The Pension Plan Box Score

This page is presented keeping in mind the old adage: Those who cannot learn from history are doomed to repeat it. -- George Santayana

The following table combined with the Pension Time Line and remarks by DOE and Contractor administrators may provide some insight on how the pension problem for older retires arose. The table, Pension Plan Box Score, shows, in columns 1 and 2, the start of each contractor's tenure and the remainder of the table shows the ad hoc adjustments that were given under each contractor starting 1975, the first year of SSA automatic COLAs. Footnotes comment on the true origin of the adjustments; the presence of RREs (Recent Retirement Exclusions) and the presence of CAPs (Caps). The presence of CAPs penalizes higher pension retirees and RREs penalize the most recent retirees immediately canceling their temporary advantages.

Pension Plan Box Score

Since Automatic SSA COLAs Introduced in 1975

Team [a]/Inning	Year[1]	1969	1973	1975	1977	1980	1987	1991	2001
Union Carbide	1948	4%	5%[b]	4-7%	8-12%	1-12%
Martin Marietta	1984						2-12% [2]	3-18% [3]
Lockheed Martin	1995
UT Battelle Y12 BWXT	2000								4-23% [4] 4-23% [4]
RRE(mo)[5]				24	18	2	66	36	36
CAP($)[6]		c:25	c:25					C:15,000	C:40,000

[a] There were minor name changes for these operating contractors during their tenure;
Source: http://www.ornl.gov/info/history/contractors.shtml

[b] Different sources give 4 or 5% for 1973

[1] Year: Row=Adjustment year; Column=Year contractor started

[2] This adjustment was prompted by UCC after leaving ORR; implemented with a very severe RRE=66.

[3] Implemented with a very severe pension CAP = $15,000 and severe RRE=36.

[4] Proposed by CORRE; Implemented with a CAP = $40,000 and a severe RRE=36

[5] RRE = Recent Retiree Exclusion (months),

[6] CAP - c:Cap on adjustment, C:cap on pension)

The Consumer Price Index increased by a factor of about 3.5 during this period, far more than the compounded adjustments granted.

Looking at the above Pension Box Score table, the Pension Time Line, the Pension Inflation Analyses and some of the DOE/Contractor statements, it is easy to conclude that Union Carbide, although they were opposed to automatic COLAs, understood the need for periodic ad hoc adjustments (4 in 11 years) to compensate for inflation and was committed to giving them. (I assume they felt that long term, automatic COLAs represented an undesirable loss of management control.). It seems equally clear that the more recent contractors did not understand the Union Carbide model or the failed, for whatever reason, to recommend equitable treatment for older retirees and higher level pensioners. The abrupt changes in 1984: a) the replacement of Union Carbide, b) the initiation of a performance award fee contract, c) the cessation of additions to the trust fund, d) the negative attitude of administrators toward older retirees and e) the pronounced reduction in the frequency of adjustments, can not be all coincidence. Ad hoc adjustments which are scaled to make appropriate corrections based on years-retired will no longer do so if arbitrary CAPs and RREs are later applied.

This explanation seems to be as good as any other making the rounds. The author is open to any comment and any more evidence, pro or con. This would not be the only instance in which Carbide has out shown their successors.

Regardless of the validity of the above rational for pension adjustments, one thing is certain: The current attitude of DOE and the contract administrators is accurately expressed, in both word and deed, as for the current employees and current retirees and against the older retirees at the higher pension levels. This policy seems shortsighted for two reasons: a) the government is seen as being decidedly unfair by some of its citizens, b) it is unfair to the surrounding economic community which experiences a short fall in disposable income and 3) DOE can always use knowledgeable spokespersons on their side of public interest debates. The statement, "I worked for a DOE contractor and they don't give a damn for people", is not the best possible endorsement of nuclear energy or for recruiting new employees either.