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Friday, February 19, 2010

Interesting topics on Director's Office "Topics and Questions" website

Anonymously contributed:

I ran across these on the Director's Office "Topics and Questions" website on the internal LLNL website, and thought they might be of interest.
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Q: I heard rumors that NNSA may raid our TCP1 fund to help fund other sites’ defined benefit plans? Is this true and is it legal?

A: No, NNSA cannot touch the LLNS Defined Benefit Retirement Plan (TCP1) funds. The plan is governed by the federal Employee Retirement Income Security Act (ERISA), which means that all of the plan’s assets must remain in the plan (that is, the plan’s assets cannot be “raided”). Regarding the status of the other NNSA sites’ defined benefit plans, NNSA is looking for funds throughout the complex to make contributions to under-funded plans. These other funds could be operating funds from all sites in the complex, which could affect our Laboratory’s operating budget — but not the LLNS Defined Benefit Retirement Plan (TCP1).

Q: Will employees in TCP1 have to start making contributions to the plan?

A: At the present time, LLNS does not anticipate the need to initiate employee contributions to the LLNS Defined Benefit Plan (TCP1). The plan was funded at approximately 150 percent as of Jan. 1, 2009, which is a very healthy level compared to other defined benefit plans. The next valuation will be performed using plan information as of Jan. 1, 2010 — this process is under way.

28 comments:

Anonymous said...

The NNSA can't touch it. Bet some other entity can. Just a guess. I don't trust anything that comes out of George's pie hole.

Anonymous said...

So what "other entity" are you referring to? The suspense is killing me.

Anonymous said...

Do some research - you'll find that his answer is correct for this one.

Anonymous said...

The LANL TCP1 pension is under funded to the tune of about $76 million. Their Director has told them to expect mandatory 2% to 4% salary contributions starting by mid April. However, even that won't be enough to fix the funding shortfall. Thus, NNSA is looking at other means to raise the money.

For some strange reason, the LLNL pension got far more money from UC than the LANL pension during the transition to the LLCs. That is the primary reason that LANL's pension appears to be facing funding problems.

Personally, I have little trust that either LLNS or LANS will be there supporting full pension payouts for the long term. The NNSA's "substantially equivalent" verbal promise cannot be trusted.

Anonymous said...

re-read what a wrote then get on the internet and do some research and enlighten us.

Anonymous said...

seems to me that if the tcp1 plan meets contractual obligations then any excess money could be used else where.

Anonymous said...

February 19, 2010 8:08 PM

Maybe a letter to the State of California Governors office can help relieve that bloated TCP-1fund to help others who're in need. Click here please Looking for Funding Resources
Anyone want to help their cause?

Governor's Office:

Governor Arnold Schwarzenegger
State Capitol Building
Sacramento, CA 95814
Phone: 916-445-2841
Fax: 916-558-3160 ( new number )

Anonymous said...

How secure is it from the state? They're always looking for places to make up budget shortfalls.

Anonymous said...

I am afraid If LLNS and LANS dont keep their promise of TCP1 payout, a few people will go postal!

Anonymous said...

Do I have this straight ...

If TCP1 under-funded,
then $ comes out of 'operating budget', resulting in budget shortfall, which means ISPing a few more employees.

Sooooo the trade off is
reduced pension OR layoff
(or worst case, both).

Anonymous said...

If TCP too under-funded, LLNS will declare it unsolvable. Then, you will get pennies on the dollar from the PBGC. Just like United Airlines did a few years ago. That is the way it works in the private industry.
No body is responsible; you cannot sue anyone. That is why LLNS is an LLC. You are not working for Bechtel, you are working for LLNS whose responsibilities are limited. Wake up!

Anonymous said...

If TCP1 becomes underfunded then NNSA is responsible for making up the difference. PBGC only kicks in if NNSA has no funding to continue contributions. TCP1 needs to remain overfunded to make up for any shortfalls down the road; any suggestion the money should be used elsewhere is ridiculous, and typically comes from those who are just hoping TCP1 fails so they can justify their decision to go with TCP2. Sad, but true.

Anonymous said...

Just goes to show, what many LANL retirees have said: Shoulda taken TCP2 and bailed. If you didn't have that chance, or decided not to take it, you lose. In life, someone always loses.

Anonymous said...

There is no way to know who won or lost in the choice between TCP1 or TCP2, only time will tell. Unlike most people who post on this subject, I hope they BOTH win.

Anonymous said...

TCP1 versus TCP2. Yawn

Be confident in your choice, whatever it was. People will only know the "right" answer in long hindsight.

Anonymous said...

TCP1 at LLNL and LANS will first get 2% of employee contributions, initially. DOE has been making payments to reimburse UC for LANL and LLNL inactives(UC + tcp2) and retirees for underfunded portions of UCRP attributed to each group. Everyone had to choose based on estimated payout and the risk or error bars around each estimate TCP1 or TCP2. Four years into transition, LANS has indicated it will start employee contributions similar to UC plans in Mike's talk. These contribution were predicted during transition and included in XL models shared at LANL to help with predictions. Another interesting variable will be the UC COLA based on the Feb. 2010 CPI in the bay area and LA.

Anonymous said...

February 20, 2010 4:55 PM

Don't worry, TCP_2 will give will give you what's on this Chart. You just have to make up your mind you're going to work until you are 65.

Anonymous said...

bunch of worry warts! TCP1 is doing better than UC. So far. LOL. what are the chances it will ever end up in PBGC? Pretty small.... and if that happens we all have something to worry about......

Anonymous said...

9:33, you are exactly right. It will only go to PBGC if NNSA has no money, and if that happens, we're in big trouble. It's too bad the threat of PBGC might have forced some into making the wrong decision. Nobody has a crystal ball, and nobody, I don't care who you are and how any times you post, knows which one was the correct choice, so why even speculate? It's a waste of time.

Anonymous said...

February 21, 2010 1:42 PM

Remember, projects are more important than people and TCP-1's lack of funding is going to come from operating funds. So what do you think will go first? Maybe you'll get lucky and they'll start asking for 2%, 6%, 10% and then 16% which was discussed many moons ago during the transition as a possibility. Of course everyone was in denial.

Anonymous said...

I beleive that TCP2 was the correct choice only if you were retiring from UC within the allotted time. For those folks, it was a no brainer. For others, the choice was one of faith and hope, not reality and data. Too bad.

Anonymous said...

6:49 PM stated:
"If TCP1 becomes underfunded then NNSA is responsible for making up the difference."

When Ellen Tauscher was at the lab, the question was asked was the TCP1 benefit guaranteed by the govt. She said No. I made my decision to go TCP2 for several reasons:

My understanding was that NNSA was on the hook for propping up what ever shortfall there was on the portion of the UC pension that covered lab employees, but signed no such agreement for TCP1.

But as what as was pointed out already, it's all said and done. We made our choices and we get to dance with the partners we chose. I chose TCP2 but I don't wish TCP1 to fail to prove that I made a correct decision. I have too many friends who chose TCP1 and their pain will not make me feel any better.

Anonymous said...

I chose TCP 2 because I didn't want to be chained to the lab and I know a lot of other people who made the same choice for just that reason. Pensions give substantial motivation to stick around even when you are unhappy with your job. A 401K on the other hand is highly portable.

Anonymous said...

The pension story is bigger than just the TCP1 shortfalls. This country is slowly heading into a long, slow depression (ie, "Great Recession" if that term makes you feel a little better).

Depressions tend to unfold very slowly and persists for a long time. Japan has been in and out depression for over 20 years now.

Unfortunately, this long downturn directly conflicts with the fact that most pensions generally need 8% returns on investments to fulfill pension "promises". Given the horrid state of the world economy, this rate of return is unlikely to happen over this next decade.

Near the end of this crisis, when US deficits are clearly so large as to be un-payable to lenders, expect our government to begin a move to seize lucrative pension assets in various ways to bail out the country. Argentina did this just last year by grabbing their citizens' pension assets and ruling that these assets must be invested in worthless Argentinian bonds!

Think it can't happen here? Then perhaps you should read this article below by AEI. Plans are already being made for grabbing 401K assets...

-
Class Warfare's Next Target: 401(k) Savings (AEI, Feb 18, 2010)

www.aei.org/article/101672
-

People are way too complacent about the enormous risks to their pensions and 401Ks. And don't even get me started on the future risks to Social Security payouts! The infamous "lock box" doesn't exist. It doesn't contain assets like US Treasury bills. Instead, it holds paper promises based on worthless IOUs!

Wake up and study what is going on around you, then prepare as best you can. This present economic crisis will be long and extremely difficult for almost everyone.... and it's only just begun.

Anonymous said...

The ucrp-llnl retained segment liability was funded (by contract) 100% + $140M/Contribution Reserve Amoun (ie.$ 3.92B + $140M) The remaining fund was transferred to tcp1 ($1.68B). The liability % for both should approx. a little over 100% each (since this "splitting" does NOT create much higher/lower asset, liability)

Per LLNS, TCP1 (Defined Benefit Pension) summary notice
"Funding Target Attainment Percentage" table the plan was at 209.62% of its funding target - $1.65 Billion in assets and $790 Million in liabilities.

Now how is it that the same pot of $ under ucrp is at funding level of approx. 100%, and at a different funding level of 209% under tcp1 ?????????????
Answer:
" The actuarial accrued
liability for the benefits of members electing to participate in the LLNS Plan, as
determined under the LLNS Plan provisions and the actuarial assumptions and methods
used by the LLNS Plan’s actuary, will almost certainly be different from the UCRP
liability associated with these former UCRP members, because the LLNS Plan is subject
to different legal requirements established in the Employee Retirement Income Security
Act of 1974 (ERISA) that apply to the defined benefit plans of private sector employers."

Another word:
The " actuarial accrued liability" computation for UCRP vs LLNS/TCP1 are completely different. Future liabilities are computed based on assumption. Not only are there different methods used, the assumptions used in computation are different between private vs public. UCRP have stated using very 'conservative' assumption/method in their computation, provided publish quarterly reports (http://www.ucop.edu/treasurer/invinfo/archive.html) and have planned accordingly.


Bottom line, beware of the stats, 'facts' presented ... need to read the fine print

Anonymous said...

I expect LLNS to freeze-out the TCP1 pension as soon as they think they can get away with it, maybe about three years from today. LLNS will do this on the orders of NNSA as a means to help reduce the financial liabilities associated with the pension. You'll get paid something upon retirement, but the pension freeze-out will stop accumulations based on additional years of service that come after the freeze-out date. Lots of US corporations have taken this path and so will the new NNSA LLCs.

Knowing NNSA, they probably view the idea of a pension freeze-out as a great way to save money and force expensive research staff to leave the labs. The future of the NNSA labs is in production efforts, and not science. That's the prime reason that Bechtel and BWXT were brought aboard the LLCs.

Anonymous said...

Both TCP1 and TCP2 ultimately are "supposed" to be covered by NNSA should either LLNS or UC fail to come through (read the documents). I completely agree with the post that stated they expect to see NNSA freeze-out the pensions in a few years. It's the trend; pensions are becoming a thing of the past.

Anonymous said...

February 28, 2010 2:34 PM

The freezing will be done just as it was done at LANL, you'll get bonus checks from now on that don't count towards the base pay your retirement is calculated on therefore you can calculate your TCP-1 retirement right now and know what you'll have to live on. Of course you have to watch ULM's wages go through the roof while yours stays FLAT, FLAT, FLA

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