Friday, February 17, 2006

Pension Changes Surprised Feds

Publication:Journal Santa Fe Section; Date:Feb 17, 2006; Section:Front Page; Page Number:1

Pension Changes Surprised Feds Lab Workers Get Benefits Briefing BY JOHN ARNOLD Journal Staff Writer

LOS ALAMOS — The University of California Board of Regents caught federal officials off-guard when it voted to split Los Alamos National Laboratory pensions from the rest of the UC retirement plan, a National Nuclear Security Administration official said Thursday.

“We did not ask the university to propose the spinoff. We did not have a proposal to do that,” the NNSA’s Tyler Przybylek told a crowd of LANL employees and retirees. “We know what you know.”

The NNSA held the first of a series of briefings Thursday on the incoming lab contractor’s proposed benefits package.

Przybylek, who was chairman of the NNSA board that evaluated LANL contract bid proposals, explained to retirees gathered at Los Alamos High School that while the incoming contractor — Los Alamos National Security LLC — would be responsible for their health and dental benefits, UC would continue to pay their pensions.

But whether those payments will come from UC’s existing $40 billion retirement plan or a much smaller one that would include only LANL’s portion of pensions is still unclear.

UC regents approved the latter plan in January, but the spinoff still must be approved by NNSA, the arm of the Department of Energy that oversees the lab contract.

In a Feb. 6 letter to UC President Robert Dynes, NNSA chief Linton Brooks said NNSA would evaluate the plan, but stressed that his agency was committed to ensuring that retiree and employee benefits would not be diminished.


Full Story

For those of us who couldn't attend these briefings, would anyone care to elaborate on what was (or wasn't) mentioned in the Journal article?
Bottom line? No matter who won the LANL contract, life at LANL will be harder, and it will be very hard indeed, for new hires, compared to continuing or retired workers. This privatization was a bad idea right from the start. (I bite my lip to restrain myself from saying, "I told you so!" -Three years ago.)

Przybylek was honest and straightforward in his presentation to LANL staff yesterday at the Lab's Main Auditorium. He even took criticism without blowing his stack--a refreshing change from a year and a half ago, when Navy ex-Admirals (Nanos and Foley) and a Republican Senator reamed us out, or keelhauled us, if you prefer. He admitted being the author of the letter from Brooks to Dynes saying, in effect, "This 'idea' of yours to split the LANL retirees off from the rest of the UC retirees is not something WE at DOE/NNSA had in mind..."

Those under 50 are stuck in the new system; people 55 and over are likely to retire from UC and hope to be rehired by LANSLLC; the rest have got to get counseling, I'm afraid. New hires will see that LANL no longer offers world-class benefits and retirement--not even health care once they retire.

It's a mess, but that's life in industrial America. LANL is no longer a public-service institution like UC. How many will retire by June 1st? Surely more than the 300 estimated by LANL upper management earlier this year or last December.

How long will chaos reign as the transition plows its way through the icebergs? Six more months? A year? I'm not taking any odds or placing any bets...
Thanks, Brad.
I am leaning towards inactive vesting, since I am under 50. The only loss seems to be in retiree health benefits, but they are likely to go the way of the dodo by the time I want/need them anyway.

The number, when I run mine, appear to favor TCP2. I do not like the idea of going into the finite-population, new DBP plan anyway.

One clarification I did get directly from Anastasio: inactive-vested transferees will be offered their current base salary. The offer letters (due on 3/15) will have a salary and benefit options spelled out.

One more tidbit from Anastasio:

The loss of lump sum is indeed an NNSA idea. While it does not appear to be in the contract itself, Anastasio said that LANS recieved "clear direction" to not offer it.

The reason is that NNSA does not want to have "unpredictable" liabilities, such as having to payout large lumps rather than the more attractive annuities. This seems to indicate that they believe the "Equivalent" TCP1 is likely to be stressed by lump sums to the point they would have to add money. Any such addition would come out of LANL operating funds (according to yesterday's Q&A)

Does anyone see anywhere in the LANS contract or in ERISA that "forbids" the lump sum upon retirement? The RFP did not specifically prohibit offering it. Losing this option is just one more reason to wonder what dictionary is LANS and NNSA using to interpret "substantially equivalent".
I couldn't attend the LANS Benefits presentation on Thur, but
had a chance to watch it via the LANL RealPlayer "Media Server"

If you didn't attend the presentation, or watch a replay on LabNet,
then I urge you to view this presentation via the Media archives.
You'll either need to be on the LANL local net, or have Cisco VPN
software and your Crypto-Card if you want to view it from home.

My first impression was puzzlement over how many empty seats there
where in the audience. I would have thought the auditorium would be
packed. Perhaps the staff is pretty much burned-out by this point.
I know I am.

Several critical items caught my attention in this presentation.
For starters, the biggest one seems to be the news that if you
decide to lock-in UCRP by going "inactive", you will: (1) only
be given "access" to retirement medical (ie, you'll pay full
cost for the coverage), and even more important is the fact that
(2) you won't even be given the chance to get "access" benefits
until you have served out 10 more years under LANS! Almost no
one I've talked to expected this, and it has come as a big shock.
However, I did notice that Tyler seemed to indicate that NNSA is
looking at this issue, so perhaps it will change. Let's all
hope so.

Some staff are still considering the "inactive" route, even
given the medical benefits bomb-shell. However, I would advise
those who are thinking of going this route to consider the fact
that the 401K in TCP2 is market-driven. As of June 1st, you
can have up to a 9-1/2 % employer match made to your new 401K.
However, even as we speak, the market-driven clause is driving
the level of this benefit down-ward. There is every reason to
suspect that the DOE enforced 105% equivalence factor will drive
the TCP2 employer percentages downwards in future years. If,
five years from today, the "market average" is for NO employer
matching of 401K's, then LANS will have to follow suite. Beware
of this risk. This country has been on a sharp downward path
in employee benefits for several years. You have recent history
to go by, and the statistics don't look promising.

Another critical item involves the issue of spousal continuance
under the TCP1 pension. We have been told that: (1) there will
be no UCRP-like automatic 25% spousal continuance, but (2) we'll
have the options of selecting spousal continuance at levels of
100%, 66%, or 50%. However, as of this date, LANS has told us
NOTHING about how much this option will cost! Indeed, a caller
at the 1:45 hour into the presentation specifically asks a
question on spousal continuance cost. She says that she can go
to the current UCRP web site and see what benefit would be if
one selects the various levels of spousal continuance, and would
like to know what LANS TCP1 corresponding payout levels would
be. When asked, Bob Archuleta of LANS punts, and the lady is
told to "submit this question to the E-mail site"! This was
a truly amazing response. We are being asked to gauge the level
of equivalence between UCRP and LANS TCP1, and the people from
LANS can't even offer us a simple answer to this critical question.
How the hell am I suppose to decide my future pension decisions
if this information is not given? This answer from LANS is
completely unacceptable. Furthermore, LANS couldn't even bring
themselves to put a single page in their huge 8MB PDF benefits
document that answers this question in an adequate fashion.
It seems to me they are stalling on this question. Why?

As to the 450 or so people at LANL who are about to be screwed
on the SSN contributions -- LANS answer seems to be "so what,
you're a small pool of people, and so we'll just ignore your
financial pain." Someday, those in TCP1 will also be a small
pool. Can we expect this same uncaring response from LANS or
NNSA if the TCP1 pension suffers from future actuarial problems?
After all, in forty years, the pool of people in TCP1 will be
quite small. I see a troubling precedence in the attitude shown
by both LANS and NNSA in their handling of this SSN issue. They
seems to be saying: "We believe in substantial equivalent, but
only if you are part of a large group that has a voice". Heck,
it seems to me that based on LANS logic, they could decide to
give our new Director millions in pension benefits, cut the staff
down to pennies, and then annouce that "in the aggregate, we
see this as substantial equivalent". This attitude from both
LANS and NNSA is deeply troubling.

Finally, to the lady who stood up at 1:50 in the presentation
and spoke her heart -- God Bless You! Too many managers in
this country seem to be fixated on only meeting the minimums --
both to their customers and to their loyal employees. Why can't
we do more than the minimum? Why can't we decide to excel in
both our performance and in the way we treat our employees?
The benefits in the TCP2 package are insulting to our future
staff. It will cause increasing discord between staff members
when new hires begin to realize, with time, that they are being
treated as "second class" citizens at LANL. DOE should be
ashamed of themselves for placing constraints on excellence
when it comes to treatment of our future employees. More than
anything DOE could possible say to us in words, this thread-bare
benefits package in TCP2 (and the probability that it will go
even lower with time) tells us almost everything we need to know
about the future direction of LANL.

We're on a race to the bottom, thanks to the DOE.
Substantially equivalent means:

The same amount of benefits capped at 105% of Industry average (based off of Fortune 10 companies). It does not mean what you had before.

LANL is not meant to be the academic mecca it was 20 years ago. That time in the American Empire is gone.. Rome has defeated Carthage.. and doesnt see what a bunch of barbarians to its north could do to it. This isnt just a government issue.. it is an issue of a majority of 330 million Americans who just want to live in Debt for the rest of their lives.

I don't think that we will see it change back to that if Congress and the White House completely changed from Republicans to Democrats in 2008.
To sum it up, LANL personnel have been asked to perform world class science, world class pit production, world class stockpile stewardship, world class threat reduction, with substantially equivalent, mediocre benefits.
Actually.. I dont think anyone is wanting "World" class from LANL anymore. It costs too much. "World" class is a marketing term that everyone says they are.. but no one really is.
You don't t'ink d'at vee in Tech Support here in New Delhi could NOT perform all d'ose tasks? Hah!

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