Ranking Member DeFazio and Congressman Cohen Seek Answers to TVA Pension Cuts
[WASHINGTON, DC] – Congressman Peter DeFazio (OR-04), Ranking Member of the House Transportation and Infrastructure Committee, and Congressman Steve Cohen (TN-09), member of the House Transportation and Infrastructure Committee, today sent a letter to Tennessee Valley Authority (TVA) President and CEO Bill Johnson seeking answers to questions regarding TVA’s historical contributions to its pension system, the pending TVA Retirement System modifications, and the impact that these changes would have on TVA workers and retirees who have voiced concern that the changes are inequitable and will subject them to drastic benefit reductions. A copy of the letter can be found here.
“I respectfully ask that Tennessee Valley Authority CEO Bill Johnson answer the proposed questions promptly and thoroughly and take all available actions to prevent the adoption and implementation of any modifications to TVA’s pension system that could harm TVA workers and retirees,” said Congressman Cohen. “It is important that if changes in the TVA pension system must be made, workers and executives at the TVA are subject to the same pension cuts for equity. Not only is it fair but it is ethically and morally right. By not subjecting all executive compensation to a reduction the message that’s sent, intended or not, is that executives are valued more than the workers and retirees. That is bad for team morale.”
“The Tennessee Valley Authority, a federally-owned corporation, needs to answer a few critical questions as the Board debates whether to make draconian cuts to the guaranteed pension plans of hard-working TVA employees,” said Ranking Member DeFazio. “First, what steps has TVA taken to avoid the extreme benefit and pension reductions that will harm over 30,000 TVA workers and retirees. Second, how does it justify making cuts to the pensions of rank-and-file employees, while leaving TVA executives’ Supplemental Executive Retirement Plan untouched. The CEO was paid $6.4 million last year. Finally, how does TVA justify what appears to be mismanagement of contributions into the pension system, which is primarily responsible for the TVA’s current financial situation. I am happy to join Rep. Cohen on this letter and look forward to receiving a response from Mr. Johnson.”
Last month, the Tennessee Valley Authority Retirement System board approved a proposal to reduce the pension benefits for employees hired in the past 20 years then shift those employees from a plan that guarantees a fixed level of benefits to a 401(k) plan for future benefit payments. TVA executives receive a supplemental executive retirement plan (SERP) which is not subject to the same cuts as other TVA workers.
TVA President and CEO Bill Johnson’s total compensation in 2015 was worth approximately $6.4 million, the highest of any federal employee in the country. Other executives at the TVA have similarly high salaries and pensions.