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Thursday, March 14, 2013
April 12, 2013: furlough starts?
Rumor has it, April 12, 2013. First day off with out pay
The story below has no direct connection with LLNL.
Actually, they would not be days off without pay. They will be paid leave days, but our salary will be at a reduced rate (for all days). Same cash flow impact for individuals and the Lab, but service credits continue to accrue at full rate.
Lots of detailed information under the Ask the Director Q&A in LabBook.
But what are the other option for Lab-holiday and/or furlough without HAPC getting destroyed? I am 55+ yrs old and no way private industry will hire me.I would rather have a furlough than being unemployed.
1) Do an *actual* furlough (not this thing they call a furlough but actually costs you 10-11x more than a normal furlough due to pension impact. The way they've specially constructed this makes it a stealth pension freeze).
2) Have an option where people could use vacation for their furlough days.
3) Use the non-base pay mechanism to reduce (instead of increase) wages.
4) etc etc etc
Parney refused to engage and involve the rest of us in coming up with solutions to this...and magically came up with the worst possible solution for us as a whole (TCP1 hit, TCP2 hit, etc) and has been persistently lying about the impact ever since -- calling it "minimal", saying doing it this way was what was best for all the employees. These are blatant lies.
There are clearly better alternatives. If Parney contests that he should publish a list of the alternatives he considered with pros/cons and why he chose the path he did.
LANL management decided last year that the sequester was going to happen and reduced staffing by 1200 workers. As a result, there is no furlough at LANL this year. We have been spending at the sequester level throughout FY2013.
If the furlough goes for three months, an HAPC is knocked down to 99.17% of its current value (assuming for simplicity a constant salary the last three years). That's a lot less effect that the Chu salary freeze the previous two years. If the furlough goes more than a few months, they'll start the RIF machinery.
No argument we are going to lose some compensation.
Did you ever notice in those letters HAPC the letter P which equals PAID. If you are forced to take a day off every two weeks UNPAID or if they reduce the pay 10% and tell you to take a 3 day weekend every two weeks, the PAID compensation is going to be less either way. Those who suggest let's do a real furlough so the HAPC won't be affected are not getting it. The total they PAY you, not your hourly/monthly pay rate but the actual PAY is what is used int he calculation. If you take leave without pay, your HAPC would take the same type of hit.
The only way to avoid it would be to lay people off. I don't see LLNS doing anything sneaky/sinister as a the primary means of reducing retirement plan value. I see it as Parney explained it, trying to not do layoffs for what may be a short financial pinch while trying to maintain earned vacation/sick leave values. And no, I don't wear rose colored glasses and no, I don't trust LLNS which is why I chose to freeze with UC and go TCP2.
In reply to 10:16PM: Furlough is not going to work for Lab because of issues with exempt employees.Exempt employees cannot check their voicemail or do any ldrd work at home as it is considered working and an exempt employees will be paid for that entire day. There are alot of precedence in this case. So the implementation of furlough will be very difficult to implement.On call emergency issues are very complex.The Lab instituted the Lab holiday to skirt all of these issues.
If the Lab gave the option for using vacation days, am in favor of this, the Lab will not be saving any dollars since Lab is still operational for the day.In addition, what will happen to employees without sufficient vacation days?
" If the Lab gave the option for using vacation days, am in favor of this"
Do you think that when you earn vacation time the money is put into an escrow account in some account separate from the lab's budget? Vacation pay still comes out of the lab's checkbook, which might have a $120 million shortfall. The vacation day in lieu of furlough would have to be paid with a bounced check.
On call is a complex issue. LDRD even more. Remember Parney said it was not business as usual and we should not step up to the plate and heroically use our own time and effort to make things not suffer, if it did not include safety and security issues. Times are tough, batten down the hatches and pull the belt in a notch or two.
The only way to avoid it would be to lay people off. I don't see LLNS doing anything sneaky/sinister as a the primary means of reducing retirement plan value. I see it as Parney explained it, trying to not do layoffs for what may be a short financial pinch while trying to maintain earned vacation/sick leave values.
March 16, 2013 at 12:06 AM
I believe you are correct. Unlike many on this blog, I don't ascribe malevolent or hidden motives to upper management. However, I think the furlough plan is doomed to failure. I see it as a well-meaning but naive and unnecessarily convoluted plan, devised mainly to attempt to reassure employees they will still have a job, and to allow managers to avoid the pain of laying off large numbers, which I assure you no manager wants to do.
Layoffs now, to the minimum extent necessary to correct the budgetary problems, and done with an eye toward preserving capabilities as much as possible, are the only answer, IMO.
"Did you ever notice in those letters HAPC the letter P which equals PAID"
WRONG. Read the pension docs, HAPC = "Highest average plan compensation" and is tied to your "base salary" NOT what you are paid.
Which is exactly the point of many of the posts regarding how this impacts the pension (and negates everything you said in your post after that non-fact).
Correct. HAPC is calculated from the base or "full-time equivalent" salary. It is not calculated from what a person is actually paid. For example, HAPC for a person who works 50% time is computed from the salary they would earn if they worked 100% time. It is their service credit that will accumulate at a reduced rate of 50%.
Yes, a relatively short closure period will cause HAPC to drop by perhaps 1%. For an employee near retirement, this is a decrease in life-long pension income of tens of thousands of dollars. This is not insignificant.
I would respect Laboratory management if they said, "this is going to hurt." Instead, they claim it will have "minimal impact" (their words). This type of response does nothing to help their credibility. Honesty is always the best policy, not meaningless motherhood statements.
I do not believe Laboratory management is specifically malevolent. However, they are administratively incompetent and fiscally irresponsible. This is evident in many ways, one being excessive overhead costs. For whatever reason, the Laboratory cannot cut management. While individuals and/or sponsor-driven projects are often asked to do more with less, management is always immune.
For example, in this era of fiscal turmoil, Global Security is about to raise it's overhead rate from 8.0% to 8.4% (retroactive to the beginning of the year; note the rate was 8.0% for FY12). In fact, there was an overt push within GS over the last six months to "spend, spend, spend" else the institution would not allow the rate increase. Fiscal restraint is never part of the equation. And it's a zero sum game. The burden of this all too common rate increase is being placed directly on the backs of real programs and project PI's. These are the actual individuals who perform the work and interact with sponsors. The funds are being siphoned from funded projects to pay for additional management costs.
This is ironic. PI's are legally required to project accurate costs in proposals and program execution plans. They cannot go back to their sponsors at a later date and demand, "I need more money - give me more money - I deserve more money." Yet this is exactly what is done by management organizations at the Laboratory. Unlike project PI's, organizations such as GS are not required to stick to a set budget. They can and do change rates essentially at will.
The previous poster is free to respond. While it may not apply to most proposals since they are not formal documents, a signed PEP, WFO, ... is a formal commitment/contract to preform work at a stated cost. It would be fraudulent to misrepresent the terms of the agreement.
Cite the specific statute? Give people a break.
The point seemed clear. ULM does not hold itself to the same standards as it holds employees. Overhead rates are changed all the time ... when it is convenient for ULM to do so ... project PIs are the ones forced to deal with it.
Let's be clear: the proposed approach to the "furlough" does not "freeze" your HAPC. It cannot be used repeatedly every 3 years to freeze your HAPC. The documents are quite clear about this.
The furlough, as proposed, can slow the rise of your HAPC. It cannot cause your HAPC to go down, because H stands for "highest".
The furlough can cause your HAPC to rise more slowly, at the level of less than 1%.
Is this 1% "significant"? If you live a long time after retirement, it can add up to a significant amount of dollars. BUT, that would still be LESS THAN 1% of all the pension you receive in the same time.
I am within range of retirement and ran the calculations. I found that worst-case I would need to work 3-4 months longer to build up the service credit & age necessary to offset the <1% loss of HAPC.
I think this is "significant" in the sense that it's something I need to know about and understand. It is not significant in the sense of making a major change in my life or plans.
Excellent: since you don't care, why don't you send a check to me every month of your retirement for this insignificant amount.
Bottom line: they're cheating you out of a benefit you *earned* by doing those previous 3 years of work and earning those raises. It should be illegal.
Also:
1) You're assuming it only happens once. It will happen repeated times. (Congress/Fed Gov fiscal situation will provide many opportunities).
2) You're assuming that you won't get RIFed (say in Sept) before you're able to do the 3-4 months of make up.
3) You're using your personal raise pattern, others have different higher impacts.
No, they're not cheating you out of anything you earned over the past 3 years. That is reflected in your current HAPC, which cannot go down.
They are making it increase more slowly (wile, by the way, paying you less now), and I agree that's defnitely a bad thing in most cases.
But the numbers show that this is not a major impact on your pension income. Many other factors will have larger effect - tax rates, your health, the rate of inflation, local economic conditions, etc. Any of those can easily swing your actual retirement income by a larger amount.
Also:
1) correct. In the calculations, I do assume that it happens only once. Because for me, it probably won't happen more than that. Others who will be here for a long time should still probably worry more about the loss of income real-time than the reduced rate of increase of their HAPC. But I haven't done that calculation.
2)Correct again. If that should happen, I'll take my severance pay, and buy an annuity that will pay more than the <1% reduction in my pension due to the furlough. Still not a problem.
3) Correct again. But I suspect that my personal raise pattern is pretty flat compared to the average of people of my general demographic. Furthermore, after 2 years of no raises, there just isn't that much variation possible. So yes, others may have higher impacts; others may have lower impacts also. Folks should do their own calculation
We're all businesspeople. We work for an employer and in return the employer gives us stuff. If your personal circumstances (and assumptions about how this will go in the future)make this a bad deal for you, then you'd be a bad businessperson to stay.
My bottom line is just that the effect of the furlough on the HAPC, while significant at the 1% level, probably shouldn't rise to the level of a deal-breaker for most folks.
We're all businesspeople. We work for an employer and in return the employer gives us stuff. If your personal circumstances (and assumptions about how this will go in the future)make this a bad deal for you, then you'd be a bad businessperson to stay.
March 18, 2013 at 3:52 PM
You have nailed it succinctly. Your business is your career. If you don't run your career like a business, you are doing yourself, and your family, a major disservice. Unfortunately, most employees have not a clue about business management (budgeting, compensation, continuing education, long-term benefits, insurance, etc.).
3:52, well put! To 7:28, in today's economy people do NOT have the luxury to run their careers like businesses; what they owe to themselves and to their families is to be working. I don't see people leaving in droves so my guess is the grass is not greener elsewhere. Most companies are going through the same financial instabilities. I think people are smart enough to know when to stay and when to pursue other opportunities; they're not as clueless as you indicate.
"3:52, well put! To 7:28, in today's economy people do NOT have the luxury to run their careers like businesses;"
**exactly the opposite of what 3:52 was saying. You DO have to run your career like a business.**
"I don't see people leaving in droves so my guess is the grass is not greener elsewhere."
**Wrong - the reason is simple inertia and cluelessness. If people ran their careers like a business, this would NOT happen. Business people know they cannot afford to stay in a money losing situation. They get out and cut their losses (at least the ones who succeed do). The reason is daily attention to the bottom line. Profit and loss. How often do most national lab employees consider their own "bottom line"?
Business people know they cannot afford to stay in a money losing situation.
Which is why when a corporation declares bankruptcy and restructures, it is good business. When someone with a house/mortgage underwater bails, there are cries of moral shortcomings.
The best part about working at the NNSA labs? Your're free to leave anytime you want. If you don't like the environment, the salary and the benefits then look elsewhere rather than spending your whole pathetic life endlessly complaining about it.
You're paid and treated according to your worth in this modern business climate. Get use to it.
If ULM treats you unfairly, flush your pension down the toilet and quit. If you beileve there is a difference between right and wrong, good business is to make you and your family homeless instead of trying to improve anything.
If you believe that you are being treated unfairly by ULM, you should exercise whatever mechanisms you can to fix that. Assuming that's unsuccessful (probably the usual case)then you have to ask yourself if you can get a better deal with another employer. If yes, go! If not, then say to yourself "I've got the best deal that I can get." Because that's the truth.
There are sure to be many things that you don't like about it (ULM unfairness), but there will also be many things you do like (your salary, your retirement. That's just life in the adult world.
Fuming at ULM probably doesn't help you a lot, beyond venting. Continuing to try to change the system is good too, but you can't assume that the system will actually improve - that's wishfull thinking.
As to the difference between right and wrong - well that depends on your level of conviction, I guess. If you really, really hate the wrongs, and it makes you feel sufficiently bad that you're willing to make your family homeless, well go for it! I admire people who have such convictions.
For me, well, I'm just not that strong, and I tolerate imperfections pretty well. I don't find that the wrongs here get very close to outweighing the rights. But that's an individual judgment.
The point is this: whatever you do (stay or go) you're making a decision. It's based on many factors. Think about it. Own the decision. If you've been making the wrong decision, change it. If you've been making the right decision, congratulate yourself and ask again tomorrow.
But don't waste your time resenting the way it is.
Let's be clear: the proposed approach to the "furlough" does not "freeze" your HAPC. [...] I am within range of retirement and ran the calculations. I found that worst-case I would need to work 3-4 months longer to build up the service credit & age necessary to offset the <1% loss of HAPC.
In a typical "furlough" scenario, the HAPC will be frozen. Specifically, the HAPC will be frozen at the pre-furlough level for approximately twice the time that the furlough lasts (e.g., if a furlough lasts 3 months, the HAPC will be frozen for 6 months). The length of time depends on employee salary history. After this time, the HAPC will rise at the same rate as it would have risen without the furlough, although the "HAPC curve" will be shifted downward. 36 months after the furlough begins, the downward-shifted HAPC will begin to rise at a faster rate. 36 months after the furlough ends, the HAPC will be back to what it would have been without a furlough.
You will need to work longer than 3-4 months to make up for an HAPC that is reduced by 1%. The reason is that you are not receiving pension income during this 3-4 month period. While the actuarial concept is rather subtle, the age factor is almost a wash. Hence, you will need to work about 9-12 months to make up for a 1% drop in HAPC. Said in another way, you will need a higher monthly pension payout to make up for the pension money you did not receive during these additional months you work. Yes, you receive a (presumably higher) salary during this time but this is all but irrelevant for your life-long pension payout.
A typical scenario is that a "furlough," as proposed, will reduce HAPC by 1% relative to what it otherwise would have been. In fact, a furlough beginning today and lasting until the end of the fiscal year will reduce HAPC by about 2% relative to what it would have been. This is for a typical employee who plans to retire 1 year from now. Such an employee will need to work an additional 1-2 years to make up for the lost pension income.
Is 1-2 years of life significant? It is for me and I believe it is for most people.
The "freeze" I was referring to was a supposed 3-year freeze of your HAPC that occurred because employement was not continuous (or something). Others have said that this would cause your HAPC to NEVER change if 1-day furloughs were executed every 36 months. That's not the way it works.
You are quite right that because of the arithmetic of averaging, your HAPC freezes as soon as a furlough starts, and starts moving again about the same time after the furlough ends as the duration of the furlough (it's a bit longer in my particular case).
You're also right that a furlough starting now and extending through the end of the FY makes about a 2% (not 1%) reduction in your HAPC.
But I disagree with your 1-2 years to recover. I bet we're defining recovery in 2 different ways. Here's my version. If a furlough does not happen, I retire in Month A with a pension of X. If a furlough does happen, and I still retire in Month A, my pension is 0.98X. If I work until Month A+4, my pension is back to X.
I think this is the right way to look at it, and it's even a little conservative, because for the additional 4 months I'll be making my salary which is higher than the pension I would have made if I retired.
HAPC again. It is amazing how a single concept, irrelevant to the overall situation, can capture the little tiny focused attention of very intelligent people, who if they had any acquaintance with the real world, would be spending their time looking for a better job. HAPC means absolutely nothing when you are RIFed. Which you are about to be. The point of the "furlough" nonsense was to get your mind off the real situation, and it worked. Now I can't wait to hear all the "Wait! Wait! I thought there was going to be a furlough!" screams. Suckers.
I like how you define your example. Without a furlough, you retire in Month A with a pension of X. With a furlough, you either a) retire in Month A with a pension of 0.99X, or b) work 4 additional months and retire in Month A+4 with a pension of X. (Note: I changed 0.98X to 0.99X because this is closer to what you had in your earlier post.) In Case b, however, you also lose 4 months of pension income. This is the key.
Let's do a back of the envelope calculation. Suppose you live 25 additional years. Ignore inflation, COLA, taxes, and investment returns. Without a furlough, your life-long pension payout is 25*12*X. With a furlough, your life-long pension payout for Case b is 25*12*X' - 4*X'. For the two life-long pension payouts to be equal, the monthly payout in the 2nd case needs to be X' = 1.0135X. To first order, you need to work 5-6 additional months beyond the 4 original months for the monthly pension payout in Case b to be 1.0135X. You need to work a total of 9-10 additional months. This example is for a relative HAPC "drop" of 1%, which is expected for a 3 month furlough. The results double for a 6 month furlough.
A more rigorous calculation (COLA, taxes, investment returns) produces a slightly higher result (i.e., > 9-10 additional working months for a 1% HAPC drop). Of course, the results depend on the specifics of each employee.
The point is that the pension income lost during the extra months of work needs to be considered. This plays a role in many retirement and actuarial calculations, such as whether it is better to take social security at 62 or 70.
Yes, I agree that overall you come out ahead by working the additional months because you continue to have earned income. In this sense even your 4 month calculation is conservative. But this earned income does not explicitly change the life-long pension payout. You need to work 2-3 times longer than your original 4 month estimate for the furlough vs non-furlough scenarios to produce identical life-long pension payouts.
I plotted a HAPC table/chart in EXCEL with the following attributes. * starting with an HAPC = 10000. * Raise of 3% * simultaneous furlough 10% for a monthly salary of $9230 for 6 months. * Salary back to 10300 at the 7th month.
Under these conditions, the 36-month moving average (the HAPC) dips linearly to -1.2% from $10000 to $9880. This is the worst of it.
Beginning in month 7 the 36 month moving average (HAPC) begins to rise linearly from $9880 until the 43nd month (3 years after the end of the furlough) where the impact of the salary reduction disappears from the average. Note that most of the improvement happens two and a half years after the furlough ends as the lowered salaries disappear monthly from the moving average. So what your impact will be depends on how long after the furlough you retired.
This is not quite the whole story. Those in TCP-1 also see their pension increase every month by the year of service credit. For retirees after age sixty this increases 2.5%/12 for each month that you continue, independent of HAPC.
So a furlough does hurt, much like the salary freeze.
7:31, I hope you don't mind if we cut and paste your words to throw back at you later; of course you'll think of some other rant to go on and state more opinions as facts and will never apologize for being wrong. If you're right, kudos to you. If you're wrong, let's see you admit to it. Meanwhile I hope the intelligent conversation that was briefly interrupted by your post continues.
HAPC again. It is amazing how a single concept, irrelevant to the overall situation, can capture the little tiny focused attention of very intelligent people, who if they had any acquaintance with the real world, would be spending their time looking for a better job. HAPC means absolutely nothing when you are RIFed. Which you are about to be.
It is very unlikely that I will be RIF'ed, if there is a RIF. It is very likely that I will retire in the next 0-3 years. I care much more about HAPC than a RIF.
That said, it would be in my best interest to be RIF'ed. I would receive a severance package in addition to my already pending pension (and perhaps unemployment benefits).
HEY SCOOBY !!!! PLEASE CHANGE THE NAME OF THIS THREAD TO "THE TWO PEOPLE IN THE LAB WHO LIVE AND DIE BY HAPC CALCULATIONS WHILE THE REST OF THE LAB GOES BELLY_UP"
I very much appreciate the intelligent mathematical analysis of the impact of the furlough to HAPC.
My thanks to those engaging in it.
I do not appreciate the troll who keeps trying to distract and deflect the discussion. Knock it off. If you want to start a thread called "the lab's going out of business in 6 months" by all means do it, but quit intruding on the furlough impact thread. Thank you.
Thanks March 20, 2013 at 7:50 PM for that explanation. I suspected that you were using a different figure of merit than I.
Yours was to reach equal integrated lifetime pension income by (say) 25 years. That's a reasonable thing to focus on, as it affects how much you'll leav behind for the kids. Breakiong even in this sense could take 10-20 months of extra working time, depending on duration of furlough.
Mine was bit more simple-minded: I want the same monthly income as if the furlough didn't happen. That takes ~4 extra months. And it costs the kids some inheritance, I guess.
Thanks for the discussion. I feel like I have a good understanding of the numbers now.
And thanks also to March 20, 2013 at 7:51 PM. Looks like you're getting the same kind of answers. One very minor comment: the 36 month moving average will go down as soon as the furlough starts, but the HAPC won't - it's stuck at the highest value while the 36 MMA goes down a bit and comes back up.
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.
Calculating the number of angels that can stand on the end of a pin. Priceless!! An excellent use of our country's finest minds! I don't agree with O'Reilly much, but "pinheads" seems to fit well. If only you had a real life, you'd be dangerous.
Calculating the number of angels that can stand on the end of a pin. Priceless!! An excellent use of our country's finest minds! I don't agree with O'Reilly much, but "pinheads" seems to fit well. If only you had a real life, you'd be dangerous.
March 23, 2013 at 9:26 PM"
BDT is back!!! you just cannot resist can you. To you Bitter-Drunken-Troll yeee-haaaa.
Scooby - do we really have to put up with this nonsense? One snark and one insane screamer. Everyone else trying to have a serious conversation. Please exercise your editing power, just a little? Sheesh.
Since the multiple personality person having an HAPC conersation with theirself now has their very own thread, maybe we can get back to the point of this one: "April 12, 2013 furlough starts." does anyone have an update on this?
Since the multiple personality person having an HAPC conersation with theirself now has their very own thread...
March 25, 2013 at 5:16 PM
LOL!! Great post! However, just a mild rebuke from the grammar police (me (sound of sirens)): "himself" would have been much more grammatically correct and way less awkward. Just sayin'.
I took TCP2, so my salary and years service has been frozen for the past 5 years. I will have to work at least 3 years longer to retire with the same pension that I would have received with TCP1. I'm not complaining about my choice, but I'd like to say a 1% cut in pension sounds so trivial to me. Remember - we have pensions, unlike so many in industry.
I just have one question for folks who decided to take TCP1: If your pension is to be paid by LANS/LLNS, and they lose the DOE/NNSA contract at some point after you retire, what happens? The LLCs were created for the sole purpose of running the labs, and and will dissolve as corporate entities after that purpose ends. Do you trust that DOE/NNSA will effectively transfer the pension responsibilities to the new contractor with no detrimental changes?
I took TCP2, so my salary and years service has been frozen for the past 5 years. I will have to work at least 3 years longer to retire with the same pension that I would have received with TCP1. I'm not complaining about my choice, but I'd like to say a 1% cut in pension sounds so trivial to me. Remember - we have pensions, unlike so many in industry.
For many SES employees who will retire in the next three years, a 1-2% cut is equivalent to $25K - $50K in life-time pension payments (in today's dollars). This does not sound trivial to me. This amount can be compared to anything you want. But $25K - $50K is still $25K - $50K. It's a lot.
Yes, it may be necessary. The Laboratory needs to deal with a budget shortfall, perhaps even in "draconian" ways, but the claimed impact on employees shouldn't be discounted or marginalized.
In the time period in which you would not be receiving $25-50k, you will be receiving $2500-5000k.
The difference on the return rate of any 2 random stocks would make much more difference than that. Exercising 10 minutes more per day probably would save you way more than that in health care. Moving out of california would save you 10x that.
And if it bothers you that much, work another 4 months.
Against the backdrop of everything else that will happen to you between retirement and your death, it's just in the noise.
It certainly is nowhere near "Draconian".
I'm with March 25, 2013 at 11:56 PM - We're fortunate that the affect isn't far worse.
Multiple-year furloughs will be a glaring beacon pointing to failed Laboratory management. NNSA will never let it happen. Mandatory layoffs (large ones) are in the future if the funding shortfalls persist. Only be glad that LLNL will get away with a furlough this year. LANL and SNL will suffer big layoffs next year, but LLNL's will be smaller because of the furloughs.
LOL!! Great post! However, just a mild rebuke from the grammar police (me (sound of sirens)): "himself" would have been much more grammatically correct and way less awkward. Just sayin'.
March 25, 2013 at 7:17 PM
Ah yes, but that would be very un- politically-correct. And, even clincally incorrect, because the multiple personalities may have multiple genders!
...multiple personalities may have multiple genders!
March 26, 2013 at 8:30 PM
Yes, but all are covered by the masculine use in unknown circumstances under correct grammar. Clinical results are irrelevant, and unnecessary, and revolting.
repost from HAPC: You are all talking about nits and nonsense. The Lab will reduce your pay X%. It is non-recoverable, will reduce your income for the duration, and subtract from your earnings and pension calculations. The impact on retirement will be there for pension and 401K, however small that impact may be. Your benefits would not change for medical if you lost a day or 2 of work per month, it takes many consecutive days off to affect this beneft. This mumbo jumbo about protecting benefits is 100% BS. This is cut in salary to make Lab management's inability to generate revenue obsure. You pension folks are paying through the nose to make up for a pension that is not sustainable and getting a paycut with this action on top. The 401K folks are taking a salary hit, which may impact your ability to make ends meet. Quite an employer, eh? Moreover, I would bet this kind of reduction in pay requires HQ approvals, just like SIP raises take. The halarious part is management thinks they are actually clever. I am sure the Lab has been advised this is legal, but it is not, without some sort of warning. No legitimate reasons have been given, and no other Lab is doing this. Think about it.
And if it bothers you that much, work another 4 months.
Actually, a furlough lasting 6 months will require one to work closer to 2 years to receive the same life-long pension payout. See posts above. I don't want to work another 2 years.
However, for people so willing to discount the HAPC impact on employees about to retire, consider this. The loss of pension income due to reduced HAPC will be about 10 times larger than the loss of income from the furlough itself. A 6 month furlough will reduce life-long pension income for a typical near-future retire by about $50K. A 6 month furlough will reduce the regular income of that same person by about $6K (assuming a monthly salary of $10K.)
$50K pension reduction vs $6K salary reduction. The salary reduction from the furlough itself is trivial compared to the loss of pension income.
The claim that a loss of $50K is not significant because there is more variability in taxes, stocks, health care, or cost of living are non sequitur. It doesn't matter how much a house costs. $50K is still a lot of money.
Just because 100 miles is farther than 50 miles, doesn't mean that 50 miles is a short distance to walk.
I don't think you folks realize the most important thing about HAPC: you have no control over it. The day you retire, you will be told what your HAPC is, and the number will definately NOT be what you calculated that it should be.
The day you retire, you will be told what your HAPC is, and the number will definately NOT be what you calculated that it should be.
March 27, 2013 at 8:45 PM
Funny, when I retired, my official retirement calculation exactly matched my own calculated HAPC. I guess it depends how much you do your homework, and how much you understand the massive life-change you are about to undertake.
Husband: Honey, I lost $50K of our retirement money when I gambled it away in Las Vegas.
Wife: You did what with our retirement money?
Husband: Dear, it really isn't that much money when you think about the impact over our entire lifetimes.
Wife: What the $#%!?
Husband: Honey, you need to put this in perspective. $50K is a drop in the bucket compared to the cost of our house, the taxes we pay, future health care costs, and long-term variability in our investment portfolio. It's no more significant than when HAPC was impacted by the furloughs at LLNL. It's trivial.
Wife: We had plans for that money, you $%#$(*& *##^&*$!
Husband: Really, dear. $50K is nothing at all. In fact, you can easily get it back by reducing your health care costs. You just need to exercise a little bit more and lose a few of those extra pounds. But I'm not saying you're fat.
Wife: [steam coming out of ears]
Husband: You look gorgeous when those red veins pop out on your neck.
Wife: Get the $%#* out of here before I do something we both will regret.
Husband: Honey, there's no need to get so emotional. Besides, if the $50K means so much to you, you can work an extra 4 months beyond your planned retirement date to make up for it. Problem solved.
I may be mistaken, but I don't think retirement planning is usually done on the basis of "life long pension income". I've attended a number of seminars and read quite a few books on the subject, and I haven't ever seen it done that way.
The way I have seen it done (and thw way I do it) is by monthly (or sometimes yearly) income. Most people approach the problem by asking "how much income will I need per month to support my lifestyle?" I've never heard anybody say "how much income do I need over the rest of my life?"
I do not argue that it's wrong - everyody approaches the problem the way that makes the most sense for them. I am arguing that most people don't do it that way, so the "2-year extra work" is less relevent to most people than the 3-4 months extra work"
Perhaps some of the retirees out there could comment on this.
I agree that monthly or annual income (after taxes) is the figure of merit for a comfortable retirement. The uncertainty of life, especially as one gets older, makes "lifelong income" an almost meaningless concept. I guess the exception would be someone whose main goal is to maximize the amount of money he leaves to his heirs. Also, most people need to consider the potential contributions from Social Security and investments. Everyone talks about how you can live on less money in retirement, but that seems to me (a retiree) to be a foolish notion if you intend to travel, keep active in your lifestyle, etc. Don't forget the cost of assisted living and/or a nursing home in your later years. That can bankrupt you in a hurry if you haven't planned for it. IMO, the goal should be to live at your current level, and still put some money away in retirement. Obviously this will only be possible if you are already putting significant money away while you are working. For what it's worth.
72 comments:
Actually, they would not be days off without pay. They will be paid leave days, but our salary will be at a reduced rate (for all days). Same cash flow impact for individuals and the Lab, but service credits continue to accrue at full rate.
Lots of detailed information under the Ask the Director Q&A in LabBook.
"... but service credits continue to accrue at full rate...."
...while your pension HAPC is getting destroyed. Have you read none of this blog!!!
You might want to stop reading pravda and start educating yourself to the real impact of this "furlough" (not actually a furlough).
"Lots of detailed information under the Ask the Director Q&A in LabBook"
Lots of spin (very carefully worded), misinformation, and sucking up to the director in LabBook.
Do some independent research, compare notes, don't rely on LabBook for heaven's sake.
Actually, they are days off without pay.
What is the funding source and how much money is in the "Paid Leave" account?
Is it just coincidence that you charge 10% of your time to an empty account, and get a 10% reduction in pay?
It is the mechanism employed to cut your pay (leave without pay).
It is in management's best interest to keep things murky and the employees confused as to their legal employment status.
But what are the other option for Lab-holiday and/or furlough without HAPC getting destroyed? I am 55+ yrs old and no way private industry will hire me.I would rather have a furlough than being unemployed.
Other options:
1) Do an *actual* furlough (not this thing they call a furlough but actually costs you 10-11x more than a normal furlough due to pension impact. The way they've specially constructed this makes it a stealth pension freeze).
2) Have an option where people could use vacation for their furlough days.
3) Use the non-base pay mechanism to reduce (instead of increase) wages.
4) etc etc etc
Parney refused to engage and involve the rest of us in coming up with solutions to this...and magically came up with the worst possible solution for us as a whole (TCP1 hit, TCP2 hit, etc) and has been persistently lying about the impact ever since -- calling it "minimal", saying doing it this way was what was best for all the employees. These are blatant lies.
There are clearly better alternatives. If Parney contests that he should publish a list of the alternatives he considered with pros/cons and why he chose the path he did.
LANL management decided last year that the sequester was going to happen and reduced staffing by 1200 workers. As a result, there is no furlough at LANL this year. We have been spending at the sequester level throughout FY2013.
...while your pension HAPC is getting destroyed.
If the furlough goes for three months, an HAPC is knocked down to 99.17% of its current value (assuming for simplicity a constant salary the last three years). That's a lot less effect that the Chu salary freeze the previous two years. If the furlough goes more than a few months, they'll start the RIF machinery.
No argument we are going to lose some compensation.
Did you ever notice in those letters HAPC the letter P which equals PAID. If you are forced to take a day off every two weeks UNPAID or if they reduce the pay 10% and tell you to take a 3 day weekend every two weeks, the PAID compensation is going to be less either way. Those who suggest let's do a real furlough so the HAPC won't be affected are not getting it. The total they PAY you, not your hourly/monthly pay rate but the actual PAY is what is used int he calculation. If you take leave without pay, your HAPC would take the same type of hit.
The only way to avoid it would be to lay people off. I don't see LLNS doing anything sneaky/sinister as a the primary means of reducing retirement plan value. I see it as Parney explained it, trying to not do layoffs for what may be a short financial pinch while trying to maintain earned vacation/sick leave values. And no, I don't wear rose colored glasses and no, I don't trust LLNS which is why I chose to freeze with UC and go TCP2.
In reply to 10:16PM:
Furlough is not going to work for Lab because of issues with exempt employees.Exempt employees cannot check their voicemail or do any ldrd work at home as it is considered working and an exempt employees will be paid for that entire day. There are alot of precedence in this case. So the implementation of furlough will be very difficult to implement.On call emergency issues are very complex.The Lab instituted the Lab holiday to skirt all of these issues.
If the Lab gave the option for using vacation days, am in favor of this, the Lab will not be saving any dollars since Lab is still operational for the day.In addition, what will happen to employees without sufficient vacation days?
"
If the Lab gave the option for using vacation days, am in favor of this"
Do you think that when you earn vacation time the money is put into an escrow account in some account separate from the lab's budget? Vacation pay still comes out of the lab's checkbook, which might have a $120 million shortfall. The vacation day in lieu of furlough would have to be paid with a bounced check.
On call is a complex issue. LDRD even more. Remember Parney said it was not business as usual and we should not step up to the plate and heroically use our own time and effort to make things not suffer, if it did not include safety and security issues. Times are tough, batten down the hatches and pull the belt in a notch or two.
The only way to avoid it would be to lay people off. I don't see LLNS doing anything sneaky/sinister as a the primary means of reducing retirement plan value. I see it as Parney explained it, trying to not do layoffs for what may be a short financial pinch while trying to maintain earned vacation/sick leave values.
March 16, 2013 at 12:06 AM
I believe you are correct. Unlike many on this blog, I don't ascribe malevolent or hidden motives to upper management. However, I think the furlough plan is doomed to failure. I see it as a well-meaning but naive and unnecessarily convoluted plan, devised mainly to attempt to reassure employees they will still have a job, and to allow managers to avoid the pain of laying off large numbers, which I assure you no manager wants to do.
Layoffs now, to the minimum extent necessary to correct the budgetary problems, and done with an eye toward preserving capabilities as much as possible, are the only answer, IMO.
"Did you ever notice in those letters HAPC the letter P which equals PAID"
WRONG. Read the pension docs, HAPC = "Highest average plan compensation" and is tied to your "base salary" NOT what you are paid.
Which is exactly the point of many of the posts regarding how this impacts the pension (and negates everything you said in your post after that non-fact).
Read the pension plan docs!
Correct. HAPC is calculated from the base or "full-time equivalent" salary. It is not calculated from what a person is actually paid. For example, HAPC for a person who works 50% time is computed from the salary they would earn if they worked 100% time. It is their service credit that will accumulate at a reduced rate of 50%.
Yes, a relatively short closure period will cause HAPC to drop by perhaps 1%. For an employee near retirement, this is a decrease in life-long pension income of tens of thousands of dollars. This is not insignificant.
I would respect Laboratory management if they said, "this is going to hurt." Instead, they claim it will have "minimal impact" (their words). This type of response does nothing to help their credibility. Honesty is always the best policy, not meaningless motherhood statements.
I do not believe Laboratory management is specifically malevolent. However, they are administratively incompetent and fiscally irresponsible. This is evident in many ways, one being excessive overhead costs. For whatever reason, the Laboratory cannot cut management. While individuals and/or sponsor-driven projects are often asked to do more with less, management is always immune.
For example, in this era of fiscal turmoil, Global Security is about to raise it's overhead rate from 8.0% to 8.4% (retroactive to the beginning of the year; note the rate was 8.0% for FY12). In fact, there was an overt push within GS over the last six months to "spend, spend, spend" else the institution would not allow the rate increase. Fiscal restraint is never part of the equation. And it's a zero sum game. The burden of this all too common rate increase is being placed directly on the backs of real programs and project PI's. These are the actual individuals who perform the work and interact with sponsors. The funds are being siphoned from funded projects to pay for additional management costs.
This is ironic. PI's are legally required to project accurate costs in proposals and program execution plans. They cannot go back to their sponsors at a later date and demand, "I need more money - give me more money - I deserve more money." Yet this is exactly what is done by management organizations at the Laboratory. Unlike project PI's, organizations such as GS are not required to stick to a set budget. They can and do change rates essentially at will.
Fiscal irresponsibility.
PI's are legally required to project accurate costs in proposals and program execution plans.
March 16, 2013 at 3:29 PM
Nonsense, please cite the US statute.
...
The previous poster is free to respond. While it may not apply to most proposals since they are not formal documents, a signed PEP, WFO, ... is a formal commitment/contract to preform work at a stated cost. It would be fraudulent to misrepresent the terms of the agreement.
Cite the specific statute? Give people a break.
The point seemed clear. ULM does not hold itself to the same standards as it holds employees. Overhead rates are changed all the time ... when it is convenient for ULM to do so ... project PIs are the ones forced to deal with it.
Back to the HAPC discussion...
Let's be clear: the proposed approach to the "furlough" does not "freeze" your HAPC. It cannot be used repeatedly every 3 years to freeze your HAPC. The documents are quite clear about this.
The furlough, as proposed, can slow the rise of your HAPC. It cannot cause your HAPC to go down, because H stands for "highest".
The furlough can cause your HAPC to rise more slowly, at the level of less than 1%.
Is this 1% "significant"? If you live a long time after retirement, it can add up to a significant amount of dollars. BUT, that would still be LESS THAN 1% of all the pension you receive in the same time.
I am within range of retirement and ran the calculations. I found that worst-case I would need to work 3-4 months longer to build up the service credit & age necessary to offset the <1% loss of HAPC.
I think this is "significant" in the sense that it's something I need to know about and understand. It is not significant in the sense of making a major change in my life or plans.
Excellent: since you don't care, why don't you send a check to me every month of your retirement for this insignificant amount.
Bottom line: they're cheating you out of a benefit you *earned* by doing those previous 3 years of work and earning those raises. It should be illegal.
Also:
1) You're assuming it only happens once. It will happen repeated times. (Congress/Fed Gov fiscal situation will provide many opportunities).
2) You're assuming that you won't get RIFed (say in Sept) before you're able to do the 3-4 months of make up.
3) You're using your personal raise pattern, others have different higher impacts.
No, they're not cheating you out of anything you earned over the past 3 years. That is reflected in your current HAPC, which cannot go down.
They are making it increase more slowly (wile, by the way, paying you less now), and I agree that's defnitely a bad thing in most cases.
But the numbers show that this is not a major impact on your pension income. Many other factors will have larger effect - tax rates, your health, the rate of inflation, local economic conditions, etc. Any of those can easily swing your actual retirement income by a larger amount.
Also:
1) correct. In the calculations, I do assume that it happens only once. Because for me, it probably won't happen more than that. Others who will be here for a long time should still probably worry more about the loss of income real-time than the reduced rate of increase of their HAPC. But I haven't done that calculation.
2)Correct again. If that should happen, I'll take my severance pay, and buy an annuity that will pay more than the <1% reduction in my pension due to the furlough. Still not a problem.
3) Correct again. But I suspect that my personal raise pattern is pretty flat compared to the average of people of my general demographic. Furthermore, after 2 years of no raises, there just isn't that much variation possible. So yes, others may have higher impacts; others may have lower impacts also. Folks should do their own calculation
We're all businesspeople. We work for an employer and in return the employer gives us stuff. If your personal circumstances (and assumptions about how this will go in the future)make this a bad deal for you, then you'd be a bad businessperson to stay.
My bottom line is just that the effect of the furlough on the HAPC, while significant at the 1% level, probably shouldn't rise to the level of a deal-breaker for most folks.
We're all businesspeople. We work for an employer and in return the employer gives us stuff. If your personal circumstances (and assumptions about how this will go in the future)make this a bad deal for you, then you'd be a bad businessperson to stay.
March 18, 2013 at 3:52 PM
You have nailed it succinctly. Your business is your career. If you don't run your career like a business, you are doing yourself, and your family, a major disservice. Unfortunately, most employees have not a clue about business management (budgeting, compensation, continuing education, long-term benefits, insurance, etc.).
3:52, well put! To 7:28, in today's economy people do NOT have the luxury to run their careers like businesses; what they owe to themselves and to their families is to be working. I don't see people leaving in droves so my guess is the grass is not greener elsewhere. Most companies are going through the same financial instabilities. I think people are smart enough to know when to stay and when to pursue other opportunities; they're not as clueless as you indicate.
March 18, 2013 at 8:40 PM:
"3:52, well put! To 7:28, in today's economy people do NOT have the luxury to run their careers like businesses;"
**exactly the opposite of what 3:52 was saying. You DO have to run your career like a business.**
"I don't see people leaving in droves so my guess is the grass is not greener elsewhere."
**Wrong - the reason is simple inertia and cluelessness. If people ran their careers like a business, this would NOT happen. Business people know they cannot afford to stay in a money losing situation. They get out and cut their losses (at least the ones who succeed do). The reason is daily attention to the bottom line. Profit and loss. How often do most national lab employees consider their own "bottom line"?
Business people know they cannot afford to stay in a money losing situation.
Which is why when a corporation declares bankruptcy and restructures, it is good business. When someone with a house/mortgage underwater bails, there are cries of moral shortcomings.
The best part about working at the NNSA labs? Your're free to leave anytime you want. If you don't like the environment, the salary and the benefits then look elsewhere rather than spending your whole pathetic life endlessly complaining about it.
You're paid and treated according to your worth in this modern business climate. Get use to it.
You're paid and treated according to your worth in this modern business climate. Get use to it.
March 19, 2013 at 9:17 AM
Well said. Don't blame your immobility on anyone but yourself.
If ULM treats you unfairly, flush your pension down the toilet and quit. If you beileve there is a difference between right and wrong, good business is to make you and your family homeless instead of trying to improve anything.
Well, yes, sort of.
If you believe that you are being treated unfairly by ULM, you should exercise whatever mechanisms you can to fix that. Assuming that's unsuccessful (probably the usual case)then you have to ask yourself if you can get a better deal with another employer. If yes, go! If not, then say to yourself "I've got the best deal that I can get." Because that's the truth.
There are sure to be many things that you don't like about it (ULM unfairness), but there will also be many things you do like (your salary, your retirement. That's just life in the adult world.
Fuming at ULM probably doesn't help you a lot, beyond venting. Continuing to try to change the system is good too, but you can't assume that the system will actually improve - that's wishfull thinking.
As to the difference between right and wrong - well that depends on your level of conviction, I guess. If you really, really hate the wrongs, and it makes you feel sufficiently bad that you're willing to make your family homeless, well go for it! I admire people who have such convictions.
For me, well, I'm just not that strong, and I tolerate imperfections pretty well. I don't find that the wrongs here get very close to outweighing the rights. But that's an individual judgment.
The point is this: whatever you do (stay or go) you're making a decision. It's based on many factors. Think about it. Own the decision. If you've been making the wrong decision, change it. If you've been making the right decision, congratulate yourself and ask again tomorrow.
But don't waste your time resenting the way it is.
Let's be clear: the proposed approach to the "furlough" does not "freeze" your HAPC.
[...]
I am within range of retirement and ran the calculations. I found that worst-case I would need to work 3-4 months longer to build up the service credit & age necessary to offset the <1% loss of HAPC.
In a typical "furlough" scenario, the HAPC will be frozen. Specifically, the HAPC will be frozen at the pre-furlough level for approximately twice the time that the furlough lasts (e.g., if a furlough lasts 3 months, the HAPC will be frozen for 6 months). The length of time depends on employee salary history. After this time, the HAPC will rise at the same rate as it would have risen without the furlough, although the "HAPC curve" will be shifted downward. 36 months after the furlough begins, the downward-shifted HAPC will begin to rise at a faster rate. 36 months after the furlough ends, the HAPC will be back to what it would have been without a furlough.
You will need to work longer than 3-4 months to make up for an HAPC that is reduced by 1%. The reason is that you are not receiving pension income during this 3-4 month period. While the actuarial concept is rather subtle, the age factor is almost a wash. Hence, you will need to work about 9-12 months to make up for a 1% drop in HAPC. Said in another way, you will need a higher monthly pension payout to make up for the pension money you did not receive during these additional months you work. Yes, you receive a (presumably higher) salary during this time but this is all but irrelevant for your life-long pension payout.
A typical scenario is that a "furlough," as proposed, will reduce HAPC by 1% relative to what it otherwise would have been. In fact, a furlough beginning today and lasting until the end of the fiscal year will reduce HAPC by about 2% relative to what it would have been. This is for a typical employee who plans to retire 1 year from now. Such an employee will need to work an additional 1-2 years to make up for the lost pension income.
Is 1-2 years of life significant? It is for me and I believe it is for most people.
I agree with you on almost all points.
The "freeze" I was referring to was a supposed 3-year freeze of your HAPC that occurred because employement was not continuous (or something). Others have said that this would cause your HAPC to NEVER change if 1-day furloughs were executed every 36 months. That's not the way it works.
You are quite right that because of the arithmetic of averaging, your HAPC freezes as soon as a furlough starts, and starts moving again about the same time after the furlough ends as the duration of the furlough (it's a bit longer in my particular case).
You're also right that a furlough starting now and extending through the end of the FY makes about a 2% (not 1%) reduction in your HAPC.
But I disagree with your 1-2 years to recover. I bet we're defining recovery in 2 different ways. Here's my version. If a furlough does not happen, I retire in Month A with a pension of X. If a furlough does happen, and I still retire in Month A, my pension is 0.98X. If I work until Month A+4, my pension is back to X.
I think this is the right way to look at it, and it's even a little conservative, because for the additional 4 months I'll be making my salary which is higher than the pension I would have made if I retired.
How do you get the 1-2 year number?
HAPC again. It is amazing how a single concept, irrelevant to the overall situation, can capture the little tiny focused attention of very intelligent people, who if they had any acquaintance with the real world, would be spending their time looking for a better job. HAPC means absolutely nothing when you are RIFed. Which you are about to be. The point of the "furlough" nonsense was to get your mind off the real situation, and it worked. Now I can't wait to hear all the "Wait! Wait! I thought there was going to be a furlough!" screams. Suckers.
I like how you define your example. Without a furlough, you retire in Month A with a pension of X. With a furlough, you either a) retire in Month A with a pension of 0.99X, or b) work 4 additional months and retire in Month A+4 with a pension of X. (Note: I changed 0.98X to 0.99X because this is closer to what you had in your earlier post.) In Case b, however, you also lose 4 months of pension income. This is the key.
Let's do a back of the envelope calculation. Suppose you live 25 additional years. Ignore inflation, COLA, taxes, and investment returns. Without a furlough, your life-long pension payout is 25*12*X. With a furlough, your life-long pension payout for Case b is 25*12*X' - 4*X'. For the two life-long pension payouts to be equal, the monthly payout in the 2nd case needs to be X' = 1.0135X. To first order, you need to work 5-6 additional months beyond the 4 original months for the monthly pension payout in Case b to be 1.0135X. You need to work a total of 9-10 additional months. This example is for a relative HAPC "drop" of 1%, which is expected for a 3 month furlough. The results double for a 6 month furlough.
A more rigorous calculation (COLA, taxes, investment returns) produces a slightly higher result (i.e., > 9-10 additional working months for a 1% HAPC drop). Of course, the results depend on the specifics of each employee.
The point is that the pension income lost during the extra months of work needs to be considered. This plays a role in many retirement and actuarial calculations, such as whether it is better to take social security at 62 or 70.
Yes, I agree that overall you come out ahead by working the additional months because you continue to have earned income. In this sense even your 4 month calculation is conservative. But this earned income does not explicitly change the life-long pension payout. You need to work 2-3 times longer than your original 4 month estimate for the furlough vs non-furlough scenarios to produce identical life-long pension payouts.
Impact on current TCP-1 beneficiaries.
I plotted a HAPC table/chart in EXCEL with the following attributes.
* starting with an HAPC = 10000. * Raise of 3%
* simultaneous furlough 10%
for a monthly salary of $9230 for 6 months.
* Salary back to 10300 at the 7th month.
Under these conditions, the 36-month moving average (the HAPC) dips linearly to -1.2% from $10000 to $9880. This is the worst of it.
Beginning in month 7 the 36 month moving average (HAPC) begins to rise linearly from $9880 until the 43nd month (3 years after the end of the furlough) where the impact of the salary reduction disappears from the average. Note that most of the improvement happens two and a half years after the furlough ends as the lowered salaries disappear monthly from the moving average. So what your impact will be depends on how long after the furlough you retired.
This is not quite the whole story. Those in TCP-1 also see their pension increase every month by the year of service credit. For retirees after age sixty this increases 2.5%/12 for each month that you continue, independent of HAPC.
So a furlough does hurt, much like the salary freeze.
Thanks Nobel Dr. Chu and consorts.
What do you think?
7:31, I hope you don't mind if we cut and paste your words to throw back at you later; of course you'll think of some other rant to go on and state more opinions as facts and will never apologize for being wrong. If you're right, kudos to you. If you're wrong, let's see you admit to it. Meanwhile I hope the intelligent conversation that was briefly interrupted by your post continues.
HAPC again. It is amazing how a single concept, irrelevant to the overall situation, can capture the little tiny focused attention of very intelligent people, who if they had any acquaintance with the real world, would be spending their time looking for a better job. HAPC means absolutely nothing when you are RIFed. Which you are about to be.
It is very unlikely that I will be RIF'ed, if there is a RIF. It is very likely that I will retire in the next 0-3 years. I care much more about HAPC than a RIF.
That said, it would be in my best interest to be RIF'ed. I would receive a severance package in addition to my already pending pension (and perhaps unemployment benefits).
HEY SCOOBY !!!! PLEASE CHANGE THE NAME OF THIS THREAD TO "THE TWO PEOPLE IN THE LAB WHO LIVE AND DIE BY HAPC CALCULATIONS WHILE THE REST OF THE LAB GOES BELLY_UP"
And as to the troll that says this stuff doesn't matter to her. Well, you are right, dear.
Obviously, the ladies doing the HAPC calculations were most recently employed at NIF doing EOS calculations.
I very much appreciate the intelligent mathematical analysis of the impact of the furlough to HAPC.
My thanks to those engaging in it.
I do not appreciate the troll who keeps trying to distract and deflect the discussion. Knock it off. If you want to start a thread called "the lab's going out of business in 6 months" by all means do it, but quit intruding on the furlough impact thread. Thank you.
VSP would fix all of this. Many want to jump ship if a VSP.
I think we should thank BDT (Bitter Drunken Troll - aka March 20, 2013 at 7:31 PM) for his restraint. He's hardly intruded at all.
Are ya feelin OK, BDT?
Thanks March 20, 2013 at 7:50 PM for that explanation. I suspected that you were using a different figure of merit than I.
Yours was to reach equal integrated lifetime pension income by (say) 25 years. That's a reasonable thing to focus on, as it affects how much you'll leav behind for the kids. Breakiong even in this sense could take 10-20 months of extra working time, depending on duration of furlough.
Mine was bit more simple-minded: I want the same monthly income as if the furlough didn't happen. That takes ~4 extra months. And it costs the kids some inheritance, I guess.
Thanks for the discussion. I feel like I have a good understanding of the numbers now.
And thanks also to March 20, 2013 at 7:51 PM. Looks like you're getting the same kind of answers. One very minor comment: the 36 month moving average will go down as soon as the furlough starts, but the HAPC won't - it's stuck at the highest value while the 36 MMA goes down a bit and comes back up.
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.
Quite right! Thanks for correcting that!
Calculating the number of angels that can stand on the end of a pin. Priceless!! An excellent use of our country's finest minds! I don't agree with O'Reilly much, but "pinheads" seems to fit well. If only you had a real life, you'd be dangerous.
"Anonymous Anonymous said...
Calculating the number of angels that can stand on the end of a pin. Priceless!! An excellent use of our country's finest minds! I don't agree with O'Reilly much, but "pinheads" seems to fit well. If only you had a real life, you'd be dangerous.
March 23, 2013 at 9:26 PM"
BDT is back!!! you just cannot resist can you. To you Bitter-Drunken-Troll yeee-haaaa.
Baiter alert.
Laying off the bottom-end employee alert.
One can only hope.
BDT! BDT! BDT!
Scooby - do we really have to put up with this nonsense? One snark and one insane screamer. Everyone else trying to have a serious conversation. Please exercise your editing power, just a little? Sheesh.
I agree. Scooby, can we just eliminate this guy who constantly comes on and adds nothing to the conversation.
We're trying to have a substantive discussion on many of these threads and he constantly interjects zero content.
I'm all for different points of view in a reasoned discussion, but he seems to get his jollies out of just interjecting non-content.
Since the multiple personality person having an HAPC conersation with theirself now has their very own thread, maybe we can get back to the point of this one: "April 12, 2013 furlough starts." does anyone have an update on this?
Since the multiple personality person having an HAPC conersation with theirself now has their very own thread...
March 25, 2013 at 5:16 PM
LOL!! Great post! However, just a mild rebuke from the grammar police (me (sound of sirens)): "himself" would have been much more grammatically correct and way less awkward. Just sayin'.
I took TCP2, so my salary and years service has been frozen for the past 5 years. I will have to work at least 3 years longer to retire with the same pension that I would have received with TCP1. I'm not complaining about my choice, but I'd like to say a 1% cut in pension sounds so trivial to me. Remember - we have pensions, unlike so many in industry.
I just have one question for folks who decided to take TCP1: If your pension is to be paid by LANS/LLNS, and they lose the DOE/NNSA contract at some point after you retire, what happens? The LLCs were created for the sole purpose of running the labs, and and will dissolve as corporate entities after that purpose ends. Do you trust that DOE/NNSA will effectively transfer the pension responsibilities to the new contractor with no detrimental changes?
I took TCP2, so my salary and years service has been frozen for the past 5 years. I will have to work at least 3 years longer to retire with the same pension that I would have received with TCP1. I'm not complaining about my choice, but I'd like to say a 1% cut in pension sounds so trivial to me. Remember - we have pensions, unlike so many in industry.
For many SES employees who will retire in the next three years, a 1-2% cut is equivalent to $25K - $50K in life-time pension payments (in today's dollars). This does not sound trivial to me. This amount can be compared to anything you want. But $25K - $50K is still $25K - $50K. It's a lot.
Yes, it may be necessary. The Laboratory needs to deal with a budget shortfall, perhaps even in "draconian" ways, but the claimed impact on employees shouldn't be discounted or marginalized.
In the time period in which you would not be receiving $25-50k, you will be receiving $2500-5000k.
The difference on the return rate of any 2 random stocks would make much more difference than that. Exercising 10 minutes more per day probably would save you way more than that in health care. Moving out of california would save you 10x that.
And if it bothers you that much, work another 4 months.
Against the backdrop of everything else that will happen to you between retirement and your death, it's just in the noise.
It certainly is nowhere near "Draconian".
I'm with March 25, 2013 at 11:56 PM - We're fortunate that the affect isn't far worse.
"And if it bothers you that much, work another 4 months."
Make that 3 years + 10-20 months.
...and that's *if* they don't do another furlough down the road (which they likely will...congress will give them many opportunities).
Multiple-year furloughs will be a glaring beacon pointing to failed Laboratory management. NNSA will never let it happen. Mandatory layoffs (large ones) are in the future if the funding shortfalls persist. Only be glad that LLNL will get away with a furlough this year. LANL and SNL will suffer big layoffs next year, but LLNL's will be smaller because of the furloughs.
LOL!! Great post! However, just a mild rebuke from the grammar police (me (sound of sirens)): "himself" would have been much more grammatically correct and way less awkward. Just sayin'.
March 25, 2013 at 7:17 PM
Ah yes, but that would be very un- politically-correct. And, even clincally incorrect, because the multiple personalities may have multiple genders!
...multiple personalities may have multiple genders!
March 26, 2013 at 8:30 PM
Yes, but all are covered by the masculine use in unknown circumstances under correct grammar. Clinical results are irrelevant, and unnecessary, and revolting.
Do the mutiple gender personalities have to have the same HAPC?
repost from HAPC: You are all talking about nits and nonsense. The Lab will reduce your pay X%. It is non-recoverable, will reduce your income for the duration, and subtract from your earnings and pension calculations. The impact on retirement will be there for pension and 401K, however small that impact may be. Your benefits would not change for medical if you lost a day or 2 of work per month, it takes many consecutive days off to affect this beneft. This mumbo jumbo about protecting benefits is 100% BS. This is cut in salary to make Lab management's inability to generate revenue obsure. You pension folks are paying through the nose to make up for a pension that is not sustainable and getting a paycut with this action on top. The 401K folks are taking a salary hit, which may impact your ability to make ends meet. Quite an employer, eh? Moreover, I would bet this kind of reduction in pay requires HQ approvals, just like SIP raises take. The halarious part is management thinks they are actually clever. I am sure the Lab has been advised this is legal, but it is not, without some sort of warning. No legitimate reasons have been given, and no other Lab is doing this. Think about it.
And if it bothers you that much, work another 4 months.
Actually, a furlough lasting 6 months will require one to work closer to 2 years to receive the same life-long pension payout. See posts above. I don't want to work another 2 years.
However, for people so willing to discount the HAPC impact on employees about to retire, consider this. The loss of pension income due to reduced HAPC will be about 10 times larger than the loss of income from the furlough itself. A 6 month furlough will reduce life-long pension income for a typical near-future retire by about $50K. A 6 month furlough will reduce the regular income of that same person by about $6K (assuming a monthly salary of $10K.)
$50K pension reduction vs $6K salary reduction. The salary reduction from the furlough itself is trivial compared to the loss of pension income.
The claim that a loss of $50K is not significant because there is more variability in taxes, stocks, health care, or cost of living are non sequitur. It doesn't matter how much a house costs. $50K is still a lot of money.
Just because 100 miles is farther than 50 miles, doesn't mean that 50 miles is a short distance to walk.
I don't think you folks realize the most important thing about HAPC: you have no control over it. The day you retire, you will be told what your HAPC is, and the number will definately NOT be what you calculated that it should be.
The day you retire, you will be told what your HAPC is, and the number will definately NOT be what you calculated that it should be.
March 27, 2013 at 8:45 PM
Funny, when I retired, my official retirement calculation exactly matched my own calculated HAPC. I guess it depends how much you do your homework, and how much you understand the massive life-change you are about to undertake.
Husband: Honey, I lost $50K of our retirement money when I gambled it away in Las Vegas.
Wife: You did what with our retirement money?
Husband: Dear, it really isn't that much money when you think about the impact over our entire lifetimes.
Wife: What the $#%!?
Husband: Honey, you need to put this in perspective. $50K is a drop in the bucket compared to the cost of our house, the taxes we pay, future health care costs, and long-term variability in our investment portfolio. It's no more significant than when HAPC was impacted by the furloughs at LLNL. It's trivial.
Wife: We had plans for that money, you $%#$(*& *##^&*$!
Husband: Really, dear. $50K is nothing at all. In fact, you can easily get it back by reducing your health care costs. You just need to exercise a little bit more and lose a few of those extra pounds. But I'm not saying you're fat.
Wife: [steam coming out of ears]
Husband: You look gorgeous when those red veins pop out on your neck.
Wife: Get the $%#* out of here before I do something we both will regret.
Husband: Honey, there's no need to get so emotional. Besides, if the $50K means so much to you, you can work an extra 4 months beyond your planned retirement date to make up for it. Problem solved.
Be careful not to get too upset. If you allow stress to shorten your life, that'll also reduce your lifetime pension payout.
If you allow stress to shorten your life, that'll also reduce your lifetime pension payout.
March 28, 2013 at 8:42 AM
Too late for most on this blog. Come to think of it, most in the country these days too.
I may be mistaken, but I don't think retirement planning is usually done on the basis of "life long pension income". I've attended a number of seminars and read quite a few books on the subject, and I haven't ever seen it done that way.
The way I have seen it done (and thw way I do it) is by monthly (or sometimes yearly) income. Most people approach the problem by asking "how much income will I need per month to support my lifestyle?" I've never heard anybody say "how much income do I need over the rest of my life?"
I do not argue that it's wrong - everyody approaches the problem the way that makes the most sense for them. I am arguing that most people don't do it that way, so the "2-year extra work" is less relevent to most people than the 3-4 months extra work"
Perhaps some of the retirees out there could comment on this.
I agree that monthly or annual income (after taxes) is the figure of merit for a comfortable retirement. The uncertainty of life, especially as one gets older, makes "lifelong income" an almost meaningless concept. I guess the exception would be someone whose main goal is to maximize the amount of money he leaves to his heirs. Also, most people need to consider the potential contributions from Social Security and investments. Everyone talks about how you can live on less money in retirement, but that seems to me (a retiree) to be a foolish notion if you intend to travel, keep active in your lifestyle, etc. Don't forget the cost of assisted living and/or a nursing home in your later years. That can bankrupt you in a hurry if you haven't planned for it. IMO, the goal should be to live at your current level, and still put some money away in retirement. Obviously this will only be possible if you are already putting significant money away while you are working. For what it's worth.
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