HAPC assumption
At the end of an older thread was this comment. Possibly interesting to many.
Anonymous said...
The HAPC is "frozen" at the start of a furlough claim has the faulty assumption that month 1 (most recent) of pay, X, is lower than month 36, Y. Even with a 10% reduction that is not true for many staff members.
At the point in time when month 1 pay X*0.9<=Y, the highest HAPC is in the past.
At the end of an older thread was this comment. Possibly interesting to many.
Anonymous said...
The HAPC is "frozen" at the start of a furlough claim has the faulty assumption that month 1 (most recent) of pay, X, is lower than month 36, Y. Even with a 10% reduction that is not true for many staff members.
At the point in time when month 1 pay X*0.9<=Y, the highest HAPC is in the past.
Comments
Specifically, a furlough/closure as proposed will not have negative consequences on the HAPC of TCP2 employees or on almost all TCP1 employees who do not retire from LLNL in the next few years.
A furlough/closure as proposed will negatively impact the HAPC and hence pension payout for the typical TCP1 employee who retires in the next 3-4 years. A likely scenario is that the HAPC and pension payout will be reduced by 1-2% relative to what they would have been (e.g., tens of thousands of dollars in life-time pension income). The impact of this pension reduction can be reduced/eliminated if an affected employee works a few months to a couple years longer than planned (the difference is largely one of perspective).
A furlough/closure as proposed may not negatively impact the HAPC and pension payout of those TCP1 employees who plan to retire in the near-future and have received large salary increases (e.g., > ~10%) over the last 3 years. However, not many employees fall into this category since average salary increases have been recently relatively small (< ~7% cumulative for SES employees, from ~2% "adjustments" in 2011 and 2012 and an actual raise package of ~3% in 2013). This is all the more true for most employees about to retire since salary changes for older employees tend to be more stable (i.e., younger employees are the ones more likely to receive larger percentage raises - applied to smaller base salaries).
And all TCP-1 beneficiaries who will retire in the next 3 years are adversely affected by the loss of retirement income for the rest their and their spouses lives. Losses as large as 1% OF TOTAL INCOME ARE PREDICTED for those who retire in the 12 month period after the furlough ends.
It is disappointing that LLNS does not make up the loss to the effected employees temporarily by contributing its fee to employees. After all, COMPARED TO DAMAGED EMPLOYEES, WHOLE THE LLNS LLC MAKES NO SIGNIFICANT CONTRIBUTION TO THE SUCCESS OF THE LAB.
Like NNSA, it is an unneeded parasite which lives of the efforts of lab employees. It takes credit for success and passes out blame.
As was stated in the very first post of this thread, if "losses as large as 1% of total income" are important to you, simply delay your retirement by 3-4months, and they go away. This is certainly a loss of 3-4 months of your retirement, no question. But compared to either your 30 year career or your 20-30 year retirement, it may not be that significant.
Especially compared to all the other things that can have comparable effect on your retirement living: health, inflation rate, stock market performance, where you choose to live, etc, etc.
I am not arguing that there is no effect from the furlough. Just to keep it in perspective.
Do you mean this to be an indictment of capitalism? If so, then isn't that an indictment of our entire American System?
Well you can badmouth LLNS, but we won't sit around and listen to you badmouth the United States of America. Gentlemen! [cue signing of My Country Tis of Thee]
I don't understand. $26,014 vs $24,521 or $22,069. Don't you mean the amount is a lot more than 1%?
In any case, the 1% number is for a furlough/closure lasting a few months, or about 2% for a furlough going through the end of the fiscal year. Those seem to be reasonable scenarios, as indicated above.
There are many variables and possibilities. It is not possible to easily consider all of them.
In particular:
- what are you assuming about raises in the next 3 years?
- what, exactly, do you mean by "one year of the furlough" - 12 months of 10% reduction? or "10% reduction from now through the end of FY13"? or what?
- any difference assumed in age or service credit between the cases?
I think that the only way the amount can go down at all is by offsetting the affect of future raises. For example, if you assumed no raise for 3 years your HAPC would be the same regardless of whether there is a furlough or not. So I think the raise assumption is important.
Also, it's odd that you calculate a reduction from $26k to $22k (15%) for a full-time salary reduction of only 10%. This doesn't seem possible, but I may be missing something.
So, would you please post your assumptions, and perhaps describe your calculations a little more, so we can understand them?
No one that pays tax in the US should have any sympathy for any one that is getting 300K per year pension at the taxpayer's trough.
March 26, 2013 at 5:04 PM"
Who gets that?
The age factor at age 55 is about 1.5% (from memory, I"m older). A post-doc who started working at LLNL at age 30 would collect about 37.5% of HAPC (1.5% x 25) at age 55.
To collect $20K ( + 0.375) a beneficiary would need to make about $50k per month.
No one at LLNL makes that much who is going to get retirement advice from a blog.
Must be April FOOLS time.
All did well for sure, retiring after age 60 with 35 years of service would gross them about 87.5% of HAPC before adjustments. Miller might have made 40 years, although I don't think so.
Everyone else collects much, much less. But still does very well. I think the average collection is around $50k +/- per year, still nice and will probably go up to 70% of the average salary which could reach $110k in a few years.
The founders of the lab recognized, like Henry Ford so long ago, that if an employee's hygienes were provided (human resources-speak for family and personal needs), they would focus their efforts on achieving excellence.
Good idea. And it worked until the trio of D'Agostino, Pryzbylek and Bodman, the new millennial-version of the three stooges, decided a little comic-relief was needed.
I the age factor at 55 is 1.83% , not 1.5% as mentioned previously, per year of service, so with 30 years our imaginary well-paid colleague would need to have an HAPC of about $40k per month or a salary of about $480k per year. Not likely for anyone at LLNL, other than Parnery. Maybe Moses or one of the Bruce's, but I doubt it.
As for your numbers, I envy you, for I cannot make a 2.08% age factor * 29 years of service = 72%. Are you sure that you didn't retire from UC under a 3+3 incentive?
Assume no salary increases in the last 36 months, so average HAPC is X. Now 10% salary reduction for say 12 months (0.9X). If I retire in about 1-2 years, my HAPC should be still X for pension calculations. So it still a impact on salary (10% reduction), there should be no impact on pension.
Please correct me if this is wrong.
You are correct. Highest average 36 months means just that. If your average goes down because of a salary reduction, your previous highest average 36 months still applies. The most recent (lower) salary does not affect the calculation. It is only those who anticipate ever-increasing salaries who will perceive a potential loss.
One way to look at it is that the rules anticipate someone who nearing retirement chooses to go on part-time status for a few years. Happens all the time. This should, and does, have no effect on his pension.
Great point! Now if only Parney had made his furlough work like this (ie the normal way), everything would be fine. But no, instead he is going to *lower our salaries*, thus impacting our pension.