Wednesday, February 22, 2006

Neither LANS TCP 1 nor LANS TCP 2 appears "Substantially Equivalent"

Submitted by Anonymous"
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Neither LANS TCP 1 nor LANS TCP 2 appears "Substantially Equivalent" to the UC contract total compensation package.

Each of these UC TCP benefits (with very conservative annualized values noted) is missing from LANS' Proposal:
1. CAP Accounts annualized value: $1200
2. 401(a) Pre-tax (federal and state) benefit: $500
3. 457(b) Pre-tax (federal and state) benefit: up to $5000
4. 25% Survivor retirement continuance $4000 to $6000

And this additional cost is imposed by LANS' Proposal:
1. Investment Funds Load 401(k): -$1000 to 2500

Total benefit difference: $11,700 to $15,200 per Year

(Basis: $75K annual salary; 25% Federal Tax, 8% NM Tax; 401k value constant at $100K to 250K; Additional Retirement Funds Management Load 1%)

An additional cost of the LANS proposal is that individuals who opted out of Social Security contributions in 1978 (some 450 individuals) will be required to pay Social Security tax (estimated $8000 per year), with little or no return.


Comments:
Go to: "http://www.ucop.edu/atyourservice/online_actions/ucrpcalc/estimator.html" and see what your lump sum isn't going to be under LANS in the future. It is truly astounding.
 
So shouldn't that tell you that you need to take the money before June 1st and boggy. I think you still have time if you act now, but if you wait--the party is over.
 
Take the money for sure; the boggy, however, is a slippery slope.
 
I'm not sure how this calculation is done. What are the assumptions? I understand that the removal of the 457(b) is a real loss, but that is a legal requirement. I don't understand the data on the 401(k).
The Social Security is also a big hit, but one that is inevitable with a new contractor.

They would need to add some other benefits to make up for some of the losses. But this would require a waiver by DOE because they would be in opposition to the RFP requirements. I think people need to speak to DOE more than to LANS. I think what LANS can do is pretty limited.
 
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