Saturday, February 18, 2006

UC employees at LANL outraged by pension shortfall

COMMENTARY UC employees at LANL outraged by pension shortfall By Manny Trujillo

The University of California pension system for thousands of employees working at the UC-run Los Alamos National Laboratory is posting its first shortfall in decades.

It has also placed current and future LANL retirees into a separate retirement plan by spinning off from the University of California Retirement Plan a new pension plan termed Cloned Pension Plan.

Employees and retirees are mad as hell. It’s a betrayal of trust after working here for years.

UC, along with the Department of Energy, is skimming off our hard-earned pension assets and treating LANL employees and retirees differently from other UC employees.

UC’s retirement plan, valued at $43.9 billion, has been one of the nation’s largest and healthiest, running a surplus so high that for the past 15 years, employees didn’t even have to contribute to it.

LANL employees’ portion of that UC fund was also healthy, valued at more than $4.3 billion.

Last year, the Los Alamos portion of UC’s retirement plan was over-funded by $265.7 million, but this year’s numbers show a dramatic $300-million decline in net assets.

As part of the DOE’s renewal of the university’s contract to run Los Alamos, the lab’s retirement fund is to be separated from UC’s larger system and taken over in June by a private entity known as Los Alamos National Security LLC.

A report prepared for UC says the plan would start out under-funded by $54 million.

UC is conducting a massive raid on our pension plan. There are several deficiencies in the plan’s calculations.

We are asking that the plan be delayed until the California Legislature, and our New Mexico Congressional delegation, have been given the opportunity to evaluate the consequences.

In the last couple of weeks, our senior senators Jeff Bingaman (D-N.M.) and Pete Domenici (R-N.M.) sent a letter of opposition to the Secretary of Energy Samuel Bodman, stating that “there are too many unanswered questions at this point for the DOE to proceed with such an irreversible action.”

Additionally, Ambassador Linton Brooks, acting administrator of the National Nuclear Security Administration, sent a letter to UC President Robert Dynes writing, “I want to make sure you are aware of our position before UC performs a substantial amount of work based on an assumption that DOE/NNSA is favorably inclined toward the approach .... As we interpret the existing contract, this is not a unilateral UC decision.”

The Cloned Pension Plan is part of an overall strategy by UC to cut our pension benefits.

UC has plans to severely undermine employees’ pension benefits over the next several years — after mismanaging of the pension fund began with its outsourcing five years ago, and loss of funds over the Enron scandal.

The union is working to alert lawmakers and the public to this urgent issue.

Manny Trujillo is the president of the University Professional and Technical Employees organization at LANL.

"As part of the DOE’s renewal of the university’s contract to run Los Alamos, the lab’s retirement fund is to be separated from UC’s larger system and taken over in June by a private entity known as Los Alamos National Security LLC."

Is Manny talking about the UCRP-LANL proposal? If so, when did this outrage escalate to include an assumption of its management by LANS?
There has been much discussion as to the meaning of "substantially equivalent 'in the aggregate'" with respect to the future pension of those who simply roll it all over from UCRS into LANS.

I for one had planned from very early in my career with UC/LANL to take the lump sum at the end of my career.

Now with the lump sum being clipped from LANS' retirement plan, I am faced with the prospect of going "inactive vested" in UCRS when the transition from UC to LANS occurs.

In reviewing my future plans, I have substantiated the losses I thought I was facing. With the forced severance from future growth and maturity of my retirement investment in UCRS and no "substantially equivalent" alternative, I am now faced with a loss of $1 Million in the growth of the future value of my UCRS lump sum.

There is no way I can make up for this $1 Million loss in the coming final ten years of my employment under the proposed LANS retirement system. I would need to save about 100% of my gross earnings for the next ten years to make up for this significant loss.

The LANS 401k plan falls far short of making up for this $1 Million shortfall. How will DOE, UC and LANS repair this inequity?

UC is unfairly terminating my employment contract with UC/LANL. What are the prospects for severence payments at the time of the LANS takeover.

"Equivalence in the aggregate" conveniently discriminates against the individual. I believe there are a significant number of us in the situation I have described.

Is there any hope or consideration to comfort the little guy in the turmoil created by the recompetition of the LANL operating contract? I have been a long-term employee of the Great Laboratory, dedicated to doing my share in support of the security of the Great Nation.
We all know that if the UC Regents forces us off of the primary UCRP and onto some spin off plan they will not take the same care to assure that this new plan grows or even survives as they will the primary UCRP of which they intend to assure we can not deplete. At that time the national labs will be no more then a bunch of bastard children who have served their purpose and are deemed to be on their own. The UC's vested interest in our well being will have been terminated. The bottom line is, why should they care? I suspect that five years from now when the labs go back up for bid again the UC will not even compete. For now they are just being nice by letting the water out of the pond slowly.
UC is not unfairly terminating your contract. Congress && DOE terminated your contract with UC. You are not going to get any severence pay because your contract is with a governmental agency and you do not have any Union contract with said governments (State and Federal) that requires them to give you any severance pay OR give you any sort of a job in the case that the Federal government terminates its contract with UC (which it will do on Mar 31).

The thinking of DOE, Congress, and I am guessing the regents of UC is:

You, the employee, have had adequate warning in the last 2 years that things were going to hell in a handbasket and were not getting any better. And so by not terminating your contract earlier or trying to find employment elsewhere in the UC system (if available), you have brought said crisis upon oneself.
Hell in a handbasket is exactly where I saw LANL headed a couple of years ago. Management, and in particular former director Nanos, seemed intent on grinding the lab into the ground.

With the support of UC, NNSA, and DOE, not in spite of it.

I encourage those of you who need to make the decision of whether or not to stay at LANL to get out and take a good look at some of the other places where you could work. Until you do so, you will not fully appreciate that LANL really is as screwed up as it seems. In fact, if you do visit other companies, you will gain a fresh, (and probably much-needed) perspective on how unhealthy a place to work LANL has become.

I gave a seminar last Monday to a UC San Diego audience of bright young grad students and professors, all of whom were alert and eager to pursue scientific knowledge. (Not ONE person fell asleep during my talk!) What a contrast to the downer atmosphere at Los Alamos. We need an infusion of enthusiasm at LANL. I told a couple of the grad students that we would welcome postdocs when they are ready in a couple of years. By then, I hope that the Lab has recovered from its funk. At lunch at the Faculty Club afterwards, several professors at the table expressed great concern at what has been done to Los Alamos, and not one of them wanted to cast LANL adrift from UC. Guess that shows you they're not all peacenik leftists.
The decision by LANS that retirees under Plan II need to wait 10 years to get medical benefits that they pay for anyway is just plain nastiness. If LANS doesn't contribute, why should one need to have any waiting time?
Agree llc001.

There are many of us who certainly believed the "Inactive Vested" route only affected the pension portion of the benefits, and no other portion of the benefits package where service credit was counted. I suspect if you watch the earlier NNSA presentations, you will see words to this effect - No double counting of service credit for pensions, but it counts for everything else.

At this point, working at LANL has become, by decree, the same as working at IBM, Kodak, HP, Lockheed, Lucent, Motorola, UT, etc. It should be thought of accordingly. The "Great Laboratory" to which emp refers is now the stuff of legend.

Any predictions for how LANL looks in 5 years, 10 years?
This post has been removed by a blog administrator.
Here's my forecast...

Will have a 3 years of "Damn, this is bad", followed by
2 years of "OK, this is somewhat better", followed by
3 years of "Damn, this is really, REALLY bad" followed by...

"Oh, my God!! Get the wife and kids down into the basement --
it Armageddon and I think I see Jesus in the clouds!!!"

Other than that last little part, I think we'll make out OK.
Post a Comment

<< Home

This page is powered by Blogger. Isn't yours?