Sunday, February 26, 2006

UC Senate reports/letters about the transition of the UCRP-LANL funds

Dear Doug,
Thanks for keeping this blog going. I get a lot of good information from it. The web site below has some UC Senate reports/letters about the transition of the UCRP-LANL funds to LANS and the propriety of who is in charge. I thought you might want to put it on the blog so folks know what the status is.

http://www.universityofcalifornia.edu/senate/reports/lans.ucrs.0206.pdf

Kandy Frame
aka: Need2%more


Comments:
Interesting letters.

But they do not address the internal separation of NON-transferring funds.

The Academic Senate is rightfully concerned about (appearance of) conflict of interest in deciding on the amount to be transferred to LANS.

But they make no mention (at least in these letters) of the wholly internal issue of creating a "separate but equal" UCRP-LANL for those who are currently retired or inactive vested, or those who might choose to retire or go inactive rather than move to LANS.

Funds that will be moved to LANS will surely be only done based on actuarial necessity (minimum $$ to meet federal requirements).

A further internal split of UCRP-LANl would have to be on the same basis as the funds-to-LANS (else a legal trap is sprung).

Therefore, since UCRP is still over capitalized, the UC Campuses can only benefit from such an internal split.

I cannot see any such split (UCRP vs. UCRP-LANL vs. LANS) surviving the inevitable legal challenges, but then again, in the past I could not see a lot of things that are now clear.
 
Well I guess this sums up all wonders:

Under the terms of the contract that DOE awarded to the Los Alamos National Security LLC (LANS), employees at the Los Alamos National Laboratory are required to leave the University of California Retirement System (UCRS) and have their pensions and associated financial obligations and assets transferred to LANS.
 
Submitted to inputonlansbenefits@doeal.gov:

This message is not about the specifics of either plan, even though a couple of specifics are mentioned. Rather it is about the long-term viability of the nuclear weapons enterprise under these plans.

Becoming an experienced nuclear weapons designer takes many years and is essentially a career commitment. There are really only two employers where you can ply this trade (legally) -- LANL and LLNL.

In the past, these have essentially been one employer, and career retention has been excellent under that employer (UC). But this is changing as of 6/1/06. It will likely change further when the LLNL contract competition is completed. The biggest change will likely be in the ability to retain essential skills in the job long enough to ensure complete expertise.

The LANS TCP2 does not appear to provide the necessary benefits required to keep talented staff at LANL working in a field in which they can not publish nor talk about their work for an extended career. The only "longevity" factors in TCP2 is access-only to retiree health care after 10 years and a 1-2% into the 401(k) for 5/10 years respectfully. Since this is essentially just a 2% deferred raise, it isn't much.

By bending to the trends of "portable" benefits and therefore "portable" careers, you are essentially encouraging everyone (transferring and new hires) to continuously consider the benefits of moving on.

Furthermore, by capping TCP2 to be essentially equal to its "peer" group, you inadvertantly are encouraging future LANS staff to be mobile, since they can get the same (or better) elsewhere.

Therefore, when the last of the nuclear weapons designers retire under TCP1, there will be no more (experienced) designers at LANL. And since the LANS proposal is the harbinger of the future, shortly thereafter, there will no no (experienced) weapons designers at all.

Now would'nt that play havoc with our nuclear deterrent. If I was a Russian or Chinese strategic thinker considering the future, this would be of great interest: "Just hold out for 10 more years, then push hard."

When you are deciding on the merits of TCP2, you should be SERIOUSLY considering that NNSA needs to be able to recruit and retain employees for the long haul -- much longer than for most careers. The national trend towards ever changing careers is NOT compatible with a responsive nuclear infrastructure and the support of a viable, convincing deterrent.

TCP1 is aimed at near-term retention (essentially less than 10 years), so, while I am personnally concerned with TCP1, it is not the most important for the future of LANL and the other NNSA labs.

Is this what you want? You should rethink...

 
receeding makes some good points.

The post provides a glimpse of the future national security problem created by the whole competition and resulting TCP1 & TCP2 benefits package. I would add that it is likely to be even worse. LANL has always had a difficult time recrutiing due to its geographic isolation and lack of most metro/urban distractions. With the market driven nature of TCP2 why would any future national security workforce come here without some greater incentive?

I have been investigating a number of UCRP lump sum cashout issues.

FYI1: UC Lump sum cashout booklet indicates that 20% tax withholding will be deducted from the total.

FYI2: Lump sum cashout peaks at 60 (at least for the #s I'm running) and then decreases (must be due to actuarial & life expectancy assumptions).

Does anyone understand why the lump sum factor (cashout/BRI) has the funny peak at 51?
Ex. Yrservice=23, sickleave=0, HPAC=11665/month
Age 50, Lump sum cash=523805 &
BRI=2917 => LSC factor=179.57
Age 51, Lump sum cash=583422 & BRI=3228 => LSC factor=180.74
Age 52, Lump sum cash=641305 & BRI=3660 => LSC factor=175.22

Does anyone understand what will happen to our current CAP & CAP II balances?

I'm looking to go inactive vested, lock in UCRP (don't trust LANS and viability of pension) and watch for a couple of years.
 
Dear receding,

You may be losing some hair, but your brains are intact. Unfortunately, your target audience may be experiencing the opposite conditions.
 
W88, That's my plan too...to go inactive on June 1st and to cash out of UC soon thereafter. I don't trust LANS any farther than I can throw them.

I believe if you roll over your lump sum to an IRA, such as in Fidelity, you should be exempt from the 20% tax with-holding. You would need to invest wisely until you can begin to withdraw from the IRA at age 59-1/2.

I look forward to LANS-Plan2 choking on the prospects of hiring the best and brightest in the future and perhaps that Plan2 will need to be sweetened not too many years down the road.
 
FYI1: UC Lump sum cashout booklet indicates that 20% tax withholding will be deducted from the total. ...unless it is rolled over into another tax-deferred fund.

If it is not so rolled over, and the recipient is under a certain age, there is an IRS penalty as well. So be sure you understand the impact if you are expecting to use your lump-sum before 59-1/2.
 
Request to all:

If you have submitted comments to DOE/NNSA on the LANS benefits proposal , please consider posting them on this blog.
Some comments that have been posted have led me to further thought (it HURTS!!) and further comments.

Today is it (unless it gets extended again)!>

Send lots of comments.
 
Call Fidelity. https://www.fidelity.com/

I was assured that one could in fact roll over their lump sum, 403b and CAP into a fixed lifetime annuity and not suffer any penalty even though I was not 59.5 years old. If you find out any different please post the results by March 7th. Thanks
 
OPPS that's only if you are 50 years old. If you are not 50 you can only go inactive and keep the money there until you are 50, but now comes a question. What happens to that money if you go to TCP-1. According to page 11 of the Mercer presentation once that happens you can no longer lum sum. Now that a real reamer.
 
Here's another scenario.. you go inactive vested and while you are inactive vested you pass away. You didn't retire...so have you just now contributed to the next CAP? Haven't gotten definition on that scenario yet.
 
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