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 reductions gain of $733 million due to investment returns loss 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.