Leonard Muzyn's TVARS Blog

The TVARS board is required to recommend a contribution from TVA to be made in fiscal year 2014 prior to the end of the current fiscal year.  (See Section 9B on pages 51-53 of the rules here .)  Since TVA sets its budget months before the end of the fiscal year, it is imperative that this recommended amount be: decided upon by the TVARS board as quickly as possible; sufficient to adequately fund TVARS; and consistent with the amounts charged to ratepayers for pension expense. All seven TVARS board members have an obligation to come together to accomplish this.  (See TVARS board members here .)  I sincerely hope we will be able to accomplish this without further rule changes suspending TVA contributions, or further claims that legitimate accrued benefits are not really vested and must be reduced.  I hope we will be able to put an end to our failure to insure that amounts paid by TVA ratepayers for pension expense are used for their intended purpose. ...

I believe it is critical that the TVARS board specify in the rules that the COLAs are "non-forfeitable" vested benefits as soon as possible BEFORE any divestiture discussions take place.  TVA has communicated for several years now that it believes COLAs are "forfeitable," or not vested.  TVA’s “understanding” could be “baked in” any divestiture discussions if the TVARS board does not act quickly.  I do not know the probability of divestiture occurring, but I believe the TVARS board should protect the members of the system by planning for the worst and hoping for the best. 

From: Muzyn, Leonard J Jr Sent: Friday, April 12, 2013 12:39 PM To: Bays, Leslie P; Hairston, Peyton T Jr; Hoskins, John M; Stokes, Allen E; Troyani, Anthony L Jr; Wilson, Tammy W Cc: Brackett, Patrick D Subject: 2014 TVARS Contribution Fellow TVARS Board Members: From the beginning of 2003* through 2012, TVARS has been substantially underfunded. However, during this ten year period, TVA collected $605,000,000 from ratepayers to cover pension costs that were then diverted to non-pension activities. $522,000,000 of this amount occurred in 2012 alone. These numbers are detailed in a letter from Dan Pitts dated January 20, 2013. (See Dan's letter here .) TVA has twice responded to Dan Pitts' letter and did not, in either instance, take exception to the data in his analysis. (See TVA's responses here and here .) Per TVARS rules, the TVARS board must soon recommend a contribution from TVA to be made in 2014. I believe a very reasonable starting point for di...

The transcript of the December 11, 2012 TVARS board meeting is now available here . The motions I made to open the meetings to the membership, member voting on benefit concessions, and informing TVA of TVARS’ funding requirements, begin on page 9. Please note especially the excellent e-mail from a retiree in support of open meetings which I read on page 11. No one on the TVARS board would second any of these motions. More information is available on my website here .

Many members of TVARS have asked the TVARS board to open its meetings. I agree. I proposed this at the last quarterly board meeting, but it was not approved. See my proposal here . The board’s governance policy does not currently provide for open meetings. See the complete governance policy here . The next quarterly board meeting will be this Friday, March 15, and it will be closed. The board’s governance policy contains a section entitled “Transparency” (Section #5) which begins: “The Rules and Regulations do not require public access to meetings; however, the Board embraces the governance principles of transparency and accountability.” I believe one might reasonably ask: If the board embraces transparency and accountability, why doesn’t the board provide for public access to its meetings in its governance policy? The Rules and Regulations do not require a lot of things that have been implemented in various board policies. The transparency section of the board's gov...

Senator Alexander's office contacted Daniel Pitts to say that Senator Alexander is asking for a response from TVA.  Senator Alexander is asking for a response to the apparent discrepancy between the amounts charged ratepayers and the amounts actually contributed to TVA's pension. Click here to see the letter Daniel Pitts sent to Senator Alexander, Senator Corker, and Congressman Duncan. As of February 8, 2013, Daniel Pitts had not received a response from TVA. Click here to see the letter Daniel Pitts sent to TVA's President and CEO.

TVA employee pension costs charged to ratepayers over the last ten years appear to exceed the amounts TVA chose to contribute to the pension fund by $605 million. The yearly amounts obtained from publicly available information are detailed in a January 20, 2013 letter to TVA’s President and CEO from Daniel Pitts , a TVA Retiree. Pension costs can fluctuate from year to year based on current market conditions and assumptions that TVA and its actuary use to estimate pension costs. Accordingly, there is no expectation that the amount of funds collected and contributed annually will closely correspond. However, over a multi-year period, it would be reasonable to expect that the cumulative amounts would be more closely aligned than the results presented in the letter. The following statement about the pension fund appears on page 6 of the 2012 TVA budget proposal submitted to Congress: “TVA’s proposed budget assumes that annual contributions continue in 2011 and 2012 consistent with ...