December 2, 2014
Thank you for contacting me about the Tennessee Valley Authority's employee/retiree pension plans.
As I am sure you are aware, the Tennessee Valley Authority (TVA) was established in 1933 to "address a wide range of environmental, economic, and technological issues, including the delivery of low-cost electricity and the management of natural resources" to the people of Tennessee, Alabama, Georgia, Kentucky, Mississippi, North Carolina, and Virginia.(1) As it currently stands, the TVA employs over 12,500 people, generates $10.8 billion in sales revenue, sells 162 billion kilowatts per hour (kwh) of electricity and receives no appropriated federal tax dollars.
Daniel Pitts, a TVA retiree, wrote an article for Pensions & Investments where he states that " the Tennessee Valley Authority's pension plan was only 63% funded at the end of its fiscal year September 30, 2013" and that "TVA expects to collect $528 million from its ratepayers in the current fiscal year, ending Sept. 30, 2014, to cover pension costs but plans to contribute only $250 million to the pension plan." Mr. Pitts avers that the TVA's "2013 funded status [for pension plans] is much worse than the 77% it was in 2008."(2)
It is my understanding that TVA pension plans are not protected or insured by the Employee Retirement Income Security Act (ERISA), the Pension Protection Act (PPA) and Internal Revenue Code requirements like many other utilities. I am astonished to hear of this news and I will follow-up with TVA leadership regarding this issue. I believe that TVA should fulfill their obligations to their employees and retirees when it comes to pensions.
Unlike many other pension plans, the TVA has the legal power to address any pension shortfall should it occur because the TVA has a monopoly over electricity and, in turn, can raise rates as necessary to fund its costs of generating electricity... which includes pension fund costs.
The House Committee on Transportation and Infrastructure has oversight over the Tennessee Valley Authority. Although I am not a member of this committee, please know that I will keep your views in mind should legislation regarding this issue come to the full House of Representatives for a vote.
Please feel free to contact me again in the future. You may wish to visit my website at http://brooks.house.gov/ for additional information about issues and legislation before Congress.
Member of Congress