the three TVARS board members it appoints at will, it is highly unlikely that any of these three will vote to remove a member unless TVA desires them to do so.  Even if the other four members (three elected and one retiree) unanimously agree, they will fall short of the needed five votes.  Thus, in effect, TVA's consent will be required for the board to remove one of its members.  In effect, TVA's consent along with the consent of just two of the four non-TVA appointed board members will be sufficient to remove a non-TVA appointed board member.

(1) The normal cost is the annual cost of providing pension benefits for services performed by today's members. 

Saturday, August 27, 2016

50/50 in 20

From Thursday's TVA Board meeting: A 50/50 chance TVA pension is properly funded in 20 years.

Click here to see all the slides concerning TVARS presented at the Thursday August 25, 2016 TVA Board meeting. 

Tuesday, August 16, 2016

TVARS Election

Announcement of Candidates

Employees who are TVARS members will elect a director from the two candidates listed below for a three-year term on the TVARS Board. The term will run from November 1, 2016, through October 31, 2019.

James W. Hovious – Systems Engineer, Generators, Power Operations, Chattanooga

Jennifer R. Weber – Senior Program Manager, FERC Compliance & Regulation, Transmission & Power Supply, Chattanooga

Click on the names above to view detailed candidate information.

Everyone Counts, Inc., an independent election firm, will handle the voting process this year.  Election ballots and instructions will be mailed to employees’ home addresses, and employees will also receive voting information at work by e-mail directly from Everyone Counts.

The election will be open from August 29-September 14 (24 hours a day, 7 days a week). The election will close on September 14 at 4:45 EDT. Employees will be able to vote by phone or online. For customer service during the election, including ballot replacement, contact Everyone Counts at 888-492-4763 (Monday-Friday 10:00 a.m.-7:00 p.m. EDT).

Note: It is TVA's policy that candidates and employees are not to use official TVA resources to solicit votes. This includes bulletin boards, electronic mail, interoffice mail, copier equipment, and fax machines.

Monday, August 8, 2016

TVARS Board Approves Pension Funding Unfairly Subsidizing TVA

On August 8, 2016, the TVARS board passed by a 4-3 vote the actual amendments to the rules implementing the changes the board approved by the same 4-3 vote on May 9, 2016.  They will take effect in 30 days if not vetoed by TVA.  I stated the following during the meeting:

  • I will vote against these amendments.  I believe that all TVARS Board members have a duty to place the interests of TVARS, an independent government entity established in 1939 with the full support of previous TVA managements, above those of current TVA management.
  • These amendments will dramatically increase TVARS’ financial risk. TVARS now has just half of the funds it needs to meet its obligations to TVA employees.  These amendments do not provide a commitment from TVA to improve the funded status.  Instead, they reduce the minimum amount TVA is required to fund over the next twenty years to levels well below those required by law of other utilities.  TVARS will be subsidizing TVA, giving it an unfair advantage over competing utilities bound by ERISA pension law.  I can understand why current TVA management may find this desirable.  I do not understand why any TVARS board member finds this desirable.
  • I made a motion to table this vote until TVA employees and retirees are able to review them and provide comments.  Four members of the TVARS board already gave these amendments to TVA, and several of TVA’s comments have already been incorporated.  If the board wanted to do what is in the best interests of the retirement system instead of simply taking directives from current TVA management, I believe the board would have passed my motion to table.  The board did not pass my motion to table.

Click here to see the actual amendments.

Sunday, July 17, 2016

Quick TVA Pension Update

The TVARS Board has yet to meet to discuss and approve the actual rules to implement the pension changes. I suspect TVA is dragging their feet as long as they can because they might want something different if the appeals court rules before the end of August. TVARS must give 30 days’ notice before the new rules take effect October 1, and I do not believe that can be done until the actual rules are finalized. I believe it is likely that Allen Stokes, Suzan Bowman, et al. will go along and rubber stamp any change requests that TVA might make. All COLAs are now in jeopardy. TVA is trying to use the TVARS approved changes as evidence that COLAs are not vested benefits. That is very clear from TVA's last filing with the court.