Monday, January 23, 2006

UC-Retirement Part 2

If the LANS retirement plan for all future employees is a defined contribution plan, then the DOE/LANS benefit plan for future employees is credible no matter what they do to former employees since LANS, or DOE is making no promises for future benefits. Neither the DOE or UC would have any future employee recruitment incentive to fund a UC-LANL retirement plan shortfall. Then the proposed UC-LANL retirement "pot" is a zero sum game where maximum funded benefits could be less than promised. If this occurs, then how is the shortfall fairly/legally shared among retirees? The obvious next question is "Should the UC/DOE continue to allow new retirees to lump out and receive a benefit based on the plan's actuarial liabilty to them even if that amount may exceed their portion of the plan's actuarial assets now or in the future, thus reducing benefits for other existing retirees"? UC may not have an obligation to fund the UC-LANL plan, but they probably have a legal obligation to fairly distribute the shortfall. Have a nice day.

Dick Yactor



----Comment by Editor----

The operative phrase here is "betrayal of trust." The trust betrayed is that between UC and LANL employees who retire(d) before the new contract takes place, namely, June 1, 2006. LLCs, of any bold stripe, don't figure into this equation at all.

Focus on that.

Yes, DOE is malfeasant in the creation of a new military-industrial corporate entity to run LANL, but UC can't just dump its previous retirees, no matter what "campus" they came from.

-Brad Lee Holian

Comments:
Remember that it was DOE - specifically the NNSA morons in Albuquerque - that set this retirement plan mess in motion... not UC.

It was DOE that required a stand alone retirement plan, a requirement that was not in the original RFP that LANL employees and congress had a chance to comment on... it was added to attract the likes of Lockheed Martin, et al who didn't want to bid against UC's huge and over funded retirement plan - they had no desire to add their corporate funds to cover LANL employees.

Also a stand alone plan is not required by DOE universally across the DOE national lab complex - the RFP for LBNL had no requirement and UC, when given the option, the Regents chose to keep all 3000+ LBNL employees in UCRP...

If you're hoping that DOE cares about the fairness of the retirement plans for employees of the labs, you're sadly mistaken. DOE is not on the side of any employee at the national labs. Expect DOE/NNSA to approve the bare minimum allowed by law/contract, and for LANS LLC to ever so slowly change this over time... and by the next contract bidding of LANL, both the lab and it's employee benefits program will have zero in common with UC and UC's benefit program.

And so goes LANL... so goes LLNL...
 
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? An even better question is, how many of you have informed your co-workers to what is going on, even if they do not care?

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This is not just a betrayal of trust between UC and retired LANL employees. It'a also a betrayal of trust beteen UC and the surviving spouses of those retired LANL employees. How many of the surviving spouses have no other income except their spouses' pensions? How many are in poor health, perhaps living in nursing homes, or being cared for by their families and have no idea that their very means of support is being stolen from them?

It's a betrayal of trust between UC and what will be come the surviving spouses of current retirees. When one plans for retirement based upon UC promises, how can one suddenly manufacture income to replace the promised pension?

I don't understand why this is not smeared across the headlines from CA to DC. I don't understand why our Congressional delegation is so quiet.
 
Lets take it one step further. If I were one of the surviving spouses whose husband or wife just dies because of this fiasco, I'd be going for a wrongful death suite for as much money as I could get. I am hereby asking all retirees to look for these symptoms and use the legal system to your advantage. It's time to lock and load.
 
I understand from a local physician that in the last couple of months the number of people with stress-related symptoms such as insomnia, elevated blood pressure, and the onset ofgastric problems is higher than the norm (don't know what the norm is nor the current figures). There are also more problems with stressed teens who hear their parents and friends' parents discussing possible financial implications.
 
This fiasco has already claimed one life and I'm sure there will be more. If you read Sara Kauppila's latest submission it will become clear that UC could care less if you live or die. And, they will never admit their responsibility for it.
 
To clarify a point, the UCRS plan is NOT a "defined contribution" plan, it is a "defined benefit" plan.

The obvious way to "fully fund" the LANL plan is to get contributions from LANL employees and the DOE. This has been the case in the past, before the plan got "over funded" and contributions ceased.
 
The primary member pools for both UCRP-LANL and LANS Plan 1 are going to be fixed at some date, June 1, say. One plausible goal, from DOE's pov, is to get the liabilities in those two Defined Benefit pension pools to zero as quickly as possible.

Toward that goal, if I were DOE, I would be encouraging people to take lump-sum cashouts from both UCRP-LANL and LANS Plan 1 vs retiring with either.

Having members take a lump-sum vs electing a retirement annuity eliminates at least one pension liability from a DB pension plan, eliminates an associated retiree health-care liability, and likely eliminates accrued sick leave liability. Remember, these two DB plans are to be "substantially equivalent".

Even putting aside DOE's savings for accrued sick leave and retiree medical benefits, the lump-sum is still cheaper for DOE. This will be the case for someone electing inactive-vested status under UCRP-LANL. According to the RFP, this election means they are automatically going to LANS Plan 2 (whatever benefits they obtain for their accrued sick leave and retiree medical benefits now fall under the TBD LANS rules). Suppose Plan 2 is a Defined Contribution plan. There will be no future pension liability for them in Plan 2. (Unclear what, if anything, accrued sick leave will mean under Plan 2.)

Now their inactive-vested pension liability resides in the UCRP-LANL plan. They have a choice of an annuity or a lump sum cashout under LANL-UCRP. A simple analysis based on UCRP plan values shows the return accruing to someone choosing to become an annuitant at some point in time is greater than someone who elects a lump-sum cashout at that same point in time. This means it is cheaper for DOE to just cash people out.

Conerns have been raised about the LANL-UCRP plan being underfunded at some point for whatever reason. Is there some reason why DOE cannot take some of the funds they would have sent to LANS for operating expenses to run LANL and put them directly into UCRP-LANL? They have already said LANS must pay for their Plans 1 and 2 out of the funds budgeted for LANL. So they peel off $10-20 million and send it directly to UCRP-LANL instead of LANS. (Maybe even save on some NM GRT as well.)
 
Concerns have been raised about the LANL-UCRP plan being under funded at some point for whatever reason.

This is the one that concerns me. If one leaves their money in the system and LANSLLC goes belly up, so does their retirement.

To me there is no reason that anyone who wants to retire before June 1st should not be allowed to retire under the primary UCRP and that all who have been retired are to stay on the primary UCRP.I see however what their ploy is and so should any good lawyer. I can only assume that after all of the UCRP employees get screwed it will be the county, state and federal employees next.

Can anyone see Socialism on the rise. If this crap keeps up the young working class will be paying 70 cents on the dollar tax just to keep the retirees on subsidies.

I wonder when the young are going to wake up and see their future is being groomed by the minute?

But I guess that's not the point. How about us old people protecting what is ours.
 
IMHO trying to second-guess the motivation for UCRP-LANL is wasted energy. Would it not make more sense to investigate the legality of this proposed action? Any LANL retiree out there with a law degree?
 
b-ohica:

I'd disagree with you that we're seeing "Socialism on the rise." What we're seeing is the result of naked capitalism, unfettered by morality or concern for anything beyond the bottom line and the next quarterly report. Pension plans don't make money for a company; they cost it money. Solution: dump the pension plan and the pensioners. Instant uptick on the financials and everyone's happy, except the poor schmucks who thought Adam Smith's invisible hand would never be clenched into a fist and delivered to their mouths.
 
Actually, Jim, the proper name for this new system is not capitalism.
It's called a kleptocracy. And you can rest assure that those at the
very top of the food chain feel completely immune from public outrage.
That's because the party now in power has given them complete license
to steal from the middle class.

Here is but one simple example from many that can be produced. Tax
time is almost here. Congress (controlled by the far-right GOP) could
have fixed the looming AMT crisis this year. But, hey, if you make over
$500 K per year, you're immune from the clutches of the dreaded AMT.
Now, isn't that special?

Watch as, in due course, thousands of middle and upper middle class
families will be forced to cough up thousands more in tax cash to cover
their sudden AMT debts. All the while, those making the "real" money
at the very top will pay taxes at a lower rate than ever before.

When you pay your taxes this April and have to re-compute based on the
AMT "screw job", take a few minutes to think about who is running the
country these days, and whether they truly have your best interest at
heart. Then, look at your kids and think about what kind of future is
coming their way. If you are unhappy with the way things currently are
(and polls show that most of you are) , then consider making a political
statement with your vote that those controlling our Congress can't
possibly mistake. Let them know "you're mad as hell, and you're not
going to take it anymore". If they get that message loud and clear,
then things may just start changing for the better.
 
larrylivermorevriper...above-referenced "the NNSA morons in Albuquerque". I know a couple of these folks. They are not business-qualified to make the decisions that were made "that set this retirement plan mess in motion", let alone the rest of the contract terms. These are contract procurement specialists that have made a career in the federal procurement bureaucracy. They could not make it in the real world, so they compete in the "special olympics" of DOE-dom. Anyway for what it is worth, these folks are also known LANL-haters. Seeing who was on the DOE/NNSA contract team for the Los Alamos recompete, made me ill from the very start. I still can't believe it. Look at what has happened.
 
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