WE ARE NOT ALONE. The DOE
Pension Plan Policies are under Fire In Washington, DC
This web posting contains two statements by members of the
Congress in the battle over traditional pensions. The statements are directed to
Secretary Bodman of the Department of Energy and to
the new DOE policy negating the values of time honored pension systems
including those of the
Note: These events need no comment but comments will
surely follow. AAB
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From: http://www.energy.gov/news/3555.htm
DOE
Announces New Policy for Contractor Benefit Reimbursements
WASHINGTON , DC The Department of Energy (DOE)
today announced new policy measures for the reimbursement of contractor pension
and medical benefit plan costs that are based on sound business practices and
market-based benchmarks for cost management. The Department will continue to
reimburse contractors for costs for current and retired contractor employee'
defined benefit pension plans and medical benefit plans under existing contract
requirements. For new contractor employees, the
Department will reimburse contractors for the costs of their market-based
defined contribution pension plans (similar to 401(k)) and market-based medical
benefit plans. The new policy will improve the
predictability of contractor benefit costs and mitigate the growth of the
Department's long term liabilities for these costs.
"We are committed to balancing the Department's responsibility to manage
resources in a cost effective way with the needs of our contractor community to
recruit and retain a highly qualified workforce," Secretary Bodman said. "The new
policy recognizes the contributions of current and retired contractor employees
and, at the same time, ensure that future costs for pension and medical
benefits are more consistent with market trends."
In a letter to management and operating (M&O) and site management
contractors, the Secretary outlined the new policy, which requires contractor
pension plans and medical benefit plans for new employees to meet two
market-based performance benchmarks commonly used by the private sector. This will ensure that pension plan and medical
benefit plan costs to DOE are competitive and consistent with market trends. A contractor's pension and medical benefit plans
meet the market-based benchmarks when the value and cost of each of its plans
does not exceed benchmarks by more than 5 percent.
The new policy provides for reimbursement of contractor costs to provide a
one-time option to employees currently in defined benefit pension plans who may
wish to transfer to a new market-based defined contribution plan. The new policy will be implemented through a
Departmental Notice in accordance with the each contractor's specific contract. The Notice establishes a timetable for
implementing its requirements in affected contracts, but requires that full
implementation be accomplished not later than
The new policy also establishes a number of more rigorous internal management
improvements to ensure that the Department prudently and effectively plans for,
administers, and carries out its obligations related
to contractor pension and medical benefits, including treatment of post-closure
benefit administration for closure site contracts.
For more information on the Department's new policy measures, please visit http://directives.doe.gov/pdfs/doe/doetext/neword/351/n3511.pdf.
Media contact(s):
Megan Barnett, (202) 586-4940
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STATEMENT OF SENATOR EDWARD M. KENNEDY ON
DEPARTMENT OF ENERGY POLICY DIRECTIVE TO REDUCE
PENSION AND HEALTHCARE BENEFITS
This policy to undermine secure pensions and
healthcare for Department of Energy contract workers is an outrage. The federal
government should be a champion for a secure retirement and quality healthcare
for all workers, instead of leading the race to the bottom. I call on Secretary
Bodman to reverse course, so federal government
contracts can be competitive in attracting the best and most talented workers
to perform this important work.
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News -
EDUCATION & THE WORKFORCE COMMITTEE DEMOCRATS
Congressman George Miller, Ranking Member
BUSH ADMINISTRATION UNDERMINES TRADITIONAL PENSIONS BY
PUSHING GOV'T CONTRACTORS TO SCRAP THEM
"The Bush administration should be working to
protect Americans' retirement nest eggs, but instead it appears to be hastening
their demise. This sets a major, incredibly troubling precedent. It shows that
the Bush administration is not only acquiescing in the idea that the days of
the traditional pension are over, but is actively supporting that result. The
Bush administration wants to encourage companies to dump their traditional
pension plans and privatize Social Security, and then tell workers that they
are on their own."
The Energy Department announced yesterday that it
will no longer reimburse contractors for "defined benefit pension plans
and medical benefit plans" for new employees. It will also encourage
employers to switch from traditional, defined-benefit plans to 401(k) or other
defined contribution plans for existing employees. In effect, this could push
companies to terminate their plans altogether, affecting the retirement
benefits of both old and new workers.
For more information on pensions, visit:
http://edworkforce.house.gov/democrats/labor_retirement.shtml