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TVARS Board Holds Quarterly Meeting

The board of directors of the TVA Retirement System held its regular, quarterly meeting Thursday, Sept. 11, 2014.

The board heard reports from the Investment, Audit, Election and Retirement committees.

Investment Committee

Wilshire Associates, the system’s investment consultant, reviewed investment performance for periods ended June 30, 2014. Performance for the quarter was positive, with the system earning 4.1 percent on investments. For the 12-month period ended June 30, the system earned 17.7 percent.

System assets, fiscal year-to-date have earned approximately $850 million. Benefit payments for the same period have totaled approximately $480 million. The system’s annualized returns over the past three-, five- and 10-year periods have been 10.3 percent, 13.2 percent and 7.1 percent, respectively. As of June 30, 2014, the system’s assets totaled approximately $7.7 billion.

Upon review and recommendation of Wilshire Associates, the board approved additional investments in real estate with Landmark Partners, JP Morgan, Oaktree Capital and Siguler Guff, existing managers for the system.

The board met with 401(k) Plan consultant Hewitt EnnisKnupp to discuss a potential improved slate of 401(k) Plan investment options.

Other topics discussed during the Investment Committee meeting:

  • Asset allocation review
  • Funded status review
  • Risk allocation review
  • Asset transfers
  • 401(k) Plan fund performance
  • Due diligence meetings with current and potential investment managers
  • Investment manager policy compliance

Audit Committee

The TVARS board reviewed and approved a contract with E.H. Johnson & Co. to provide audit services for certain testing procedures of internal controls requested by TVARS, including testing that will assist Crowe Horwath, the system’s external auditor, in their annual audit of the system.

Election Committee

The results of the director election between Steve Ellis and Tony Troyani were accepted by the TVARS board. As previously announced, Troyani was elected to serve a new three-year term that begins Nov. 1 and ends Oct. 31, 2017. This year’s election was conducted again by VR Election Services. More than 35 percent of eligible voters participated in this year’s election, with about 90 percent of the votes cast via the Internet.

Retirement Committee

The board accepted the March 31, 2014, Actuarial Valuation of the Variable Annuity Plan performed by Mercer Human Resource Consulting (Mercer), the system’s actuary. The valuation is performed annually to review plan experience and recommend any necessary adjustments to the outstanding units in the Variable Annuity Plan.

The board also met with a representative from Mercer to discuss the proposed assumptions for preparing the Sept. 30, 2014, annual actuarial valuation. After a review and discussion of the information provided by Mercer, the board approved 7.0 percent as the assumed rate of return for the Sept. 30, 2014, annual actuarial valuation. There was no change in the mortality assumptions or in the expected rate of inflation.

The board also approved an engagement letter with Mercer to provide ongoing actuarial services for FY 2015.

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

 

 

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