Wednesday, January 19, 2005

More Concern About the RFP

This was directed to me yesterday afternoon:

From: <>
Date: January 18, 2005 12:12:24 PM MST
To: <>
Cc: <>
Subject: Fwd: Urgent: info and links to DOE draft RFP

Read the forwarded message and attachments first and the the following paragraphs will make more sense.

The DOE tried to remove "excess pension funds" in 1993 (confirmed by Bob Drake), and were still trying to do this as a part of contract negotiations with UC (http://www.ig.doe.gov/text/IG-0394.txt). They can't do much now as the DOE RFP board stated on sunday night that the pension is funded only to 109% of liabilities right now. With a change of age factors from 0.025 to 0.015 (at age 60) the pension would then be "overfunded" again. Only as an estimate of how much, the UC pension that will be segregated by doe is $6Billion, then dividing by 1.09 gives liabilities of $5,504,587,156 and excess funding would be $495,412,844. Just as an estimate liabilities would decline probably somewhat proportional to the change in age factors (only an estimate, let me know if you have a better estimate) so the new liabilities would then be:
0.015/0.025 * CurrentLiabilities = $3,302,752,294. This makes for excess pension funding of an estimated $2,697,247,706.

The DOE may not be able to take over the pension as there is a "process in place to evaluate and decide upon legal owner/obligor of the [retirement] plans." This comes from a PWC audit of LLNL dated 6-30-2004 (pages 17 and 18 of the pdf are of interest, www.universityofcalifornia.edu/regents/regmeet/nov04/902attach4.pdf).

A representative of Senator Bingaman mentioned on monday that they are trying to scrap the whole rfp process...

Begin forwarded message:

From: <>
Date: January 17, 2005 7:05:51 PM MST
To: <>
Subject: Urgent: info and links to DOE draft RFP

Subject: Urgent: LANL/DOE RFP info

Get the word out about the new DOE RFP. I read it, it is potentially terrible for LANL, and most people don't know. (see attachment) The main threat is to those who have not yet retired. They worked many years toward a decent UC pension and DOE is planning to drastically reduce pensions.
Threats:
1.They are creating a spinoff LANL retirement account, under any scenario.
2. They are going to audit it yearly against actuarial responsibilities, ( i.e. how many people times life expectancy)
3. They are going to remove excess funds yearly.
4. They are going to limit future retirement contributions to about .60 of current contributions.
5. The future pension multiplier of yrs. of service may be much less than 2.5% , maybe 1.5%

6. At change of contract, LANL Employees will have three choices: (Quote: DOE Contract Officer, meeting Jan. 16, 2005.)
a. Remain 'on board' and switch companies, guarenteed job. (past yrs. of service go to new contractor) get whatever benefits contractor offers.
b. Become 'inactive' UCRP by 'quitting' LANL job prior to contract change, no guarenteed job, lose sick leave balances, benefits calculated as new employee.
c. Retire.

Read the first attachment for supporting facts from the contract (RFP).
As I got a few requests for one, second attachment is a sample comment.

Please get this info to anyone you know who is concerned about the LANL operating contract.

Sincerely, <>

Attachment 1

Attachment 2


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