Here today......gone tomorrow
Read this story and substitute 'TCP-1' for Central States pension plan. All remaining defined benefit retirement programs will quickly be relegated to the history books.
http://www.washingtonpost.com/business/economy/congressional-leaders-hammer-out-deal-to-allow-pension-plans-to-cut-retiree-benefits/2014/12/09/4650d420-7ef6-11e4-9f38-95a187e4c1f7_story.html?hpid=z6
26 comments:
So it is matter of time before TCP-1 is gone.
So it is matter of time before TCP-1 is gone.
A safe statement. Once the last retiree expires, TCP-1 will indeed be wound up.
In the mean time, keep the speculations coming...
Not our pensions! As a retiree you may have earned your pension promise but our Congress had decided to let corporations renege. All done secretly, of course, behind your back:
Congress eyes move to cut pension benefits
CNBC, Dec 10th
The latest assault on private pensions may be coming from the U.S. Congress.
Lawmakers on Wednesday were finalizing a deal to shore up the government's pension insurance fund with provisions that would raise premiums and allow troubled pension plans covering more than one employer to cut retiree benefits.
For everyone on the UC pension "money train" your next. This pension has a unfunded liability of $10B. You next folks!
http://www.dailycal.org/2014/07/06/uc-aims-limit-10-billion-unfunded-pension-liability/
12:52 AM
Since you don't have TCP-1 you may not understand that the article has everything to do with it. The new law applies only to defined benefit plans and that is what TCP-1 is. It also applies only to multiemployer plans and - guess what - TCP-1 became multiemployer on the day of transition. Even though I sit at the same desk and do the same work for 25 years and have been in the exact same retirement plan the entire time, it is now a multiemployer plan. Prior to transition the employer was UC and now it is LLNS.
Far from being "crap" this is among the most important topics that serve LLNL employees and retirees.
December 11, 2014 at 6:20 AM,
LLNS TCP-1 is not a "multiemployer" pension plan in the legal technical sense.
As the article points out multiemployer are very specific unique types of pension plans where an employee belongs to a union and moves around to different employers. Another example would be trade craft workers in "Hollywood" - an electrician or set construction worker may work for several different studios or production companies in a year. The worker belongs to a union that has a contract with the various studios - their pension would be jointly managed by the union and the studios, with the union taking the lead. Otherwise the worker would have to keep track of dozens of different retirement programs as they moved from job to job.
The problem as the article points out, it gives a whole lot of money to the union, and this can lead to corruption and mismanagement of pension funds. This is why the government separates these types of plans from single employer plans.
Lastly, TCP-1 began life as a fully funded "closed" plan. Unlike the plan in the article that is open and continues to add new employees, albeit at a low rate below what is necessary to sustain it for current retirees and future retirees - which is why its in trouble.
Thank you for clearing this up. It is clearly not the same, and it's just another example of a TCP1 hater pouncing on an article to post so that they can feel good about their TCP2 choice without really looking at the facts.
"...It's obvious to anyone with a functioning brain stem that this article has nothing to do with the LLNS TCP-1 and that your attempted inference is false..."
Yes and no. The measure claims to help pensions that are "distressed" or "staggering to insolvency". Yes LLNS TCP1 is a closed system and doing comparatively well (assets to liabilities at the moment) within the complex and compared to UCRP.
However, this measure presents a slippery slope to any pension manager that is clever enough to make a "business need" financial case to reduce or stop employer contributions, require employees to pay even higher percentages of their paychecks to the pension system, or reduce retiree pensions.
Does LLNS have a good track record on employer paid pension contributions so far, or have they presented arguments to avoid or reduce employer paid contributions and increase employee paid contributions?
One or more LLNS pension managers have apparently made successful decisions with the TCP1 pension fund so far independent of employer/employee contributions. Thank You. We should acknowledge this accomplishment, and focus our concerns and complaints with the LLNS pension (employee contributions, etc.) to the appropriate and responsible set of LLNS pension decision makers that are perhaps NOT one in the same...
Classic tactic: Lobbyists chipping away at the legal protections for pensions bit by bit. And they're starting to win. Multiple cities found ways to reduce pensions, congress steadfastly refuses to allow PBGC to raise their rates to cover pension liabilities, etc. Then force this rider into a must-pass budget bill. It's all part of a coordinated strategy and it's being executed well.
Dec 11, 12:17pm:
Yup. Your republican congress at work, bought and paid for by the highest bidder.
And the middle class man in the street gets screwed once again.
Republican and Democrats apparently supported this more or less. I think the issue was these multi-employer pensions risked bankrupting the pension guarantor and would require a huge bail out by the gov, which neither wanted to do. So Repub's and Dem's do as they always do, put it on the back of the public. The public does not pay that lobbying money so they get the shaft.
The current financial snapshot of TCP1 looks good.
However...
The PBGC, the safety net for TCP1 and other pensions across the country, is "underfunded" by ~36 billion and has a 90% chance of insolvency by FY 2025 according to FY 2013 projections.
"...An important reason why this report (FY 2013 projections) is disturbing is because it looks like the population of severely distressed plans has grown..." This was stated by Joshua Gotbaum, PBGC Director (and a supporter of this particular pension plan cut to benefits legislation).
Goggle: PBGC + underfunded + insolvency + projections
The take away here is not to worry excessively about TCP1, but on the other hand, don't think the PBGC is a 100% viable pension insurance when you read the annual TCP1 pension fund statement either.
Actually the take away is not to worry about TCP1 any more than you would about TCP2 (for those who froze with UC).
"...Actually the take away is not to worry about TCP1 any more than you would about TCP2 (for those who froze with UC)..."
Anyone have the current UCRP vs TCP1 asset/liability and projection pension data?
Anyone have the current UCRP vs TCP1 asset/liability and projection pension data?
December 12, 2014 at 10:16 AM
Apples and oranges. TCP1 is a closed, fixed liability pension plan. UCRP gains new members thus new revenue, every day.
UCRP currently has a $10b shortfall, whereas LLNS pension is solidly in the black.
So far so good for TCP1.
PBGC is going broke and congress refuses to let them increase their rates...so PBGC is in a no-win situation. Definitely do not count on PBGC to rescue us.
"...Apples and oranges. TCP1 is a closed, fixed liability pension plan. UCRP gains new members thus new revenue, every day.."
New UCRP members bring in new UCRP revenue + new liabilities + new uncertainties, but this doesn't mean UCRP is a useless reference.
this doesn't mean UCRP is a useless reference.
December 12, 2014 at 11:09 AM
It just means that it is useless to compare UCRP to TCP1 and expect to gain any useful additional information about either.
For both TCP1 and TCP2 it is NNSA we are counting on to rescue us should UCRP or LLNS fail to fund. Talking to people who went with TCP1, I don't know anyone who had planned to count on PBGC, and having PBGC as a backup was not even a consideration in the decision process.
As far as I am aware, there is no current connection between UCRP and either TCP1 or TCP2. Is that not correct?
"...For both TCP1 and TCP2 it is NNSA we are counting on to rescue us should UCRP or LLNS fail to fund. Talking to people who went with TCP1, I don't know anyone who had planned to count on PBGC, and having PBGC as a backup was not even a consideration in the decision process..."
I agree with you. It is however justifiable to acknowledge the current PBGC's ability or inability to insure our pension since its utility is mentioned as comforting boiler plate on LLNS annual pension statements every year. A reliance on the NNSA to backstop our pension? Maybe.
As said earlier, the LLNS pension managers responsible for the relative success of the fund, should be acknowledged and separated from the greater set LLNS managers with the authority to increase employer and employee paid pension contributions.
Think of the LLNS pension manager(s) as your highly trained and accomplished private physician, and LLNS managers with the authority to approve required patient expenditures as the hospital administration and insurance company.
10:15, employees, for the transition, had to choose between freezing with UCRP (TCP2) or rolling everything over to LLNS (TCP1). Those who chose TCP2 also receive employer matching towards their 401K. There is no UCRP connection for employees hired after the transition, and TCP1 has no connection to UCRP. That is my belief anyway.
The connection between the new law and TCP-1 is only that there is now a precedent for reducing benefits. If TCP-1 were to head into troubled water there is now a greater chance that benefits could legally be reduced, congress did it once, so they could do it again. So long as TCP-1 (or 2) remains healthy, all is well. So keep an eye on pension management.
"So keep an eye on pension management."
Good idea...but...we have no window into how are own pension is managed. There is no employee representation, no LLNS disclosure, no open meeting (like when UC pension manager used to come over once a year and give a talk and take questions).
LLNS makes available only the absolute legal bare minimum of information, and does so as late as legally possible.
Our pension is a black box. With tens of millions of it disappearing to un-named consultants.
So, yeah, I'd love to keep an eye our pension. Unfortunately, that is impossible.
Your pension management concerns are valid. If one believes their employer is managing their employee pension fund in a manner other than allowed by the Employee Retirement Income Security Act (ERISA), the DOL should be able to supply the guidelines for such concerns. Asking LLNS to directly address such concerns is not advisable unless your retirement date is very very near.
I told you this in 2013 and you wanted to hang me from a pole. The time is now come. 2015.75 will begin the sovereign debt crisis. And it is begining to look like the Mad Max scenario is unfolding.
POS
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