Monday, January 23, 2006

Points to consider to the UC Pension Debacle

From Anonymous:
____________________________


Doug,

For UC's pension debacle, I've collected some data from the articles and comments posted on your site along with what I know to create a list of points that might be of use to many readers of your site. More importantly, this list might also serve as a starting point with which UC retirees might create a clear and coherent set of concerns and demands to present to UC. After all, retirees are in a contractual agreement with UCOP, and should a party in that contract take action that endangers their ability to fulfill their obligations, the other parties to the contract have every right to point this out and insist that the errant party take action to ensure that they can live up to their obligations.

  1. There never has been and is not now a UCRP-LANL partition of the UCRS funds. This partition has never been considered seriously in the past because of the extreme difficulty in creating an equation to partition the funds. Some of the difficulty lies in individual employment histories within UC that include some employment at LANL, and the way the surpluses and banks of COLA funds and CPI funds might be distributed among the partitions. These two items do not exhaust the list of difficulties in disentangling the funds. In the Los Alamos Monitor article, the UC Associate Vice President for Human Resources and Benefits, Judy Boyette, seems to have some notion of how difficult this partition might be in noting that it might not be in place by May 31. She seems to be one of the few UC officials that has any idea of the difficulty.
  2. There is a statement in an article from the Tri-Valley News that once the LANL UCRS funds was a few hundred million dollars ahead and currently is about $54 million in deficit. This is a statement straight out of fantasyland. It is impossible to make such a statement before some equation for partitioning the funds has been created and agreed upon. This may be an attempt to deny the UCRS surplus funds along with the COLA and CPI bank of funds by braggadocio to the LANL partition, but the IRS rules and inevitable class actions suits that will follow should prohibit this and force a reasonable accounting for all of these funds. Certainly, if we can go back into the past with the LANL partition idea, we can account for how much the LANL partition has been hurt by problems in the rest of UCRS previously (remember when UC decided they were top heavy and decided to pension off old professors?) and augment it accordingly from the rest of the UCRS funds.
  3. In the Associated Press article, the Regents' Chairman Gerald Parsky is quoted as saying that UC would provide "substantially equivalent" pension benefits to retirees. Perhaps he misspoke or was misquoted. If I remember correctly, the phrase "substantially equivalent" is taken from the contract between the LANS LLC and the Federal Government. It does apply to current employee and all LANL retiree benefits such as health care etc. It also applies to any new pension plan(s) created by the LLC for its new employees or employees it rehires from UC, but it does not apply to the pension of UC retirees. UC retirees have a preexisting and legally enforceable contract with UCOP for their pension; this preexisting contract is not and cannot be altered by any agreement between the LLC and the Federal Government. In light of Abe Jacobson's analysis where he notes the use of the term "nonforfetable" it seems that the phrase "exactly the same" is more applicable to the UC retiree's pension.
  4. The two main risks to retirees from a partitioning of the UCRS funds appears to be a possible loss of the COLA and the possibility of the smaller partition(s) running out of funds. In the Monitor article, someone only identified as Mollinix (UC senior vice president for business and finance?) seems to have this in mind in stating that putting current LANL retirees into a separate account could benefit the University and others in the retirement plan. However, should one partition of the UCRS pension receive a COLA or CPI different from any other partition(s) this would surely give rise to ruinous class action suits for which UC would inevitably pay. UC retirees do, after all, have a contract with UCOP despite the UC administration's desire to forget about that. Apparently, it is also Molinex in the Monitor article that also talks about establishing "once and for all" the assets to be transfered to the LANL partition. This is not realistic. Should the LANL partition run out of funds while the rest of UCRS is funded, that would abrogate the nonforfeitable right of a UCRP member to receive UCRP retirement benefits and is a breach of the contract between UC retirees and UCOP.

Comments:
Well stated. I would only add a re-worded comment that I made somewhat facetiously in the preceding thread: What's to prevent UC from cloning a UCRP-RETIREES partition or any other partition of UCRP so as to benefit the group remaining in the parent partition?
 
As anyone heard a peep from our Congressional delegation or are they all too busy trying to sort out the Santa Fe Post Office?

A friend told me she called both Udall's and Domenici's offices on Friday and neither one had received many calls - maybe 5 each.
 
Dear Travis:

FYI: I have received one (1) response to my letter to the NM Congressional delegation, namely, a form e-mail from Tom Udall.

Doesn't look good. (DC Staffers--are you there? ? ?)

-Brad
 
Don't forget to consider and include the inequity of the 5-year retirement incentive given by UC some years ago that DOE then took upon themselves to cut LANL retirees to a 3-year incentive.

Who got the benefit of the leftovers out of that one?
 
So how many of you have taken the time to contact these people and see if you have a case? I think it would be very good to find out, because if you do not, then the party is over and we all just got boned. So how many thousand people can I count on?

http://www.giccb.com/

1999 HARRISON ST.
SUITE 1600
OAKLAND, CALIFORNIA
94612
510-832-5411
510-832-1918 FAX

E-MAIL:
webinfo@GICCB.com
 
I did contact them, and received an immediate response. They said that as yet no one has contacted them formally about a law suit, but they wer following the developments and are interested in the issues.

Sue Chasen
 
Hey, let's get this California attorney out here to talk to everyone. Let's get the LANL Retirees Group involved. As I said before, I'm willing to cough up a $1000.00 as long as the class is set up fairly - everyone in unless they opt out, etc.

Udall and his form letters are a waste. As a registered Democrat, I get a better response from Domenici than from Udall or Bingaman. I hope I don't get form letters in response to what I have sent them.

How do we get this started? We can't wait till it's too late. Can we get an injunction to keep this from happening until after a court decision?
 
I too contacted the law office and received the same response as Sue.

I too contacted a number of congressmen's offices...and boy did I get an earfull from Domenici's place. From the response I got, I could tell that Domenici doesn't want to dirty himself with any connection to our situation with DOE/NNSA, UC and LANS...that LANL staff are spoiled brats and whiners.

Ladies and gentlemen, I believe we are on our own.
 
Regarding the original poster's Item 4. If the UCRP-LANL partition were to fall short, it seems reasonable that UCRS would go to DOE for the funds needed.
 
Regarding educatedbeyondmyability's post of 1/23/06 10:40 pm:

If you look at the current UC/DOE contract, page 29, you will see exactly that fact. DOE agrees to fund shortfalls in the UC pension plan arising from economic conditions beyond UC's control. Everyone should do their homework about the current contract obligations on both sides before going ballistic. The complaint that "no information is available" is just not true. It just will not be spoon-fed.
 
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