Comments on the DOE Informational Meeting – June 22, 2006

DRAFT 2        Bob Henderson & Al Brooks – 7/25/06        DRAFT 2

 

This critique comprises the reformatted contents of the DOE presentation slides each accompanied by critical comments on the slides or external DOE information related to the slide contents. The comments on a slide are roughly in the order of the slide's bulleted items. Some of the comments are adapted from earlier critiques which may be referenced by Internet link after a brief summary. These earlier comments can be found on:

 

http://home.comcast.net/~brooks50/PensionPlanInformer.htm  (look in Informer Index).

 

This critique focuses on the Oak Ridge pension problems but we readily the other sites have a similar problem and invite them to share concerns.

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Slide 1

 

DEPARTMENT OF ENERGY

CONTRACTOR PENSION AND

MEDICAL BENEFITS POLICY

 

June 22, 2006

 

 

Comments:

1) This meeting was a result of a request by CORRE to Congressmen Zach Wamp and a subsequent request and pressure applied to DOE by Mr. Wamp. The meeting had been preceded by several meetings between CORRE and local DOE or Contractor administrators and several exchanges of correspondence.

2) The original purpose of the meeting was to discuss the retirees concerns for the apparent reduction in ad hoc pension adjustments since 1984 when Union Carbide left and the resulting need for current adjustments

3) The discussion directly with the DOE Headquarters staff was deemed necessary due to the repeated statements that the responsibility for pension decisions had been transferred from local DOE staff and Contract administrators to Headquarters making it impossible for local administrators to answer retiree's questions. This was apparent in the meeting.

4) The presenter was Ms. Ingrid Kolb, Director, of the DOE/HQ Office of Management Dave Reichle, president of CORRE, gave the CORE response.

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Slide 2: AGENDA

 

= Provide current status of DOE Notice 351.1, Contractor Employee Pension and Medical Benefits Policy

 

= Provide overview of key features of the Policy

 

= Open forum – feedback on contractor employee pension and medical policy

Comments:

1) The original topic of concern: the impact of inflation on the pension plan and lack of adequate COLAs seems to have been minimized in the agenda.

2) The timing of DOE N 351.1 seems to be a coincidence and this topic and the topic of the medical benefits policy was added by DOE as well as a review of the DOE-wide pension problems.

3) A discussion of N 351.1 and DOE's larger problems tends to divert attention form the Oak Ridge problems which precede the current suggested changes dating back to 1984 when Union Carbide left. Regardless of the final action taken on the subjects of N 351.1, the Oak Ridge pension pland will NOT have required COLAs and its retirees will be at the mercy of the DOE administrators who have for 22 years initiated only one ad hoc adjustment and have indicate a strong preference for not doing so in the future. DO NOT BE DIVERTED FROM OUR REAL PROBLEM.

3) The open forum did allow the retirees to voice their concerns and questions but there was little constructive discussion or interchange. The lack of DOE credibility was apparent.

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Slide 3: POLICY IMPLEMENTATION

= DOE Notice 351.1, Contractor Employee and Medical Benefits Policy, issued on April 27, 2006.

= Implementation not later than July 26, 2006 for medical benefits and March 1, 2007 for pension benefits.

= On June 19, 2006, the Secretary of Energy suspended the Notice for one year.

= Provides opportunity to obtain views of stakeholders, including Members of Congress.

Comments:

1) The description of DOE N351.1 was useful and instructive but was quite adverse to the main retiree concern: the lack of adequate ad hoc adjustments. In fact, N351.1, by denying reimbursement to the contractors for any expense incurred for any future or potential improvement to a current defined benefits pension plan, rang the death knell on any such plan which did not already contain a contractual provision for periodic adjustments, including the Oak Ridge Plans.

2) The replacement of defined benefit pension plans by defined contribution (401k) plans is a relatively new topic for Oak Ridge retirees and has not been locally debated. However, it is known that the concept is controversial and NOT recommended by several subject experts. The full debate of this topic as well as the changes to medical benefits is beyond the scope of this critique.

3) The suspension of N351.1, as requested by Sen. Peter Domenici (R-NM), for one year will be a welcome move if the time is used to seriously obtain the retirees' views. This meeting did not do so; it, like the agenda and slides indicate told the retirees what the future would be and then asked for and largely ignored their concerns. It was not apparent that the concerns were even being captured for future consideration.

4) The members of representatives of the members of congress and candidates were quite vocal in their support of the retirees and, I believe got their eyes opened. The Tennessee Senators were not present or represented.

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Slide 4: BACKGROUND

DOE reimburses the allowable costs of Contractor pension programs and other post-retirement benefits (PRBs), including medical benefits, through 46 M&O and other site operating contracts:

Major Plan Distribution

= 3 Defined Benefit Plans

= 23 Defined Benefit Plans supplemented by Defined Contribution Plans

= 7 Defined Contribution Plans

> 100 Medical Benefit Plans

Personnel Covered

= 100,000 Active Employees

= 57,000 Retirees

= 46,000 (approx) Retiree

   Beneficiaries/Dependents

 

Comments

1) While this slide shows the complexity of the DOE Contractor retirement systems, it does not show the wide variability in their nature, status or provisions. It is in the comparison of these details that the Oak Ridge is found to be wanting in several aspects.

2) The details behind this slide are not made avail to the retirees.

3) The slide did little but to convince the public that DOE has created a problem and is sacrificing the Oak Ridge retiree to solve it..

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Slide 5: FINANCIAL IMPACT OF CONTRACTOR DEFINED BENEFIT PENSION AND PRB PLANS

= DOE contributions to Contractor defined benefit and medical plans:

= FY 2006 Projection --$784M

= Increase since FY 2000 – 198 percent

= DOE contributions to Contractor defined contribution plans:

= FY 2006 --$219M

= Total FY 2006 contributions are just over $1 Billion which equals 1 out of every 23 dollars spent by the Department

= Accrued Unfunded Liability (represents current financial exposure as indicated on DOE’s financial statement)

= FY 2005 --$11.6B

= Increase since FY 2000 – 63 percent

 

Comments:

1) This slide also supported the contention that DOE administers several benefit plans and experiences increasing costs (along with all other employers)

2) These claims are undoubtedly true but merging the costs of Pension Plans and medical plans covers up the individual costs and hides the primary cause of the problems: inflating medical costs. DOE ignored the retirees' comments.

3) While DOE undoubtedly made large contributions to defined contribution plans and trust funds, they have not made a contribution since 1984 to the Oak Ridge Pension Trust Fund. Rather they are reducing the benefits at every opportunity to prevent such additions.

4) One out of twenty three billion sounds big but what does it mean when realistically compared to the costs of other agencies and businesses. Less than 5% really sounds rather small for a major expense. How do we really compare with others?

5) An unfunded balance of $11.6 billion may sound large but it includes both pensions and medical liabilities and is MOSTLY medical. Pensions are not the big growing cost problem. The important fact for Oak Ridge is that we are over funded. Why should Oak Ridge retirees be punished for poor administration of the other sites? They'll really be sticking it to the people who live a long time. The golden years will have more of a copper hue if pennies are still here.

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Slide 6: DEPARTMENT OF ENERGY BUDGET ($ Billions)

Enacted FY 2000-2006

** Requested FY 2007

* Forecast FY 2008-2011

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

18.0

20.0

21.5

22.4

23.5

24.6

23.5

23.5**

23.5*

23.8*

24.1*

24.6*

Comments:

1) This slide (originally a graph) shows the DOE total budget from 2001 to 2011 (* projected). It does show a flat budget from 2004 to 2011 but Oak Ridge the pension problem started back in 1984. The data really have very little to do with the Oak Ridge pension problems. It expresses only what DOE asked for or congress was willing to provide and has nothing to do with the current Oak Ridge retirees' problems and DOE's decision to let them twist in the wind. Did DOE even ask for the necessary funds and explain to congress why inflation happens in Oak Ridge, too.

2) Further some of this data is in the proposal stage: Why doesn't DOE propose enough to pay a decent pension to Oak Ridge retirees?

3) In a government agency, the criteria should not be a rising or fixed budget but : Is the agency fully meeting its responsibilities? Are the activities being carried out efficiently and in a timely manner? And, does the agencys policies lead to a stable and reasonable future?

 

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Slide 7: POLICY OBJECTIVES

= Ensure fairness to incumbent contractor employees and retirees.

= Improve stewardship of taxpayer dollars by:

= Limiting expected cost growth associated with benefit liabilities.

= Moderating the volatility and improving the predictability of the Department’s cost reimbursement obligations.

= Ensuring that costs for contractor employee pension and medical benefits are more consistent with market trends.

= Providing direction on the treatment of contractor post-retirement benefits at closure sites.

Comments

1) Someplace there is a new definition of fair which I failed to learn. I don't believe that anyone can convince me that cutting a retiree's buying power by a factor of five over thirty years is fair. Certainly not someone who will get an automatic COLA every year.

2) The Oak Ridge pension plan trust fund is over funded to the legal limit. It costs them nothing. The only way they can limit cost growth is to fund some other activity with it.

3) The policy changes will certainly reduce the volatility if DOE's obligations by transferring them to the individual who must then depend on the investment market. I remember 1929.

4) Predictability! God, that the retirees' economic future should be sacrificed because DOE can't predict the future of the economic system. When a government starts sacrificing its citizens due to its incompetence, then we are all doomed.

5) "Market trends" is meaningless to a congressional funded agency and is a euphemism for "Pass all the risk and responsibility to the individual". This just passes the increase in cost to someone else; it does nothing to control medical costs and the cost of living.

6) The directions for the retirees seem to be: Turn right at retirement and go to the poorhouse. I can't believe that this is my government doing this to me.

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Slide 8: PENSION BENEFIT POLICY

Incumbent Employees

= Continue to reimburse Contractors for allowable costs associated with existing pension benefit plans for incumbent contractor employees.

= Reimburse the costs for Contractors to provide a one-time option for participating incumbent contractor employees to transfer to a new market-based plan.

= Continue to reimburse Contractors for allowable costs associated with pension benefits provided under collective bargaining agreements.

New Employees

= Reimburse Contractors for the allowable costs of pension plans that are consistent with current market trends (defined contribution plans) for new contractor employees.

= Consider as an unallowable cost, the participation of a new employee in an existing defined benefit plan by a date certain to be negotiated with Contractors, but no later than March 1, 2007.

Applicable to Incumbent and New Employees

= Disallow Contractor requested pension plan benefit augmentations which may increase liabilities, including subsidized early retirement benefits and lump sum pension distributions, unless required by law or approved by the Secretary.

Comments

1) DOE by not defining what these costs are and exactly who benefits from them, continually sweeps the Oak Ridge pension problem under the rug: The retires, new or old, have no right to an ad hoc COLA unless it is specified in a negotiated contract. One must read the N351.1, the DOE Orders 350.1 and any applicable contracts (collective bargaining agreements) to fully understand the import of the N 351.1 policy changes. One must also be aware of what these documents do not say: they do not establish the right to any cost of living adjustments for salaried employees.

2) Market based again means a 401k type, defined contribution plan, passing the risk and responsibility to the individual. This is the administration's plan for social security and other pensions which the Congress has rejected.

3) This reimbursement policy accomplishes by indirection that which DOE avoids to direct – but this is the death knell of the classical pension.

4) "Disallowing Contractor requested pension plan benefit augmentations" is another euphemism for '"no more adjustments or improvements of any kind." DOE N 351.1 is rather definitive on this point and if anyone believes that the Secretary will be generous on this point, I have a bridge up in Brooklyn for sale cheap.

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Slide 9: MEDICAL BENEFIT POLICY

Incumbent employees

= Continue to reimburse allowable costs for existing Contractor medical benefit plans as required in specific contract terms and conditions.

= Continue to reimburse Contractors for allowable costs associated with medical benefits provided under collective bargaining agreements.

New Employees

= Limit cost reimbursement to market-based medical benefit plans or participation in non-market based medical plans if new enrollees share the costs so that the benefits are market-based.

= Determine as unallowable the costs associated with new enrollees in existing non-market-based contractor medical plans unless the new enrollees share in the costs so the benefits are market-based.

Applicable to Incumbent and New Employees

= Disallow Contractor requested benefit augmentations to existing plans unless required by law or approved by the Secretary.

Comments:

1) I can't find anyone with an enforceable contract except the various unions collective bargaining agreements. Just because Carbide gave ad hoc adjustments didn't establish a contractual relationship.

2) Market based again means a 401k type, defined contribution plan, passing the risk and responsibility to the individual.

3) Again, "disallowing" is a not too subtle way of directing the contractors not to do something. Several members of congress have said DOE is starting to micromanage their contractors.

4) This slide makes it pretty clear that new employees have no choice; it's market-based or nothing.

5) The last bullet makes it pretty clear that you go along with the DOE way or you'll have a tough time of it.

 

 

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Slide 10: PENSION AND MEDICAL BENEFITS POLICY FOR CLOSURE SITES

= When feasible, budget annually to reduce pension plan under-funding at an accelerated rate prior to closure.

= When feasible, settle pension liability with Contractor at or near closure.

= Where appropriated funds are not available for settlement at closure, Contractor remains sponsor, but, with DOE approval, may transfer to a corporate relative pending settlement or otherwise continue plan administration and management in accordance with contract terms.

= Continue to reimburse the Contractor until the obligation can be settled.

= Analyze feasible alternatives to provide long-term Contractor medical benefit coverage.

Comments:

1) Oak Ridge is not a closure site and presumably this slide does not apply but there is still an under tone of DOE reducing its liabilities and the volatility of its commitments.

2) One way to reduce liabilities is to reduce them to zero.

3) It looks as though medical costs are definitely on the chopping block also.

 

 

 

 

 

 

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Slide 11: POLICY IMPACT

Federal Government and the Department of Energy

= Ensures fairness to incumbent contractor employees and retirees.

= Improves stewardship of taxpayer dollars.

Department of Energy Affected Contractors

= Supports efforts to recruit and retain a highly qualified workforce.

= No impact on existing collective bargaining agreements.

Incumbent Contractor Employees

= Provides continuity in pension and medical benefits pursuant to existing policy as implemented in specific contract terms and conditions.

= Provides a one-time option to transfer to a pension plan that offers portability.

New Contractor Employees

= Provides competitive pension and medical benefits.

= Provides pension portability.

Comments:

1) When DOE reduces its liability and avoids the volatility of future costs some one else must take over the job. Certainly the Contractor can't be expected to do it unless they are reimbursed; and that seems unlikely. Therefore it must fall to the individual who had better successfully saved the money and made good investments or do without the medical care or go on welfare. All three will probably happen.

2) I heartily approve of "taxpayer dollar" stewardship though I'm not sure if I like my pension cut so the rich men can have tax cuts. Somebody needs to explain stewardship (and equity) to Washington, DC.

3) It nice to know that DOE will conform to contract law but many retirees don't have a contract. I hope DOE will also comport with human decency.

4) This one time option may be transfer to a plan that is unproven and may be a blooper.

5) Competitive to what: Other plans with decreasing benefits.

6) Hopefully. There's something to port.

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Slide 12: OAK RIDGE CONTRACTOR DEFINED BENEFIT PENSION PLANS

Current:

= Bechtel Jacobs Company LLC: Bechtel Jacobs Company LLC Pension Plan for Grandfathered Employees

= BWXT-Y12, LLC/UT-Battelle, LLC: Retirement Program Plan for Employees of Certain Employers at the US DOE Facilities at Oak Ridge, Tennessee

= Wackenhut Services, Inc. -Oak Ridge: The Wackenhut Services, Inc. Pension Plan for Employees at Oak Ridge, Tennessee

Comments:

1) While it is valuable to know that there are new participants in the plan, it is not clear that it is all one plan with equal benefits for all.

2) The slides raise several questions about the plans actual structure: a) Is there one plan or five plans and one trust fund? b) How does a single plan deal with collective bargaining agreements for the union workers and none for the non-union workers? c) Did the newcomers bring trust funding or not? d) Where are the K-25 retirees and who represents them? d) How do the advisory committees function and how many are there?

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Slide 13: OAK RIDGE CONTRACTOR MULTIPLE EMPLOYER PENSION PLANS

= Contractors are the employers and sponsors of all of the pension plans.

= DOE is contractually obligated to reimburse the Contractor for allowable costs subject to appropriations.

= One of the three Contractor Plans is currently fully funded based on ERISA requirements without DOE contributions.

= All three of the Contractor Plans are able to meet existing promises to pay beneficiaries.

Comments

1) Here are answers to some of but not all of the previous questions and they raise even more questions.

2) If contractors are employers and sponsors, why have the responsibility and initiative been transferred to Headquarters and local suggestions for plan improvements been effectively prohibited by "non-reimbursable" proclamations?

3) How can any contractor risk committing any plan to any future obligation if reimbursement is dependent on future congressional appropriation? It would seem that DOE is avoiding all future commitments unless they issue contracts to ALL employees.

4) Does the whole federal pension system rest on such a flimsy and whimsical basis such that DOE can without consulting change it? I think NOT.

5) It seems there are three contractor plans (one fully funded) and all of which can meet existing promises (even if not fully funded and dependent on the DOE budget requests and the further vagaries of congress.). What does "funded" and "under-funded" really mean?

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Slide 14: HOW OAK RIDGE MULTIPLE EMPLOYER PENSION PLANS RANK – 2004

= Hourly Employees*

= ORNL - Retirement benefits rank 10th out of 31 DOE Contractor pension plans with 99.9% salary retained upon retirement

= Y-12 – Retirement benefits rank 9th out of 31 DOE Contractor pension plans with 100% salary retained upon retirement

= Bechtel Jacobs --Retirement benefits rank 11th out of 31 DOE Contractor pension plans with 99.2% salary retained upon retirement

= Salaried Employees*

= ORNL - Retirement benefits rank 11th out of 28 DOE Contractor pension plans with 93.4% salary retained upon retirement

= Y-12 – Retirement benefits rank 9th out of 28 DOE Contractor pension plans with 93.5% salary retained upon retirement

= Bechtel Jacobs – Retirement benefits rank 8th out of 28 DOE Contractor pension plans with 94.4% salary retained upon retirement

= Federal Employees**

= By comparison, the average retirement benefit for Federal employees covered by the Civil Service Retirement System is 66% of their final salary.

*Assumes retirement at age 65 years of age with 35 years of service, social security benefits and maximum employer contributions to defined contribution plans.

**Based on retirement after 35 years of service at age 65. Federal employees do not earn Social Security credits for CSRS-covered employment.

Comments

1) This slide contains the crux of the pension plan problems. It is based on ill-defined computations which DOE uses to qualify the pension plan as "generous" and also to manage the pension plans. Similar computations are contained as charts in correspondence from DOE headquarters and in the BenVal report.

2) The DOE casual descriptions of the computation vary with the source of the description. In addition, DOE chooses the comparison list and some valid comparisons are not permitted. To-date, DOE has refused to reveal the details of the computations which in itself should disqualify them as acceptable measures of pension plan performance.

3) Even more unfortunate is that from the sketchy description given, the computations contain: a) a fundamental error in algebra, b) an error in the pension plan model, c) assumptions so far from reality as to be gross errors, and d) differences of opinion as to the model for and the descriptor of the pension. The most grievous failure of the model may be that the computation is made solely at the time of retirement and it cannot possibly reflect the performance of the pension benefit with passing time and inflation.

4) The computations involve the addition of the monthly pension payment (see assumptions): a monthly social security payment and the "maximum employer contributions to defined contribution plans". This is a suspect operation, How can a defined benefit savings program be included in the pension benefit and also be claimed as a outstanding benefit by itself? You shouldn't count it twice.

5) The fundamental error in algebra is the addition of monthly salaries to a lump sum of money. The units are different, $/month and $, making it an illegal algebraic operation and the result has no rational meaning. If this error is one of improper description then the question of how the lump sum is annualized remains unanswered.

6) The error in the pension plan model is that the computation is made immediately after retirement and can not possibly show the behavior of the pension after 30 years of inflation, about an 80% reduction in buying power.

7) The first assumption so far from reality as to be a gross error is the assumption of 100 % participation in the defined benefits plan when the empirical studies show that the figure is close to 6%. A second one is that everyone works until age 65; the SSA says it's only 38%. A third error is that the multiplier is 1.4 % where for most retirees the multiplier is 1.2 %. Errors of this magnitude invalidate models.

8) The differences of opinion as to the model for and the descriptor of the pension comprise: a) the validity of including the defined compensation program in a pension benefit, b) the validity of dividing the pension benefit by the terminal wages removing any evidence of low salaries and hence low pensions, and c) describing a pension plan which lies close to the average as "generous".

9) It is the intent of DOE to have the above BenVal ratios lie in the range of 95-105%. Currently, the following ratios are known: Oak Ridge = 107.7, Sandia = 118, Los Alamo=122. Perhaps having a multiplier factor twice what Oak Ridge has does give you some slight advantage.

9) The Federal Employees Retirement System clearly states that the Social Security Benefits the Basic Benefit Plan and the Thrift Savings Plan are a part of the pension system and must be considered jointly. This has not been true of the Oak Ridge Savings plan. It is not clear how this slide treats the federal pension systems but neither the FERS or the Civil Service Retirement system seem to be well fitted by this model. However they do have periodic COLAs.

10) The failure of DOE to obtain and use a computational model reasonably acceptable to the retirees is a point of distrust to the retirees. It would have been so simple to have given an accurate description of what was done. It is openness that prevents major errors. It is also distressing that the conclusions of this slide are used to inform legislators that the pension benefits are "generous'" and it is never clear if the legislatures have the opposing critique of the claims.

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Slide 15: REQUESTS FROM OAK RIDGE RETIREES*

= Ad Hoc increase in pension benefits for all retirees that will restore at least 75% of the loss in value of pensions due to cost of living increases

= Contractors’ estimated long-term liability --$95.4M

= Flat-rate reduction factor of 2 percent for retirees who have chosen the surviving spouse option

= Contractors’ estimated long-term liability --$51.3M

*Source: CORRE’s 2006 Position Paper: A Statement of Proposed Changes in Pension Benefits for 2006

Comments

1) This slide accurately portrays the CORRE requests as far as it goes. It avoids discussing the reason for the flat-rate reduction (current equity) and makes no mention that DOE has made no payments to the pension fund since 1984.

2) It does not reveal what the net cost to DOE will be after the existing fund surplus is committed to these improvements.

3) Nor does it discuss why NOT making new payments to the trust fund is to be avoided at any cost (to the retirees).

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Slide 16: RETIREE BENEFIT INCREASES

Date

Description

1969

1973

1975

1977

1980

1987

1992

2001

2004

Retiree ad hoc increase

Retiree ad hoc increase

Retiree ad hoc increase

Retiree ad hoc increase

Retiree ad hoc increase

Retiree ad hoc increase

Retiree ad hoc increase

Retiree ad hoc increase

$600/400 Minimum

Comments:

1) This is a very revealing slide, in what it doesn't say.

2) The last adjustment was proposed by CORRE and affected very few retirees although it was badly needed by them.

3) The other adjustments were severely limited by caps and recent retiree exclusions; many retirees did not receive an increase. Unstated caps and recent retiree exclusions can result in retirees completely missing out on several of what appear to be reasonable ad hoc adjustments.

4) The increases did NOT keep up with the cost of living and this slide completely avoids any quantitative discussion of its impacts or lack of them.

5) Union Carbide left in 1984 and initiated all increases through 1987. CORRE initiated the increase in 2001.

6) Only one ad hoc increase was initiated by a contractor since Carbide left. This new policy of N351.1 will preclude any increases of any kind for the current retirees and vested employees who are in the current plan.

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Slide 17: CHALLENGES AND CONCERNS

= Increased pressure on appropriations and budget.

= DOE’s FY 2006 budget is $23.6 Billion and is expected to remain relatively flat through FY 2011.

= Spiraling costs mean less money to achieve DOE’s mission (e.g., environmental cleanup at former nuclear weapons sites and advanced scientific research).

= Plan assets may not be sufficient to cover cost of proposed ad hoc increase resulting in greater liabilities and possible plan contributions.

Comments:

1) The cost of doing business in the entire world has risen steadily during the last sixty years. Why implement Draconian practices affecting a minority group of old employees who can do little to avoid their disaster?

2) Budgets are flat either because DOE didn't ask for more funds or congress did not approve more. In either case, it is a conscious decision not to support a decent pension for the retirees.

3) One of DOE's missions by stated policy is to supply funds for a decent pension for retirees. This includes explaining the problem to congress and requesting adequate funds. This is not accomplished by fallacious computations and the use of overly flattering adjectives to describe the pension plans.

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Overall Comments

1)     There is absolutely nothing in the slides to establish there is equity among the pension plans at the several DOE sites.

2)     The DOE arguments for the high quality of the Oak Ridge pension benefits are both specious and fallacious and they do not support the glowing reports on the Oak Ridge pensions.

3)     Throughout the slides there is an objective to NOT make any new payments to the Oak Ridge pension fund which has a surplus and to sacrifice the affected retirees in order to do so.

4)     The undercurrent that DOE should adopt "market-based" or "market competitive" benefit plans totally avoids a discussion that DOE is not a market-based enterprise subject to market pressures but is rather a government agency funded by congress. Profit and loss are not legitimate factors in the competitive market sense. Granted some corporations are seeking to shed their pension obligations but they are also facing bankruptcy, i.e., are financial failures. Are we to believe that our government is also a financial failure? Even when the administration assures us the economy is strong?

5)     The slides give no indication that the moves toward defined contribution pension plans are closely related to the administration's intention to likewise change social security, industrial pensions and medical benefits. This DOE action is being watched with great interest by the political, corporate and labor union world. We are a small frog in a big pond. Frogs get ahead by kicking!!

6)     The slides raise questions about the trust fund: Exactly what are its terms? A trust is usually thought of a collection of assets supplied by a grantor, held and managed by a trustee for a specified benefit to a specified grantee or beneficiary. Federal laws and rules also control pension trusts. The questions are: Who is the trustee? How do new groups of retirees leave or join the beneficiaries? Some at Paducah feel they did not get their fair share when they left. Is it reasonable to assume that DOE could expect to find it necessary to add funds occasionally? Were the attempted 420 transfers combined with no adjustments to compensate for inflation an act of bad faith and a violation of the intent of the trust? Why are the several trust funds not managed with greater uniformity?

7)     Again, it seems disingenuous that the slides purport to give the retirees concerns before they were expressed as well as give the conclusions prior to receiving any suggestions. It looks like snake oil to the commenter.

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