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Report on Latest TVARS Board Quarterly Meeting

The board of directors of the TVA Retirement System (referred to below as either TVARS or System) held its regular quarterly meeting Friday, June 8.

Included in this article are summaries of what was discussed and/or voted on during this meeting following reports by the Investment, Audit, Election and Retirement Committees of the TVARS board.

Unless otherwise noted, all votes were unanimous.

Each TVARS board director serves on one or more of these four committees.

Committee appointments are made on an annual basis.

Investment Committee

Wilshire Associates, the System’s investment consultant, reviewed investment performance for periods ended March 31, 2012.

Performance for the quarter was strong with the System earning 7.34 percent, or approximately $505 million, on its investments.

For the fiscal year to date, the System earned 12.2 percent.

For the 12-month period ended March 31, the System earned 3.84 percent and for the 3-year period an annualized 17.1 percent.

The TVARS board reviewed the fund’s asset allocation and investment policy benchmark.

The asset allocation review involved an analysis of long-term expected returns, risks and correlations of various asset classes.

The fund’s policy asset allocation was not changed but will be reviewed again at future meetings.

The board did approve some adjustments to the investment policy benchmark for certain prior periods to more accurately reflect historical investment allocations.

The board discussed the hiring of a defined contribution plan consultant to assist the board in its administration of the 401(k) Plan, including review and monitoring of funds in the investment menu, evaluation and monitoring of plan fees, and strategy involving plan options and design.

While no action was taken at this meeting, the board plans to consider one or more other firms that have experience in the defined contribution consulting area before making a decision.

Other topics discussed during the Investment Committee meeting included the following:

  • Investment managers’ compliance with their guidelines
  • Due diligence meetings with current and potential investment managers
  • Asset transfers during the quarter
  • Asset allocation policy implementation update
  • 401(k) Plan fund performance

Audit Committee

The board approved an engagement letter with Crowe Horwath, the System’s external auditor, to perform FY 2012 financial statement audits for the defined benefit plan and the 401(k) Plan.

The board also approved an agreement with John E. Sands, arbitrator and mediator, to provide mediation services with respect to the current lawsuit involving TVA and TVARS (Duncan, et al. v. TVA and TVARS).

Election Committee

The System will be holding an employee election for a director position.

The schedule for this year’s election was approved by the board and was communicated to employees in TVA Today on June 18.

As previously communicated, this year’s election will conducted by VR Election Services.

Retirement Committee

Prior to 2011, retiring employees were not required to show proof of date of birth.

In an effort to strengthen the data used in the calculation of benefits, the board approved a service agreement with Small World Solutions to conduct a date of birth audit on the System’s beneficiary and retiree payroll.

Small World Solutions currently provides reports of deceased members that are on the TVARS payroll.

The Board voted 6-1 to defer consideration of the following to the September TVARS meeting, adding it to the Retirement Committee agenda: New business: A proposal to change the rules to clarify that cost-of-living adjustments (COLAs) are non-forfeitable benefits.

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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