Tennessee Valley Authority

NOMINATOR COMMENTS

While the nature and type of retirement benefits have changed over the years, the mission of TVARS remains the same. TVARS is continually working to improve the financial wellness and retirement outcomes of TVA employees and retirees and is currently pursuing this goal by transitioning the 401(k) plan from a savings-focused plan to a true retirement plan that provides investments, savings opportunities, guidance and payment options that support participants and their beneficiaries during employment and throughout retirement.

Colby Carter, Managing Counsel, Tennessee Valley Authority
Photograph by Matt Kalinowski

PLANSPONSOR: How would you describe the TVA? Is there anything unique about its demographics?

TVARS: Congress created the Tennessee Valley Authority in 1933 to serve the people of the Tennessee Valley region. As a federal corporate agency and the nation’s largest public power provider, TVA provides energy to 10 million people and 800,000 businesses across seven states.

Our strength is in our people, a highly skilled workforce with unique experiences, perspectives and knowledge. TVA knows that our employees can perform at their best when taken care of professionally, physically, mentally and financially. We’re fortunate to have an employee population that is highly engaged in its benefits and investments—we have many strong savers in the 401(k) plan.

PLANSPONSOR: What are you most proud of as it relates to your retirement plan offering?

TVARS: Given TVARS’ legacy and experience in providing pensions and annuities for TVA employees and retirees, the system has been committed to providing a retirement income option within the 401(k) plan. TVARS partnered with BlackRock, the investment manager for the 401(k) plan’s Target Retirement Portfolios, and recordkeeper Fidelity to be one of the first plan sponsors to add LifePath Paycheck to the portfolios as an in-plan, in-fund solution that would be flexible, liquid, low-cost and easy to understand and communicate to participants.

With the availability of LifePath Paycheck, participants have the option to purchase a guaranteed lifetime income stream with their funds in the Target Retirement Portfolios—along with guaranteed payout and spousal beneficiary options—from insurers selected by BlackRock.

PLANSPONSOR: Please cite any noteworthy initiatives you have taken in the past 24 to 36 months that have produced results to improve your plan, and describe the results.

TVARS: TVARS administers a defined benefit (pension) plan and a 401(k) plan, the Tennessee Valley Authority Savings and Deferral Retirement Plan, which cover most full-time and part-time TVA employees and are separate from the Civil Service and Federal Employees Retirement Systems.

Given its experience in providing pensions and annuities to TVA employees and retirees, TVARS desired to provide a similar option for participants in the 401(k) plan and partnered with BlackRock to explore an in-plan, in-fund solution that would be flexible, liquid, low-cost and easy to understand and communicate. After years of work, in June 2024, TVARS made a change to the investments in the target-date funds by switching to BlackRock LifePath Paycheck Funds from BlackRock LifePath Index Funds.

Like any change to a benefits offering, it can be complicated to figure out how to communicate the change clearly and in simple language to participants and to engage them in a way to understand how the new offering could help them. To communicate this effectively, TVARS built a custom microsite to host educational videos, resources and FAQs to answer any participant questions. TVARS also trained its internal retirement benefits teams on the ins and outs of the new product offering, so they were prepared to handle any inbound questions. TVARS also offered in-person and virtual education sessions in Fall 2024. In 2025, TVARS plans to add information about the new target retirement paycheck portfolios and an in-plan annuity option to its educational webinars for employees and plans to roll out virtual education sessions.

In February 2025, TVARS added the PIMCO Income Fund to the 401(k) investment lineup to provide a quality income-generating investment option for participants nearing and throughout retirement.

PLANSPONSOR: What does winning Plan Sponsor of the Year mean to you and your employer?

TVARS: This award validates the years of work the TVARS board and staff have spent, and will be spending, to offer a 401(k) plan and benefits that provide financial security for participants and their families during employment and throughout retirement. We also hope this recognition and our journey encourages many other sponsors to provide bold and innovative DC investments, savings opportunities, guidance and payment options that support participants.

PLANSPONSOR: Is there anything else you would like to share?

TVARS: The amount of time, work and oversight required for TVARS to implement BlackRock LifePath Paycheck was immense, but TVARS and its partners always remained focus on the purpose of a guaranteed retirement income option—that is, to improve the financial wellness and retirement outcomes for TVA employees and retirees who no longer have access to a pension. Because LifePath Paycheck Funds differ from traditional target-date funds by including an allocation to lifetime income units, more due diligence was required by TVARS, and education is crucial for participants to fully understand the product and how to purchase a guaranteed lifetime income stream if they choose to do so.

This year, for our Plan Sponsor of the Year profiles, we are publishing Q&As based on the finalists’ applications and nominator comments. Responses are edited and may be paraphrased. In cases where the finalist self-nominated or, on its application, referred judges to the nomination for the answer, we have attributed those nominator answers to the plan sponsor.