Monday, February 20, 2006

More UC retirees healthcare woes....

Submitted by Anonymous:

From the Wall Street Journal online 02/20/06

Big Bill: California's promised health-care benefits for retirees could total as much as $70 billion and could force the state to set aside as much as $6 billion a year to fund the looming tab, according to a state legislative analysis released Friday. The obligation stems from health benefits the state has promised to its employees and their dependants once they retire. A new accounting rule that goes into effect next year requires states and local governments to recognize the value of these obligations and start figuring out how to pay for them. The analysis recommended that the California Legislature start looking for ways to fund the obligation but noted s that "given the state's budget situation" immediately setting aside $6 billion a year "is unrealistic." -- Deborah Solomon

Has nothing to do with UCRP.
The medical benefits for retires comes out of operating funds. UC has said for years that this benefit could be taken away at any time. I think the time has come.
The medical benefit comes from DOE not UC. It is DOE's call to stop the medical benefit, not UC's. It is part of the operating expenses of the Laboratory, not UC's say.
If LANL functions like LLNL, the retiree medical is collected as a "tax" in your overhead. Therefore, I believe it will be up to the new company to decide if they are willing to subsidize their retirees.
I believe that this isn't simply up to the local contractor but also under the approval of the DOE. It is part of the contract.
You are probably correct that DOE must approve the change, however, if the Laboratory makes a recommendation to DOE for a cost saving measure, do you really believe that DOE would deny that request?
I believe that DOE provides the funding for the retiree healthcare directly and it isn't simply part of the LANS budget that might be eliminated. So it isn't simply LANS recommending it to be turned off.
David, maybe LANL handles it differently than LLNL. I recently worked an issue of payroll burden costs with our Budget Office at LLNL and when they dissected the costs there was a line for "retiree benefits." When I asked what that was for, they said it was to pay the medical, dental benefits for the current retirees. I was really surprised to find out that was how the benefit costs were being collected. As I said, possibly LANL manages their costs differently than LLNL.
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