Tennessee Valley Authority Reorganizes Asset Allocation, Provides $ 300 Million Contribution


Tennessee Valley Authority, Knoxville, plans to contribute $ 300 million to the VAT retirement system in the fiscal year ending Sept. 30, 2022, it revealed Monday in its 10-K filing with the SEC.

TVA contributed $ 306 million to its closed defined benefit plan in the fiscal year ended Sept. 30, according to the filing.

Also on file, the authority revealed that it had changed the plan’s asset allocation in August in order to “reduce risk and volatility” in the TVARS portfolio.

As of September 30, the target allocation of the pension fund was 38% defensive growth assets, 25% inflation sensitive assets, 20% defensive assets and 17% growth assets.

The previous target allocation, as shown in the 10-K file from the previous year, was 32% of global public equities, 20% of each security-focused fixed income and each opportunistic fixed income, 10% of each real public asset and each real private asset and 8% of private equity. .

The new 10-K case indicated that the actual allocation as of September 30 was 35% defensive growth assets (up from 20% a year earlier), 27% inflation sensitive assets (up from 18% ), 20% defensive assets (up 18%) and 18% growth assets (versus 44%).

The new 10-K case revealed that the TVARS board of directors reduced the expected return on plan assets assumption to 5.75%, from 6.75%, based on “external actuarial advice, current outlook on capital markets, asset allocation policy and planned investment spending and the impact of active management.

As of September 30, pension fund assets stood at $ 9.11 billion, while expected benefit obligations stood at $ 13.35 billion, for a funding ratio of 68.2 %, compared to 58.2% a year earlier.

The plan’s discount rate as of September 30 was 2.9%, compared to 2.75% the previous year.

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