""
 
 

Report on Latest Quarterly Board Meeting

The board of directors of the TVA Retirement System (referred to as either TVARS or System) held its regular quarterly meeting Tuesday, Dec. 11.

Read more about 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 Sept. 30, 2012. Performance for the quarter was positive with the System earning 5.09 percent on its investments. For the 12-month period ended Sept. 30, the System earned 16.69 percent and ranked in the 39th percentile among the 532 plans in Wilshire’s Total Fund Universe. Earnings for the System over the last year totaled over $1 billion. The System’s annualized returns over the last 3, 10 and 20 years have been 10.26 percent, 8.55 percent and 8.44 percent, respectively. This performance ranks in the 17th, 19th and 32nd percentile among other institutional funds followed by Wilshire.

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

  • Revisions to the investment policy statement
  • Trade cost analysis
  • Dodd-Frank implementation update
  • Investment managers’ compliance with their guidelines
  • Due diligence meetings with current and potential investment managers
  • Asset transfers during the quarter
  • 401(k) Plan fund performance
  • Risk allocation review
  • Funded status review

Audit Committee

The annual audit to assess controls related to System operations for the period from Aug. 1, 2011, to July 31, 2012 (SSAE 16 audit report), performed by E. H. Johnson & Company, P. C., was provided to the board. The report resulted in no significant findings and was accepted by the board.

The board also received an update from Crowe Horwath LLP, external auditor for TVARS, regarding the current audit of financial statements for FY 2012.

Election Committee

The election committee had no items on the agenda.

Retirement Committee

The board accepted the March 31, 2012 Actuarial Valuation of the Variable Annuity Plan performed by Mercer Human Resource Consulting, the System’s actuary. This valuation is performed annually to review plan experience and recommend any necessary adjustments to the outstanding units in the Variable Annuity Plan.

The board approved a 2.30 percent cost-of-living adjustment (COLA) for eligible retirees for calendar year 2013. Retirees will see the increase in checks beginning Jan. 31, 2013. 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 goods and services).

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 COLA plus 3 percent, with a minimum rate of 6 percent. Based on the above COLA of 2.30 percent, the interest rate will remain at the minimum of 6 percent for Cash Balance participants in 2013.

The board voted to amend the Trust Agreement with Fidelity Investments, record keeper for the 401(k) Plan, to reduce participant fees. Under the new fee structure, a portion of recordkeeping expenses deducted from plan assets will be credited back to individual participant accounts. Additional information will be provided to participants once the details of the plan have been finalized. Participants could see the credit to their account as early as Dec. 31, 2012.

Questions

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

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).

 

 

HomeForms and DocumentsBoardContact UsPrivacy PolicyDisclaimer