I share Dennis’ concerns below. If anyone can think of another reason why TVA would want to extend the term of the 7th TVARS director with the particular rule change described below, please let me know.
From: Dennis To
[mailto:dpto19533@gmail.com]
Sent: Monday, April 16, 2018 2:12 AM
To: Dennis To
Subject: Why the need for interim 7th director?
Sent: Monday, April 16, 2018 2:12 AM
To: Dennis To
Subject: Why the need for interim 7th director?
At the tvars Board
mtng on Oct 30, 2017, Wilson Taylor (TVA-appointed director) made a motion
which was then approved by 4-to-2 majority vote. This motion allowed
Allen Stokes to stay on (for one year) as interim director until the 7th
director is selected by the tvars board. Did Wilson make such a motion in
the best interest of retirees? Of course, not. That motion was clearly
intended to serve some purpose of TVA. The big question is, what is
it for?
There is a very
serious implication behind this move. For the entire history of tvars
existence, I believe this is the first time ever that somehow there is a sudden
need for an interim 7th director. Back in 2004, tvars went for an
extended period w/o a 7th director. They interviewed me for 7th
director. The selection was deadlocked (3-3) w/ the 3 tva-appointed tvars
directors against my selection. I withdrew my name, after which they selected
Frank Alford as 7th director. So, nobody ever saw a need
for an interim 7th director before. Why now?
Let’s talk about
the wordings of that motion. It says “such seventh member shall be restricted from
voting on amendments to these Rules and Regulations and the Deferral Plan
Provisions, with the
exception of any amendments required by IRS rules or related to the tax-qualified status of
the System and Deferral Plan. So, Allen can only vote to amend
the Rules & Regs if the action by tvars has some connection to
either the IRS regulations and/or the tax status of the current pension/annuity
plan. What action? What tax implications? Had that
been me who made a motion on such an extraordinary matter, I would have given a clear and rational explanation
as to why. Wilson Taylor (and the other two appointed directors)
apparently did not do that. Why didn’t they? Is there a hidden agenda
here? What about Tony
Troyani? Why did he vote to support that motion? Did TVA
tell him the purpose of the motion? If TVA didn’t tell him, then why did
Tony vote “yes” on something he didn’t understand what for? If TVA did
tell him, then Tony owes it to
the membership (those who voted for him) to explain why he thought such an
action is in the best interest of the members.
Now, let me refer
to an email (see below) that I sent on October 23, 2012, on the subject
“Kilgore's 3-Min Recording re Insurance Company”. In item 3 of that
email, I talked about Kilgore avoiding the issue about sending retirees to
insurance company. It is my belief that Kilgore (or his staff) did
actively explore that possibility with some insurance company but the talk did
not progress any further. It is possible that the current mgmt of TVA may
have actively explored this same issue. If so, TVA may have already
reached some tentative understandings with some insurance company (say, ABC
Company) to take over the pension system. This means ABC would have to assume TVA’s pension and annuity
obligations to current (and future) retirees as set out and defined under the language of the
R&Rs. ABC is in the business of making, not losing, money on
any deal. They would want to be perfectly clear as to who (which tvars
member), how much, when, and how long they have to pay. This is of utmost
importance to an insurance company. TVA probably told them the R&R
language is the basis for determining the financial obligations to be
transferred to them. It’s fair to assume that ABC scrutinized the R&Rs very
closely to see what can be done to the language to minimize their financial
obligations if they agree to take the retirees. They might have found
some way to do this via the “tax” thing. This is what I think TVA needs Allen Stokes for.
Of course, this is all speculations on my part. I have no factual basis
to support my speculations here.
Dennis P. To
Phone
(VN) 011 84 129 238 2078
Phone
(USA) 626-693-6876
Meeting No. 470
MINUTES OF MEETING
OF THE BOARD OF DIRECTORS RETIREMENT SYSTEM OF THE TENNESSEE VALLEY AUTHORITY
October 30, 2017
A special-called
meeting of the Board of Directors (Board) of the TVA Retirement System (System)
was held on Monday, October 30, 2017, at 4:35 p.m., EDT, at the TVA Knoxville
Office Complex, WT-8 225, Knoxville, Tennessee.
The following
directors were present: Anthony L. Troyani, Vice-Chair; Brian M. Child; James
W. Hovious; Leonard J. Muzyn; Wilson Taylor III; and Tammy W. Wilson. Allen E. Stokes, Chair, recused
himself from the meeting. Also present were Patrick D. Brackett,
Executive Secretary; William B. Jenkins, Jr., Assistant Secretary; Sally R.
Weber, Manager, Retirement Operations; W. Colby Carter, Senior Counsel; and
James S. “Chris” Christie, Jr., Partner, Bradley Arant Boult Cummings (via
telephone).
Prior to the
meeting, the Board reviewed and discussed the draft amendment ... regarding a
proposed carryover
provision for the 7th director retiree in the event the Board is unable to
select a new 7th director by the end of the position’s term. ....
Director Taylor made a motion to approve the amendment .... to add a 1-year limit on any
carryover term and to place certain restrictions on the ability to vote on
amendments. The motion received a second from Director Wilson .... the
Board voted on the original motion, which passed by a roll call vote of 4 to 2.
Directors Child, Taylor, Troyani and Wilson voted for the motion,
and Directors Hovious and Muzyn voted against the motion. With this motion, the
Board approved the following:
The board shall
consist of seven members, three of whom shall be elected by and from the
membership of the System, three of whom shall be appointed by TVA, and one of whom shall be a retiree
selected by a majority vote of the other six. .... Each term shall be
... in the event the three elected directors and the three appointed directors do not select a seventh director
by the expiration of the seventh director’s term, then the current sitting
seventh director (i) shall continue to serve as a member of the board for an
additional one (1) year or until such time as the six directors select
the seventh director by a majority vote, if earlier, and (ii) during such continuation period,
such seventh member shall be restricted from voting on amendments to these
Rules and Regulations and the Deferral Plan Provisions, with the exception of any amendments
required by IRS rules or related to the tax-qualified status of the System and
Deferral Plan. Any vacancy on the board shall be filled by election or
appointment, as the case may be, for only the unexpired portion of the
predecessor's term.
From: Dennis To [mailto:dpto19533@gmail.com]
Sent: Tuesday, October 23, 2012 5:04 PM
Subject: Kilgore's 3-Min Recording re Insurance Company
Sent: Tuesday, October 23, 2012 5:04 PM
Subject: Kilgore's 3-Min Recording re Insurance Company
Attached is a 3-min
recording of Kilgore’s talk in Kingston in response to the rumor about TVARS
termination and insurance company. I listened carefully to the
recording. His statement was quite clever and deliberate. No doubt
it was crafted by his communication staff and carefully reviewed by the legal
staff in OGC. What is important
is not what he actually said, but what he didn’t say.
- He only talked about
insurance company. He specifically mentioned GM and Verizon doing
those deals w/ Prudential. He NEVER said one word about TVARS
termination. I think he purposely avoided that one. The
insurance thing is a product (or an outcome) of the termination. If
I were in his position, the 1st thing I would do is come right
out and forcefully dispute the rumor about termination even before I
started talking about insurance. I would, of course, avoid the
termination issue altogether if it’s true.
- He said not to be
fearful of going to insurance company. He said he understood why GM
and Verizon do this. It’s actually not a bad thing, he said.
Listening to him, it sounds like he was giving a sales pitch for Prudential.
- Right at the end (of the
Prudential thing), he said very briefly “we haven’t considered it.” That’s all he said.
He spent 99% of the time talking about Verizon and GM and Prudential, but
only 4 words about what concerned the audience the most. This was
very clever. He never said “we haven’t talked with Prudential or any
other insurance company about this possibility, etc.” Now let’s suppose
his subordinates (certain senior mgrs on CFO’s staff) have been meeting or
talking with Prudential. They would simply say they were there to
“listen” to what the insurance people got to say (or offer). They
would say they have no authority to “consider” anything like that because
it is such an important decision that MUST be submitted to the TVA Board
for “consideration.” And they would be technically correct in saying
that.
- He talked about COLA not
being an automatic thing. They would consider it if they can afford
it. Otherwise, he said if everybody gets COLA, we (TVA) all would be
out of money. He never said a word about the earlier promise that
after the 4-yr freeze ends, the current COLA will be restored.
Is he going to get the TVARS Board to change the R&Rs to make future
COLAs contingent upon TVA’s ability to afford it?
Per my email of Feb
24, 2011, to the TVARS Directors, I said “Pension obligations to retirees are
legitimate business costs. Thus, according to the language in section
(f), TVA must increase the power rates to fund the TVARS deficit. I
believe TVA has been acting in
violation of the TVA Act by letting TVARS have a big funding deficit.”
Dennis P.
To, P.E.
Phone (VN) 0129 238 2078
Phone (USA) 832-475-8183
From: Dennis To [mailto:dpto1953@gmail.com]
Sent: Wednesday, October 24, 2012 2:01 PM
Subject: “not a bad thing” to be turned over to insurance company?
Sent: Wednesday, October 24, 2012 2:01 PM
Subject: “not a bad thing” to be turned over to insurance company?
I have very little
doubt that Kilgore/Kim Greene/Thomas are going in the direction of TVARS
termination and insurance transfer. Per my 12/20/2010 email, that’s why
they used the 30-yr Treasury
rate, and not the TVARS discount rate, to estimate pension deficit for
SEC reporting.
People are all
upset and scared of the insurance thing. Yet, instead of trying to allay
their fear, Kilgore kept
complimenting Prudential and Verizon on the idea. (Imagine a
politician telling a group of pro-life folks that abortion is a good
thing?) Why did he? He’s a savvy politician, or else he would not
have gotten to where he is now. If you had been in his position, you
would have refrained from saying that to a group of scared people even if you
believe in it. But he did and that’s really scary because it’s an
indication of how likely they are wanting to do this to us, why? They
would avoid paying $1.5B (or
more) in frozen COLA benefits to existing retirees, plus add’l savings
by freezing future pension benefits of current employees. That’s why.
Did Kilgore
actually think people are naive enough to believe it’s “not a bad thing” to be
turned over to insurance company? Common sense tells you otherwise.
If it’s a good thing, why aren’t all other corporations (except GM and Verizon)
doing the same? Why doesn’t the Postal Service do this? Is it such
a creative, novel concept (too good to be true) that Prudential just
invented? Insurance companies don’t stay in business by losing money on
any deal. If they are to take on an obligation to pay some retiree $5,000
a month, they would want at least $5,500/mo to make it worth their while.
That’s why nobody else is doing what Verizon and GM did.
Kilgore already had
this thing all thought out. By the time the insurance thing becomes a
reality, he would be long gone. So what does it matter what he
said? His successor would simply say “He said it, I didn’t, life is
tough, isn’t it?” and that would be the end of it, right? Would be great
if we can get sworn statement (signed by him, Kim Greene, and John Thomas)
denying any truth whatsoever to the rumors about tvars liquidation and
insurance. Are they gonna do that? Don’t bet on it.
We (a few of us)
have been in communications with Senator Corker’s office. The Senator and
his staff are monitoring this situation closely.
Dennis P.
To, P.E.
Phone (VN) 0129 238 2078
Phone (USA) 832-475-8183
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