Leonard Muzyn's TVARS Blog

The TVA 401K share class changes scheduled for December 4, 2013 have been delayed to February 5, 2014. At that time, the share classes of 16 investment options are scheduled to change. As a result, the fund codes, ticker symbols, and expense ratios will change. The new share classes will offer you the same investment strategies and risks, but the overall expenses will be lower. The transfers of balances will appear as exchanges on your account history and quarterly statement. You may also receive prospectuses as a result of these transactions. Click here to see the October 2013 letter from Fidelity explaining the changes and which funds will be affected. Except for possibly having to update your rebalance elections if you use that feature (see below), you do not need to do anything if you are satisfied with how your current investment elections will be modified . However, if you would like to request changes to your account, obtain additional information, or find a...

IRS contribution limits The overall 401(k) contribution limit for calendar year 2014 will increase from $51,000 to $52,000. This overall limit includes employees’ pre-tax, after-tax or Roth contributions to the 401(k) Plan; TVA’s matching contributions to the 401(k) Plan; and employees’ after-tax contributions to the Fixed or Variable funds. The pre-tax contribution limit to the 401(k) plan will remain at $17,500, while the pre-tax catch-up limit for employees who are age 50 or older in 2014 will remain at $5,500. Note: Catch-up contributions do not count toward the overall contribution limit of $52,000. In addition, the interest rates for the Cash Balance Benefit Structure and the Fixed Fund remain at 6 percent for 2014. Retirement Estimates with New Actuarial Factors Now Available As announced earlier in TVA Today, the TVARS board in November adopted new actuarial assumptions. The new assumptions more accurately reflect the life expectancy of TVA employees and retirees. N...

The TVARS board approved a 1.53 percent cost-of-living adjustment (COLA) for eligible retirees and beneficiaries for calendar year 2014. Retirees will see the increase in checks beginning Jan. 31, 2014. The COLA is calculated by comparing the percentage change in the average CPI-U for Nov - Oct compared to the previous Nov - Oct.

As part of TVA CEO William D. Johnson’s $5,904,531 compensation package for nine months work in fiscal year 2013, he received $2,051,329 of value in his Supplemental Executive Retirement Plan (SERP).  The SERP is made available to a limited number of TVA executives and is not part of TVARS.  The SERP received $6,000,000 of ratepayer money.  Mr. Johnson received $12,066 of value in his TVARS pension.  TVARS received nothing.  (See pages 135, 168 and 172 in TVA’s fiscal year 2013 10-K financial statement .) 

I made the following statement during the September 12, 2013 TVARS board meeting. It will be included in both the transcript and in the official minutes: The minutes of the July 19, 2013 board meeting that we are voting to approve indicate that four TVARS board members voted to recommend that TVA contribute $285 million to its employees' pension plan next fiscal year. Two TVARS board members voted against it because they thought it was too much to ask TVA to pay. $285 million is clearly not enough, but I was the only one who voted against it for that reason. Our members can see from TVA’s financial statements that last fiscal year TVA contributed nothing to its employees' pension plan while it contributed $8 million to its executives' supplemental pension plan. Our members can see that TVA's reported pension expense was $530 million . Our members can see from the TVARS annual report that TVARS paid approximately $600 million in benefits to approximately 23,1...

Posted in CEO Employee Forum , Financial Services on August 7 2013 Question: I’ve heard TVA plans to eliminate the original retirement plan and force all employees into the cash balance plan. If this happens, would employees currently in the original plan have the opportunity to retire in the plan within a certain timeframe, or would they automatically be transferred to the cash balance plan with no warning? Answer: There are no plans to eliminate the original retirement plan or force TVA employees under the original plan into the cash balance plan. The TVA Retirement System will continue to have two benefit structures within the Plan: the Original Benefit Structure and the Cash Balance Benefit Structure. The System also administers a defined contribution plan with matching contributions, the TVA Savings and Deferral Retirement Plan (401(k) Plan). There are currently no plans to “do away with” or change any of the options previously mentioned.

The board of directors of the TVA Retirement System held its regular quarterly meeting Friday, June 28. The TVARS board approved changes to the TVARS rules and 401(k) Plan provisions to allow credit on up to 4% of regular salary or wages for certain TVA lump-sum payments made to employees in FY 2013 in lieu of base-wage or salary increases. The credit is used to calculate pension benefits under the rules and TVA matching contributions under the 401(k) Plan.