Friday, January 27, 2006

Letter to Bodman from Domenici & Bingaman

UCRP-LANL.pdf

Also, a letter from Udall (form letter, but a letter nevertheless) that was sent to several concerned citizens in response to mail received.
_________________________________

Thank you for contacting me about the recent press reports
regarding the University of California's decision to transfer existing
LANL retirees from the University of California Retirement Plan
(UCRP) to a new entity, following the lab management contract award to
Los Alamos National Security, LLC (LANS). I appreciate hearing from
you about this issue and share your concerns about this development.

While we all anticipated some uncertainty during the transition
to the LANS management team, I was surprised to see the recent
proposal regarding existing retirees. I, as well as the entire LANL
community, had received assurances from those administering the
contract bidding process that existing LANL retirees would see no
changes in their benefits. Once I learned of these plans, I immediately
contacted the University of California and National Nuclear Security
Administration (NNSA) for an explanation of their actions.

I realize that as retirees plan for the future, they need to know
that their pension benefits will be reliable and not fluctuate. Please rest
assured that I will continue to press the relevant parties for a proper
explanation so that we all can better understand the proposal.

Thank you again for contacting me about this very troubling
development. I will be in touch with you again once I receive a
satisfactory explanation of the situation and what it might mean for the
entire LANL community. In the meantime, please feel free to contact me
if you have further concerns.



Very Truly Yours,

Tom Udall
Member of Congress



Comments:
A weekend present to LANL staff and retirees from the ENTIRE New Mexico Congressional delegation (that matter, I mean).

We still need to be vigilant, and not prematurely jubilant. But we HAVE been heard.
 
This is good new for current LANL retirees. The RFP did not require the winning bidder to create a stand alone plan that included retirees, so UC can be forced to drop its plan to clone UCRP for LANL retirees.

However, unless the contract is changed by DOE, after June 1, 2006 all LANL staff will be in a brand new (non-UCRP) LANS LLC only retirement plan. This was in the RFP and is currently a contractual requirement for the LLC taking over LANL.

So LANL employees (who plan to stay on after June 1) and LLNL employees need to press their congressional representatives to force DOE to modify its new LANL contract with LANS LLC and also not include in the RFP for LLNL, the requirement for a stand alone retirement plan.

I do not understand why continuing employees at LANL/LLNL could not be given an option to either stay in UCRP or move into the new LLC plan. This would be similar to choice given to UC lab/campus employees when UC separated its retirement system from the state's system (CalPERS).

NNSA's Linton Brooks will be at LLNL next week and has an all hands meeting schedule with lab employees that will be televised internally. I hope someone in the invitation only audience asks him this question. As well as one about the fairness of forcing lab employees out of their overall UC employment status.
 
Larry

The reason the retirements have to be moved, is that people who will be working for LLNL/LANL will not be working for a state organization anymore. They will be working for a private company and that requires all kinds of paperwork changes. It is "simpler" if more painful to move the people's funds to a private fund than try and get special legislation and deal with the IRS and other auditors for that.

I am going to pop some more pop-corn.. the LANL soap opera is better than Desperate Housewives.
 
Guy,

very good point.

Although, I still go back to the 1st draft of the LANL RFP and the fact that it did not require the bidders to set up either an LLC or stand alone retirement plan for LANL staff. There are no federal or DOE procurement rules that require either of these for FFRDCs or M&O run federal facilities.

Caltech (a private university) runs JPL (a federal facility) for NASA, and the 5000+ JPL employees are in the Caltech retirement plan.

LBNL's 4500+ employees were allowed by DOE to stay in UCRP.

The horse if out of the old barn, and from what I'm sensing, UCOP is getting comfortable with the prospects of divorcing UC from day to day oversight of LANL and LLNL. The lab admin office in UCOP (VP Foley's) is shrinking in staff/size. Soon the new LANL and LLNL directors will no longer report to Dynes (or UCOP or the Regents) at all.

If the LANS LLC is like other LLCs across DOE, it will just be a paper illusion that allows the site to run itself without corporate policies getting in the way of it doing exactly as the local DOE managers tell it to do.

Remember Mike is both the president of LANS LLC and LANL, so he reports to himself, and as president is held accountable by a board that only meets in private a few times a year.

I'd expect Mike's role might change with the bidding of the LLNL contract. UC really wants LLNL, and from what I've heard would rather run it alone. However, if forced by the DOE's RFP to create an LLC, UC will team with Bechtel on the bid. UC would then push hard on its LANS LLC partners to expand LANS's scope and go after LLNL. If LANS has gets the win, Mike remains as LANS's president over the two labs, who would still be separate but run on paper by the same entity - something UC has always publicly stated was the best way to run them. Mike could then appoint a new LANL director, keep the existing LLNL director (whomever that is at the time), and kick back as head of LANS LLC (with his $1.3 million/yr salary) while the two labs basically run themselves. Its great having a crystal ball - I wish I had Mike's job... but will just settle for more popcorn, the remote control and next week's tv guide... "Lost" comes on at what time?
 
The "retirees" class contains more than just current retirees, and I would like to see everyone emphasize this. My opinion is that UC is trying to make it appear that it's just a small percentate. However those affect by this proposed change include the following:

1. current retirees
2. surviving spouses of deceased retirees
3. possible surviving spouses of current retirees
4. all vested employees who are elligible to retire
5. future surviving spouses of #4

Furthermore, some current retirees did not opt into Social Security so they will not be drawing SS benefits. Moreover they would be seriously impacted if they lost their health insurance because they would be forced to pay for Medicare.

All but #1 of these groups are being ignored by UC to make this seem to have as small an impact as possible. Let's file a FIFA request to find out what the real number is.
 
What does the magnitude of the impact (number of people impacted) have to do with the validity of the proposed action? The significance of the impact on each impacted individual is not trivial and I still fail to see the legal and/or moral basis for such an ex post facto differentiation of UCRP members.
 
The magnitude of the impact is significant in that we have become a society impacted by bean counters. You hear too often "Oh, it only affects a few people" as an excuse for doing something that is not morally right.

In one of my discussions with a staff member of one of our Congress members, I pointed out that of the supposedly 9,000 folks drawing from the LANL UC bucket, some of those are elderly widows, possibly being cared for in a nursing home or at home by family members. This puts an entirely different face on what UC is doing, and it puts our Congressional delegation on the hotseat. And I iterated for this staff member the list that I submitted to the blog.

Wrong is wrong, but putting a face to wrong gives it much more of an impact.
 
Travis,

I understand what you say and I share your concern, wholeheartedly, for every impacted individual. What I question is the merit of playing the bean counters' game. By engaging in their debate about the scale of the action's impact, aren't you inviting a hopeless argument about the relative size of an impact that would qualify it as being "morally wrong?" Does "relatively small impact" exonerate a fundamentally (in a legal and moral sense) flawed action? You said it yourself: Wrong is wrong. I worry that if you try to put a face to it, it gives the bean counters something to dispute and distract attention from the fundamental merit of our cause.
 
Due,

I see your point. However the entire retirement issue hits too close to home. In a small area of 7 homes live the following;

1. me (a retiree) and probably my surving spouse;
2. the retiree next door and probably his surviving spouse;
3. the retiree across the street and probably his surviving spouse;
4. the vestee and old enough to retire across the street and probably his surviving spouse; and
5. the vestee and old enough to retire across the street and probably his surviving spouse.

Five families in 7 homes, none of whom can change their plans for retirement with their wives (who based upon actuarial tables will out live them) are all affected by this proposal.

So putting a face on this does not just make it easier for the bean counters to minimize the impact. It makes all of us aware of how not only us but our neighbors are affected.

What we're going to see if UC is successful is a glut of homes dumped on the market because many retirees are not going to be able to live here if their retirement is cut. House prices will fall (yes, they are over inflated but many, rightly or wrongly, count on selling their homes if necessary to provide a retirement cushion) thus providing cheaper homes for those moving into town. Don't forget that one of Nanos' complaints about this community was that there were too many retirees living here and not enough cheap homes on the market.
 
Travis,

Being a LANL retiree myself I am certainly sympathetic to your predicament. But I don't think that UC or DOE will be swayed by it. Their bean counters have done the cost-benefit analysis, and the benefits that concern them are not yours or mine. I think our only shot is to persuade someone to act on our behalf based on the legal merits of our position.

BTW, my friends call me "Overdue."
 
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