Leonard Muzyn's TVARS Blog

I would first like to take this opportunity to wish all TVARS beneficiaries a wonderful Christmas.  All the best in 2020! The following 2020 COLA, interest crediting rates, and IRS contribution limits were reported by TVARS. The following financial update was based on TVA regulatory filings and reporting by Dave Flessner, Business Editor of the Chattanooga Times Free Press.  Cost-of-living adjustment (COLA) for 2020 For 2020, the COLA for eligible retirees and beneficiaries will be 1.54 percent. TVARS Rules and Regulations provide that eligible retirement benefits (pension and supplemental benefits) will receive a COLA based on an inflation measure, which is the Consumer Price Index — All Urban Consumers (CPI-U) — an index maintained by the U.S. Labor Department that measures the price changes in a broad group of various goods and services purchased by consumers. Under TVARS Rules, the COLA is calculated as the percentage change in the average CPI-U for the period of November 2

Report from the 7th Director Search Committee – Sam DeLay, Chair Please add this to the minutes for the meeting, June 6, 2019 as item A-6647, or the appropriate number. The committee met on June 5, 2019 and discussed the election progress and the prospects for another round of interviews, currently proposed for July 2019 by the TVARS Executive Pat Brackett. It was recognized that the Board would likely not be able to reach consensus on the candidates to make a selection of the 7th Director and the committee recommends another path for electing the 7th director. The committee recommends modification of Section 3(2)(a) of the Rules and Regulations of the TVA Retirement System to amended to delete the language marked through and to add the language underlined to enable retirees to elect their own representative. As part of the items for this meeting, “Attachment – Description of Instant Runoff Voting” TVARS' election service provider proposed an Instant Runoff process which

Next month marks the two-year anniversary of the March 2017 GAO TVARS Report .  The GAO recommended that TVA "take steps to have its retirement system adopt funding rules designed to ensure the pension plan’s full funding."  The GAO went further and recommended using a "closed amortization period" to ensure that the plan is fully funded at the end of the period.  TVARS uses an "open amortization period."  What is the difference to TVA retirees?  $4,360 million according to the GAO: Notice that in both cases, TVA begins by owing the pension $6,000 million and paying $452 million in the first year.  So far, so good.  What do we notice about the payments TVA is required to make as the years go by?  Well, using the "closed amortization period,"  the annual payment remains $452 million.  However, the way TVARS does it, using the "open amortization period," the annual payment is reduced by $3 million to $5 million as each year passes.