TVARS has announced the following 2024 information of interest to employees and retirees.
Cost-of-living adjustment (COLA) for 2024
For 2024, the COLA for eligible retirees and beneficiaries will be 4.44%.
The TVARS Rules and Regulations (TVARS Rules) provide that eligible retirement benefits (pension and supplemental benefits) will receive a COLA benefit based on a formula using the Consumer Price Index – All Urban Consumers (CPI-U) – an index maintained by the U.S. Labor Department that measures the price changes in a broad group of various goods and services purchased by consumers. The COLA is calculated as the percentage change in the average CPI-U for the period of November 2021 – October 2022 to the period November 2022 – October 2023 (4.69%) minus 0.25%. Eligible retirees and beneficiaries will see the increase in checks beginning January 31, 2024.
Interest Crediting Rates for 2024
Cash balance (pension) accounts receive interest credits on a monthly basis and Fixed Fund (annuity) accounts receive interest credits on a daily basis and the annual interest crediting rates are set for each calendar year according to formulas in the TVARS Rules.
- For employees with cash balance accounts who were hired prior to January 1, 1996, the interest rate for 2024 will be 7.69%.
- For employees with cash balance accounts who were hired on or after January 1, 1996, the interest rate for 2024 will be 6.25%.
- For Fixed Fund accounts, the interest rate for 2024 will be 6.25%.
For employees with cash balance accounts who were hired prior to January 1, 1996, the calculation is equal to the change in the 12-month average CPI-U plus 3% (but not less than 6% nor greater than 10%).
For employees with cash balance accounts who were hired on or after January 1, 1996, and for Fixed Fund accounts, the calculation is equal to the change in the 12-month average CPI-U plus 2% (with a floor of 4.75% and a ceiling of 6.25% based on a formula in the TVARS Rules).
Cash Balance Account Values available in Fidelity NetBenefits
Beginning later this month, employees who are eligible for a Cash Balance benefit will be able to see the value of their Cash Balance Account in Fidelity NetBenefits. The Cash Balance Account information will be updated monthly on the Fidelity NetBenefits platform and will be included along with 401(k) Plan account and (if available) Fixed and Variable Fund account information. By providing Cash Balance account information on NetBenefits, this will allow these employees to see up-to-date values of their TVARS retirement accounts all in one place to help with awareness of total retirement benefits and overall financial planning.
IRS contribution limits for 2024
During 2024, employees will be able to contribute up to $23,000 to the 401(k) Plan on a pre-tax and/or Roth basis, which is an increase of $500 from 2023. Employees who are age 50 or older at any time during 2024 may make additional “catch-up” contributions to the 401(k) Plan of up to $7,500 over the $23,000 limit on a pre-tax and/or Roth basis. Note: There will be 27 pay periods in 2024, so please calculate your contributions accordingly.
The overall contribution limit to the 401(k) Plan and the TVARS Fixed and Variable Funds for 2024 will be $69,000, which is a $3,000 increase from 2024. This overall limit includes the following contributions: (i) employee pre-tax, Roth, and after-tax contributions to the 401(k) Plan; (ii) TVA’s matching and non-elective (automatic) contributions to the 401(k) Plan; and (iii) employee after-tax contributions to the Fixed and Variable Funds (only available for contributions by employees hired before January 1, 1996). Any “catch-up” contributions made by employees age 50 or older to the 401(k) Plan do not count toward the overall contribution limit of $69,000.
New actuarial factors for monthly retirement benefits effective April 1, 2024
Under the TVARS Rules, TVARS is required to periodically study the experience of the System’s participants and benefits and review the assumptions and factors that are used to calculate retirement benefit payments based on that experience.
After an experience study this year by the TVARS actuary (Mercer Human Resource Consulting), the TVARS Board adopted new actuarial assumptions and factors for the calculation of retirement benefits effective April 1, 2024. Among other changes, the updated assumptions and factors more accurately reflect the life expectancy of TVA employees, retirees, and beneficiaries.
Even though these new assumptions will not go into effect until April 1, for comparison purposes, TVARS will be able to provide estimates reflecting the new factors in January. For employees considering retirement before April 1, these estimates will show the impact of the factors and help the employee decide whether to retire before or after April 1. To request an estimate, employees are encouraged to e-mail the request directly to tvars@tva.gov.
For answers to questions or for more information, please call the TVA Retirement System at 800-824-3870, or send an email to tvars@tva.gov.