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TVA Pressures TVARS to Circumvent Court of Appeals

TVA has asked the TVARS Board to vote this month on a proposal to permanently reduce pension benefits:

  • prior to a ruling from the Sixth Circuit Court of Appeals on the 2009 benefit reductions
  • in a way the TVARS Board has already determined is in violation of TVARS rules and regulations
  • in a way that would be illegal if TVA's pension plan was covered by laws that other pension plans must follow
  • which could lead to lawsuits from system beneficiaries against each individual TVARS Board member who votes to approve the proposal
  • with the vote on the proposal highly likely to be in TVA's favor given TVA's de facto control over the TVARS Board
  • with TVA asking for retiree and employee feedback without agreeing to make all of it public, enabling it to be selectively divulged or ignored

I gave a presentation to the Board of the Tennessee Valley Authority Retirees' Association on January 6, 2016 in Nashville, TN explaining many of these items in further detail.  Please view that presentation here.

Comments

  1. AnonymousJanuary 9, 2016 at 10:17 AM

    Leonard, page 36 of your presentation indicates that if TVA terminates the system as a result of the TVARS Board not accepting their proposal, that the termination process would require TVA to immediately make-up the underfunding. Please can you explain this. If the system was terminated then what would there be to fund?

    ReplyDelete
    Replies
    1. Leonard J. Muzyn, Jr., CFAJanuary 9, 2016 at 11:01 AM

      Terminating the system does not remove TVA's obligation to fund the benefits already earned. This includes 100% of retiree benefits and whatever portion employees have earned up to the date of termination.

      Delete
    2. Sam Stewart, TVA retireeJanuary 10, 2016 at 3:49 PM

      Guess I am wondering what action an individual member can take to ensure our retirement benefits are protected. Any recommendations?

      Delete
    3. Leonard J. Muzyn, Jr., CFAJanuary 10, 2016 at 7:34 PM

      To stop TVA's proposal, 4 of the 7 TVARS Board members must let it be known they do not support it. So far, Jim Hovious and I have stated that we do not support it. If two other TVARS Board members will join us, it is doubtful the proposal would even be brought up for a vote. The remaining TVARS Board members are: Tony Troyani, altroyani@tva.gov;
      Allen Stokes, aestokes@tva.gov;
      Brian Child, bmchild@tva.gov;
      John Hoskins, jmhoskins@tva.gov; and
      Tammy Wilson, twwilson@tva.gov

      Delete
    4. UnknownJanuary 13, 2016 at 8:48 AM

      Just wrote they an email stating, in the nicest way I knew, that we retirees had mean all our commitments to TVA and would hope TVA would honor their commitments to us. Also mentioned a fellow retiree I know who is 86 and does not even know about the proposal. Hope this helps in some way.

      Delete

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