December 2, 2014
Dear xxxxxxx:
Thank you for contacting me
about the Tennessee Valley Authority's employee/retiree pension plans.
As I am sure you are aware, the
Tennessee Valley Authority (TVA) was established in 1933 to "address a
wide range of environmental, economic, and technological issues, including the
delivery of low-cost electricity and the management of natural resources"
to the people of Tennessee, Alabama, Georgia, Kentucky, Mississippi, North
Carolina, and Virginia.(1) As it currently stands, the TVA employs over 12,500
people, generates $10.8 billion in sales revenue, sells 162 billion kilowatts
per hour (kwh) of electricity and receives no appropriated federal tax dollars.
Daniel Pitts, a TVA retiree,
wrote an article for Pensions & Investments where he states that " the
Tennessee Valley Authority's pension plan was only 63% funded at the end of its
fiscal year September 30, 2013" and that "TVA expects to collect $528 million from its
ratepayers in the current fiscal year, ending Sept. 30, 2014, to cover pension
costs but plans to contribute only $250 million to the pension plan."
Mr. Pitts avers that the TVA's "2013 funded status [for
pension plans] is much worse than the 77% it was in 2008."(2)
It is my understanding that TVA
pension plans are not protected or insured by the Employee Retirement Income
Security Act (ERISA), the Pension Protection Act (PPA) and Internal Revenue
Code requirements like many other utilities. I am astonished to hear of this news and I will follow-up
with TVA leadership regarding this issue. I believe that TVA should fulfill
their obligations to their employees and retirees when it comes to pensions.
Unlike many other pension plans,
the TVA has the legal power to address any pension shortfall should it occur because the TVA has a monopoly
over electricity and, in turn, can raise rates as necessary to fund its costs
of generating electricity... which includes pension fund costs.
The House Committee on Transportation and Infrastructure
has oversight over the Tennessee Valley Authority. Although I am not a
member of this committee, please know that I will keep your views in mind
should legislation regarding this issue come to the full House of
Representatives for a vote.
Please feel free to contact me
again in the future. You may wish to visit my website at http://brooks.house.gov/ for additional
information about issues and legislation before Congress.
Sincerely,
Mo Brooks
Member of Congress
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