Company: TVC
Filing Date: 2025-11-13
Form Type: 10-K
Source: 0001376986-25-000056
Chunk: 164

Company: Tennessee Valley Authority
Filing Date: 2025-11-13
Form: 10-K
Item: Item 8
Chunk 164
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 assets(2)6.50%6.50%6.50%N/AN/AN/AWeighted average interest crediting rate5.11%5.13%5.14%N/AN/AN/ACost of living adjustment (COLA)(3)2.00%2.00%2.00%2.00%2.00%2.00%Average rate of compensation increase3.96%4.01%3.28%N/AN/AN/APre-Medicare eligible per capita claims costsCurrent health care cost trend rateN/AN/AN/A7.25%7.50%7.00%Ultimate health care cost trend rateN/AN/AN/A5.00%5.00%5.00%Year ultimate trend rate is reachedN/AN/AN/A203420342031Pre-Medicare eligible per capita contributionsCurrent health care cost trend rateN/AN/AN/A7.25%5.00%5.00%Ultimate health care cost trend rateN/AN/AN/A5.00%5.00%5.00%Year ultimate trend rate is reachedN/AN/AN/A203420222022Post-Medicare eligibleCurrent health care cost trend rateN/AN/AN/A—%—%—%Ultimate health care cost trend rateN/AN/AN/A4.00%4.00%4.00%Year ultimate trend rate is reachedN/AN/AN/A202620262026

Notes

(1)  The actuarial assumptions used to determine the benefit obligations at September 30 of each year are subsequently used to determine net periodic benefit cost

for the following year except the assumptions rate of compensation increase and weighted average interest crediting rate.

(2)  The actual return on assets for 2025, 2024, and 2023 was 4.90 percent, 12.72 percent, and 6.13 percent, respectively.

(3)  The COLA assumption rate is the ultimate rate.  The actual CY rate is used in determining the expense, and for years thereafter the ultimate rate is used.

Discount Rate.  In selecting the assumed discount rate, TVA reviews market yields on high-quality corporate debt and endeavors to match, through the use of a hypothetical bond portfolio, instrument maturities with the maturities of its pension obligations in accordance with the prevailing accounting standards.  The selected bond portfolio