The Tennessee Valley Authority will add another $275 million next year to its employee pension plan to help shore up the underfunded retirement plan and pay for enhanced benefits for more than 23,000 TVA retirees.
But with TVA's Retirement System still underfunded by $4.8 billion in its last financial report, some retirees want TVA to do more to ensure the long-term health of the pension plan.
Dan Pitts, a TVA retiree who has complained about TVA's previous failure to fully fund the pension program, said he is encouraged that TVA moved this year to ensure that what TVA collects from its ratepayers to cover pension costs will be contributed to the pension.
" This is major step forward in transparency for TVA's ratepayers as well as pension plan participants and I think the TVA board needs to be commended for taking this action," Pitts said. "But I think TVA still needs to do more to help ensure it meets its obligations."
The minimum required TVA contribution for fiscal 2016, according to fund actuaries and plan rules, is $209 million. The TVA Retirement System board recommended that TVA contribute $350 million.
TVA's planned payment to the pension next year duplicates a similar contribution of $275 million last year.
About $100 million is needed just to meet the costs of new benefits from more retirees and a cost of living adjustment for retirees already on Social Security.
TVA spokesman Scott Brooks said TVA's retirement system issues about $650 million in payments each year to more than 23,000 retirees. TVA contributes funding and the retirement system makes money on its investments each year.
"The recent volatility in the investment market has impacted TVA's retirement system, as it has other retirement plans, but it remains fully capable of meeting its obligations," Brooks said. "TVA remains committed to its employees, both past and present, and stands behind its obligation to them and the TVA Retirement System."
TVA's retirement plan has liabilities of more than $12.2 billion. In its fiscal 2014 year- end report, TVA reported that its retirement system is only about 61 percent funded, based upon projected benefit costs and investment earnings for the future.
Last year, TVA employees mounted an online petition to urge TVA to fund its pension plan.
Last year, TVA put $250 million into the pension fund, which also exceeded the minimum requirement of $198 million, but was also less than what the TVARS board recommended.
Contact Dave Flessner at dflessner@timesfreepress.com