Actual post from Dec. 15 from one of the streams. This is a real topic. As far as promoting women and minorities even if their qualifications are not as good as the white male scientists, I am all for it. We need diversity at the lab and if that is what it takes, so be it. Quit your whining. Look around the lab, what do you see? White male geezers. How many African Americans do you see at the lab? Virtually none. LLNL is one of the MOST undiverse places you will see. Face it folks, LLNL is an institution of white male privilege and they don't want to give up their privileged positions. California, a state of majority Hispanics has the "crown jewel" LLNL nestled in the middle of it with very FEW Hispanics at all!
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I now yield the floor to one of the usual haters claiming anyone that stuck with TCP-1 is an imbecile and deserves the negative fate sure to await.
LLNS will continue to rewrite employment policy and modify benefits/contributions to its betterment. We have SHRM Leader Art Wong to shepherd us through these future challenges.
Years ago, everybody was worried about how much they had to contribute to their defined benefit plans. It was usually assumed that the plans were inefficient, poorly managed, ripe for curruption, and generally a bad idea (except for UC which was always recognized as an unusually high performer). I think that most people thought they could do better at investing their own pension monies. Plus, DB plans made it hard to consider changing employers (losing years of service).
Basically, DB plans were defeated in the marketplace by the basic idea of "give me my retirement money, and I'll manage it."
As usual, the grass wasn't quite as green as expected, but people do now have direct responsibility for their retirement, the funds are portable, and it's pretty easy to compare the value of different 401(k) offerings. What's not to like?
In our case, UC was a great fund manager, so we managed to get the benefits without contributing to them for a long time. That was pretty nice. But funds weren't designed to make the benficiaries rich, rather to give them back what was promised.
Also, I have to say that I probably would not have started saving nearly as early or continued to save so regularly if I had been required to manage it myself. So that was pretty helpful. But my lack of discipline is really my problem.
So what's so wrong with today's standard approach? It seems like just what we all asking for 20 years ago.
"TCP1 folks should be situationally aware of our pension fund management to include fund contribution sleight of hand."
1) The sleight of hand already happened when LLNL used one pension calculation to justify forcing employees to pay in and then used an entirely different calculation (via MAP21 change lobbyist got put in) to justify LLNL NOT paying their portion -- in direct contradiction of the slides LLNL management had presented the employees.
2) It's pretty much impossible to be situationally aware of our pension fund management...when we have no visibility into how our pension is being managed, what it's current state is, decisions being made, etc.
2. 2nd thought, the liabilities grow about 5% per year.
3. So both should be about 10% better funded than last year.
4. This is above and beyond the $20M that the employees of each lab contributed due to significant salary reductions.
5. NNSA did not contribute the matching $20M to LLNLs TCP1 in spite of an agreement to do so.
6. I believe it did make a significant contribution to LANLs TCP1 which is about 20% less well funded, due to the happenstance of being established one year before LLNLs, when the market was less favorable.
7. I believe NNSA also contributed to UC again to keep those who froze in UCRS at an agreed on funding level.
So LANL TCP1 should be over 90% funded, LLNL TCP1 about 110% funded and the Lab portions of UCRS about 100% funded as of the end of 2013.
This summary is from memory. Freely correct the errors.
We'll see if either Bret or Charlie attempt to present the info in the months to come in such a clear way to you, the stakeholders.
It is a poor substitute for 4 reasons, he outlined.
1. Not all members contribute to their retirement.
2. Some Members do not take sufficient risk to earn adequate returns.
3. Some Members take out their contributions before retirment.
4. Some members take a lump-sum cash out at retirement, with devastating tax consequences.
Traditional professionally managed DB plans avoid all of these pitfalls, no matter what the contribution level. Their real weakness was that some DB managers did not contribute fully as liabilities were incurred, rather committing future earnings, a situation in many states and municipalities today, something UC managers did not allow DOE to do. So TCP1 at both labs is nearly fully funded.
Frontline continued that Ohio ran a social experiment from the 70s allowing state employees to get the same contribution in a DB or DC program. It stopped the DC 401(k) like program after many years because a sad significant fraction of retirees in those programs were doing poorly because they mismanaged their pensions, even though adequate funding was provided by the state. This couldn't happen in the DB program that was separate and professionally managed.
Interesting stuff. Much to ponder soberly.
This low (I assert) value makes the PV of the liability stream high, an unlikely outcome over the 40 - 60 year life of TCP1.
If this speculation turns out to be true, the funding situation of both TCP1 will improve.
This is not true with STRS, PERS or UCRS that use a 7.25% discount factor. A much less conservative model.
In short, I assert, it is unlikely that LLNL TCP1 members need to contribute to their plan, and that their contributions will be returned to the goverment when the plan is closed as the last member dies.
This is differant than California STRS, UCRS and PERS retirees, whose plans are funded much differantly and which are managed much less conservatively.
Parney didn't tell you this did he, when he said you needed to contribute like UCRS.
I STRONGLY CONCUR with this.
This is what I was STRONGLY CONCURRING with.
It is unlikely Parney even today knows who the most capable lab employees in this matter are. Bret probably does based on his savvy and long history here, but he is an interegnum caretaker.
It is imperative that new Director's are selected from within the labs. There is not time for them to learn who is capable and who is a charlatan.
Outside managers are not cognizant of lab-specific details, nor selecting staff adequate to the task. Nor are they aware of the complex interplay of demands that need to be satisfied for continued success.
So, to be equivalent we should be contributing roughly half of what they contribute.
...not to mention the fact that the LLNL pension is in far better fiscal shape than UCRS.
Another example of not having the right person and horsepower in the right place.
It is likely savvy candidates will review this un-editted mountpeice. This is your chance to influence the future.
First point. Ignore selection committee member Bodman. He is evil. Follow Mara's lead.
What could be done to move in that direction? Does this require a lawsuit, or just a polite request to Brett?
http://www.nirsonline.org/storage/nirs/documents/Retirement%20Savings%20Crisis/retirementsavingscrisis_final.pdf
The Retirement Savings Crisis: Is It Worse Than We Think? (June 2013) uses the Federal Reserve’s Survey of Consumer Finances to analyze retirement plan participation, savings, and overall assets of all U.S. households. The research finds retirement savings are dangerously low.
Of note - "Most people do not have a clear idea of how much they need to save to have enough income—including Social Security—to maintain their standard of living in retirement. For instance, a $200,000 retirement account balance may seem high, but is less than half of the minimum amount that a couple with $60,000 in combined annual income will need, according to conservative estimates. The financial services provider Fidelity Investments recommends a minimum of 8 times income in retirement savings for retirement at age 67... Aon Hewitt, a large human resources consulting firm, estimates that 11 times salary is needed in retirement assets in order to retire at age 65. Both models include a target replacement rate of 85 percent of pre-retirement income. Significantly, given the current median Social Security claiming age of approximately 62, high long-term unemployment among older adults, and large disparities in life expectancy and health status by income, delaying retirement until age 67 may not be realistic for a significant share of workers"
Here's a very interesting report
http://www.nirsonline.org/storage/nirs/documents/Retirement%20Savings%20Crisis/retirementsavingscrisis_final.pdf
The Retirement Savings Crisis: Is It Worse Than We Think? (June 2013) uses the Federal Reserve’s Survey of Consumer Finances to analyze retirement plan participation, savings, and overall assets of all U.S. households. The research finds retirement savings are dangerously low.
Of note - "Most people do not have a clear idea of how much they need to save to have enough income—including Social Security—to maintain their standard of living in retirement. For instance, a $200,000 retirement account balance may seem high, but is less than half of the minimum amount that a couple with $60,000 in combined annual income will need, according to conservative estimates. The financial services provider Fidelity Investments recommends a minimum of 8 times income in retirement savings for retirement at age 67... Aon Hewitt, a large human resources consulting firm, estimates that 11 times salary is needed in retirement assets in order to retire at age 65. Both models include a target replacement rate of 85 percent of pre-retirement income. Significantly, given the current median Social Security claiming age of approximately 62, high long-term unemployment among older adults, and large disparities in life expectancy and health status by income, delaying retirement until age 67 may not be realistic for a significant share of workers"
January 9, 2014 at 6:05 AM
January 9, 2014 at 6:05 AM
I have passed it along to as many as I can especially my son and I have asked all of them to do the same.
POS
POS
I thought that the standard retirement withdrawl rule was 4% of assets annually, so one can withdraw about $8000 annually from a $200,000 retirement savings account. That's a lot less than $60,000.
Also, I find it interesting that the LLNL TCP1 pension plan is doing at least as well as the UC pension plan. I repeatedly heard the claim that TCP1 was at a severe disadvantage because UC could count on fresh blood from younger workers joining the plan, but apparently that's an oversimplification. It seems that all that matters is the ratio of assets versus liabilities, and there is no reason that a properly managed "closed" pension plan like TCP1 can't perform as well as an "open" one.
January 13, 2014 at 8:39 AM
You are entirely correct. It is a matter of actuarial science. Don't pay any attention to POS; he just wants to be part of the "blood and property" solution he keeps predicting and even advocating.
January 13, 2014 at 8:39 AM
Once you hit 59 1/2 there is no limit to how much you can withdraw annually from your 401k retirement account.
The 4% rule applied to how long the savings might last. From the NYTimes last year...
"ONE thing most retirees want to avoid is outliving their money. Since the mid-1990s many of them have relied on a staple of retirement planning known as the 4 percent rule to avoid that. Although the name says 4 percent, the rule is that if retirees withdraw 4.5 percent of their savings every year, adjusted for inflation, their nest egg should last 30 years, the length of time generally used for retirement planning.
That percentage was calculated at a time when portfolios were earning about 8 percent. Not so anymore. Today portfolios generally earn much less, about 3.5 percent to 4 percent, and stocks are high-priced, which is linked historically to below-average future performance. Many financial advisers are rejecting the 4 percent rule as out of touch with present realities.
The rule was created in 1993 by Bill Bengen, owner of Bengen Financial Services in San Diego, who examined every 30-year retirement period since 1926, reconstructing market conditions and inflation. He identified 1969 as the worst year for retirees because a combination of low returns and high inflation had eroded the value of savings. Using that as his worst case, Mr. Bengen tested different withdrawal percentages to see which one would allow savings to last 30 years. At first 4 percent worked, he says, based on a portfolio with a 60/40 split between large-cap stocks and intermediate-term government bonds. After research, Mr. Bengen decided to add small-cap stocks to the mix and revised his recommendation to 4.5 percent. The 4 percent name, however, stuck."
http://www.nytimes.com/2013/05/15/business/retirementspecial/the-4-rule-for-retirement-withdrawals-may-be-outdated.html