Thursday, January 19, 2006

Los Alamos lab employees outraged over UC pension fund vote

HEATHER CLARK
Associated Press
ALBUQUERQUE - Los Alamos National Laboratory employees and retirees say they are outraged that the University of California Board of Regents has approved the creation of a separate pension fund for the lab.

The regents ratified a committee recommendation without discussion during a meeting Thursday in San Diego. The pension fund for the lab - called the UCRP-LANL Plan - will be removed from the overall UC pension fund.

UC President Robert Dynes recommended the regents approve creating a "cloned" plan that would provide the same monthly benefit formulas as the regular UC retirement plan. It would cover active, inactive and retired members, according to a report from Dynes' office.

But lab employees and retirees said Thursday they feel betrayed by the regents.

"Once this word gets out, people are going to be even more incensed," Charles Mansfield, president of the Laboratory Retiree Group, Inc., said after hearing about Thursday's decision. He had described employees and retirees as "livid" the day before the vote.

Mansfield said the move is a breach of trust between the university and lab employees and retirees.

Since 2003, when the Department of Energy announced the lab's management contract would be put out for bid, Mansfield said UC told employees they would remain with the UC retirement plan. Los Alamos National Security, a team led by UC and Bechtel Corp., was picked to manage the lab last month. Its contract starts June 1.

Mansfield said the retirees fear that management of the pension fund would be subcontracted to another firm that would raid the fund, which had a market value of $4.3 billion last June. UC's total pension fund was worth $41.8 billion.

Brad Holian, a semiretired physicist, is concerned the smaller lab fund would be riskier in the long run than the larger UC fund.

"It is terribly unfair to suddenly force people who have worked for over two decades at the lab under the UCRP system into an entirely new and unknown entity," Holian wrote in a letter to Sen. Pete Domenici, R-N.M. "Retirement is all about planning, and we have been given no opportunity to plan for such a catastrophic turn of events."

UC officials have described the lab's pension fund as "extremely healthy."

On Wednesday, Regents' Chairman Gerald Parsky said the university would stand by its commitment to lab employees and retirees to provide "substantially equivalent" pension benefits.

Asked about the regents' vote Thursday, designated lab director Michael Anastasio said LANS was still committed to a smooth transition. He said LANS will submit its benefits proposals, including pensions, to the Department of Energy for approval next week.

LANS hopes to make formal offers to employees by March 15, he said.

Dynes has recommended that the new fund become effective no later than March 31.

---

Associated Press Writer Michelle Locke in San Diego contributed to this report.

Comments:
Having spent the day talking to various walks of life from the technician in the trenches to the Phd's that we work with the conclusion of how the UC Regents should be dealt with in lieu of their most recent action which was approved yesterday in San Diego is unanimous. The conclusion is that it is time to speak up and bring on a class action suite in order to retain our UC retirement under the larger and more robust pot of funds that is in the possession of the 200,000 people strong University of California, not their most recent offering.

This course of action was chosen based on the interpretation of the information that is being disseminated by the UC, and observance of the UC Regent attempt to back-door its loyal employees. This was the straw that broke the camels back. Feel free to pass this message for informational purposes only, until such time we see documentation that proves otherwise. It's time to resolve this fiasco once and for all.

This is the collective opinion of the mass majority of the people who I have spoken too today. It is our request that you read the attachments comp.pdf and UCRPDoc.pdf and form your own opinion. I persoanlly beleive that you will come to the same conclusion as we have. Afterwards if you feel the need to address the issue by means of legal aid please contact

Office Location(s)
Oakland, California
1999 Harrison Street, Suite 1600
Oakland, California 94612-3528
Telephone: 510-832-5411
Fax: 510-832-1918 URL:
http://www.lawyers.com/giccb
Info@GICCB.com
 
Gotta love some of these quotes in the latest article of the Los Alamos
Monitor. They are very telling.

LANL pension split advances - Los Alamos Monitor - Jan 20, 2006

http://www.lamonitor.com/articles/2006/01/19/headline_news/news02.txt

-------------------------------------------------------------------------
UC Vice President for Business and Finance said the amount of money to be
retained by UCRP and the amount transferred would not be known until right
before the transfer occurs, but that it will establish "once and for all"
what the assets actually are.
-------------------------------------------------------------------------

Right. Just as the pension separation of LANL employees was done in great
haste in the dead of night, expect UC to tell us absolutely nothing about
the funding transfer formula to be used until the very last minute (ie,
after it's already a done deal). Heck, this UC VP is already hinting
to us that it's going to be a last minute "screw job"! What more do you
need to know?


-------------------------------------------------------------------------
Mollinix said that placing current retirees into a separate account within
UCRP would be beneficial to the university and other employees in the
retirement plan.

"If returns have been excessive, they might have a claim on that plan;
or if insufficient, they might seek reimbursement from the Department of
Energy," he said.
--------------------------------------------------------------------

The "they" in the statement is, of course, current and retired LANL staff.
Could this be any clearer? The separation is seen by some in UC as a way
to benefit UCRP to the detriment of the LANL staff. They don't like our
claims to any over-funding of the current UCRP pension and wish to strip
it all away. It looks like they will soon get their wish.


Kukuck and Anastascio did the best they could in this afternoon's
meeting to put lots of lipstick on this pig. However, at the end of
the day, it's still a pig. Nothing can hide that fact. And the
lawyers won't save us on this one. Just go read some of the many
news stories about what has been happening to employee pensions in
this country and it becomes very clear that there is very little
legal recourse when your company decides to give you the good ol'
pension "screw-job". It has become a new American tradition.
 
If those who want to stay with LANSLLC want to take their " lump sum" as calculated on the UC benefits web site and invest it into an unstable yet to be proven asset, then so me it; but by no means are any current UC employees or retirees to be thrown off the primary UCRP.

Sent to the law firm list in this post today.
 
Before anyone seeks legal counsel on the UCRP-LANL split-off proposed Wednesday by UC President Dynes, based on the UCRP Summary Plan Description so freely distributed to employees by the University of California, they should pull out their copy and read the fine print on the last page. Some excerpts are:
“What is written here does not constitute a guarantee of plan coverage or benefits ...”
“The University of California intends to continue the benefits described here indefinitely; however, the benefits of all employees, annuitants, and plan beneficiaries are subject to change or termination at the time of contract renewal or at any other time by the University or other governing authorities.”
“Source documents are available for inspection upon request. “
“No person is authorized to provide benefits information not contained in these source documents, ...”
I requested these source documents six months ago, and upon paying the Regents $39.37 was sent them. You can find the UCRP source document at
http://www.upte.org/LosAlamos/docs/UCRP_PLAN_Sept_04.pdf It is a 1.5 MB pdf so give it a few minutes to load.

Now go to article 2.06, excerpted below:
“2.06
ACTUARIALLY EQUIVALENT
Actuarially Equivalent means benefits and payment options the actuarial present values of which are equal. Actuarial present values shall be determined using the Actuarial Assumptions from time to time approved by The Regents and incorporated into this Section. The current assumptions are:
(a) assumed rate of investment earnings: 7.5% per year;
(b) assumed rate of Consumer Price Index movement: 4.0% per year;
(c) assumed rates of mortality used to determine benefits and payment
options:
(i) Effective July 1, 2004, the 1994 Group Annuity Reserving Table for Males with ages set back three years for the Member and ages set back five years for the Eligible Survivor or Contingent Annuitant;
...
(d) assumed cost of living adjustment: 2.0% per year; ... “

Note that the UCRP life-expectancy tables are twice-reduced from the unisex (averaged over male and female life expectancies) tables required by the Federal Government IRS and ERISA. The male tables have a lower life-expectancy than the unisex tables, and then there is the additional age setback in (i). The result of this is that the UCRP-calculated retirement liabilities are much smaller than what is actually expected, leading to understated UCRP liabilities systemwide.

Given that the LANL portion of UCRP is now underfunded (LANL_UCRP_ActuarialStudy_July20.pdf) even with the use of an understated plan liability, and that no new employee contributions to this plan are anticipated, it is hard to understand the basis for the statement appearing in the AP article above ‘UC officials have described the lab's pension fund as "extremely healthy." ‘
 
Post a Comment

<< Home

This page is powered by Blogger. Isn't yours?