February 12, 2016
By Steven Wishnia and Neal Tepel
Chattanooga, Tenn – Unions representing Tennessee Valley Authority workers have asked Congress to block planned cuts in pensions for its more than 10,000 current workers and 23,700 retirees.
The TVA’s Retirement System Board is expected to decide this month on whether to cap cost-of-living increases at 3% a year and switch workers with less than 20 years on the job to a 401(k) defined-contribution plan. TVA President Bill Johnson said the cuts were necessary because the authority is $6 billion short of the $12.8 billion it needs to fund future benefits. Union leaders disagree, noting that the TVA—a 1930s New Deal project that supplies electricity to much of the South—made a record $1.1 billion in profits last year, and Johnson, who made $6.4 million, is the highest paid federal employee in America. “This is a federal government corporation, but those who work in the executive suite are lining their pockets like TVA is their personal business while forcing 'austerity' on front-line employees,” said Gay Henson, president of the TVA Engineering Association. “It's wrong. It's shortsighted. It may be illegal—and if it's not, it should be.” TVA’s retirement program is neither backed by the government, as other federal agencies’ plans are, nor regulated by the Employee Retirement Income Security Act, as private employers’ plans are. Read more