Tag Archives: billion

TVA Pension Fund Underfunded by Billions; Consumers May Pay

TVA’s pension fund for 24,000 retires has unfunded liabilities of about $4 billion, according to the Chattanooga Times-Free Press, and ratepayers could be making up the difference.
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.
But this year, the federal utility didn’t add money, and Chief Financial Officer John Thomas says the fund’s $3.5 billion gap could be made up through market gains in 10 to 15 years.
“TVA is going to stand behind its obligations to employees and retirees,” Thomas said, adding that the fund’s market investments had a good year in fiscal 2012.
Despite paying out $650 million to retirees over the past year, the fund still gained $500 million from market growth to reach its current $7 billion.
But some TVA retirees are not happy that the utility did not make a board-approved discretionary $300 million contribution in 2012. The utility put $1 billion in the fund in 2009 and an additional $270 million in 2011.
As recently as 1997, the pension fund was overfunded by about $2 billion. For at least six years before 2008, TVA didn’t put in any money.
A national pension expert who briefly reviewed TVA’s August quarterly report to the U.S. Securities and Exchange Commission said Friday that ratepayers should ask why they must shoulder the burden of meeting pension obligations.
“What they’re saying is, ‘We’re financing our pension with future revenues,'” said Harry Dressler of Dressler Strategic Advisors Inc. in Florida.

THEC Wants $1.8 Billion (and has a matching money plan)

NASHVILLE, Tenn. (AP) — The Tennessee Higher Education Commission agreed Tuesday to support a plan that would have colleges and universities pay part of the cost for campus construction projects and also requested approval of a five-year capital program that totals $1.8 billion.
Commissioners in a telephone conference call Tuesday agreed to send the plan to Gov. Bill Haslam and state finance officials but did not have a quorum to formally act on the proposed capital outlay for the fiscal year that starts in July 2012 and the five-year plan.
The Knoxville News Sentinel reported that THEC supports the five-year plan that both the University of Tennessee and Board of Regent systems hope will be financed with a bond issue (http://bit.ly/uiTBiF ).
Haslam said Tuesday that his Republican administration does “want to increase the amount of funding going to higher ed capital in Tennessee.”
“And I think it’s fair to say one of our clear intentions in this year’s budget is to spend more on capital both for higher ed and for the state’s own needs.”
The commission is requesting $245 million in new projects for 2012-13, $40 million of which would come from institutions’ match, and $84 million in maintenance for the next fiscal year.

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UT Foundation Raises $1.3B, Hires More Fundraisers

The University of Tennessee Foundation has hired five new fundraising employees and expects to hire seven more by the end of October, reports Megan Boehnke. The move is part of a five-year push to increase donations by increasing the number of people asking for them.
At the same time, the foundation is wrapping up its seven-year fundraising campaign and is expecting to reach $1.3 billion in gifts by the Dec. 31 close date.
“When we started this campaign, we didn’t know we were going to have the recession, and the common wisdom when we were moving into this recession was (for) so many schools in adjacent states that had a billion-dollar campaign, they completely pulled out of it because they thought, ‘There’s no way we can accomplish this,'” said Andrea Loughry, chair of the UT Foundation board, following a meeting Thursday in the Haslam Business Building.
“So to accomplish that in this economy is a huge pat on a back for our professional staff but also a huge compliment to the alumni and friends of the University of Tennessee and the fact that they keep on giving in spite of the economy we’ve been in.”
As the foundation — the system’s fundraising arm — wraps up its first $1 billion campaign, it also is reorganizing. The Legislature in the spring approved a new “interdependent” structure for the foundation that allows it to manage its own payroll and ultimately hire 60 new employees over five years in hopes of doubling annual giving by 2020.
Of the five new employees, the university hired three fundraising officers who will work in regional cities with large alumni bases: Nashville, Charlotte, N.C., and Houston, said Scott Rabenold, acting vice president for development and alumni affairs.
“The No. 1 reason people don’t give is because they aren’t asked,” Rabenold said. “We have very passionate alumni and very successful alumni, so the biggest obstacle to our successful fundraising is getting out and talking to them. The more boots we can put on the ground, the greater impact we can have for students and faculty.”