In NewsOnline today:
On Tuesday (April 1), the University of California transferred assets valued at more than $1.6 billion (valued as of Sept. 30, 2007) from the University of California Retirement Plan (UCRP) to the LLNS Defined Benefit Pension Plan. The transferred assets cover just more than $1 billion of associated liabilities. These are the pension assets and liabilities for the benefits of LLNL employees who chose TCP1.
With this transfer, the LLNS plan will be the best funded pension plan in the DOE Complex with a funded ratio of 166 percent. “We do not expect to need to make plan contributions for a number of years, and with reasonable investment returns, contributions may not be required for decades,” said Paul Rosenketter, chairman of the LLNS Benefit & Investment Committee. “The LLNS Benefits and Investment Committee has selected a number of highly regarded managers to invest these assets in a diverse set of equity and fixed income investment vehicles to cover future pension benefit payments.”
The UCRP pension assets and liabilities for retirees and for LLNL employees who chose TCP2 remain with UCRP. Those pension benefit payments will be paid directly by UCRP.
The DOE/NNSA contract required that the LLNL segment assets remaining with UCRP be sufficient to cover 100 percent of the associated liabilities for the retained benefits (as of Sept. 30, 2007). In addition, DOE/NNSA is required to reimburse UC for contributions made on behalf of the LLNL segment of UCRP when then segment liabilities exceed assets.
Because of the negative performance of the various financial markets since the start of the LLNS contract, UC and DOE/NNSA recognized that contributions for the LLNL segment of UCRP will be required next year. As a result of the anticipated contributions, DOE/NNSA determined UC should hold back additional assets of $140 million as a “Contribution Reserve Amount” to pay the anticipated UCRP contributions. This amount would be sufficient to cover payments for approximately three years. If the $140 million were not held back, DOE/NNSA would have required LLNS to make the UCRP contributions from the Laboratory’s operating funds, which would have severely impacted Lab programs and required even deeper reductions in Lab staffing.
Regardless of whether pension benefits will be paid by the LLNS plan or UCRP, Frank Russo, principal associate director of Operations and Business, reminded employees that both plans are “safe, secure and well funded.” DOE/NNSA is contractually obligated to make contributions to UCRP for any future funding shortfalls in the LLNL segment and, by federal law and contract, must continue to ensure the financial integrity of the LLNS plan.
19 comments:
Hope they have good money managers in todays stock market slump which will be here for decades. I wonder when TCP-1 16% contributions will start. Want to bet it isn't that far down the line?
A few more years of record foreclosures, $4-$7 dollar a gallon for gas and I can't see much stock market growth to come. As a matter of a fact at those gas prices I can't see how people are going to be able to afford to go to work. Can you imagine a $500 - $700 bill for gas a month just to get to work and back. I sure as heck can.
Anyway good luck with your pension programs and those 401K's the government tells you must save in, to make your own nest egg while they limit what you can put away a year to $20,500. Well again, good luck.
Don't hold your breath about when contributions start for TCP1. TCP1 is over 60% overfunded. This is because before the TCP1/TCP2 split was ever known, US had to use actuarial calculations based on all LLNL employees being in the UC pension system and accruing future estimated service credits.
But when the TCP1/TCP2 split happened, there was suddenly a lot of employees who stopped accruing service years. Because the UC/DOE agreement says that any amount left over (less the $70M retained for TCP2 which got increased to $140M) would be transferred to LLNS (the relevant documents are on the UC site), LLNS suddenly got 600M more than needed to fund 100%.
TCP2 has only $140M as reserve, but TCP1 got $600M.
Percentage-wise TCP2 got about a 2% buffer whereas TCP2 got a 60% buffer.
Makes me glad that I took TCP1.
Don't worry it won't take long to lose the $600M in the stock market. Can't wait until they convert TCP-1 to PBGC.
Wait a minute . If TCP-1 is over funded shouldn't DOE be taking that 60% back and using it for something useful. DOE was always complaining about the UCRP pension plan being overfunded and that was only at 110%. DOE always claimed the overture money was rightfully theirs. Maybe DOE is again being proven what they are.
Since your TCP-1 is 60% plush how long will it take to deplete the funds entirely as LLNL continues to lay off people at the rate of ~2000 a year for the next two years assuming they all start drawing on the system to make sure they get their fair share before its gone and no one being hired into TCP-1 or asking for contributions to sustain the pot of money. When the bog dog who are making 100% of their pension at the rate of $200 -$400K a month I don't think that 60% overfunded is going to be there very long.
9:56pm is correct... also, the TPC-1 population is fixed and is only decreasing over time, while the $600M overfund (which is not invested but held in an interest bearing account) will grow. TPC-2 (and UCRP for that matter) have continuously increasing liabilities as new employees join. In hindsight, TPC-1 was a gift to those who took it... that is as long as you stay employed by LLNS and end up retiring from LLNL.
April 3, 2008 5:59 AM
I think you dreamweaver TCP-1 pukes need to read the letter a little closer instead of reading the first few lines and getting all happy, happy, and think you have th bull by the horns.
What does this say happy happy people:
"Because of the negative performance of the various financial markets since the start of the LLNS contract, UC and DOE/NNSA recognized that contributions for the LLNL segment of UCRP will be required next year. As a result of the anticipated contributions, DOE/NNSA determined UC should hold back additional assets of $140 million as a “Contribution Reserve Amount” to pay the anticipated UCRP contributions. This amount would be sufficient to cover payments for approximately three years. If the $140 million were not held back, DOE/NNSA would have required LLNS to make the UCRP contributions from the Laboratory’s operating funds, which would have severely impacted Lab programs and required even deeper reductions in Lab staffing.
Regardless of whether pension benefits will be paid by the LLNS plan or UCRP, Frank Russo, principal associate director of Operations and Business, reminded employees that both plans are “safe, secure and well funded.” DOE/NNSA is contractually obligated to make contributions to UCRP for any future funding shortfalls in the LLNL segment and, by federal law and contract, must continue to ensure the financial integrity of the LLNS plan.
Sure glad I took TCP-2 and lock it into UCRP.
"...I think you dreamweaver TCP-1 pukes..."
Envy showing through your smile Bluto?
A few facts
1. TCP-1 population is closed and fixed.
2. It is probably 50% overfunded today, even in a down market.(the 66% valuation was at the market high on Sep 30, 2007. It is down about 14% since then)
3. The valuations and liabilities are made by very conservative ERISA assumptions.
4. The funds can't be used for any other purpose than the designated beneficiaries.
5. The fund managers would have to be horrible or dishonest to mismanage this endowment margin enough to affect its beneficiaries.
TCP-1 folks appear to be in pretty good shape.
April 3, 2008 6:59 PM
I wish for TCP-1 to go PBGC very soon.
"The fund managers would have to be horrible or dishonest to mismanage this endowment margin enough to affect its beneficiaries"
No problem here, that's how it was with ENRON and they got away with it. That's the way it was with Countywide and they got awya with it. What makes you think your funds with LLNS is any more protected. It's a "for profit" company and profit could mean making sure they win and you lose. I have zero trust in these people now and will never trust them. They are no better than any other employer. What a world we have made for the children, hah. As far as I am concerned anyone who has children today is a fool and has done nothing but brought them into a world of hell. The average NON SPOON fed child will be just a slave to us and abuse with no pot of gold at the end of the rainbow. They will simply work until death. Wondeful hah?
5:05
You need to reread what was posted. It is TCP2 that required retaining $140M because of the market. TCP1 got $600M for a lot fewer number of people. Those who planned the transfer in B111 had to take TCP1 in order to eat their own pie. They made darn sure that TCP1 will be OK.
4:25 AM
Complainers like you have unfairly attacked Parsky -- he is still a Regent and over TCP2. How do you know that UC will be better than the investment firm that manages TCP1 ? In either case, TCP1 and TCP2 should both be fine. Sound pension management is the norm in the US. Those horror stories about pension shortcomings have not been caused by poor pension management but because companies raided the pension plans or governmental entities promised too much to unions.
"Complainers like you have unfairly attacked Parsky -- he is still a Regent and over TCP2."
Isn't this the clown that caused UCRP to take a dump the last go around with his Enron investments? The most unfortunate thing about there being no pension plan equal to UC is the future for all generation hereafter is gloomy and there's no longer actually retirement for at mass majority. Most won't realize this until their to old and by that time it'll be to late. I can see where criminal activity of all sorts will be on the rise,drug use to cope should go up dramatically as well as the suicide rate and elderly euthanasia. I guess that's one way to keep people off the state subsistence programs and not have to pay for medical care. What a system we have in place. I guess if one were to think about it hard and visit the streets in some poor areas of our cities you'd get a picture of your future and what a lack of substance income in your older years will bring. The homeless that roam our streets are a fine example of what is to come for the masses. You people who get TCP-1 or TCP-2 are the last generation to experience a life after employment.
Those that went TCP-2 should have availed themselves of one of those spreadsheets that was going around or got the advice from a financial planner. The truth is that you have basically screwed yourselves out of about half a million dollars over your retirement lifetime with your frozen pension.
Hey blogmeister, what's with the "TCP-1 puke" post being allowed in? Do you only allow name-calling posts that agree with your opinion?
Parsky could find away to ruin the pension fund. You need to read the East Bay Express article: http://www.eastbayexpress.com/ebx/PrintFriendly?oid=426427
He cost the University BILLIONS. Don't think you're in good hands with the hired guns at the helm.
Hello April 4th 7:34AM.
I considered the word "pukes" not an expletive and let the comment in.
If that offended you, you must be extremely sensitive.
Allowng that comment in has nothing to do with me agreeing with it. I am in the middle; I just screen comments according to the rules of the BLOG; I dont have to agree with them. If I did, There will be about 2/3 less comments in this BLOG. Have a good weekend!
Parsky got a bum rap. Sure they could have handled the transition better when they took away management from the former treasurer, but from an investment point of view they simply went from a concentrated, active management philosophy to a more diversified index strategy, including more international investments.
Close examination shows that the pension plan did better than if it held the former holdings.
The main reason for the shortfall in the pension is that UC does not want to be too overfunded or else the state legislature will take money away to meet their budget shortfalls. That's why UC used CAP to transfer money form the pension plan to direct ownership by the employees.
April 4, 2008 5:05 PM
The reason for UC pension plan bitting the dust was Parsky's poor investements and nothing else. He invested in ENRON and it fail. BTW: Parsky couldn't hold a candle to the lady that was there before he took over her job. She'd still walk the dog on his butt any day of the week and twice on sunday.
The issue is not whether TCP1 will be around when you retire. The issue is whether you will be around LLNL to retire.
During the next three years you should expect 2500-3000 employees to bite the dust.
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