Branstetter, Stranch & Jennings
(615) 254-8801
Becca Stinson
Communications Consultant
(615) 426-1428
BRANSTETTER, STRANCH & JENNINGS ANNOUNCES LAWSUIT ON BEHALF OF MEMBERS, BENEFICIARIES OF THE TENNESSEE VALLEY AUTHORITY RETIREMENT SYSTEM
TVARS Board of Directors Sued for Improperly Reducing Vested Benefits
Owed to Plan Members
NASHVILLE, Tenn., March 5 – The six directors of the Tennessee Valley Authority Retirement System (TVARS) have violated their fiduciary duties and the constitutional rights of TVARS participants by improperly reducing their accrued and vested benefits to the tune of $300 million, according to a class action lawsuit filed today by a group of TVA retirees on behalf of themselves and the class of current and former TVARS members and beneficiaries who are adversely affected by the actions of the TVARS board. The TVARS has provided retirement benefits for approximately 34,000 current and retired employees of the largest federally-owned corporation in the nation since 1939.The plaintiffs seek class action status for their claims and request both damages and injunctive relief.
The TVARS board of directors is tasked under law with fiduciary responsibility for protecting the assets of the retirement plan and to act solely in the interests of its participants and beneficiaries. The actions by the TVARS board of directors in August 2009 to eliminate cost of living adjustments (COLA), permanently reduce an interest rate accrual benefit, and increase in the minimum age for COLA benefits for all participants retiring after January 1, 2010, were taken in violation of their fiduciary duties and the procedural safeguards in place under TVARS Rules and Regulations which required the board to provide participants with at least 30 days notice of the changes. The conduct of the board also deprived TVARS participants and the class of privileges and immunities guaranteed to them by the United States Constitution, and violated the anti-cutback provisions of applicable Internal Revenue Code.
The lawsuit seeks to prevent the TVARS board from enforcing these plan changes and restore all accrued and vested benefits to TVARS members. This lawsuit also follows on the heels of an audit report recently published by the TVA’s inspector general, which found that, due to a market slump and TVA’s failure to make regular retirement fund
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TVARS Lawsuit / Page 2
contributions, TVARS assets are currently $3 billion below what actuaries said it needed to meet future financial obligations. In his report, TVA Inspector General Richard Moore called the situation “a perfect storm” that created a “financially unhealthy system.”
About Branstetter, Stranch & Jennings, PLLC
Branstetter, Stranch & Jennings provides a full range of legal services to a diverse clientele. Founded in Nashville, Tenn., in 1952, the firm specializes in complex litigation, including class actions, shareholder derivative, securities, and other complex cases both in Tennessee courts and federal courts throughout the nation. Visit www.branstetterlaw.com for more information.
Contact our firm if you are interested in learning more about this investigation.