TVA employee/retiree group takes initiative on pensions
In response to TVA’s under-funding of its employee pension for over a decade, a group of TVA retirees have formed the Tennessee Valley Authority Retirees Coalition (TVARC). TVARC has now joined forces with the National Retiree Legislative Network (NRLN) to seek congressional assistance in bringing the employee pension back to a safely funded level.
At the end of FY 2015, TVA’s employee pension was only 53 percent funded with liabilities of $12.8 billion and assets of $6.8 billion, leaving the pension underfunded by $6 billion. TVA’s employee pension covers 35,000 retirees and employees, most of whom reside in the states of Tennessee, Kentucky, Alabama and Mississippi.
TVA’s recent proposal to not only cut pension benefits but also to fund the pension with only $275 million a year will keep it in a critically underfunded status for many years and increase the likelihood of additional benefit cuts or even termination by TVA.
When Congress passed the Employee Retirement Income Security Act of 1974, TVA was not included under the law and, as a result, TVA’s pension plan does not have the safety net provided to other major electric utilities’ pensions by the Pension Benefit Guaranty Corporation.
Congress decided that the TVA pension did not need the protections, like minimum funding requirements, provided to private sector pension plans . Today, TVA operates as a government corporation, and receives no federal funding. Since Congress excluded TVA from pension laws that mandate minimum funding for corporate pensions, TVARC’s executive committee believes that current U.S. representatives and senators have a responsibility to see that the TVA pension plan becomes properly funded in a reasonable length of time.
TVARC’s objective is to convince TVA executives, TVA board members and the TVA Retirement System (TVARS) board members of the importance of developing a realistic strategy to adequately fund the TVA pension plan.
Bowling Green, Ky.