Monday, August 29, 2005

Director’s Instruction provides guidance on hiring of UC retirees

August 29, 2005

The Laboratory has modified procedures for rehiring retirees, under guidance from a new Director’s Instruction issued last week.

Revisions to the policy on rehiring retirees were based on a recommendation from a team chaired by Mike Burns of the associate directorate for weapons programs (ADWP). This team reviewed a 2004 Director’s Instruction on returning retirees and recommended modifications. This team subsequently joined the “Fix-It” initiative created by Laboratory Director Bob Kuckuck to investigate and brainstorm solutions to issues raised by staff and various Laboratory organizations. The “Fix-It” initiative is led by the Chief Science Office (CSO).


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Rehiring of retiree's, hummmmm. Is the vicious rumor of some type of retirement or severance package a real thing!?
Wishful thinking, I'm afraid.

UC is likely not going to win the contract. Given that, why would they want to increase the burden on the UC retirement system by taking early retirees when they can let LM carry that baggage? To take early retirees would result in an overall reduction the ROI of the retirement program. Once it is announced that LM has won, there will be a flood of retirees as it is; no need to provide an additional incentive.
Why should there be a flood of retirees if LM/UT win? The system is going to change no matter which side wins. Those that fear the change will (or logically, should have) already retired before the announcement. Those that really want to work at the lab will work here whichever side wins, and will probably be relatively happy (there are always malcontents) if LM/UT wins because things will probably run smoother.
" Why should there be a flood of retirees if LM/UT win?"

To lock in their retirement benefits.

The point 7:35 was trying to make, and which is true although it seems to escape a large fraction of LANL staff, is that UC is not bidding on the contract! The 2 credible bidders are both LLCs; one UC/Bechtel and the other UT/LM. No matter who wins, if you continue to work at LANL you will no longer be a UC employee. End of story.

Your comment also brings up something else I have repeatedly heard around town that seems at odds with what the RFP stated. Why do you think that someone has to quit to "lock in" their UC benefit? The final version of the RFP clearly said that current LANL employees would be offered 3 choices under the new operator:
1) quit, keep your UC retirement and take your chances on rehiring
2) transfer acumulated service & retirement $ (although it should be interesting to see how that could be done) from UC to the new entity.
3) "freeze" UC retirement and service and start new (0 years of service credit; contribute to their plan going forward)with the new operator.
01:36:02 PM:

1) Is the only one that makes any sense to me.

2) Requires that you trust LM not to change their benefits package down the road.

3) Obligates you to work for however long it takes to get vested in LM's program, after however many years you had already worked towards getting vesting in UC's program. Thanks, but no.
The conclusion to be drawn from the Director’s Instruction, almost belaboring the obvious, is: “If you choose to retire, don’t plan on coming back to work here again.”

It appears that the DOE is pushing everyone to roll over their pensions into the new Limited Liability Company. They are trying to make potential retirees (particularly those who may not be financially secure, without continuing to work part-time) uneasy about their future, so they decide on the roll-over option instead of retiring. It’s to the DOE’s advantage to keep as many employees as they can - for the moment.

But consider that under either the roll-over option or the “freezing” option, while you’re “Guaranteed Employment”; it could be for as little as 6 months. If there is a “reduction in force” after that, the DOE will have been able to keep the employees it wants, and get rid of the ones it doesn’t. And they could reduce the pension schedule after 6 months. There may even be ways the DOE can keep the excess pension funds, once the funds have been rolled over from UCRP into the LLC.

I have to wonder if blocking rehiring retirees will even be legal after the new LLC is established? After all, it will be a COMPLETELY NEW corporation. It is illegal for a completely separate company to make a deal with another company to not to hire their people. After the new company is in place, it would seem it might be illegal for them to exclude former retirees of the separate, old company (UC-LANL). Even if the DOE asserts that that this is legal; look for some lawsuits to occur.

This doesn’t mean everyone who retires is guaranteed to be rehired. But it does mean that a former retiree would have to be treated equally to any other job applicant; and that a certain fraction of former retirees would have to be rehired.

Another factor is the recent Supreme Court decision that states that companies must now take affirmative action to prevent age discrimination; and that it is no longer necessary to establish malicious intent to establish age discrimination. This could have a significant legal bearing on how people of retirement age will be treated. If you’re over 40, you’re now a minority, just like any of the other minorities; even if you are a middle-class white male.

Regarding the comment by Finknottle : 8/30/2005 06:12:17 PM:

If you choose option three, then it would seem that per the present UCRS retirement manual you will not be eligible for the UCRS medical benefit. This is scarey in particular with the potential for a RIF.


Regarding the comment at 8/30/2005 07:21:44 PM:

If you choose option one, then attempt to get rehired into your former position if it is advertise, you might easily be able to make the case that you are the best qualified applicant if your past performance reviews and ORC scores are very good. Then, they would have to rehire you or risk the age discriminiation litigation.
Here are a couple of thoughts. If you choose to "roll over" your UC retirement credit to the new contractor and you are within 7 years of retirement, and you decide to retire within those seven years, you will begin to receive retirement checks from the new LLC. Whose contract may expire (be lost)in seven years, at which point the new LLC will evaporate since its only reason for being was to operate the LANL contract. So who then signs your retirement checks?? OK - assume DOE/NNSA executes yet another RFP requiring yet another new LLC to take on the contract. How happy are you having your retirement service bounce around among unknown and not-yet-existing companies, every seven years?
As I suggested, 08:09:06 PM: retire now, to lock in your benefits, if it is possible for you to do so.
Seems to me that option 1 is the sensible choice. At least that way you are locked in to a retirement income plus have the medical.

Of course, not everyone has this option.
6:12 and all of the other staff who don't bother to do their homework:

Regarding UC medical benefits and the potential that they will continue. Ask anyone who has retired from LANL what about the letter they get each and every year that makes the following points in exquisite legalese:
- we, the UC regents, have DECIDED to continue providing medical benefits to LANL retirees for another year (note, it is a decision, not a must-do)
- this DECISION does not in any way establish a precedent
- we will continue to make a DECISION each year on continuing this benefit.

Bottom line: even if UC was bidding, there is no guarantee that they would offer the retiree medical benefit indefinitely; for some time now they have been positioning themselves to drop it if the costs become to high (look at Ford and GM). A person would be a fool to assume that this benefit will remain forever; and probably the king of fools if they make a decision to stay, retire, or rollover based on getting this benefit. That said, I have met many people wearing crowns.
Thank you all for your comments and insight. We have to turn every stone over. It is disheartening to have the rug pulled out from under you after 30+ years of service. Hopefully between all of us we can make a smart decision.
08:38:34 AM: Speaking of doing one's homework, that letter that UC retirees receive each year states that "we, the UC regents, have DECIDED to continue providing medical benefits to UC retirees for another year..."

It is the entire body of UC retirees that face the potential loss of health benefits, not just the UC/LANL retirees.
Regarding the previous post, I don't know if UC could eliminate the medical benefits for ONLY the LANL retirees and continue them for the rest of the retirees. BUT, I am quite certain that to attempt to eliminate the medical benefits for ALL of the UC retirees (present and future) would be politial suicide for whomever suggest it.
I wouldn't take too much comfort in the assertion by 6:45 that it would be political suicide to eliminate UC pension benefits. All it takes is a round of voter disenchantment with UC to change the political climate, and California is well known for such seismic voter shifts.
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