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This BLOG is for LLNL present and past employees, friends of LLNL and anyone impacted by the privatization of the Lab to express their opinions and expose the waste, wrongdoing and any kind of injustice against employees and taxpayers by LLNS/DOE/NNSA. The opinions stated are personal opinions. Therefore, The BLOG author may or may not agree with them before making the decision to post them. Opinions not conforming to BLOG rules are deleted. Blog author serves as a moderator. For new topics or suggestions, email jlscoob5@gmail.com

Friday, June 23, 2017

LLNL & LANL pensions

Only a matter of time before LLNL and LANL pension plans are sold off to insurance company


http://www.reuters.com/article/us-accenture-pensions-aig-idUSKBN19E19Y?il=0

Consulting and outsourcing services provider Accenture Plc (ACN.N) said on Friday it would transfer $1.6 billion in pension obligations to insurers American International Group Inc (AIG.N) and MassMutual.

The transfer includes about $600 million in lump-sum payments to about 7,000 current and former U.S. employees of Accenture and $1 billion in purchases of annuities from insurance companies.


U.S. insurers are buying corporate pension plans at a record clip as rising interest rates and all-time high stock-market values give companies the perfect excuse to offload them.

Calculating they can make more money from selling companies an annuity to cover the cost of the pension plans and then invest the proceeds in bonds and other securities, insurers are competing to persuade corporate America to sell them their pension risk.

Pension transfers totaling $13.7 billion were finalised last year, up 1 percent from 2015, according to LIMRA, an industry trade group. The figure is the second highest annual total ever recorded, LIMRA said.


The average corporate pension fund was 83 percent funded in May, according to Mercer Investment Consulting

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16 comments:

Anonymous said...

Don't expect anyone to buy the UC Pension system, which has $61B (yes billions) in liabilities. Folks in the UC plan are living in dilution and should really be scared. Also, I wouldn't want to be in a pension system that is being paid through the tuition of students in the UC system.

Anonymous said...

So much ignorance and speculation in so few words. Scooby kill this thread before the zombie merde fest begins.

Anonymous said...

A well funded pension like that at LLNL or LANL makes a very attractive target to insurance companies that offer corporate annuities. It would be foolish not to realize they would love grabbing the lab pensions to skim off some extra profits. This would also start the process of letting the NNSA off the hook if things go south in the markets and the lab pensions become underfunded. Yes, it's speculation but there is good reason to speculate. As the article states, it is already happening with many corporate pensions.

Anonymous said...

The weapon labs "corporatized" by moving to a for-profit management scheme. Almost nobody could envision that happening before 2000 but it did, indeed, happen. Handing the lab pensions over to the big insurance firms would be the next logical step in this process. The change-over in the management contract coming to LANL may be the opportune time for it to happen at Los Alamos. I doubt that past NNSA promises like "substantial equivalent" when be included in the next contract process.

Anonymous said...

Speculative masturbation. Go to church. He will help you with your fear of your life. Unsnowflake yourself.

Anonymous said...

Speculative masturbation. Go to church. He will help you with your fear of your life. Unsnowflake yourself.

June 24, 2017 at 3:06 AM

Up late on another self-loathing bender raging at an unfair world that you think owe you something. By the way thinking the world owes you something is the definition of a snowflake.

The 10:52 and 10:37 posters are indeed speculating however the directions seem reasonable in light of current trends
in corporate America and how things at the lab have turned out. You on the other hand have nothing to offer other than
crude insults. To be honest you seem to have some real issues with your life and are the one that needs help. Seriously consider
getting some help before you post on this blog again.

Anonymous said...

Not relevant to TCP-1s until government wants to close them. Probably won't because no savings would occur, since all folks would join TCP -2 which probably costs a similar amount. Both cost the government about 10% of current salary, which is about the same in all non-startup high tech industries and governments. Both are well funded but the government would need to put up an additional $150 M to pay LANLs TCP-1 to full funding. LLNL is now slightly 3% or $30M overfunded. Unlikely government would play with this tar baby. They did the last transition very poorly by all accounts.

Anonymous said...

June 24, 2017 at 10:43 AM

LLNL's pension is actually 33% overfunded.

The April 2017 Annual Funding Notice to LLNS Defined Benefit Pension Plan members stated - "The [LLNS] Plan's Funding Target Attainment Percentage for the Plan Year [2016] and each of the two preceding plan years is - 144.38% (2014), 141.41% (2015), and 133.43% (2016) - The Plan's funding target attainment percentage decreased to 133.43% due to increasing plan liabilities."

The plan has 2,611 current working employees, 757 retired employees receiving benefits, and 239 ex-employees with the right to future benefits. Total LLNS Pension Plan assets = $2,775,073,754.

Anonymous said...

Yeah, well, your solid numbers will not stop the multitude of ill-informed jerks here from spouting off about doomsday. Just how they roll.

Anonymous said...

The plan has 2,611 current working employees, 757 retired employees receiving benefits, and 239 ex-employees with the right to future benefits. Total LLNS Pension Plan assets = $2,775,073,754.

June 24, 2017 at 12:47 PM


These numbers make no sense, 757 only? That cannot be right.

Anonymous said...

Read the damn literature you are sent.

It clearly says the estimate of future liabilities depends on the estimated discount rate. Duh. It is a simple equation. The current discount rate is so low that the best estimate is 103% funded. That is what a insurance company under ERISA would take to take on the liability. The discount rate that leads to a 33% overfunding will not occur again in the effective lifeime, the centroid of payments, of the liability stream. It is a fig leaf.

103% funded. It is enough, but barely. The government will soon be forced to resume their $40m per year contibution to keep LLNL's TCP-1 plan fully funded.

LANL is less. But I don't get their plan numbers. Probably 85% to 90% fully funded. UCRS snd STRS are 75-80% funded. Less if a realistic discount rate is used.

Anonymous said...

757. Most LASL and LLL retirees reired previously under UCRS.

The TCP-1s are relatively recent closed limited population cadres permanently selected by each employee at the time of the contract changes at both labs. About half of each lab selected TCP-1 and half selected to stay in UCRS And receive a defined payment plan, a nice one, called TCP-2.

SO 3500 At LlNl and perhaps 5000 at LANL is about right. With 20% retired since 2006 -2008 in both places.

Seem plausible.

Anonymous said...

June 25, 2017 at 4:28 AM

I believe that you need to read the LLNS Pension notice.

FAQ 6 - How are Liabilities determined?
"A pension plan's liability is the value of retirement benefits due to current and future retirees. Since most of the benefits will be paid out in future years, the liability is calculated as a present value in today's dollars.

The liabilities will decrease over time as benefits are paid out. However, until benefits are paid, the Plan's liabilities will grow with interest. In addition, the liabilities will increase over time as plan participants earn additional benefits through pay and service increases. Since the Plan is closed to new participants, recently hired LLNS employees earn no benefits under the Plan and have no impact on the Plan's liabilities.

The Plan's liabilities are also sensitive to the interest rates used in calculating a present value in today's dollars. Lower interest rates mean that more money is needed today to satisfy the future benefit payments since that money is expected to grow more slowly. Therefore, the Plan's liabilities increase when these rates fall and decrease when these rates rise."

FAQ 8- How are interest rates used
"The interest rates are mandated by the government through the PPA [Pension Protection Act of 2008]. Prior to 2012, PPA interest rates were based on current interest rates on high-grade corporate bonds. Beginning in 2012, PPA interest rates were changed as part of the Moving Ahead for Progress in the 21st Century Act to be based on the 25-year average of interest rates on high-grade corporate bonds. Interest rates have been at historical lows, so using the 25-year average significantly raises the PPA interest rates. PPA interest rates will decline as long as current interest rates remain significantly below the 25-year average."

Plan Year 2016 funding target attainment:
With adjusted interest rates (25 yr ave) = 133.43%
Without adjusted interest rates (current) = 101.46%

Anonymous said...

You can take all these numbers and throw them in the trash, since they will not matter to retirees in the future. The numbers will matter when some owner of the plan, either LLNS or the next contractor likely, sets a fair market price to sell the plan to an insurance company. Once the buyer has agreed to the price, the deal closes and they now own the plan for the future.

It may not be "fair" but it is happening on a regular frequency all across America. The days of defined benefit retirement plans are long gone and the legacy plans are becoming an unacceptable liability to corporate owners.

Anonymous said...

It may not be "fair" but it is happening on a regular frequency all across America. The days of defined benefit retirement plans are long gone and the legacy plans are becoming an unacceptable liability to corporate owners.

June 25, 2017 at 8:43 AM

It is not only "not fair" it is illegal under Federal Acquisition Regulations. Look it up.

Anonymous said...

Exactly. And if the fund was closed today an insurance company would use cuuent rates to value it. Plus a fee. So there would be no extra funds returned to the NNSA to pay the tab to close LANS TCP-1. The tab would be over $100M. Too much to pay.

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