Tuesday, January 17, 2006
|Once-strong program now running short |
| The plush University of California pension that kept thousands of scientists working on U.S. nuclear weapons is losing its gold-plated luster, posting its first shortfall in decades. |
From the latter days of the Cold War until recently, the university's retirement plan of more than $40 billion has been one of the nation's largest and healthiest, with a sufficient surplus of assets over liabilities so that employees have not had to contribute to their retirement for 15 years.
But this week, as the university's governing Board of Regents considers carving out a separate, "cloned" pension plan for employees at Los Alamos National Laboratory, one of two nuclear-weapons labs run by the university, a report prepared for the university shows that such a plan would start out underfunded by $54 million.
and corporate pensions are beginning to see big shortfalls with the
initial wave of baby-boom retirements. One way in which these pensions
are attempting to overcome the problem is by taking a sizable portion
of the pension (say 20%) and placing it into high-return / high-risk hedge
funds. These secretive hedge funds will promise to make you 15% or 20%,
but with huge overhead costs that go directly into the pockets of the
fund managers. The quality of recent hedge funds has gone downhill,
now that everyone and their cousin is making a grab for these lucrative
hedge fund fees. Talk of a coming collapse in the hedge fund markets can
be heard among some economic analysts.
Since the new URCP-LANL and LANL-LLC pensions will start out underfunded,
it will become very tempting for the pension managers to take the easy way
out and attempt to make up for losses by turning our money over to the hedge
funds. A recent Forbes article pointed out that the large surge of pension
cash coming into hedge funds (in a desperate move to stay afloat) is a
probable indication that people are about to lose a lot of cash due to
the hedge fund mania and mis-management.
Note that if our new pension managers rely on hedge funds and we lose on
this risky bet, there will be no PBGC coming to our rescue. It would
appear that the pension risks for both current and future LANL retirees
may be much higher than most people ever imagined.
the LANS corporate plan is shown as falling under ERISA. I believe that would allow PBGC insurance.
In my opinion, the chart needs to do a better job of conveying information. Many coworkers who have seen the chart have stated it does not clearly convey the language in the RFP. Who knows, maybe things have changed?
and, thus, falls under ERISA. That might act as a "carrot" to induce some
current employees to transfer to the LANS-LLC pension, rather than be stuck
in the UCRP-LANL pension which won't fall under ERISA.
If you are a current retiree, however, you won't be given the option to
make this choice. You'll be wrenched out of UCRP and placed into a
small, static pool of old annuitants who make up the UCRP-LANL pool.
When looked at in this fashion, being lumped with a statistically more
robust pool of younger employees in the LANS-LCC might be preferable.
Also, I found this paragraph in the UC PDF document to be interesting:
...a similar model further refined by the LANL experience could be used
when the Lawrence Livermore National Laboratory management contract is
put out for bid, which the DOE/NNSA have indicated will occur in
2006 or 2007.
People out at LLNL better start paying close attention to this story,
because you're next in line for this treatment. You'll soon be loosing
the protection of the vast UCRP pension pool no matter whether you are
currently retired or still working at LLNL.
"We come then to the question presented: Does segregation of children in public schools solely on the basis of race, even though the physical facilities and other "tangible" factors may be equal, deprive the children of the minority group of equal educational opportunities? We believe that it does...We conclude that in the field of public education the doctrine of 'separate but equal' has no place. Separate educational facilities are inherently unequal. Therefore, we hold that the plaintiffs and others similarly situated for whom the actions have been brought are, by reason of the segregation complained of, deprived of the equal protection of the laws guaranteed by the Fourteenth Amendment.
The Supreme Court struck down the "separate but equal" doctrine of Plessy v. Fergusson for public education, ruled in favor of the plaintiffs, and required the desegregation of schools across America.
It is more than ironic that as we celebrate Martin Luther King's birthday we are faced with a "separate but equal" pension plan proposed for all LANL retirees and soon-to-be retirees. We hired on as UC employees, we paid into UCRP, we retired as UC employees, and we expected to receive our pensions from UCRP.
Now we learn that UC does not want to honor its committment to us. We learn that UC wants to establish a "separate but equal" pension for UC-LANL. Nowhere in any documentation that I have indicates that UC may do this. The Supreme Court has already ruled that separate but equal is not the law of the land. Separate facilities are inherently unequal whether they are educational facilities or pension plans.
I am willing to contribute $1000 to a class action lawsuit if this is accepted by the Regents and the DOE. Who else is willing to contribute?
Energy department opens Livermore lab competition - Jan 16, 2006
"...Lockheed Martin, which lost the bidding for Los Alamos (it teamed up
with the University of Texas), has said it might compete for the
Wouldn't it be a hoot if after UC won the LANL contract in NM, Lockmart/UT
picked up the LLNL contract over in CA. Surely the DOE wouldn't pass up
the chance for of an ironic choice like that. I'm sure they'll want to
do it just that way.
Later in The Daily Texan article, however:
"The UT System may have the No. 1 football team in the nation, but it doesn't have its name on a national laboratory or a single school in the top 50 academically. Its priorities should be on the latter."
I would like to ask you to visit the LANL The Real Story blog
on a daily basis. Both LANL and LLNL employees have a major concern that
needs to be monitored very closely. We went to work for LANL and LLNL
as a University of California employee whereby we have contributed to this
retirement fund for as many as 35 - 40 years, with the understanding that if we kept our
noses clean and protected the nations nuclear weapons stockpile; we would in turn
be assured a pension from the UCRP, not from some corporation that has no record of success. i.e LANSLLC
I personally view this attempt to transfer all liabilities by the UC as nothing
more than a breech of contract. It seems that the University of
California has decided to give away millions if not billions of
dollars of our money to a new corporation. In the meantime the
retirees and current employees of both labs are at risk of losing
everything we ever worked for based on this transfer of funds.
Can anyone see a ploy?
I do not believe for a moment that this move is totally legal and
I would hope if need be that this law firm http://www.giccb.com/jggwilliam.html
would consider taking the case to it limits. We as lab employees
should be guaranteed to retire as University of California employees
under the UCRP, and nothing else will be acceptable. The last thing we
need is someday to get a letter in the mail that says, sorry we do
not have the funds to pay your retirement anymore. Thank you for your
services and have a good day.
It is my hopes that you will continue to monitor this web site and
keep the retirees of both labs inform on daily basis where you can
expose the UC's ploys and despicable actions. Crooks will get away
with whatever we allow them to, and I have no intention of allowing
them to get away with anything. They have shown their concerns for me
and I now intend to show my concerns for them. It is my hopes that
with your help we will win the battle and the war. It is my hopes
that you will hear from thousands of more employees whereby you can continue
to keep us on the front page and expose how ruthless one can be.
Can we depend on your help?
I hear that we made tomorrows paper. More to come on the UC
# posted by TravisMcGee : 1/17/2006 07:13:28 PM
No problem here but I will bet that if this law firm sees a case they will take it for part of the "take".
Lets hope it never leads to this but it good to keep them informed and on line reading the blog.