Company: TVC
Filing Date: 2025-11-13
Form Type: 10-K
Source: 0001376986-25-000056
Chunk: 283

Company: Tennessee Valley Authority
Filing Date: 2025-11-13
Form: 10-K
Item: Item 1
Chunk 283
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 hierarchy in accordance with FASB guidance issued in May 2015. 

    The pension plan is invested in equity commingled funds, which can be categorized as either passively managed index funds or actively managed funds.  The equity index funds seek to track the performance of a particular index by replicating its capitalization and characteristics.  Passive fund benchmark indices include the Russell 1000 index and MSCI ACWI ex-U.S. index.  The actively managed equity funds seek to outperform certain equity benchmarks through a combination of fundamental and technical analysis.  Active funds select portfolio positions based upon their research.

    The pension plan is invested in debt commingled funds, which can be categorized as either passively managed index funds or actively managed funds.  The pension plan's debt index fund invests in a diversified portfolio of fixed-income securities and derivatives of varying maturities to replicate the characteristics of the Bloomberg Barclays Capital U.S. TIPS.  The fund seeks to track the total return of the Bloomberg Barclays Capital U.S. TIPS index.  The actively managed debt funds seek to outperform certain fixed-income benchmarks through fundamental research and analysis.  The funds invest in a diversified portfolio of fixed income securities and derivatives of varying maturities.  Varying by strategy, fund objectives include achieving a positive relative total return through active credit selection and providing risk management through desired strategic exposures.

    The pension plan's investments in equity and debt commingled funds can generally be redeemed upon notification of the investment managers, with required notice periods varying from same-day to monthly.  These investments do not have unfunded commitments. 

    Institutional Mutual Funds.  Investments in institutional mutual funds are valued at prices based on their NAV.  Institutional mutual funds have daily published market prices that represent their NAV (or unit value) per share and are classified as Level 1.

    Cash Equivalents and Other Short-Term Investments and Certificates of Deposit.  Cash equivalents and other short-term investments are highly liquid securities with maturities of less than three months and 12 months, respectively.  These consist primarily of discount securities such as commercial paper, repurchase agreements, U.S. Treasury bills, and certain agency securities.  These securities, as well as certificates of deposit, may be priced at cost, which approximates fair value due to the short-term nature of the instruments.  Model based pricing which incorporates observable inputs may also be utilized.  These securities are classified as Level 2