In NewsOnline today:
On Tuesday (April 1), the University of California transferred assets valued at more than $1.6 billion (valued as of Sept. 30, 2007) from the University of California Retirement Plan (UCRP) to the LLNS Defined Benefit Pension Plan. The transferred assets cover just more than $1 billion of associated liabilities. These are the pension assets and liabilities for the benefits of LLNL employees who chose TCP1.
With this transfer, the LLNS plan will be the best funded pension plan in the DOE Complex with a funded ratio of 166 percent. “We do not expect to need to make plan contributions for a number of years, and with reasonable investment returns, contributions may not be required for decades,” said Paul Rosenketter, chairman of the LLNS Benefit & Investment Committee. “The LLNS Benefits and Investment Committee has selected a number of highly regarded managers to invest these assets in a diverse set of equity and fixed income investment vehicles to cover future pension benefit payments.”
The UCRP pension assets and liabilities for retirees and for LLNL employees who chose TCP2 remain with UCRP. Those pension benefit payments will be paid directly by UCRP.
The DOE/NNSA contract required that the LLNL segment assets remaining with UCRP be sufficient to cover 100 percent of the associated liabilities for the retained benefits (as of Sept. 30, 2007). In addition, DOE/NNSA is required to reimburse UC for contributions made on behalf of the LLNL segment of UCRP when then segment liabilities exceed assets.
Because of the negative performance of the various financial markets since the start of the LLNS contract, UC and DOE/NNSA recognized that contributions for the LLNL segment of UCRP will be required next year. As a result of the anticipated contributions, DOE/NNSA determined UC should hold back additional assets of $140 million as a “Contribution Reserve Amount” to pay the anticipated UCRP contributions. This amount would be sufficient to cover payments for approximately three years. If the $140 million were not held back, DOE/NNSA would have required LLNS to make the UCRP contributions from the Laboratory’s operating funds, which would have severely impacted Lab programs and required even deeper reductions in Lab staffing.
Regardless of whether pension benefits will be paid by the LLNS plan or UCRP, Frank Russo, principal associate director of Operations and Business, reminded employees that both plans are “safe, secure and well funded.” DOE/NNSA is contractually obligated to make contributions to UCRP for any future funding shortfalls in the LLNL segment and, by federal law and contract, must continue to ensure the financial integrity of the LLNS plan.
On Tuesday (April 1), the University of California transferred assets valued at more than $1.6 billion (valued as of Sept. 30, 2007) from the University of California Retirement Plan (UCRP) to the LLNS Defined Benefit Pension Plan. The transferred assets cover just more than $1 billion of associated liabilities. These are the pension assets and liabilities for the benefits of LLNL employees who chose TCP1.
With this transfer, the LLNS plan will be the best funded pension plan in the DOE Complex with a funded ratio of 166 percent. “We do not expect to need to make plan contributions for a number of years, and with reasonable investment returns, contributions may not be required for decades,” said Paul Rosenketter, chairman of the LLNS Benefit & Investment Committee. “The LLNS Benefits and Investment Committee has selected a number of highly regarded managers to invest these assets in a diverse set of equity and fixed income investment vehicles to cover future pension benefit payments.”
The UCRP pension assets and liabilities for retirees and for LLNL employees who chose TCP2 remain with UCRP. Those pension benefit payments will be paid directly by UCRP.
The DOE/NNSA contract required that the LLNL segment assets remaining with UCRP be sufficient to cover 100 percent of the associated liabilities for the retained benefits (as of Sept. 30, 2007). In addition, DOE/NNSA is required to reimburse UC for contributions made on behalf of the LLNL segment of UCRP when then segment liabilities exceed assets.
Because of the negative performance of the various financial markets since the start of the LLNS contract, UC and DOE/NNSA recognized that contributions for the LLNL segment of UCRP will be required next year. As a result of the anticipated contributions, DOE/NNSA determined UC should hold back additional assets of $140 million as a “Contribution Reserve Amount” to pay the anticipated UCRP contributions. This amount would be sufficient to cover payments for approximately three years. If the $140 million were not held back, DOE/NNSA would have required LLNS to make the UCRP contributions from the Laboratory’s operating funds, which would have severely impacted Lab programs and required even deeper reductions in Lab staffing.
Regardless of whether pension benefits will be paid by the LLNS plan or UCRP, Frank Russo, principal associate director of Operations and Business, reminded employees that both plans are “safe, secure and well funded.” DOE/NNSA is contractually obligated to make contributions to UCRP for any future funding shortfalls in the LLNL segment and, by federal law and contract, must continue to ensure the financial integrity of the LLNS plan.
Comments
A few more years of record foreclosures, $4-$7 dollar a gallon for gas and I can't see much stock market growth to come. As a matter of a fact at those gas prices I can't see how people are going to be able to afford to go to work. Can you imagine a $500 - $700 bill for gas a month just to get to work and back. I sure as heck can.
Anyway good luck with your pension programs and those 401K's the government tells you must save in, to make your own nest egg while they limit what you can put away a year to $20,500. Well again, good luck.
But when the TCP1/TCP2 split happened, there was suddenly a lot of employees who stopped accruing service years. Because the UC/DOE agreement says that any amount left over (less the $70M retained for TCP2 which got increased to $140M) would be transferred to LLNS (the relevant documents are on the UC site), LLNS suddenly got 600M more than needed to fund 100%.
TCP2 has only $140M as reserve, but TCP1 got $600M.
Percentage-wise TCP2 got about a 2% buffer whereas TCP2 got a 60% buffer.
Makes me glad that I took TCP1.
I think you dreamweaver TCP-1 pukes need to read the letter a little closer instead of reading the first few lines and getting all happy, happy, and think you have th bull by the horns.
"Because of the negative performance of the various financial markets since the start of the LLNS contract, UC and DOE/NNSA recognized that contributions for the LLNL segment of UCRP will be required next year. As a result of the anticipated contributions, DOE/NNSA determined UC should hold back additional assets of $140 million as a “Contribution Reserve Amount” to pay the anticipated UCRP contributions. This amount would be sufficient to cover payments for approximately three years. If the $140 million were not held back, DOE/NNSA would have required LLNS to make the UCRP contributions from the Laboratory’s operating funds, which would have severely impacted Lab programs and required even deeper reductions in Lab staffing.
Regardless of whether pension benefits will be paid by the LLNS plan or UCRP, Frank Russo, principal associate director of Operations and Business, reminded employees that both plans are “safe, secure and well funded.” DOE/NNSA is contractually obligated to make contributions to UCRP for any future funding shortfalls in the LLNL segment and, by federal law and contract, must continue to ensure the financial integrity of the LLNS plan.
Sure glad I took TCP-2 and lock it into UCRP.
Envy showing through your smile Bluto?
A few facts
1. TCP-1 population is closed and fixed.
2. It is probably 50% overfunded today, even in a down market.(the 66% valuation was at the market high on Sep 30, 2007. It is down about 14% since then)
3. The valuations and liabilities are made by very conservative ERISA assumptions.
4. The funds can't be used for any other purpose than the designated beneficiaries.
5. The fund managers would have to be horrible or dishonest to mismanage this endowment margin enough to affect its beneficiaries.
TCP-1 folks appear to be in pretty good shape.
I wish for TCP-1 to go PBGC very soon.
"The fund managers would have to be horrible or dishonest to mismanage this endowment margin enough to affect its beneficiaries"
No problem here, that's how it was with ENRON and they got away with it. That's the way it was with Countywide and they got awya with it. What makes you think your funds with LLNS is any more protected. It's a "for profit" company and profit could mean making sure they win and you lose. I have zero trust in these people now and will never trust them. They are no better than any other employer. What a world we have made for the children, hah. As far as I am concerned anyone who has children today is a fool and has done nothing but brought them into a world of hell. The average NON SPOON fed child will be just a slave to us and abuse with no pot of gold at the end of the rainbow. They will simply work until death. Wondeful hah?
You need to reread what was posted. It is TCP2 that required retaining $140M because of the market. TCP1 got $600M for a lot fewer number of people. Those who planned the transfer in B111 had to take TCP1 in order to eat their own pie. They made darn sure that TCP1 will be OK.
Complainers like you have unfairly attacked Parsky -- he is still a Regent and over TCP2. How do you know that UC will be better than the investment firm that manages TCP1 ? In either case, TCP1 and TCP2 should both be fine. Sound pension management is the norm in the US. Those horror stories about pension shortcomings have not been caused by poor pension management but because companies raided the pension plans or governmental entities promised too much to unions.
Isn't this the clown that caused UCRP to take a dump the last go around with his Enron investments? The most unfortunate thing about there being no pension plan equal to UC is the future for all generation hereafter is gloomy and there's no longer actually retirement for at mass majority. Most won't realize this until their to old and by that time it'll be to late. I can see where criminal activity of all sorts will be on the rise,drug use to cope should go up dramatically as well as the suicide rate and elderly euthanasia. I guess that's one way to keep people off the state subsistence programs and not have to pay for medical care. What a system we have in place. I guess if one were to think about it hard and visit the streets in some poor areas of our cities you'd get a picture of your future and what a lack of substance income in your older years will bring. The homeless that roam our streets are a fine example of what is to come for the masses. You people who get TCP-1 or TCP-2 are the last generation to experience a life after employment.
Hey blogmeister, what's with the "TCP-1 puke" post being allowed in? Do you only allow name-calling posts that agree with your opinion?
He cost the University BILLIONS. Don't think you're in good hands with the hired guns at the helm.
I considered the word "pukes" not an expletive and let the comment in.
If that offended you, you must be extremely sensitive.
Allowng that comment in has nothing to do with me agreeing with it. I am in the middle; I just screen comments according to the rules of the BLOG; I dont have to agree with them. If I did, There will be about 2/3 less comments in this BLOG. Have a good weekend!
Close examination shows that the pension plan did better than if it held the former holdings.
The main reason for the shortfall in the pension is that UC does not want to be too overfunded or else the state legislature will take money away to meet their budget shortfalls. That's why UC used CAP to transfer money form the pension plan to direct ownership by the employees.
The reason for UC pension plan bitting the dust was Parsky's poor investements and nothing else. He invested in ENRON and it fail. BTW: Parsky couldn't hold a candle to the lady that was there before he took over her job. She'd still walk the dog on his butt any day of the week and twice on sunday.
During the next three years you should expect 2500-3000 employees to bite the dust.