Parable III: Will I Die A Pauper?
By Charlie Price – 02/06/06
For years, I said in jest that I wanted to write my first
bad check on the day I died.
“Can’t take it with you,” I heard. Well, now I’m afraid I may write a bad
check much sooner. Let
me explain why.
I’m an average married, retired working man, age 77. Maybe I‘m a bit
above average inasmuch as both my wife and I have college degrees (UT--
go big orange!). We
worked at good jobs (probably above average) and lived modestly, drove used
cars, paid all our debts and taxes, raised and educated two sons, and helped
with six grandchildren.
When we reached retirement age we carefully analyzed our assets
and potential pensions and decided that we could stop working with sufficient
income to keep a decent standard of living. It was the “American
Way.”
Both of us were eligible for Social Security pensions; I had
contributed the maximum to Social Security for all my 43 working years I and my
wife, Elma, contributed to SS for her many years as a school teacher. These Social
Security pensions amounted to about 1/4th of our salaries. Elma got
the standard Tennessee Teachers’ pension which turned out to be about 1/3rd of
her salary when she retired.
I got the standard pension from Martin-Marietta as a result of my
30 years working at the AEC/ERDA/DOE facilities in Oak
Ridge. (AEC is the Atomic Energy Commission,
ERDA is the Energy Research and Development Administration, and DOE is the
Department of Energy. These
were/are U.S. Government agencies which evolved from the Manhattan Project that
developed the Atomic Bomb during WWII.) My pension was computed as 1.2 times my
years of service times the average of my last 3 years salary; thus, this
amounted to a little over 1/3rd of my final salary. My Oak Ridge
pension was to be the major source of our future income.
We figured that our pensions would pay us a little more than
half of our salaries at retirement time. Our house was paid for and we had some
savings in 401K plans.
We figured that we could retire comfortably. I retired in 1992 and Elma in 1995.
For several years we seemed to be doing OK. But lately we realize that we are NOT
making it. We
are spending our savings.
I have not consulted an actuary but chances are that I will be a
pauper before I die unless we get some increase in our pensions. Our SS pensions and
Elma’s Tennessee Teacher pensions provide some cost of living adjustments
(COLAs) but they do not seem to keep up with our cost of living. Let me give some
examples:
- When I
retired first class postage was 22 cents. Now its 39 cents – a 77%
increase.
- When I
retired the highest electric bill I ever saw for our 1956 vintage all-electric
house was $200. Natural
gas came to town and I installed a gas furnace thinking I would save money. Last month (a
mild one) the gas bill was over $300 plus an electric bill of $100 – so a
100% increase.
- Gasoline
for the car of course needs no analysis, but we don’t travel much.
- The
grocery store seems to increase prices on the food we eat (not prime cuts)
periodically but I have no data to quote. I’m not surprised anymore when
the checkout cash register goes over $100 for a few groceries.
I think our cost of living for necessities has gone up by
more than 50% since I retired. YET – my principal source of income,
my Oak Ridge pension, has not
increased that I know about.
A friend retired in 1982 and his pension has not increased either. This is a big worry
and I have been trying to figure out why my pension does not go up. I can’t seem to get
any answers that make sense.
Let me tell what I think is the case --
In 1963, I came to work for Union Carbide in Oak
Ridge; Carbide was the AEC contractor and managed all
three plants there – K25, Y12, and X10. When I reported for work I asked about
a retirement plan and expected to contribute to it as I had for eight years with
my previous employer, General Electric Company. I was told that Carbide had a
non-contributory pension plan and retirement pay was based on years of service
and I was led to believe that I would never have to worry about a good pension
when I retired if I stayed on with the “company.” I was naive, trusting, and did not
worry about retirement back then when I was a youngster of 33.
In 1982 Carbide gave up as contractor for DOE and the new
contract was given to Martin-Marietta Corp. As I understand it, Carbide managed
and operated the Oak Ridge facilities
on a cost plus $1.00 per year contract basis. I understand that AEC/ERDA/DOE budgets
and funding allowed Carbide to establish and put money into an employee’s
retirement fund in order to provide benefits for current and future retirees. This fund was a
budget line item and DOE (and its predecessors) approved it on an annual budget
cycle. I assume
that the Carbide financial and actuarial people did their best to provide
adequate funding for current and future retirees. In fact, it must have been adequately
funded and well managed because this fund has received NO NEW MONEY since 1984,
according to information I recently learned about. Yet, it is the source of pension
payments to all retirees and apparently is intended to be the only source of
funds for future retirees.
In 1982, Martin-Marietta Corp. replaced Carbide as the Oak
Ridge contractor BUT the contract was changed to a
cost plus AWARD FEE deal.
This meant that the bureaucracy at the Oak Ridge Office
Operations office of DOE determined a “grade” for Martin’s performance of the
contract and awarded payment on the basis of that grade every year. I am not privy to
just how the grade is determined and what factors went into it, and probably
could not understand it even if the rules were documented. HOWEVER, it seems obvious that keeping
spending low and jumping through whatever hoop was popular with DOE was a major
factor in the grade given the contractor, consequently the award fee paid. Obviously,
Martin-Marietta and/or whoever is contractor in Oak Ridge these days (the
contractors keep changing and I can’t keep up with it) tries to keep spending low
to please DOE and apparently gives NO PRIORITY to contributing to a retirement
fund for old, has-been employees who mean nothing to the year’s award fee. BUT they designate
monies out of the pension fund, TO WHICH THEY OR DOE CONTRIBUTES NOTHING, for
employees hired after 1984.
The Oak Ridge
contractor needs to have competent employees in order to do the work required
by DOE, and they must pay competitive salaries and offer competitive benefits
in order to attract and keep a viable work force. Many of these folks (like I was back
in my youth) are educated engineers and scientists who can get a good job
somewhere else if they want.
So, now in their wisdom, the contractor, with DOE approval,
offers a better retirement plan than they did when I retired. Many folks with
whom I worked closely during my years in Oak Ridge retired within the last year
and they get a 20 percent higher portion of their salary (now higher also) in retirement
pay that I do. I
have been talking with some of my friends in the same boat as I, and I have
joined CORRE – Coalition of Oak Ridge Retired Employees. I now hear that DOE has treated
contractor retirees in other parts of the country better than in Oak
Ridge and retirement pay is better in Los
Alamos NM, for example. CORRE is trying to
get an increase in our pensions but has had no success so far.
Why can’t retirees like me get a cost of living increase or
some retroactive pay to help us get by? I’ve written my congressmen and, at
Senator Alexander’s request, some DOE official wrote me a letter saying, in
effect, that I was getting all I was promised and I am as well off as anyone. And, he said that
the pension fund had to be saved for current employees. I found his letter condescending. I
would like to know his salary and retirement benefit package.
Can anything be done? If so, what and how? Apparently, to get a pension increase
the manager of the fund will have to be directed by DOE to provide it. Apparently, my only
hope is to try to make the situation embarrassing enough to DOE and our elected
representatives that they will take action. Do a few thousand old retirees have
any influence? Based
on the letter I received, it seems DOE has absolutely no incentive to help us
or empathy for our plight.
Using our votes and influence to get our representatives to move
DOE seems to be the only hope.
My dad was a pauper when he died. He was also college educated (also UT)
and taught school in Tennessee
for over 40 years. He
was a WWI vet. He
retired in 1970 at age 70.
He had a stroke in 1990 and died in 1992. Expenses after his stroke took all his
assets. I did
not want to follow in his footsteps so I bought a long-term care policy. This should keep me
off Medicaid and save the taxpayers some money. But it looks like I may have to write
some bad checks before I cash in. Or, maybe I can get a job somewhere.
Thanks for listening, kind reader, and forgive me for
complaining. I am
thankful for what I have. I’m still proud to be an American. In my retirement
years, I have been tracing my roots and with help from genealogists and a DNA
sample, I find that I am a direct descendant of John Price who came from Wales
to the Jamestown Colony in 1611. America
is in my blood; I’m the 12th generation. I’m just a frustrated and disappointed
American, who feels used and betrayed by the system. Maybe I was born 11 generations too
late. But maybe
Grandpa John had it worse; a lot of his contemporaries got scalped. When I think about
it, I’m getting “scalped” also.
Charles E. Price
642 Peachtree Lane
Kingston, TN
37763
Copyright 2006
Permission to publish with approval from the writer
Published with permission - AAB