Friday, September 16, 2005

A rational for the VERIP which actually makes sense

A comment from the

http://lanl-the-real-story.blogspot.com/2005/09/lets-do-brief-review.html

post; a rational for the VERIP which actually makes sense:

There is an amazing amount of misunderstanding and financial ignorance evidenced on this thread. For a bunch of highly-paid scientists, engineers and technicians. it is sad. How can you effectively plan your retirement if you have only the most rudimentary understanding of finances?

So. what does UC gain in offering a VERIP? It gains the ability to keep in its retirement system all the money actuarily earmarked for those retirees who take advantage of the deal, and use it to generate more income, as opposed to it being syphoned off by the new contractor (whichever one wins, it won't be UC) as required by the RFP.

A VERIP is in UC's best interest, and certainly in the best interest of those current UC employees that could take advantage of it.

Also think of the 7-year new contract. If you retire in the interim, your retirement checks will be signed by "Los Alamos National Security, LLC," or by "Los Alamos Alliance, LLC." In the next contract competition, whichever of those two corporations wins now might be gone, evaporated permanently, since the only reason for their creation or existence was to win the current contract. Who wants to be in that boat?

Comments:
If (in the unlikely event) we see a VERIP between now and the end of the UC contract, it will not have anything to do with gaming the situation here but the general financial distress and excess tenured staff in the UC system at large.
 
To the original poster,

Financial ignorance is nearly as common as the unwillingness to read.

Largely because of a massive number of letters, e-mails, and phone calls from LANL staff, St. Pete intervened and required NNSA to structure the RFP process to include an extended transition period wherein current LANL staff could evaluate the new operator's pension plan and choose one of 3 options: 1) retire before the contract change, and cease employment at LANL; 2) retire under UC, start in the new pension plan with 0 years service; and 3) move your years of service from the UC plan to the new operator's plan.

So. While I am one of the financially ignorant LANL staff (more or less in your words), I can read and assimilate simple concepts. Help me understand why UC would be interested in pushing a VERIP to keep money in their system when they get the same result by not doing anything -- this does assume that the people who will keep their money with UC (cases 1 and 2 above) are the same ones who would take the VERIP.
 
Option 2 is not to retire at all, but for those not yet qualifying for retirement, they may opt to "transfer" their money into the LLC's new frozen retirement plan, using "same-as" age factors as we currently have under UC. Therefore, no growth of this plan would be anticipated as no new monies would be coming in. Our "high-three" at retirement age would be our last 3 years' salary under UC. Of course, how well this fund is managed will determine how healthy it is upon pay-out time.

For those who retire under option 1, regardless of whether it is before the contract change or not, no guarantee of future employment is offered.
 
Thats why I'll probably take Option 1, leave and never look back.

Some folks overlook the fact that UCRS retirement includes a COLA each year if retirement is taken before 6/1/06.

Don't forget the beneficial precedent of retiree medical coverage under UCRS. The retiree coverage may go year-to-year, but consider the clout in the number of California State employee retirees as a lobbying group compared to 7000 LLC groupies soon-to-be isolated in Los Alamos.
 
The bottom line is that UC can't issue a VIRIP offer to LANL without DOE approval. This has happened in the last ten years and DOE said no, fearing too many would take it and leave the lab understaffed. So without DOE approval, forget it!
 
Thanks Doug, I am the original poster.

To 3:47 pm:
You are correct (and corrected the misimpression of 10:57 am). If you can retire and need the UC retiree health benefit because it is better than the new LLC, then retirement from UC is best. If you are under 60 (medicare eligible), teminate UC, and "lock in" UC retirement but don't retire, you must either assume your own health care or accept what the new LLC gives new employees (so far unspecified). If you want to work after UC retirement, you are competing with all other applicants for positions with the new LLC. Presumably, if you have many years of experience and proven expertise, you'll compete favorably, since there will have been a large number of "voters with their feet."
 
Dont worry about it. Not even worth discussing or posting about. I have it on authority from UCOP that "No way is there going to be a VERIP". Case closed.
 
"Thats why I'll probably take Option 1, leave and never look back...
Don't forget the beneficial precedent of retiree medical coverage under
UCRS." - Post 7:11 pm

"If you can retire and need the UC retiree health benefit because it is better
than the new LLC, then retirement from UC is best." - Post 8:45 pm


It's been made very clear to people at both DOE presentations and within the
RFP that healthcare for current retirees will NOT BE WITH UC! If you are a
current retiree, or about to be a retiree, then your future health benefits
will be coming from the new LLC. I'm amazed that people still don't get
this basic point. UC medical coverage is kapput, nada, gone, come June 1st,
even if you are currently retireed from UC. If you are currently making
decision on whether to retire based on the thought you can "save" your UC
medical benefits, you are poorly informed. Read the RFP, folks. All
liablilities for LANL medical coverage (both current employees and retirees)
is going to fall in the lap of the new LLC. Just pray that they decide
to follow UC's example and continue decent health care coverage for
future and current retirees. It's not a guaranteed benefit.
 
I can envision a scenario where UC might have a buyout scenario. There are two keys.

First, how does UC have to transfer funds from the UC plan to the new LLC?

If they have to do a lump sum payment it may be to the UC fund's advantage to keep you in the pool by getting you to retire and doling out the funds slowly.

The second required key would be to have UC LOSE the bid. If UC is not involved in the future of the lab they may be more inclined to protect that retirement fund as best they can. If UC loses the bid and does a VERIP and DOE says no, what is DOE's threat going to be - take away the contract - hello, it's gone.

Contract 48 describes a spin-off program in case the UC-DOE contract is not renewed. That will be a fact by next summer.

UCOP would state at this time there is definitely no VERIP - they are still in the running aren't they?

An interested observer from LLNL
 
Dear Friend at LLNL...

Even if UC "wins" the bid, UCRS will still be required to fork over the retirement funds to the LLC. There will be no more UCRS presence at Los Alamos after 5/31/06 even if UC is the minor contract partner with Bechtel for the Los Alamos LLC. All employees that want to have a job will be forced to leave UC and to work for the new LLC.
 
The 8:02 comment is correct. UC as a single entity is out of the lab. What I was trying to imply was that if UC/Bechtel won the bid they might be less inclined to offer a VERIP since they would still be working with DOE at LANL. They wouldn't want the brain drain nor would DOE look kindly upon it. Should Lockmart win, UC could be altruistic and help the transfer for the nation's good, or possibly they could take the tact of limiting the harm to the UC retirement fund. If they have to lump sum it out to a plan the UC is not involved in (LockMart wins) the scenario of a buyout might take place.

But it's probably all wishful thinking on my part.

Still observing from Livermore
 
New Question: Will either Bechtel or LockMart look upon Los Alamos LLC employees as direct staff of the successful bidder for purposes of direct corporate transfer to another location while preserving vested benefits and seniority?
 
8:02. They will fork over funds only for those "transferring". The funds of those electing "inactive" status or retirinng will stay with UC.
 
I don't like the implications on the pension. I ain't gonna let the door hit me in tha ass!
 
To the interested observer from LLNL:

Why would UC still care about DOE's view of a VERIP, if the UC Bechtel team loses the LANL bid? You work there! LLNL is next up in the bidding cycle, and UC clearly wants to keep it. They won't do anything to complicate that bid process.
 
"Why would UC still care about DOE's view of a VERIP, if the UC Bechtel team loses the LANL bid? You work there! LLNL is next up in the bidding cycle, and UC clearly wants to keep it. They won't do anything to complicate that bid process."

Right. Just like they wouldn't do anything to complicate the bid process for LANL. UC has repeatedly proven their incompetence regarding oversight of National Laboratories.
 
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