The Tennessee Valley Authority is facing a multibillion-dollar pension shortfall, and it appears the federal utility has been scrambling to shore up the losses with ratepayer cash.
When investment markets tanked in 2008 and TVA’s pension fund took a nearly $2 billion dive, the tab for making sure there was enough money to cover commitments to 24,000 retirees fell to electric ratepayers.
Fully funded, TVA’s retirement plan should total $11.5 billion.
Instead, it now stands at $7 billion.
TVA has infused it with almost $1.3 billion since 2009 — ratepayer money.
There’s a bigger problem, though, says Justin Owen with the Beacon Center, a Nashville-based free-market think tank: Pension problem are rampant throughout the country, and politicians are moving too slow to apply fixes.
“The (TVA) story is symptomatic of a larger problem,” Owen said. “What it amounts to us political promises. Now we’re seeing that many of those promises… are empty promises.”
Beacon has studied pension problems across the U.S. recently, looking at how pension bailouts across the nation would affect Tennessee taxpayers.
“We have to stop making these promises in the future,” Owen said. “We can’t afford it.”
He said that public entities need to move to retirement plans similar to the 401(k) plans offered in the private sector.