Sunday, June 12, 2005

The new tier I pension plan

From Anonymous:

A point most people seem to have missed. If you ROLL into the new tier I pension plan, it is a plan that will have no new employees in the future. All new employees are part of the new tier II pension plan. As such the tier I plan cannot possibly survive without ever increasing costs to the remaining employees. Yes, it is a little bit like social security, with fewer and fewer young people supporting the old retired workers. Well, if it won't work for social security, why would a system with no new employees coming in work? The answer is simple, you will contribute vast amounts of money AND much like social security, you will receive less than you expected in the future. IT CAN BE NO OTHER WAY! How would you like to be in the last handfull of people in the tier I plan? Take my word on this, lawyers are not accountants, and this whole thing of two pension plans CAN NOT WORK. If you choose to "bail out a boat", chooose UC "inactive status", at least it still has a lot of freeboard.

Comments:
If you go Inactive Vested, you are ever after on the new (less generous) vacation/sickleave schedule.
 
no one wins with any of the new systems. Udall had it right. As soon as the "stand alone" pension was included in the RFP everyone was screwed... And Domenici and Bingman are WORTHLESS.... How they gonna recruit new staff? Lousy salary and benefits and high living costs in Los Alamos and Santa Fe? Ya right
 
I think the SEB knows full well that this is the case. Tyler P. slyly hinted that plan members might have to begin making contributions within 2-4 years. With plan 1 likely to be underfunded, and no new employees entering this plan, and discounting huge gains from investment of the funds assets, it is almost a certainty that members of this plan will have to make ever increasing contributions. Like a pyramid scheme, the last ones out will be hit the hardest, unless DOE steps in to bail out the whole mess. What are the odds of that happening?
 
The following site presents an interesting summary table of retirement plans for some major midwest universities (just as a comparison with respect to UC):
http://www.okstate.edu/osu_per/benefits/retdefben.htm
 
What I hear Sunday was that LANL was not a "crown jewel", but rather just one of the "sites" managed by DOE (mentioned several times by Roberto). To that end we were going to be managed just like all the other sites, including benefits. Guess we just have to get use to it!
 
Welcome to the LANL bomb factory of the future.
 
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