Wednesday, December 7, 2016

More Filings in Support of Employees and Retirees in TVARS Court Case


 INTRODUCTION

In the words of the Sixth Circuit, “TVARS has an obligation to look out for the interests of plan participants . . . .” At a minimum, TVARS must follow its own Rules. That did not happen between 2009 and 2013. The TVARS Board passed amendments that slashed hundreds of millions of dollars of COLA and interest benefits. The Board failed to give proper notice of the amendments and disobeyed the Rules that protected such benefits. The Board then took hundreds of millions of dollars out of the Excess COLA Account, a fund set aside to pay for COLAs in the future. The amounts taken far exceeded the limits in the Rules.

The Court should grant summary judgment to Plaintiffs and enforce the Rules. It makes a difference to tens of thousands of employees and retirees. Not even federal agencies can ignore the law for cost savings or expediency.


Wednesday, November 2, 2016

New Filings in Support of Employees and Retirees in TVARS Court Case

Both the 2009 Amendments and the debits to the Excess COLA Account violated the Rules. TVA’s arguments ignore critical language in the Rules and persuasive authority from the Sixth Circuit. The material facts are undisputed, and Plaintiffs are entitled to judgment as a matter of law.

First, the TVARS Board violated Rules § 13 by not giving “at least 30 days’ notice of the proposed amendment” to plan participants. TVARS waited to give notice until after it took the final vote. At that point, the 2009 Amendments were no longer merely “proposed,” and plan participants did not have a chance to petition the Board.

Second, the 2009 Amendments reduced benefits in violation of Rules § 13 in two separate ways. The COLAs at issue were already “covered by accumulated reserves held therefor,” the Excess COLA Account. The interest rate credited to existing balances in the Annuity Savings Account was a “nonforfeitable” or vested benefit.

Third, the TVARS Board violated Rules §§ 9.B.6 and 10.D.2 by debiting all of the COLA costs for 2009-2013 from the Excess COLA Account. Defendants have not even tried to justify this under the Rules. The Court should declare the debits unlawful, regardless of how it rules on the 2009 Amendments.

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.