Report on Quarterly Meeting of TVARS Board

The TVA Retirement System board of directors held its regular quarterly meeting Friday, June 17.

Wilshire Associates, the System’s investment consultant, discussed the investment performance to date. For fiscal year 2010, the fund earned 11.5 percent vs. the policy benchmark of 9.9 percent, a level that ranked the System in the 10th percentile compared to public plan sponsors in the Wilshire Associates Inc. database.

Fiscal year 2011 investment returns have also been strong, with return on assets through March totaling about 10 percent. Over the past 12 months through March, assets have earned 15 percent. This performance is in the top 12 percent of all 721 funds in the database. TVARS’ performance the last 10 years through March was 6.1 percent and ranks in the top 24 percent of all funds tracked by Wilshire. Since 1988, TVARS assets have earned 8.89 percent annually.

As a result, TVARS’ funded status has continued to improve during fiscal year 2011. Based on the performance for fiscal year 2011 discussed above, assets have earned approximately $652 million. Of this, $305 million has been used for benefit payments. Under the accounting standards used by TVA, funded status has increased from 66 percent to 69 percent in the fiscal year through March. Under the accounting standards used by TVARS, funded status has increased from 80 percent to 84 percent in the fiscal year through March.  

Each TVARS board director serves on one or more of four committees. Committee appointments are made on an annual basis. As the newly selected seventh director, TVA retiree Allen Stokes was appointed to serve on the audit and investment committees. Stokes, who was selected as the seventh director at the last TVARS quarterly meeting, retired from TVA in January 2007, having last served as senior manager of Special Projects in Human Resources’ Information Services.

A complete list of committee appointments is available here.

Investment Committee

To assist the board as it continues to look at the long-term investment of the System’s assets, Wilshire Associates and Bridgewater, one of the System’s investment managers, presented various asset allocation and investment strategies to the board.

Additional material was provided by the TVARS staff and PIMCO, another of the System’s investment managers.

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

  • Compliance guidelines for several investment managers
  • Information on fee reductions for the Spartan 500 Index Fund for the Variable Fund and the 401(k) Plan
  • Report on quarterly rebalancing of System assets

Audit Committee

At Friday’s meeting, the TVARS board approved a Board Self Evaluation Policy. This policy can be viewed here.

The policy will be in addition to the Investment Policy Statement, the 401(k) Investment Policy Statement, the Service Provider Evaluation and the Interaction Policy, and the Ethics & Code of Conduct Policy that the board previously approved and which are also available on the TVARS website.  

The board will continue its governance work with Hewitt EnnisKnupp, an outside advisory firm, at a scheduled workshop on June 29. The board will review and discuss the following policies at this workshop:

  • Election Policy
  • Confidentiality Policy
  • Communication Policy

The board also approved an engagement letter for Crowe Horwath, the System’s external auditors, to provide FY 2011 financial statement audits of the defined benefit plan and the 401(k) Plan. During the Audit Committee meeting, the board received information from the staff regarding 23 due-diligence conference calls and/or meetings the staff held with current and potential investment managers.

Election Committee

As communicated in the June 20 TVA Today, the System will be holding an employee election for a director position. The schedule for this year’s election was approved by the board.

Retirement Committee

The staff recommended a default benefit option for vested terminated employees who fail to apply for benefits within the 60-day timeframe provided for in the rules.

The board will consider taking actions at its September meeting to make sure that these participants are defaulted to a deferred pension benefit commencing at age 65.


Anyone with questions can contact Retirement Management by email at retsvcs@tva.gov or by phone at 865-632-2672, 800-824-3870 (toll-free) or 865-632-7576 (for the hearing-impaired).






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