UC opening for Lab 'Management'
Frank Munger had this item from a few days ago.
Darling was reported to be very close to Atkinson, both at UCSD and UCOP, but did not appear to be as near and dear to the present UCOP leadership. Some may recall his involvment in 'managing' the LANL interactions with Congress a few years ago.
"Bruce Darling named NAS executive officer
Bruce B. Darling, currently vice president for laboratory management at the University of California, has been named the new executive officer of the National Academy of Sciences and National Research Council.
"His transition from the university to NAS will occur over the next several months," the NAS announcement said. "He will succeed E. William Colglazier, who now serves as science and technology adviser at the U.S. Department of State."
Posted by Frank Munger
Tuesday, January 31, 2012
Monday, January 23, 2012
Rally against Bechtel-Run Weapons Lab
MEDIA ADVISORY from Justiceinmedia@yahoo.com
January 23, 2012
More than One Hundred Laid-Off Lawrence Livermore Employees to Rally against Bechtel-Run Weapons Lab as Trial Date Nears
Contact: Gary Gwilliam, ggwilliam@giccb.com or (510) 832-5411
Deborah Colaianni, dcolaianni@justiceinmedia.com or (202) 679-2652
WHAT: A rally of 130 former employees of Lawrence Livermore National Security (LLNS), who were fired in the wake of the laboratory’s transition from public to private control. The former employees, all plaintiffs in individual lawsuits against LLNS, will discuss strategy and developments as the first of their lawsuits nears trial.
WHO: The five plaintiffs in the first trial will hold a news conference prior to the group meeting. They will discuss their claims against LLNS, ranging from wrongful termination to age, race and disability discrimination. Their consolidated lawsuits are scheduled for trial on February 6, 2012.
Lead Counsel Gary Gwilliam will also be available to media to explain how privatization of the lab led to the discriminatory and unlawful layoffs.
Media will have access to all former employees who attend the 6 p.m. group meeting immediately following the news conference.
WHEN: 5:15 p.m., Thursday, January 26, 2012
WHERE: Robert Livermore Community Center, 4444 East Avenue, Livermore CA 94550
====================================================================
THE BACKGROUND
NUCLEAR WEAPONS LAB PRIVATIZED
Founded in Livermore, Calif., in the early 1950s, under the auspices of the University of California, Lawrence Livermore National Laboratory was one of the United States’ flagship nuclear weapons labs.
Even after the Cold War ended, the federal government remained interested in the lab’s science and paid to keep it running.
In 2006, the Bush administration’s Department of Energy solicited bids from private contractors to assume control of Livermore. The purpose, the government said, was to transition the lab “to industrial standards and capitalize on private sector expertise.”
Two years later, the DOE awarded the contract to Lawrence Livermore National Security LLC, (LLNS), a private partnership led by Bechtel Corp., the multinational engineering company based in San Francisco. In exchange for millions in management fees, Bechtel promised to improve efficiency at Livermore.
The lab also continued to receive taxpayer dollars—upwards of $1 billion annually.
PROMISES ASIDE, AFTER PRIVATIZATION, 440 EMPLOYEES LAID OFF
When LLNS took over, the lab employed around 7,000 people. Nearly all were longtime University of California employees. In 30 years, there hadn’t been a single layoff at Livermore.
As part of the takeover, LLNS agreed to hire all existing workers, who were assured they would not be terminated without reasonable cause.
But within months of LLNS taking control, 440 permanent employees were let go. Most had been with Livermore for many years and were over the age of 40.
For example, Marian Barraza – one of the first five plaintiffs to go to trial -- had worked at Lawrence Livermore for 38 years. A purchasing specialist, Ms. Barraza was one of only two career employees in her unit. Both were laid off in May 2008 while a younger employee with fewer than two years of seniority was kept on.
Despite their long tenure and proven loyalty, the 440 employees – from administrative assistants to nuclear scientists – were escorted off the LLNS grounds by security personnel.
MORE THAN 130 EMPLOYMENT DISCRIMINATION SUITS FILED
Following the layoffs, many of the ex-employees began considering litigation. Ultimately, 130 former employees of Livermore filed individual complaints with the California Department of Fair Employment and Housing, the agency charged with enforcing the state’s anti-discrimination laws.
In May 2009, Gwilliam, Ivary, Chiosso, Cavalli & Brewer, an Oakland-based law firm, filed suit against LLNS in Alameda County Superior Court, representing 130 of the wrongfully terminated employees.
Many of the 130 are still searching for jobs in a strained economy. Some have lost their homes and health; others have filed for bankruptcy.
All 130 cases have been consolidated for trial. (This is NOT a class action.)
INDUSTRY EXPERT QUESTIONS MOTIVATION FOR LAYOFFS
LLNS argued that a $280 million budget shortfall necessitated the layoffs, but based on the review of Dr. Robert Civiak, an independent consultant who specializes in budget and policy issues related to nuclear weapons, LLNS had sufficient funds to avoid any layoffs. Dr. Civiak says LLNS’s claim of a $280 million shortfall was fabricated to get increased funding from the Bush administration.
He is expected to testify on behalf of the plaintiffs at trial.
January 23, 2012
More than One Hundred Laid-Off Lawrence Livermore Employees to Rally against Bechtel-Run Weapons Lab as Trial Date Nears
Contact: Gary Gwilliam, ggwilliam@giccb.com or (510) 832-5411
Deborah Colaianni, dcolaianni@justiceinmedia.com or (202) 679-2652
WHAT: A rally of 130 former employees of Lawrence Livermore National Security (LLNS), who were fired in the wake of the laboratory’s transition from public to private control. The former employees, all plaintiffs in individual lawsuits against LLNS, will discuss strategy and developments as the first of their lawsuits nears trial.
WHO: The five plaintiffs in the first trial will hold a news conference prior to the group meeting. They will discuss their claims against LLNS, ranging from wrongful termination to age, race and disability discrimination. Their consolidated lawsuits are scheduled for trial on February 6, 2012.
Lead Counsel Gary Gwilliam will also be available to media to explain how privatization of the lab led to the discriminatory and unlawful layoffs.
Media will have access to all former employees who attend the 6 p.m. group meeting immediately following the news conference.
WHEN: 5:15 p.m., Thursday, January 26, 2012
WHERE: Robert Livermore Community Center, 4444 East Avenue, Livermore CA 94550
====================================================================
THE BACKGROUND
NUCLEAR WEAPONS LAB PRIVATIZED
Founded in Livermore, Calif., in the early 1950s, under the auspices of the University of California, Lawrence Livermore National Laboratory was one of the United States’ flagship nuclear weapons labs.
Even after the Cold War ended, the federal government remained interested in the lab’s science and paid to keep it running.
In 2006, the Bush administration’s Department of Energy solicited bids from private contractors to assume control of Livermore. The purpose, the government said, was to transition the lab “to industrial standards and capitalize on private sector expertise.”
Two years later, the DOE awarded the contract to Lawrence Livermore National Security LLC, (LLNS), a private partnership led by Bechtel Corp., the multinational engineering company based in San Francisco. In exchange for millions in management fees, Bechtel promised to improve efficiency at Livermore.
The lab also continued to receive taxpayer dollars—upwards of $1 billion annually.
PROMISES ASIDE, AFTER PRIVATIZATION, 440 EMPLOYEES LAID OFF
When LLNS took over, the lab employed around 7,000 people. Nearly all were longtime University of California employees. In 30 years, there hadn’t been a single layoff at Livermore.
As part of the takeover, LLNS agreed to hire all existing workers, who were assured they would not be terminated without reasonable cause.
But within months of LLNS taking control, 440 permanent employees were let go. Most had been with Livermore for many years and were over the age of 40.
For example, Marian Barraza – one of the first five plaintiffs to go to trial -- had worked at Lawrence Livermore for 38 years. A purchasing specialist, Ms. Barraza was one of only two career employees in her unit. Both were laid off in May 2008 while a younger employee with fewer than two years of seniority was kept on.
Despite their long tenure and proven loyalty, the 440 employees – from administrative assistants to nuclear scientists – were escorted off the LLNS grounds by security personnel.
MORE THAN 130 EMPLOYMENT DISCRIMINATION SUITS FILED
Following the layoffs, many of the ex-employees began considering litigation. Ultimately, 130 former employees of Livermore filed individual complaints with the California Department of Fair Employment and Housing, the agency charged with enforcing the state’s anti-discrimination laws.
In May 2009, Gwilliam, Ivary, Chiosso, Cavalli & Brewer, an Oakland-based law firm, filed suit against LLNS in Alameda County Superior Court, representing 130 of the wrongfully terminated employees.
Many of the 130 are still searching for jobs in a strained economy. Some have lost their homes and health; others have filed for bankruptcy.
All 130 cases have been consolidated for trial. (This is NOT a class action.)
INDUSTRY EXPERT QUESTIONS MOTIVATION FOR LAYOFFS
LLNS argued that a $280 million budget shortfall necessitated the layoffs, but based on the review of Dr. Robert Civiak, an independent consultant who specializes in budget and policy issues related to nuclear weapons, LLNS had sufficient funds to avoid any layoffs. Dr. Civiak says LLNS’s claim of a $280 million shortfall was fabricated to get increased funding from the Bush administration.
He is expected to testify on behalf of the plaintiffs at trial.
Friday, January 20, 2012
Hey LANS, where's the $65,725,677?
Anonymous:
Hey LANS, where's the $65,725,677?
McMillan told us where the fee goes, but failed to account for $65,725,677. Senior Management bonuses baby, bonuses!
Overall, of the $94,274,050 in total fee available for FY2011, LANS was awarded $83,725,677 for performing approximately $2.6 billion worth of work for the nation.
Where the fee goes:
Under the LANS, LLC structure, performance fee goes to LANS’ parent organizations: the University of California, Bechtel National, Babcock & Wilcox, and URS.
From there:
The University of California has provided approximately $9 million of its fee to fund collaborative research between LANL and UC scientists and engineers in areas important to the Laboratory. (For more information, see the recent Call for Proposals, which solicits ideas for this year’s collaborative research funding opportunities.)
The four LANS partners provided $2 million from performance fee to upgrade the Weapons Neutron Research facility at LANSCE, at the request of Director Mike Anastasio.
The four partners provided $6.7 million to fund LANL costs that cannot be billed to the government. Examples include:
At least $3 million for community and educational investments under the LANS Community Commitment Plan (CCP). If our fee reaches a certain threshold, this number rises. An announcement on this year’s CCP funds is forthcoming.
Funding to recruit and retain valued scientists and engineers.
A $50,000 challenge grant to reimburse businesses that helped emergency responders during the Las Conchas Fire,
Overall, the four partners reinvest approximately $18 million of annual fee in Lab capability and Northern New Mexico.
Hey LANS, where's the $65,725,677?
McMillan told us where the fee goes, but failed to account for $65,725,677. Senior Management bonuses baby, bonuses!
Overall, of the $94,274,050 in total fee available for FY2011, LANS was awarded $83,725,677 for performing approximately $2.6 billion worth of work for the nation.
Where the fee goes:
Under the LANS, LLC structure, performance fee goes to LANS’ parent organizations: the University of California, Bechtel National, Babcock & Wilcox, and URS.
From there:
The University of California has provided approximately $9 million of its fee to fund collaborative research between LANL and UC scientists and engineers in areas important to the Laboratory. (For more information, see the recent Call for Proposals, which solicits ideas for this year’s collaborative research funding opportunities.)
The four LANS partners provided $2 million from performance fee to upgrade the Weapons Neutron Research facility at LANSCE, at the request of Director Mike Anastasio.
The four partners provided $6.7 million to fund LANL costs that cannot be billed to the government. Examples include:
At least $3 million for community and educational investments under the LANS Community Commitment Plan (CCP). If our fee reaches a certain threshold, this number rises. An announcement on this year’s CCP funds is forthcoming.
Funding to recruit and retain valued scientists and engineers.
A $50,000 challenge grant to reimburse businesses that helped emergency responders during the Las Conchas Fire,
Overall, the four partners reinvest approximately $18 million of annual fee in Lab capability and Northern New Mexico.
Wednesday, January 18, 2012
Major Loss of National Security Expertise at Sandia
Anonymously contributed:
Major Loss of National Security Expertise at Sandia
New Mexico Business Weekly by Dennis Domrzalski, NMBW Staff
Date: Friday, January 13, 2012, 4:00am MST - Last Modified: Friday, January 13, 2012, 2:07pm MST
Sandia National Laboratories lost 428 people to retirement in fiscal year 2011, and it said good-bye to another 511 retirees in the first quarter of its 2012 fiscal year, between Oct. 1 and Dec. 31, 2011.
Together, those retirements represent about 11 percent of the lab’s 8,600-person workforce. The numbers were supplied by Sandia, which explained that most retirees choose the final quarter of the year to carry out their departures. In 2011, the first of the baby boom generation hit age 65, and for years, there's been speculation that Sandia and other large employers would start to see retirements.
Major Loss of National Security Expertise at Sandia
New Mexico Business Weekly by Dennis Domrzalski, NMBW Staff
Date: Friday, January 13, 2012, 4:00am MST - Last Modified: Friday, January 13, 2012, 2:07pm MST
Sandia National Laboratories lost 428 people to retirement in fiscal year 2011, and it said good-bye to another 511 retirees in the first quarter of its 2012 fiscal year, between Oct. 1 and Dec. 31, 2011.
Together, those retirements represent about 11 percent of the lab’s 8,600-person workforce. The numbers were supplied by Sandia, which explained that most retirees choose the final quarter of the year to carry out their departures. In 2011, the first of the baby boom generation hit age 65, and for years, there's been speculation that Sandia and other large employers would start to see retirements.
Sunday, January 15, 2012
Comments on the revised LLNS 401 (k) plan
Anonymously contributed:
Comments on the revised LLNS 401 (k) plan
Being prepared for new federal rules demanding more transparent fee disclosure for 401k plans, LLNS joined many other 401k sponsors nation-wide to reduce 401k expenses and fees this year. Lawrence Livermore National Laboratory’s employees now have a new set of investment options. Overall, the move was a positive correction to a long-overdue 401k problem. But it still does not correct the excessive annual bookkeeping/administration fees. Also, some actively managed investment options are difficult to be explaind if LLNS is asked how they are acting under their fiduciary duty to protect the benefits of participants/beneficiaries.
The first trouble is the excessive annual $86 bookkeeping fee. Many 401 k plans do charge employees flat admin fees. But the fees are usually around $25 per participant per year. Wal-mart, the latest company sued by its employees for expensive retail class investment options in an institutional 401k plan, charged only $1 annually per participant.
To give some context, the LLNS 401k plan started without any participant fees in 2007. It is believed that there was a competitive bid. Fidelity won the bid based on the overall proposed service quality and expenses. In 2008, the financial crisis caused massive damages to almost every person and organization in USA. Fidelity, somehow, decided to recover some of their loss by charging $86 per year per participant for the LLNS 401k plan. It is unknown if LLNS tried to object the charges or not, considering that lab participants also suffered huge loss at the same time. It is very disturbing to know that Fidelity, as a financial institution, could partially recover their loss by adding salts into individual investors’ injuries. Also, the new charges could be interpreted as a classic bait-and-switch tactic used by Fidelity, regardless the excuse of the financial meltdown. Anyway, the fees started somewhat deceptively. Fidelity now charges each account every quarter and spread the charges across different funds. For inexperienced investors, the fees just look like regular expenses arisen from each fund. But the fees actually come from Fidelity. Also, Fidelity did not charge the full amount in the first 2 years (2009 and 2010). They rollover-ed the “forgotten” charges into 2011 so the total charge in 2011 per account is more than $110.
The excessive annual participant fees were even more difficult to be justified considering what Fidelity was already profited from the plan by selling Fidelity funds to lab employees. Many of the Fidelity funds sold were expensive retail class funds, including Fidelity Contrafund (FCNTX), Fidelity Diversified International Fund (FDIVX), and Fidelity Growth Company Fund (FDGRX). It is still unclear how much Fidelity gained. But the 2010 Form 5500 should shed some light. The form reports that there was 3649 participants. Out of the 228.7 million plan asset in the end of 2010, 36% of the money (totalled 83 millions) went into Fidelity’s mutual funds and manged income portfolio. The plan asset in 2011 was reported to be more than 400 millions so we can roughly estimate that 144 million (36%) went into Fidelity funds, which mostly are actively managed funds with expense ratios around 1%. So in total, it is estimated that Fidelity could at least directly gained from the LLNS 401k plan by 1.5 million in 2011 (3649x $110 = $401, 390 participant fees + 114 million x 1% = $1,14 million fund expenses), not counting indirect gains (or kick-backs) by selling other mutual funds in the plan.
The new investment options, especially the passively managed index options in the LLNS 401k plan are in general improved choices. Among them are some very competitive stock and bond indexing investment options with expense ratios ranging from 0.03% to 0.1%. But some of the active options are hard to be explained to experienced investors.
* For example, the International Equity Fund, which invests solely in the Fidelity Diversified International Fund Class K (FDIKX), has an expense ratio of 0.79% for lab participants. But FDIKX is only rated as a 3-star fund with an expense ratio of 0.77% on Morningstar. It looks like Fidelity charges lab employees more than they charge retail customers. In additiona, a close examination reveals that FDIKX has almost identical performance in the past years as a comparable index (MSCI EAFE) has. It is reasonable to suspect that this is yet another passively managed fund which is claimed to be actively managed to justify the higher expenses.
* Large Cap Growth Equity Fund: an investment option with an expense ratio of 0.47%. It is very difficult to find any online information about this option since it is a secretive separate account without the same transparency and regulations as mutual funds do. Anyway, even the fund’s own unaudited fact sheet reports that this large cap growth equity fund was beaten by its benchmark (Russell 200 Growth Index) in the past 3, 5, and 10 years. Overall, it underperforms the benchmark by 2.29 percent (annualized) since its inception. Wise investors would wonder why not invest a cheaper, regulated, transparent, and better performing index fund tracking the Russell 2000 Growth index.
* Small-Mid Cap Equity Fund is a separate account mixing two options together. It is not clear how the two options are mixed, who is managing it , or even which company is mixing them. The fund fact sheets only mentions that manager is “Management Team” and Company is “Multiple Advisor”. One of the options is Cramer Rosenthal McGlynn Small/Mid Cap Value Fund , which should be identical to its public institutional mutual fund (CRIAX) rated with only 3 stars on Morningstar. The other one, Wells Capital Fundamental SMID Cap Growth Equity, does have better return than Russell 2500 Growth Index according to its online fact sheet. But unlike mutual funds, information from separate accounts is not audited. The methodology of calculating returns is not regulated for separate accounts neither. Yes, financial firms have proven to be very creative when reporting unregulated data.
* The CORE plus bond is more interesting. It is claimed to be a relabeled PIMCO Total Return Fund (PTTRX). But it has very different share price (NAV) from PTTRX although both share the same expense ratio (0.46%). It cannot be tracked anywhere, at least for now. The question here is how investors can know it is really what it claims.
A fundamental problem with the LLNS 401k plan, also all other private 401k plans, is that participants/beneficiaries don’t have too much to say for the fees and investment strategies of the plan. Participants’ hands are tied, even if they hate the greedy service provider and absurd investment options. They can only make changes (rollover to a better plan) if they change jobs. Some participants may had spent hours on choosing funds with a long term goal. But all of sudden, LLNS decided to overhall the entire investment options without notice. For lab participants, it is advised to consider the volatility of the plan management when making long-term investment choices. The Thrift Saving Plan, a 401k-like plan for federal employees, consults with the employee advisory council for advice. Unfortunately, private 401k plans usually don’t have the same protection for participants. It is only up to individual participants to voice their opinions and concerns and hopefully employers can listen before lawsuits come.
In summary, the revised LLNS 401k plan is definitely a big improvement. But it is very disappointing to see that the excessive annual participant fees are still there. It is also very confusing why some inferior, or even expensive, actively managed investment options are added. Another troubling aspect is that with the introduction of separate accounts and commingled pools, the transparency and regulation protection participants had with mutual funds are gone. It looks like LLNS only tried to passively react to the the fee disclosure pressure from the labor department and not motivated by their legal fiduciary duty for beneficiaries.
References
* Form 5500/5500-SF Filing Search, http://www.efast.dol.gov/portal/app/disseminate?execution=e1s1
* Walmart, Merrill Lynch Agree To Pay $13.5 Million To Settle 401(k) Fiduciary Lawsuit, http://www.forbes.com/sites/williampbarrett/2011/12/05/walmart-merrill-lynch-agree-to-pay-13-5-million-to-settle-401k-fiduciary-lawsuit/
*The Federal Retirement Thrift Savings Plan https://www.tsp.gov/index.shtml
* Will 401(k) Fee Disclosures Bring Clarity to Perplexed Workers?
http://abcnews.go.com/Business/401k-plan-best-employer-choose/story?id=14729357#.TvjtaNRSSVM
* DOL Aligns Deadlines for Retirement Plan Fee Disclosures http://www.shrm.org/hrdisciplines/benefits/Articles/Pages/disclosuredeadlines.aspx
* http://www.gpo.gov/fdsys/pkg/FR-2011-07-19/pdf/2011-18029.pdf
* Stern Advice: Companies shake up 401(k)plans, cut fees, http://www.reuters.com/article/2011/12/08/us-column-personalfinance-idUSTRE7B623Q20111208
* Wells Capital Fundamental SMID, http://www.wellsfargoadvantagefunds.com/pdf/managedaccounts/FactSheet_FundamentalSMIDCapGrowth.pdf
* Separately Managed Accounts: A Mutual Fund Alternative, http://www.investopedia.com/articles/mutualfund/08/managed-separate-account.asp#axzz1hbI7KCGT
Comments on the revised LLNS 401 (k) plan
Being prepared for new federal rules demanding more transparent fee disclosure for 401k plans, LLNS joined many other 401k sponsors nation-wide to reduce 401k expenses and fees this year. Lawrence Livermore National Laboratory’s employees now have a new set of investment options. Overall, the move was a positive correction to a long-overdue 401k problem. But it still does not correct the excessive annual bookkeeping/administration fees. Also, some actively managed investment options are difficult to be explaind if LLNS is asked how they are acting under their fiduciary duty to protect the benefits of participants/beneficiaries.
The first trouble is the excessive annual $86 bookkeeping fee. Many 401 k plans do charge employees flat admin fees. But the fees are usually around $25 per participant per year. Wal-mart, the latest company sued by its employees for expensive retail class investment options in an institutional 401k plan, charged only $1 annually per participant.
To give some context, the LLNS 401k plan started without any participant fees in 2007. It is believed that there was a competitive bid. Fidelity won the bid based on the overall proposed service quality and expenses. In 2008, the financial crisis caused massive damages to almost every person and organization in USA. Fidelity, somehow, decided to recover some of their loss by charging $86 per year per participant for the LLNS 401k plan. It is unknown if LLNS tried to object the charges or not, considering that lab participants also suffered huge loss at the same time. It is very disturbing to know that Fidelity, as a financial institution, could partially recover their loss by adding salts into individual investors’ injuries. Also, the new charges could be interpreted as a classic bait-and-switch tactic used by Fidelity, regardless the excuse of the financial meltdown. Anyway, the fees started somewhat deceptively. Fidelity now charges each account every quarter and spread the charges across different funds. For inexperienced investors, the fees just look like regular expenses arisen from each fund. But the fees actually come from Fidelity. Also, Fidelity did not charge the full amount in the first 2 years (2009 and 2010). They rollover-ed the “forgotten” charges into 2011 so the total charge in 2011 per account is more than $110.
The excessive annual participant fees were even more difficult to be justified considering what Fidelity was already profited from the plan by selling Fidelity funds to lab employees. Many of the Fidelity funds sold were expensive retail class funds, including Fidelity Contrafund (FCNTX), Fidelity Diversified International Fund (FDIVX), and Fidelity Growth Company Fund (FDGRX). It is still unclear how much Fidelity gained. But the 2010 Form 5500 should shed some light. The form reports that there was 3649 participants. Out of the 228.7 million plan asset in the end of 2010, 36% of the money (totalled 83 millions) went into Fidelity’s mutual funds and manged income portfolio. The plan asset in 2011 was reported to be more than 400 millions so we can roughly estimate that 144 million (36%) went into Fidelity funds, which mostly are actively managed funds with expense ratios around 1%. So in total, it is estimated that Fidelity could at least directly gained from the LLNS 401k plan by 1.5 million in 2011 (3649x $110 = $401, 390 participant fees + 114 million x 1% = $1,14 million fund expenses), not counting indirect gains (or kick-backs) by selling other mutual funds in the plan.
The new investment options, especially the passively managed index options in the LLNS 401k plan are in general improved choices. Among them are some very competitive stock and bond indexing investment options with expense ratios ranging from 0.03% to 0.1%. But some of the active options are hard to be explained to experienced investors.
* For example, the International Equity Fund, which invests solely in the Fidelity Diversified International Fund Class K (FDIKX), has an expense ratio of 0.79% for lab participants. But FDIKX is only rated as a 3-star fund with an expense ratio of 0.77% on Morningstar. It looks like Fidelity charges lab employees more than they charge retail customers. In additiona, a close examination reveals that FDIKX has almost identical performance in the past years as a comparable index (MSCI EAFE) has. It is reasonable to suspect that this is yet another passively managed fund which is claimed to be actively managed to justify the higher expenses.
* Large Cap Growth Equity Fund: an investment option with an expense ratio of 0.47%. It is very difficult to find any online information about this option since it is a secretive separate account without the same transparency and regulations as mutual funds do. Anyway, even the fund’s own unaudited fact sheet reports that this large cap growth equity fund was beaten by its benchmark (Russell 200 Growth Index) in the past 3, 5, and 10 years. Overall, it underperforms the benchmark by 2.29 percent (annualized) since its inception. Wise investors would wonder why not invest a cheaper, regulated, transparent, and better performing index fund tracking the Russell 2000 Growth index.
* Small-Mid Cap Equity Fund is a separate account mixing two options together. It is not clear how the two options are mixed, who is managing it , or even which company is mixing them. The fund fact sheets only mentions that manager is “Management Team” and Company is “Multiple Advisor”. One of the options is Cramer Rosenthal McGlynn Small/Mid Cap Value Fund , which should be identical to its public institutional mutual fund (CRIAX) rated with only 3 stars on Morningstar. The other one, Wells Capital Fundamental SMID Cap Growth Equity, does have better return than Russell 2500 Growth Index according to its online fact sheet. But unlike mutual funds, information from separate accounts is not audited. The methodology of calculating returns is not regulated for separate accounts neither. Yes, financial firms have proven to be very creative when reporting unregulated data.
* The CORE plus bond is more interesting. It is claimed to be a relabeled PIMCO Total Return Fund (PTTRX). But it has very different share price (NAV) from PTTRX although both share the same expense ratio (0.46%). It cannot be tracked anywhere, at least for now. The question here is how investors can know it is really what it claims.
A fundamental problem with the LLNS 401k plan, also all other private 401k plans, is that participants/beneficiaries don’t have too much to say for the fees and investment strategies of the plan. Participants’ hands are tied, even if they hate the greedy service provider and absurd investment options. They can only make changes (rollover to a better plan) if they change jobs. Some participants may had spent hours on choosing funds with a long term goal. But all of sudden, LLNS decided to overhall the entire investment options without notice. For lab participants, it is advised to consider the volatility of the plan management when making long-term investment choices. The Thrift Saving Plan, a 401k-like plan for federal employees, consults with the employee advisory council for advice. Unfortunately, private 401k plans usually don’t have the same protection for participants. It is only up to individual participants to voice their opinions and concerns and hopefully employers can listen before lawsuits come.
In summary, the revised LLNS 401k plan is definitely a big improvement. But it is very disappointing to see that the excessive annual participant fees are still there. It is also very confusing why some inferior, or even expensive, actively managed investment options are added. Another troubling aspect is that with the introduction of separate accounts and commingled pools, the transparency and regulation protection participants had with mutual funds are gone. It looks like LLNS only tried to passively react to the the fee disclosure pressure from the labor department and not motivated by their legal fiduciary duty for beneficiaries.
References
* Form 5500/5500-SF Filing Search, http://www.efast.dol.gov/portal/app/disseminate?execution=e1s1
* Walmart, Merrill Lynch Agree To Pay $13.5 Million To Settle 401(k) Fiduciary Lawsuit, http://www.forbes.com/sites/williampbarrett/2011/12/05/walmart-merrill-lynch-agree-to-pay-13-5-million-to-settle-401k-fiduciary-lawsuit/
*The Federal Retirement Thrift Savings Plan https://www.tsp.gov/index.shtml
* Will 401(k) Fee Disclosures Bring Clarity to Perplexed Workers?
http://abcnews.go.com/Business/401k-plan-best-employer-choose/story?id=14729357#.TvjtaNRSSVM
* DOL Aligns Deadlines for Retirement Plan Fee Disclosures http://www.shrm.org/hrdisciplines/benefits/Articles/Pages/disclosuredeadlines.aspx
* http://www.gpo.gov/fdsys/pkg/FR-2011-07-19/pdf/2011-18029.pdf
* Stern Advice: Companies shake up 401(k)plans, cut fees, http://www.reuters.com/article/2011/12/08/us-column-personalfinance-idUSTRE7B623Q20111208
* Wells Capital Fundamental SMID, http://www.wellsfargoadvantagefunds.com/pdf/managedaccounts/FactSheet_FundamentalSMIDCapGrowth.pdf
* Separately Managed Accounts: A Mutual Fund Alternative, http://www.investopedia.com/articles/mutualfund/08/managed-separate-account.asp#axzz1hbI7KCGT
Sunday, January 8, 2012
LLNL RIFs in April
Rumors starting to surface regarding the first round of RIFS to begin at LLNL in late April! Anyone care to share in inf on this subject?
Brewster McFrisk
Brewster McFrisk
Bechtel awarded but performance report not released!
Anonymously contributed:
LANL Managers Rewarded
By John Fleck / Journal Staff Writer on Thu, Jan 5, 2012
Federal officials this week awarded a Bechtel-University of California team $83.7 million for its management of Los Alamos National Laboratory in 2011, plus a one year extension of its lab management contract as a bonus, but refused to release the performance evaluation report on which the decisions were based.
The one-year extension means the current team will be in charge at Los Alamos through 2017.
“The award is a tribute to our employees’ dedication to delivering on our commitments,” lab director Charlie McMillan said in a statement. “2011 was an outstanding year for science and mission execution at the Laboratory.”
Refusal to make public the Los Alamos “Performance Evaluation Report” and a similar report evaluating Lockheed Martin’s performance managing Sandia National Laboratories, which the Journal has been requesting for more than a month, continues an agency practice that has drawn criticism from watchdogs who say the information is vital to understanding whether the agency is being a responsible steward of taxpayer dollars.
LANL Managers Rewarded
By John Fleck / Journal Staff Writer on Thu, Jan 5, 2012
Federal officials this week awarded a Bechtel-University of California team $83.7 million for its management of Los Alamos National Laboratory in 2011, plus a one year extension of its lab management contract as a bonus, but refused to release the performance evaluation report on which the decisions were based.
The one-year extension means the current team will be in charge at Los Alamos through 2017.
“The award is a tribute to our employees’ dedication to delivering on our commitments,” lab director Charlie McMillan said in a statement. “2011 was an outstanding year for science and mission execution at the Laboratory.”
Refusal to make public the Los Alamos “Performance Evaluation Report” and a similar report evaluating Lockheed Martin’s performance managing Sandia National Laboratories, which the Journal has been requesting for more than a month, continues an agency practice that has drawn criticism from watchdogs who say the information is vital to understanding whether the agency is being a responsible steward of taxpayer dollars.
what happened to the LLNS 401k mutual fund dividends?
Anonymously contributed:
Anyone know what happened to the LLNS 401k mutual fund dividends between Nov-Dec 2011?
I have been expecting dividends from my LLNS 401k mutual funds since the fund changeover in October and have seen none in three funds. Does anyone know what is going on? Fidelity reps do not, they say the prospectus is unavailable. I have a call into LLNL benefits and am awaiting a reply.
Background: In October of 2011, LLNS changed some of the mutual funds offered in the 401k plan to lower fees. The former Pimco Fund became the Core Plus fund with the same Pimco fund as its sole investment. Likewise the former Spartan SP500 fund, became the SP500 Fund with the state street SP500 Index (SVSPX). The former Vanguard Target retirement fund became the Vanguard Target retirement income fund with sole holding of the Vanguard target retirement income fund -Trust 1 (VTINX).
Each of the holdings of the three new LLNS funds mentioned above have declared a dividend payable either monthly or at the end of December 2011; as their predecessors have done regularly in the past. But now my current 401k account summary for each fund does not list any dividends for the period between October thru December?
Does anyone know why? Did George get a special severance? Did Parney's bonus package get a new income stream? Que Pasa?
s/the skeptical Regeanite -trust but verify
Anyone know what happened to the LLNS 401k mutual fund dividends between Nov-Dec 2011?
I have been expecting dividends from my LLNS 401k mutual funds since the fund changeover in October and have seen none in three funds. Does anyone know what is going on? Fidelity reps do not, they say the prospectus is unavailable. I have a call into LLNL benefits and am awaiting a reply.
Background: In October of 2011, LLNS changed some of the mutual funds offered in the 401k plan to lower fees. The former Pimco Fund became the Core Plus fund with the same Pimco fund as its sole investment. Likewise the former Spartan SP500 fund, became the SP500 Fund with the state street SP500 Index (SVSPX). The former Vanguard Target retirement fund became the Vanguard Target retirement income fund with sole holding of the Vanguard target retirement income fund -Trust 1 (VTINX).
Each of the holdings of the three new LLNS funds mentioned above have declared a dividend payable either monthly or at the end of December 2011; as their predecessors have done regularly in the past. But now my current 401k account summary for each fund does not list any dividends for the period between October thru December?
Does anyone know why? Did George get a special severance? Did Parney's bonus package get a new income stream? Que Pasa?
s/the skeptical Regeanite -trust but verify
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