Effective January 1, 2018, the TVA Retirement System (TVARS) has partnered with The Bank of New York Mellon (BNYM) for retirement benefit payment and reporting services. BNYM has been the trustee and custodian of TVARS pension assets for 30 years and is one of the largest providers of benefit payment and reporting services. As a result of this partnership, your TVARS retirement payments will now be processed and sent to you by BNYM. Click here to see the services and features that BNYM offers TVA retirees.

2018 Cost-of-living Adjustment

The TVARS Board approved a 1.84 percent cost-of-living adjustment (COLA) for eligible retirees for calendar year 2018. Retirees will see the increase in checks beginning January 31, 2018. The COLA is calculated by comparing the percentage change from one 12-month period to another 12-month period of 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 good and services) minus .25%.

TVA Retirement System has strong financial year

The TVA Retirement System (TVARS) ended fiscal year 2017 with strong investment returns and significant contributions from TVA, which resulted in assets over $8 billion—the highest level in 10 years.

For the fiscal year, the System earned 10.5% on its investments (or approximately $750 million) and outperformed its policy benchmark by 1.3% while maintaining a well-diversified and risk-focused portfolio. Preliminary performance numbers for calendar year 2017 show a 13% investment return (or approximately $900 million).

In addition to strong investment performance, significant contributions from TVA greatly helped to improve the System’s financial condition even as the System made benefit payments to retirees and beneficiaries during the fiscal year of $700 million. Along with the $300 million required by the System’s Rules and Regulations, TVA made an additional discretionary contribution of $500 million in September, 2017. The TVA board has also approved a $300 million contribution to the System for fiscal year 2018.

Recent TVARS board actions

At its December quarterly meeting, the TVARS board elected Brian Child, Senior Manager, Long Range Financial Planning, as the board’s Chair, and Wilson Taylor, Director, HR Business Office and Ombudsman, as the board’s Vice-Chair. Also at its December meeting, the TVARS board approved interest crediting rates for calendar year 2018 calculated according to the System’s Rules and Regulations.

For 2018, all fixed fund (annuity) accounts will earn 4.75%. Cash balance accounts for employees hired on or after Jan. 1, 1996, will receive interest credits equal to 4.75%, while the cash balance of accounts for employees hired before Jan. 1, 1996, will continue to receive interest credits equal to 6.0%.

IRS contribution limits for 2018

Employees making pre-tax salary deferrals or Roth contributions to the 401(k) Plan, may contribute up to $18,500 during calendar year 2018, which is a $500 increase from 2017. Employees who are age 50 or older at any time during 2018 have an additional $6,000 they may contribute in pre-tax salary deferrals or Roth contributions to the 401(k) Plan, which are called “catch-up” contributions.

The overall individual contribution limit to the 401(k) Plan and the System’s defined benefit plan for 2018 will be $55,000, which is a $1,000 increase from 2018. This overall limit includes 401(k) pre-tax salary deferrals, Roth contributions, after-tax contributions, TVA’s matching contributions, and TVA’s (automatic) non-elective contributions. For employees hired before Jan. 1, 1996, who are eligible to contribute to the System’s fixed and variable funds, this overall limit also includes any after-tax contributions made to those funds during 2018. Any “catch-up” contributions made by employees age 50 or older to the 401(k) Plan do not count toward the overall individual contribution limit of $55,000.

For questions or more information please call TVARS at 865-632-2672, or email retsvcs@tva.gov.

TVA Retirement System Board Approves Amendment

At an October 30, 2017, special-called meeting, the TVA Retirement System (TVARS) board approved an amendment to the TVARS Rules and Regulations providing a limited carryover period of up to one (1) year for the current seventh director to continue in the event the TVARS board is unable to select a new seventh director by the end of the sitting seventh director’s term. Please see the Notice of Amendment.

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