Congressman questions why TVA executives cut employee pension but not executive compensation

TVA President Bill Johnson smiles during the TVA board meeting Thursday, February 11, 2016 in the TVA Chattanooga Office Complex. TVA President Bill Johnson smiles during the TVA board meeting Thursday, February 11, 2016 in the TVA Chattanooga Office Complex.

By Dave Flessner March 10, 2016 4 min read

FILE – In a July 13, 2008 file photo, Rep. Steve Cohen, D-Tenn., prepares for a debate in Memphis, Tenn. In the city where Martin Luther King Jr. was assassinated, a once-unbeatable former mayor wants the Democratic congressional primary to be a referendum on race. Willie Herenton is accusing white two-term incumbent U.S. Rep. Steve Cohen of “trying to act black.” He tells voters in this majority-black city that they “need to come off that Cohen plantation and get on the Herenton freedom train.” (AP Photo/The Commercial Appeal, Britney McIntosh, File) NO SALES

A Tennessee congressman is urging TVA’s top brass to give up some of their compensation and retirement benefits if they want to implement cost-of-living caps and other cost-saving measures for rank-and-file TVA employees and retirees.

In a letter to TVA, U.S. Rep. Steve Cohen, D-Memphis, 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 for its top brass.

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 and then shift those employees from a plan that guarantees a fixed level of benefits to a 401(k) plan for future benefit payments. TVA management has proposed even more cost-of-living caps and limits to trim $700 million of future liabilities from the TVA Retirement System, which is now $6 billion short of what it needs to meet all of its financial obligations for TVA’s 23,000 retirees and their families and the nearly 10,000 employees covered by the plan.

TVA executives receive a supplemental executive retirement plan (SERP) which is not subject to the same cuts as other TVA workers.

Cohen questioned why TVA hasn’t proposed similar cuts in retirement benefits among TVA executives. TVA CEO Bill Johnson’s total compensation in 2015 was approximately $6.4 million, up from $4.6 million the previous year and the highest of any federal employee in the country.