Tuesday, May 23, 2006

Has UC already planned for the spin off of lab pensions?

Submitted by Anonymous:
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Readers should check out the UC Regents presentation (pdf attached UCRP contributions). Note that the slides indicated the proposed contributions only include campuses and medical centers (starting on slide #3). Has UC already planned for the spin off of lab pensions? LANL and LLNL UCRS members should request a funding curve.
Hewitt is the favorite firm for the UC and DOE. They have interesting documents on their website such as (2nd pdf file attached total retirement pg 6). Note that in March of 2003 Hewitt had completed a pension study with 18 of 23 companies that had defined benefit plans (DBPs). In 2004 the LANL / LLNL Ben val study didn't include a single company with a defined benefit plan. Did DOE direct the comparator group to NOT include any DBPs? The LLNL contract website now includes this very sub-standard ben val study.
Hewitt seems to be a hired gun and can give any numerical result the paying client wants. Their assumptions have obvious flaws especially ignoring COLAs and other parameters such as interest rates and rates of return. To be complete, many simulations and cases need to be calculated to show the effects of certain assumptions and estimates.

It is obvious to LANL employees (especially trained in mathematics/engineering/science/business) that results are being tailored to the results desired. Numbers don't lie, but results can be manipulated with assumptions and "spun" or presented in the best light or to obscure important details. You will find client friendly documents on Hewitt pages about how to; not over pay employees that are not going to leave, how to rely on social security for your total retirement funding, and to control medical costs.
I think the UC finance committee should require a second and more independent review of these results being presented in public and being used as the basis of actions to our 40 billion dollar pension fund. This is open bias and UCRS members deserve better.


Comments:
"Numbers don't lie, but results can be manipulated with assumptions and "spun" or presented in the best light or to obscure important details"

Since this statement constitutes a cherished principle for so many in leadership these days, perhaps it should be carved into a sandstone slab and placed in front of the Lab's new admin building.
 
I wouldn't worry about this too much. Dynes can be trusted to do the right thing.
 
There may be a less sinister explanation: this is a graph depicting the relative effect of future contributions. LANL and LLNL will not be contributing, whether there will or won't be a spinoff.
 
As for Hewitt consulting for UC, don't forget to include Mercer that did the numbers on us for LANS. What was said about Hewitt, directly applies to Mercer. In fact, I believe Mercer is much more powerful than Hewitt, in that Mercer is internationally bent on the "one-world economy"...check out "www.imercer.com" for yourself. We've been screwed by the newest wave of MBA indoctrination.
 
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