March 13,, 2016
By Steven Wishnia and Neal Tepel
Chattanooga, Tenn – The Tennessee Valley Authority Retirement System board voted March 3 to recommend reducing pension benefits for its about 11,000 current workers and 24,000 retirees. The proposal would end contributions to defined-benefit pensions for workers with less than 10 years of service and move them to a 401(k)-style plan.
Workers with 10 to 20 years would have half their pension contributions moved into the defined-contribution plan. If the proposal is approved by the TVA’s management and board, the authority, which has provided electricity to much of the rural South since the 1930s, would be the first federal agency to cut pensions. The changes would not affect pensions for TVA executives such as CEO William D. Johnson, whose $6.4 million compensation in 2015 likely made him the highest-paid federal employee in the country. Because the TVA runs under a combination of government and market rules, it is exempt from many of the restrictions protecting private and public-sector workers’ pensions. “There is nothing regulating them to handle their pensions properly, except management’s good graces,” said Gregory J. Junemann, president of the International Federation of Professional and Technical Engineers, which represents TVA engineers and scientists. Read more