Saturday, May 28, 2005

Are Retiree Medical Benefits Really Protected in the RFP?

From Anonymous:

Are Retiree Medical Benefits Really Protected in the RFP?

Will ALL those UC employees over 50 currently eligible to retire from UC with medical benefits continue to receive such coverage under a new contract? Specifically, there is a tiered level of medical coverage for employees with less than 20 years of service credit. For example, for someone with 15 years of service, the UC employer contribution for medical premium is paid at 75%, with the UC retiree paying the difference. If someone retires from UC under that condition, what will happen with a new contractor when the medical coverage is taken over under the new contract. The RFP does say that the offeror will supply a medical plan for retirees, but they are free to set their own service requirements, which may differ from UC if UC should not be successful. I have asked HR this question and they say they do not know and will have to wait till December 1 to find out. Some number of current retirees under these conditions could be in for a surprise next June when they lose their medical insurance because they do not have enough service requirements with the new contractor. Actually a similar question extends to the "equivalent " retirement plan one with the same age factors as UC. Having the same age factor is not necessarily the same as now, because additional age + years of service requirements can be added. For example at Sandia right now, an over 50 employee cannot retire until his age + years of service add to 75, quite different from UC currently. So Lockheed may not be much of a bargain for us.

This is an excellent question and indicative of many of the types of questions that will come in the following weeks and months as LANL employees discover these little time bombs. The bottom line is that this is a very carefully and cleverly crafted RFP written by a team of attorneys for DOE. Whose interests does one think they protected. As with anything legal, "the devil is in the details" and there are plenty of details in this RFP document. For example, I have not seen one question regarding the conflict between the Fact Sheet- -that says "May 31, 2006 Transition period ends" and the RFP, Section H-36,(a),(2),(i), that says " “Transferring Employees” are those employees who transfer from employment with the predecessor contractor to employment with the Contractor within six (6) months after June 1, 2006 and without a break in their employment at LANL." This conflict of dates presents a situation where one could still be a continuously employed LANL employee who chose NOT to retire by 6/1/06 but who also chose NOT to transfer as of 11/30/06. What category do they fit into? Can they still retire UCRP because they chose NOT to transfer? I am taking a "wait and see" approach for now but the more I read, I now am considering the lump-sum cashout for the first time ever in my thinking. Hi, I am your friendly DOE attorney, trust me! I think not!
Retiree medical benefits are not protected in the RFP. Any aspect of the new contract can be modified after the contract is awarded. Companies all over the country are trying to dump retiree medical benefits because of the cost. Why would Bechtel or Lockmart be different?

My understanding is these benefits are paid from the LANL budget, not by UC even though we are UC retirees. Of course this is contrary to what's done for "real" UC retirees There is a retirees association that everyone should contact so that our voices are heard. One person speaking up has not voice. I have contacted the AARP about what legal standing we might have if our benefits are jerked. More later on this.
Its intersting that UC employees in California receive there retiree medical benefits paid from UCRP. It would be interesting to know what the LLNL and Berkley arrangment is. Again, UC employees in New Mexico are being short changed. In effect, we are subsidizing Health care costs of California retiree's out of our share of UCRP.
Regarding medical benefits for retirees: Maybe we need to get a lawyer?
Let us look at this conundrum from a different slant. First I believe that this was part of a contract negotiation, there for the contract can be renegotiated of pronounced null and void at any time, bankruptcy comes to mind. Therefore I believe that if you have not contributed to, money in this case, then how can you expect, and I do not want to here about good faith, because there is no such thing in business, an organization to pay for something that it cannot control the cost of? Now some of you will start squawking about unions, government etc. Which is bogus unions and government could careless about you and yours. What I believe is that no one is due a free ride, except those wounded in the defense of this country. So the next contract your union or you negotiate for, tell them that you want medical savings accounts. Then you will regain not only control over this situation, you will get back a modicum of self-respect. If you do not do this then all you are is a bunch of crybabies.
I have read the RFP and feel that we should crete an employee association/ union to watch out for LANL employees and retirees legal rights. No one else is doing this.
There is safety in numbers.
For all of you out there who haven't yet retired, under the present UC contract, you should be aware that even now there is no guarantee of retiree medical benefits in perpetuity. Every LANL retiree gets a note, every year, from UC that nicely and clearly makes the following points:
- we're continuing to provide medical coverage for you this year because we have the money to do so.
- this is a result of a decision process. We don't have to do this but we have elected to.
- there is no guarantee that we will do this forever; we reevaluate and make a decision every year.
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