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Benefit Plans Benefit Plans (Tables)
 12 Months Ended
Sep. 30, 2019
Retirement Benefits [Abstract]  
Obligations and Funded Status
The changes in plan obligations, assets, and funded status for the years ended September 30, 2019 and 2018, were as follows:
Obligations and Funded Status
For the years ended September 30
798,000,000

Pension Benefits
 
Other Post-Retirement Benefits
 
2019
 
2018
 
2019
 
2018
Change in benefit obligation
 
 
 
 
 
 
 
Benefit obligation at beginning of year
$
11,725

 
$
12,601

 
$
428

 
$
494

Service cost
44

 
53

 
11

 
14

Interest cost
499

 
473

 
18

 
19

Plan participants' contributions
7

 
7

 
—

 
—

Collections(1)
—

 
—

 
22

 
25

Actuarial (gain) loss
1,756

 
(658
)
 
78

 
(46
)
Plan change
7

 
—

 
—

 
(17
)
Net transfers (to) from variable fund/401(k) plan(2)
1

 
(26
)
 
—

 
—

Expenses paid
(6
)
 
(6
)
 
—

 
—

Benefits paid
(721
)
 
(719
)
 
(58
)
 
(61
)
Benefit obligation at end of year
13,312

 
11,725

 
499

 
428

 
 
 
 
 
 
 
 
Change in plan assets
 

 
 

 
 

 
 

Fair value of net plan assets at beginning of year
8,003

 
7,989

 
—

 
—

Actual return on plan assets
389

 
454

 
—

 
—

Plan participants' contributions
7

 
7

 
—

 
—

Collections(1)
—

 
—

 
22

 
25

Net transfers (to) from variable fund/401(k) plan(2)
1

 
(26
)
 
—

 
—

Employer contributions
307

 
304

 
36

 
36

Expenses paid
(6
)
 
(6
)
 
—

 
—

Benefits paid
(721
)
 
(719
)
 
(58
)
 
(61
)
Fair value of net plan assets at end of year
7,980

 
8,003

 
—

 
—

Funded status
$
(5,332
)
 
$
(3,722
)
 
$
(499
)
 
$
(428
)

Notes
(1) Collections include retiree contributions as well as provider discounts and rebates.
(2) Includes one-time transfers to the 401(k) of $23 million related to the 2018 plan amendment.
Amounts Recognized on TVA's Consolidated Balance Sheets
Amounts related to these benefit plans recognized on TVA's Consolidated Balance Sheets consist of regulatory assets and liabilities that have not been recognized as components of net periodic benefit cost at September 30, 2019 and 2018, and the funded status of TVA's benefit plans, which are included in Accounts payable and accrued liabilities and Post-retirement and post-employment benefit obligations:
Amounts Recognized on TVA's Consolidated Balance Sheets
At September 30
 
Pension Benefits
 
Other Post-Retirement Benefits
 
2019
 
2018
 
2019
 
2018
Regulatory assets (liabilities)
$
4,731

 
$
3,119

 
$
25

 
$
(73
)
Accounts payable and accrued liabilities
(5
)
 
(6
)
 
(28
)
 
(28
)
Pension and post-retirement benefit obligations(1)
(5,327
)
 
(3,716
)
 
(471
)
 
(400
)

Note
(1) The table above excludes $383 million and $360 million of post-employment benefit costs that are recorded in Post-retirement and post-employment benefit obligations on the Consolidated Balance Sheets at September 30, 2019 and 2018, respectively.
Post-Retirement Benefit Costs Deferred as Regulatory Assets
Unrecognized amounts included in regulatory assets or liabilities yet to be recognized as components of accrued benefit cost at September 30, 2019 and 2018, consisted of the following:
Post-Retirement Benefit Costs Deferred as Regulatory Assets (Liabilities)
At September 30
 
Pension Benefits
 
Other Post-Retirement Benefits
 
2019
 
2018
 
2019
 
2018
Unrecognized prior service credit
$
(714
)
 
$
(819
)
 
$
(135
)
 
$
(159
)
Unrecognized net loss
5,350

 
3,842

 
160

 
86

Amount capitalized due to actions of regulator
95

 
96

 
—

 
—

Total regulatory assets (liabilities)
$
4,731

 
$
3,119

 
$
25

 
$
(73
)
Projected Benefit Obligations and Accumulated Benefit Obligations in Excess of Plan Assets
The projected benefit obligation, accumulated benefit obligation, and fair value of plan assets for the pension plan at September 30, 2019 and 2018, were as follows:
Projected Benefit Obligations and Accumulated Benefit Obligations in Excess of Plan Assets
At September 30
 
2019
 
2018
Projected benefit obligation
$
13,312

 
$
11,725

Accumulated benefit obligation
13,246

 
11,659

Fair value of net plan assets
7,980

 
8,003
Components of Net Periodic Benefit Cost
The components of net periodic benefit cost and other amounts recognized as changes in regulatory assets for the years ended September 30, 2019, 2018, and 2017 were as follows:
Components of Net Periodic Benefit Cost
For the years ended September 30
 
Pension Benefits
 
Other Post-Retirement Benefits
 
2019
 
2018
 
2017
 
2019
 
2018
 
2017
Service cost
$
44

 
$
53

 
$
60

 
$
11

 
$
14

 
$
18

Interest cost
499

 
473

 
464

 
18

 
19

 
21

Expected return on plan assets
(477
)
 
(478
)
 
(457
)
 
—

 
—

 
—

Amortization of prior service credit
(99
)
 
(99
)
 
(99
)
 
(24
)
 
(22
)
 
(22
)
Recognized net actuarial loss
336

 
409

 
472

 
4

 
8

 
14

Total net periodic benefit cost as actuarially determined
303

 
358

 
440

 
9

 
19

 
31

Amount expensed (capitalized) due to actions of regulator
1

 
(54
)
 
365

 
—

 
—

 
—

Net periodic benefit cost
$
304

 
$
304

 
$
805

 
$
9

 
$
19

 
$
31
Expected Amortization of Regulatory Assets in Next Fiscal Year
The amounts in the regulatory asset that are expected to be recognized as components of net periodic benefit cost during the next fiscal year are as follows:
Expected Amortization of Regulatory Assets in 2020
At September 30, 2019
 
Pension Benefits
 
Other Post-Retirement
Benefits
 
Total
Prior service credit
$
(97
)
 
$
(24
)
 
$
(121
)
Net actuarial loss
435

 
9

 
444
Actuarial Assumptions
TVA's reported costs of providing the plan benefits are impacted by numerous factors including the provisions of the plans, changing employee demographics, and various assumptions, the most significant of which are noted below.
Actuarial Assumptions Utilized to Determine Benefit Obligations at September 30
 
Pension Benefits
 
Other Post-Retirement Benefits
 
2019
 
2018
 
2019
 
2018
Discount rate
3.20
%
 
4.35
%
 
3.30
%
 
4.40
%
Rate of compensation increase
3.50
%
 
3.60
%
 
N/A

 
N/A

Cost of living adjustment (COLA)(1)
2.00
%
 
2.00
%
 
2.00
%
 
2.00
%
Pre-Medicare eligible
 
 
 
 
 
 
 
Initial health care cost trend rate
N/A

 
N/A

 
6.75
%
 
6.25
%
Ultimate health care cost trend rate
N/A

 
N/A

 
5.00
%
 
5.00
%
Year ultimate trend rate is reached
N/A

 
N/A

 
2027

 
2024

Post-Medicare eligible
 
 
 
 
 
 
 
Initial health care cost trend rate
N/A

 
N/A

 
—
%
 
—
%
Ultimate health care cost trend rate
N/A

 
N/A

 
4.00
%
 
4.00
%
Year ultimate trend rate is reached
N/A

 
N/A

 
2023

 
2021


Note
(1) The COLA rate is the ultimate long-term rate.
Actuarial Assumptions Utilized to Determine Net Periodic Benefit Cost for the Years Ended September 30(1)
 
Pension Benefits
 
Other Post-Retirement Benefits
 
2019
 
2018
 
2017
 
2019
 
2018
 
2017
Discount rate
4.35
%
 
3.85
%
 
3.65
%
 
4.40
%
 
3.95
%
 
3.70
%
Expected return on plan assets
6.75
%
 
6.75
%
 
7.00
%
 
N/A

 
N/A

 
N/A

Cost of living adjustment (COLA)(2)
2.00
%
 
2.00
%
 
2.00
%
 
2.00
%
 
2.00
%
 
2.00
%
Rate of compensation increase
3.50
%
 
5.34
%
 
5.43
%
 
N/A

 
N/A

 
N/A

Pre-Medicare eligible
 
 
 
 
 
 
 
 
 
 
 
Initial health care cost trend rate
N/A

 
N/A

 
N/A

 
6.25
%
 
6.50
%
 
6.50
%
Ultimate health care cost trend rate
N/A

 
N/A

 
N/A

 
5.00
%
 
5.00
%
 
5.00
%
Year ultimate trend rate is reached
N/A

 
N/A

 
N/A

 
2024

 
2024

 
2019

Post-Medicare eligible
 
 
 
 
 
 
 
 
 
 
 
Initial health care cost trend rate
N/A

 
N/A

 
N/A

 
—
%
 
—
%
 
—
%
Ultimate health care cost trend rate
N/A

 
N/A

 
N/A

 
4.00
%
 
4.00
%
 
4.00
%
Year ultimate trend rate is reached
N/A

 
N/A

 
N/A

 
2021

 
2021

 
2021

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
Sensitivity to Certain Changes in Pension Assumptions
The following chart reflects the sensitivity of pension cost to changes in certain actuarial assumptions:
Sensitivity to Certain Changes in Pension Assumptions
At September 30, 2019
 
 
Actuarial Assumption
 
Change in Assumption
 
Impact on 2019 Pension Cost
 
Impact on 2019 Projected Benefit Obligation
Discount rate
 
(0.25
)%
 
$
16

 
$
399

Rate of return on plan assets
 
(0.25
)%
 
14

 
N/A

Cost of living adjustments
 
0.25
 %
 
27

 
261
Sensitivity to Changes in Assumed Health Care Cost Trend Rates
The following chart reflects the sensitivity of post-retirement benefit cost to changes in the health care trend rate:
Sensitivity to Changes in Assumed Health Care Cost Trend Rates
At September 30, 2019
 
1% Increase
 
1% Decrease
Effect on total of service and interest cost components for the year
$
4

 
$
(4
)
Effect on end-of-year accumulated post-retirement benefit obligation
71

 
(68
)
Asset Holdings and Fair Value Measurements
s consistent with the asset allocation policy. At September 30, 2019 and 2018, the asset holdings of TVARS included the following:
Asset Holdings of TVARS
At September 30
 
 
 
 
Plan Assets at September 30
Asset Category
 
Target Allocation
 
2019
 
2018
Global public equity
 
35
%
 
37
%
 
44
%
Private equity
 
8
%
 
10
%
 
7
%
Safety oriented fixed income
 
17
%
 
18
%
 
16
%
Opportunistic fixed income
 
15
%
 
12
%
 
10
%
Public real assets
 
15
%
 
15
%
 
15
%
Private real assets
 
10
%
 
8
%
 
8
%
Total
 
100
%
 
100
%
 
100
%


Fair Value Measurements

The following table provides the fair value measurement amounts for assets held by TVARS at September 30, 2019:
TVA Retirement System
At September 30, 2019
 
Total(1)(2)
 
Quoted Prices in Active Markets for Identical
Assets/Liabilities
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets
 
 
 
 
 
 
 
Equity securities
$
1,766

 
$
1,762

 
$
—

 
$
4

 


 
 
 
 
 
 
Preferred securities
10

 
1

 
9

 
—

 
 
 
 
 
 
 
 
Debt securities
 
 
 

 
 

 
 

Corporate debt securities
1,387

 
—

 
1,382

 
5

Residential mortgage-backed securities
427

 
—

 
424

 
3

    Debt securities issued by U.S. Treasury
807

 
807

 
—

 
—

Debt securities issued by foreign governments
210

 
—

 
209

 
1

Asset-backed securities
144

 
—

 
116

 
28

Debt securities issued by state/local governments
18

 
—

 
18

 
—

Commercial mortgage-backed securities
81

 
—

 
80

 
1

 
 
 
 
 
 
 
 
Commingled funds measured at net asset value(3)


 
 
 
 
 
 
Equity
795

 
—

 
—

 
—

Debt
308

 
—

 
—

 
—

Commodities
217

 
—

 
—

 
—

Blended
125

 
—

 
—

 
—

 
 
 
 
 
 
 
 
Institutional mutual funds
97

 
97

 
—

 
—

Cash equivalents and other short-term investments
329

 
1

 
328

 
—

Certificates of deposit
3

 
—

 
3

 
—

Private credit measured at net asset value(3)
78

 
—

 
—

 
—

Private equity measured at net asset value(3)
891

 
—

 
—

 
—

Private real estate measured at net asset value(3)
546

 
—

 
—

 
—

 
 
 
 
 
 
 
 
Securities lending collateral
224

 
—

 
224

 
—

 
 
 
 
 
 
 
 
Derivatives
 

 
 

 
 

 
 

Futures
2

 
2

 
—

 
—

Swaps
5

 
—

 
5

 
—

Options
1

 
—

 
1

 
—

Foreign currency forward receivable
1

 
—

 
1

 
—

 
 
 
 
 
 
 
 
Total assets
$
8,472

 
$
2,670

 
$
2,800

 
$
42

 
 
 
 
 
 
 
 
Liabilities
 

 
 

 
 

 
 

Derivatives
 
 
 
 
 
 
 
Futures
$
4

 
$
4

 
$
—

 
$
—

Foreign currency forward payable
1

 
—

 
1

 
—

Swaps
12

 
—

 
12

 
—

Options
1

 
—

 
1

 
—

 
 
 
 
 
 
 
 
Securities sold under agreements to repurchase
118

 
—

 
118

 
—

 
 
 
 
 
 
 
 
Total liabilities
$
136

 
$
4

 
$
132

 
$
—

Notes
(1) Excludes approximately $132 million in net payables associated with security purchases and sales and various other payables.
(2) Excludes a $224 million payable for collateral on loaned securities in connection with TVARS's participation in securities lending programs.
(3) In accordance with Subtopic 820-10, certain investments that are measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.
The following table provides the fair value measurement amounts for assets held by TVARS at September 30, 2018:
TVA Retirement System
At September 30, 2018
 
Total(1)(2)
 
Quoted Prices in Active Markets for Identical
Assets/Liabilities
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Assets
 
 
 
 
 
 
 
Equity securities
$
1,787

 
$
1,786

 
$
—

 
$
1

 

 
 
 
 
 
 
Preferred securities
10

 
4

 
6

 
—

 
 
 
 
 
 
 
 
Debt securities
 
 
 

 
 

 
 

Corporate debt securities
1,151

 
—

 
1,148

 
3

Residential mortgage-backed securities
377

 
—

 
371

 
6

Debt securities issued by U.S. Treasury
696

 
696

 
—

 
—

Debt securities issued by foreign governments
322

 
—

 
304

 
18

Asset-backed securities
129

 
—

 
103

 
26

Debt securities issued by state/local governments
17

 
—

 
17

 
—

Commercial mortgage-backed securities
74

 
—

 
70

 
4

 
 
 
 
 
 
 
 
Commingled funds measured at net asset value(3)


 
 
 
 
 
 
Equity
1,175

 
—

 
—

 
—

Debt
317

 
—

 
—

 
—

Commodities
232

 
—

 
—

 
—

Blended
109

 
—

 
—

 
—

 


 


 


 


Institutional mutual funds
109

 
109

 
—

 
—

Cash equivalents and other short-term investments
466

 
42

 
424

 
—

Certificates of deposit
2

 
—

 
2

 
—

Private credit measured at net asset value(3)
8

 
—

 
—

 
—

Private equity measured at net asset value(3)
631

 
—

 
—

 
—

Private real estate measured at net asset value(3)
583

 
—

 
—

 
—

 


 


 


 


Securities lending collateral
318

 
—

 
318

 
—

 
 
 
 
 
 
 
 
Derivatives
 
 
 
 
 
 
 
Futures
7

 
7

 
—

 
—

Swaps
8

 
—

 
8

 
—

Foreign currency forward receivable
3

 
—

 
3

 
—

 
 
 
 
 
 
 
 
Total assets
$
8,531

 
$
2,644

 
$
2,774

 
$
58

 
 
 
 
 
 
 
 
Liabilities
 

 
 

 
 

 
 

Derivatives
 
 
 
 
 
 
 
Futures
$
3

 
$
3

 
$
—

 
$
—

Foreign currency forward payable
3

 
—

 
3

 
—

Options
1

 
—

 
1

 
—

 
 
 
 
 
 
 
 
Securities sold under agreements to repurchase
108

 
—

 
108

 
—

 
 
 
 
 
 
 
 
Total liabilities
$
115

 
$
3

 
$
112

 
$
—

Notes
(1) Excludes approximately $95 million in net payables associated with security purchases and sales and various other payables.
(2) Excludes a $318 million payable for collateral on loaned securities in connection with TVARS's participation in securities lending programs.
Fair Value Measurements Using Significant Unobservable Inputs
The following table provides a reconciliation of beginning and ending balances of pension plan assets measured at fair value on a recurring basis where the determination of fair value includes significant unobservable inputs (Level 3):
Fair Value Measurements Using Significant Unobservable Inputs
 
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Balance at October 1, 2017
$
88

Net realized/unrealized gains (losses)
(4
)
Purchases, sales, issuances, and settlements (net)
(23
)
Transfers in and/or out of Level 3
(3
)
Balance at September 30, 2018
58

Net realized/unrealized gains (losses)
4

Purchases, sales, issuances, and settlements (net)
(12
)
Transfers in and/or out of Level 3
(8
)
Balance at September 30, 2019
$
42
Estimated Future Benefit Payments
Cash Flows

Estimated Future Benefit Payments.  The following table sets forth the estimated future benefit payments under the benefit plans.
Estimated Future Benefits Payments
At September 30, 2019
 
Pension
Benefits(1)
 
Other Post-Retirement Benefits
2020
$
782

 
$
29

2021
779

 
27

2022
778

 
25

2023
775

 
24

2024
771

 
22

2025 - 2029
3,786

 
111

Note
(1) Participants are assumed to receive the Fixed Fund in a lump sum in lieu of available annuity options allowed for certain grandfathered participants resulting in higher estimated pension benefits payments.
Amounts recognized on Consolidated Balance Sheets
Amounts related to other post-employment benefit obligations are recognized on TVA's Consolidated Balance Sheets. The current portion which represents unpaid losses and administrative fees due are in Accounts payable and accrued liabilities. The long-term portion is recognized in Post-retirement and post-employment benefit obligations.
Amounts Recognized on TVA's Consolidated Balance Sheets
At September 30
 
2019
 
2018
Accounts payable and accrued liabilities
$
36

 
$
39

Post-retirement and post-employment benefit obligations
383

 
360