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TVARS Board Holds Quarterly Meeting

The board of directors of the TVA Retirement System held its regular quarterly meeting Friday, Dec. 13. 

Discussions involved the Investment, Audit, Election and Retirement Committees of the board. 

Investment Committee

Wilshire Associates, the system’s investment consultant, reviewed investment performance for the period ended Sept. 30, 2013. Performance for the quarter was positive, with the system returning 5.03 percent on its investments. For the 12-month period ended Sept. 30, the system earned 12.2 percent and ranked in the 35th percentile among the 904 plans in Wilshire’s Total Fund Universe. The system’s annualized returns over the last three, five, and 10 years have been 9.9 percent, 8.3 percent, and 7.1 percent, respectively. This performance ranks in the 30th, 24th, and 33rd percentile among other institutional funds followed by Wilshire. 

Other topics discussed during the Investment Committee meeting included:

  • Investment policy statement
  • Wilshire consulting services
  • PIMCO investment management
  • 401(k) Plan
  • Economic conditions
  • Due diligence meetings
  • Asset transfers
  • Private equity and private real assets
  • Risk allocation review
  • Funded status review

Audit Committee

The Audit committee met with E. H. Johnson & Co. on Dec. 6 to review the annual audit of controls related to system operations for the period from Aug. 1, 2012, to July 31, 2013 (SSAE 16 audit report). The report resulted in no findings and was accepted by the board at its meeting.

The board also received an update from Crowe Horwath LLP, external auditor for TVARS, regarding the current audit of financial statements for FY 2013.

The TVARS board approved the following policies as part of their overall governance:

  • Succession Planning Policy
  • Investment Policy Statement (amended)

These policies will be available on the TVARS website at www.tvars.com, along with previously approved policies.

Retirement Committee

The board approved a 1.53 percent cost-of-living adjustment (COLA) for eligible retirees 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 U.S. Labor Department’s Consumer Price Index-All Urban Consumers – or the CPI-U (the CPI-U takes into account price increases/decreases for various goods and services) from the 12-month period ended Oct. 31, 2013, to the 12-month period ended Oct. 31, 2012.

The board also established the annual interest rate to be applied to the Cash Balance pay credits for members of the Cash Balance Benefit Structure. The TVARS rules provide for the interest rate to be the change in the CPI plus 3 percent, with a minimum rate of 6 percent. Based on the above COLA of 1.53 percent, the interest rate will remain at the minimum of 6 percent for Cash Balance participants in 2014.

Under the rules that govern the operation of the system, the board is required to periodically review the assumptions that are used to determine benefit payments. At their September meeting, the board adopted new actuarial assumptions based on the review performed by the system’s actuary, Mercer Human Resource Consulting. The board voted to approve amendments to the appendix of the rules and regulations effective Feb. 1, 2014, to reflect the new actuarial assumptions. Therefore, the system will switch to mortality tables that more accurately fit the demographics of TVARS’s membership for retirements on or after Feb. 1, 2014. Click here to read previous coverage of the new assumptions.

Each TVARS board director serves on one or more of the four committees. Committee appointments are made on an annual basis. Unless otherwise noted, all decisions were unanimous.

Questions

The TVARS board is committed to providing accurate and timely information to employees and retirees.

Anyone with questions can contact Retirement Management by e-mail at retsvcs@tva.gov or by phone at 865-632-2672, or 800-824-3870 (toll-free).

 

 

 

 

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