Company: TVC
Filing Date: 2025-11-13
Form Type: 10-K
Source: 0001376986-25-000056
Chunk: 167

Company: Tennessee Valley Authority
Filing Date: 2025-11-13
Form: 10-K
Item: Item 8
Chunk 167
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Impact on 2025 Projected Benefit Obligation(in millions)Discount rate(0.25)%$12 $241 Rate of return on plan assets(0.25)%19 N/ACost of living adjustments0.25 %20 168 

Each fluctuation above assumes that the other components of the calculation are held constant and excludes any impact for unamortized actuarial gains or losses.

Plan Investments

    In June 2025, based on current market conditions and updated capital market assumptions, the asset allocation policy was modified to progress towards the goal of reducing risk and volatility in the TVARS investment portfolio.  TVARS investments are being reallocated in a prudent manner over time to move toward the new asset allocation targets.  Pursuant to the TVARS Rules and Regulations, any proposed changes in asset allocation that would change TVARS's assumed rate of investment return are subject to the review and veto of the TVA Board.  The qualified pension plan assets are invested across fixed income, equities, and real assets.  The TVARS asset allocation policy includes permissible deviations from target allocations, and action can be taken, as appropriate, to rebalance the plan's assets consistent with the asset allocation policy.   At September 30, 2025 and 2024, the asset holdings of TVARS included the following (prior year amounts have been reclassified to conform to the current presentation):

Asset Holdings of TVARS  Plan Assets at September 30Asset CategoryTarget Allocation20252024Fixed Income68 %59 %58 %Equity20 %23 %25 %Real Assets12 %18 %17 %Total100 %100 %100 %

137

Fair Value Measurements    The following table provides the fair value measurement amounts for assets held by TVARS at September 30, 2025:TVA Retirement SystemAt September 30, 2025(in millions) Total(1)(2)Quoted Prices in Active Markets for IdenticalAssets/Liabilities(Level 1)Significant OtherObservable Inputs(Level 2)SignificantUnobservableInputs(Level 3)Assets    Equity securities$740 $727 $— $13 Preferred securities2 — — 2 Debt securities   Corporate debt securities770 — 764 6 Mortgage and asset-backed securities523 — 520 3     Debt securities issued by U.S. Treasury433 433