January 12, 2006
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| CORRE Letter to Y-12 Manager January 12, 2006 |
Coalition of Oak Ridge Retired Employees Working for Fair, Equitable, and Competitive Benefits For Former K-25, Y-12, and ORNL Employees P. O. Box 4266 Oak Ridge, Tennessee 37831-4266 January 12, 2006 Mr. William J. Brumley Manager, Y-12 Site Office National Nuclear Security Administration P. O. Box 2050 Oak Ridge, Tennessee 37831-8009 Dear Mr. Brumley: Information on Pensions of Oak Ridge Retirees Thank you for your letter of November 14, which responded to Congressman Duncan’s request to Secretary Bodman to provide information related to our pension plan. We would like to complete the pension fund data that was provided. In addition, we believe that there is a need to address some points in your letter and enclosure. First, we believe it confuses matters to provide members of Congress with information related to only a portion of the plan. In fact, CORRE representatives have been contacted and asked to explain why our numbers for the pension plan are different, and the difference is almost totally attributable to the fact that yours were not for the complete plan. BWXT, a contractor of NNSA, is responsible for administration of the pension plan, which includes employees and retirees of ORNL and Y-12, as well as retirees of K-25. It would appear to us that the contractor and your agency should therefore provide complete data. To clarify the record, we attach a tabulation of the present status of the total Pension Trust Fund as of December 14, 2005. This information was received from BWXT, for which we are most appreciative. (These are latest actuarial numbers from their contractor, Towers and Perrin.) We want to discuss the information you provided in the enclosure with your letter, as follows: 1. Proposed Ad Hoc Increase – you state that an accrual of $57.6 million in additional liabilities would occur. For all retirees, the liability would be $95 million. 2. Two Percent Reduction Factor – you show an additional liability of $29.6 million, but the figure would be $51 million for all retirees. We feel that changing the reduction factor for current employees in bargaining negotiations amounted to “raiding” the pension fund to avoid perhaps paying more wages out of operating funds. Contractors saved operating money by incurring liabilities against the Pension Trust Fund, and extended the change also to salaried workers but not to retirees. (We would point out that CORRE has not requested that the reduction be applied retroactively to retirement dates.) 3. Other Related Information a. Design of defined benefit plan not intended to provide for cost-of-living increases. While cost-of-living increases are not a contracted part of the plan, the understanding of employees (now retirees) was that adjustments would be made, as they had historically been made. Also, we do not believe the design of the plan calls for all future benefit enhancements for active employees to be taken from increases in value of the Pension Trust Fund, or that the enhancements would be traded for employee concessions. The fact is that the government has not made a contribution to the plan since 1984, a period of over 20 years. b. The generosity of the total compensation package. Many of the retirees had no benefit from 401K plans, many were not in it very many years, and medical payments required by retirees continue to escalate with inflation. c. BWXT Y-12 has an obligation to maintain adequate pension funding for future retirees. We agree with that statement, but, if BWXT Y-12 and NNSA felt the Pension Trust Fund had plenty of surplus for making significant improvements for current employees, then it should have been apparent that the Fund had adequate surplus for providing an equitable adjustment for retirees at the same time. CORRE feels strongly that your emphasis on “future retirees” is unbalanced, and should be replaced with an equal concern for present and future retirees! d. Retirement plans under current business environment. That there is a decreasing number of employees that are covered by defined benefit pension plans is irrelevant. DOE did not see fit to change the plan in Oak Ridge, as it has done in other locations. The government is obligated to be fair and equitable in the administration of the plan its contractor set up. The poor record of industry relative to pension plans has nothing to do with the Oak Ridge plan. It does appear that we are among the fortunate few, but we are nonetheless covered by a pension plan which has a Pension Trust Fund to which contributions were made over the years on our behalf, and that Fund now has a sufficient surplus to cover the improvements that CORRE is requesting. e. Fund Surplus – The surplus in the fund on December 14 was about $590 million, rather than the $342 million you quoted for only Y-12. After granting what CORRE is requesting, the fund would still have a surplus of $444 million. We would like for NNSA and its contractor (BWXT Y-12, Administrator of the plan) to address the above facts, and tell us why it is not possible, in all fairness to retirees, to grant our request. Sincerely, David E. Reichle President, CORRE Attachment – Analysis of Funds Copies to: Congressman John J. Duncan, Jr. Samuel W. Bodman, Secretary of Energy C. Anson Franklin, NA-1, FORS Michael C. Kane, NA-60, FORS Steven Liedle, 9106, MS-8002, BWXT Y-12 Gerald G. Boyd, M-1, DOE-ORO DOE Fund for Retirees of Oak Ridge Contractors (1) Analysis of Funds Estimated by CORRE – December 14, 2005 (2) _________________________________________________________________ Subtotal Total Item ($ Millions) ($ Millions) Fund Assets 2.932 Liabilities 2,342 Retirees 1,144 Active Employees 1,198 Surplus – Before Adjustment 590 Proposed Adjustment 146 Compensate for Inflation 95 2 Percent Spousal Reduction 51 Surplus – After Proposed Adjustment 444 __________________________________________________________________ Liabilities After Adjustment 2,488 __________________________________________________________________ (1) Covering approximately 12,000 retirees from ORNL, Y-12, and past K-25; and covering current employees of ORNL, Y-12, some Wackenhut, Bechtel-Jacobs, and Bechtel-Jacobs subcontractor companies. (2) These estimates of CORRE are based on the best available data from pension fund reports. Note: Bold emphases added on web site. |
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Working for Fair, Equitable, and Competitive Benefitsfor13,000 Former K-25, Y-12, and ORNL EmployeesCoalition of Oak Ridge Retired Employees P.O. Box 4266, Oak Ridge, Tennessee 37831-4366
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| Date Modified: 19 March 2007 |