U.S. Rep. Steve Cohen, D-Tenn., today urged TVA President Bill Johnson to cut executive pensions along with reductions in some pension benefit increases planned for TVA's rank and file employees and retirees.
In a letter to TVA, Cohen criticized what he said was "an apparent inequity" in the way the federal utility plans to change pension benefits for employees and the lack of changes in TVA's supplemental executive retirement plans.
Last week, the Tennessee Valley Authority Retirement System board approved a proposal to reduce the pension benefits for employees hired in the past 20 years then shift those employees from a plan that guarantees a fixed level of benefits to a 401(k) plan for future benefit payments. TVA executives receive a supplemental executive retirement plan (SERP) which is not subject to the same cuts as other TVA workers.
The TVA Retirement System board approved the changes to help shore up TVA's pension plan, which is underfunded by $6 billion for the 23,000 retirees and 10,000 employees of TVA covered by the plan. TVA has proposed caps on future pension benefits and cost of living increases to help pare $700 million of future liability. The TVA Retirement System approved more modest changes and asked TVA to boost its annual contributions to the pension plan more than what TVA had proposed.
Cohen questioned why TVA hasn't proposed similar cuts in retirement benefits or pay for the utility's top bosses. Johnson's total compensation in 2015 was approximately $6.4 million, the highest of any federal employee in the country.
"It is important that workers and executives at the Tennessee Valley Authority are subject to the same pension cuts for equity," Cohen said. "Not only is it fair but it is ethically and morally right. By not subjecting all executive compensation to a reduction the message that's sent, intended or not, is that executives are valued more than the workers and retirees. That is bad for team morale."