Leonard Muzyn's TVARS Blog

The TVARS Board has yet to meet to discuss and approve the actual rules to implement the pension changes. I suspect TVA is dragging their feet as long as they can because they might want something different if the appeals court rules before the end of August. TVARS must give 30 days’ notice before the new rules take effect October 1, and I do not believe that can be done until the actual rules are finalized. I believe it is likely that Allen Stokes, Suzan Bowman, et al. will go along and rubber stamp any change requests that TVA might make. All COLAs are now in jeopardy. TVA is trying to use the TVARS approved changes as evidence that COLAs are not vested benefits. That is very clear from TVA's last filing with the court.

Revised and updated on June 23, 2016 Please click here to download the appellate courtroom audio of “15-6019 Charles T Evans vs Tennessee Valley Authority Retirement System TVA” from June 14, 2016.  The attorney for the plaintiffs speaks first, followed by the attorney for TVARS, followed by the attorney with TVA’s OGC.  The appellate court judges seemed very interested and asked many questions.  The oral arguments lasted over twice as long as scheduled.  All sides seemed to agree that the district court erred in finding that TVA retirees and employees did not have the right of judicial review.  I was very impressed with plaintiffs’ attorney Michael Wall who spoke first and made some clarifications at the end.  I believe he did an excellent job answering the judges questions and citing case law to support his arguments.  He also seemed to have a real mastery of the TVARS rules. TVA’s OGC attorney Edward Meade speaks about the “apparently inco...

I voted against the amendments scheduled to take effect on October 1, 2016 because they reduce earned benefits the board has determined are vested.  They also authorize TVA to inadequately fund the remaining benefits for the next 20 years.  They reduce benefits by about $700 million.  Even after this reduction, actuarial projections indicate that the 20-year funding requirements will not be enough to fully pay the remaining benefits.  In addition, these amendments transfer significant stock market risk to the plan’s beneficiaries while giving the board the authority to suspend TVA’s contributions to the plan for any reason. TVA will still be able to terminate the plan at any time. TVA’s agreeing that the remaining COLAs are vested gives the beneficiaries nothing because the rules clearly state that the retirement board determines what benefits are to be paid.  The board has already determined and informed the court hearing the pending lawsuit that COLAs are...

Benefits Changes Not Significant for Retirees By SUZAN BOWMAN, TVARA Valleywide President [Leonard Muzyn’s comments are in brackets.] What a wild ride 2016 has been so far! As I write this, we were just notified that the TVA Retirement System Board voted to accept TVA’s latest proposal on changes in retirement benefits (see article on this page). The actual wording of the amendments had not been finalized at this time. [Am I the only person concerned that a vote was taken before the actual wording was available?] Overall, the changes are not going to have significant impact on TVA retirees. [An average loss of almost $10,000 per retiree is not significant? Maybe it’s all relative. Some retirees do receive very large pensions and this proposal did hit future retirees, or current employees, harder.] You should not see any changes in your current check amounts. [A reduction in next year’s increase may feel OK now because it is a year away, but it is still a reduction.] More go...

Our actuary expressed five key concerns with the funding policy in TVA’s April 18, 2016 proposal.  These concerns were included in a written report to TVARS and are applicable to what the board approved in the May 9, 2016 meeting.  Board members owe a fiduciary duty to the beneficiaries of the system to act in their best interest independent of TVA.  Therefore, as a TVARS board member, I had no choice but to vote against this proposal.  This proposal may help TVA executives meet their goals and receive larger bonuses, but it exposes beneficiaries to these five very serious concerns.  I am ashamed to be associated with this board whose majority so clearly demonstrates that they place their own career advancements and financial securities above the duties required of them as members of this board.  This is a summary of the five key concerns expressed by our actuary about the proposal: It is not clear if participants or TVA are bearing the investment risk i...

Brian Child called for a vote on the first page of Bill Johnson’s latest letter.  It is not clear to me what the total changes are that the TVARS board has approved.  It did not seem to matter exactly what we were voting on.  Allen Stokes, Brian Child, Tammy Wilson and John Hoskins voted to approve whatever it was.  So much for an independent, collaborative and methodical TVARS board.  I’ve been involved in negotiations before and this had nothing to do with negotiating.  Like you, I will wait and see what spin TVA puts on it and try to figure out exactly what it means. From: Leonard Muzyn Date: Thursday, May 5, 2016 at 6:39 PM To: "tvarsmuzyn@gmail.com" Subject: TVARS Meeting Monday May 9 A TVARS Board special meeting teleconference is scheduled for Monday May 9th at 2:00 p.m. EDT.  Tammy Wilson, Brian Child, and John Hoskins have called for this special meeting to discuss the response from the TVARS Board to TVA’s counterproposal.  A spec...

A big thank you to everyone who wrote in opposition to President & CEO Bill Johnson’s proposal, and for the many suggestions for improvement.  You made a difference.  Many of our ideas were used to improve a counter offer which was passed 4-3 on March 3, 2016.  Though improved, I voted against this counter offer, and I remain firmly opposed to it.  These are some of my reasons: It reduces benefits by approximately $700 million, almost as much as the original proposal. It reduces vested COLA and supplemental benefits which members have earned the right to receive through their service as TVA employees. It fails to bring the minimum TVA required contribution formula into line with best practices for government plans as recommended by our actuary. It gives power to the TVARS Board to remove a board director for violation of policies created by the TVARS Board. I first saw this counter offer the morning of the vote, though most of the items were previousl...