Additional Disinformation by DOE and Contractors

Al Brooks and Bob Henderson – 11/3/07

The following are items of disinformation issued by DOE or Contractors additional to those discussed by CORRE president, Dave Reichle. The black and blue text is the original Reichle text and the red text is the additions (insertions). Mr. Reichle has been consulted about these comments.

2. Retirees from DOE Contractors in Oak Ridge retire with an equivalent of over 99% of their working salary as retirement income.

-This statement is false. It is based on faulty assumptions, erroneous computations and misrepresented data that maximize income estimates and generate misleading conclusions.

-The DOE comparison used the current Oak Ridge multiplier (1.4) although that multiplier applies only to retirees that retired after July, 2001. All other retirees must utilize a smaller multiplier (1.2).

-DOE included a maximum Social Security benefit as income, based on retirement at age 65. In 2005, 85% of the national workforce that retired did so at age 62. The additional three years increases the benefit by approximately 25%.

-DOE fails to mention the deleterious effects that salary caps and service exclusions have had on the few adjustments that were granted before and after 1984.

-DOE assumed 100% participation in and maximum contribution to a 401(k) plan, beginning with its inception in 1984. 401(k) plans are voluntary. National data indicate that only 70% of the eligible workforce participates in a 401(k) plan and only 23% of the participants max out their contribution in any one year.

- DOE calculates the rank of pension benefits in a manner that violates the rules of mathematics. The specific error is: for a hypothetical retiree (not necessarily typical or average), they add monthly payments to the retiree (sum of pension and social security) and total of the corporation's contributions to any 401k savings plan. The added quantities that have different units ($/mo and $) and that make no sense when added. These erroneous rankings are used: 1) to declare any pension that exceeds 0.95 as "generous" and thus adequate, and 2) to compare the DOE pension plans with the plans of other corporate entities, chosen by DOE. DOE claims that the Oak Ridge rankings are about 10-th in a list of 30. This is true but the ranking is also about average

- A recent Silver Bullet letter at ORNL claimed "that $3,000+ had been paid on his behalf into the company pension fund". This is contrary to the statements that no contributions to the fund have been made since 1984 and thus constitutes misinformation.

- Much of what DOE claims about pension plan rankings suffer from the same gross error. It is egregious to have a major branch of our own federal government actively promulgating such gross errors the total effect of which is to harm the very individuals who devoted so much talent and energy during their careers working on the programs of that same government agency.

-The truth is that, after 35 years of service, a pre-2001 retiree receives a pension equivalent to 42% of his or her largest salary (3 year average).