July 19, 2006
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| CORRE Minutes July 19, 2006 |
Coalition
of Oak Ridge Retired Employees
Minutes of Annual Meeting July 19, 2006, 2:00 p.m. Oak Ridge Mall Crown Conference Room An estimated 700 people were in attendance at the meeting. Copies of the final agenda were handed to attendees at the door. The agenda is shown below. Agenda Welcome and Announcements Sandy Dean, Communications Report to CORRE Members – 2006 Dave Reichle, President Introduction of Legislative Candidate Speakers Pete Lotts, Legislative Chair Questions from Audience Dave Reichle and Board Members Sandy Dean welcomed those present, and urged them to join CORRE if they haven’t already done so. She urged members to try to recruit others to join. President Dave Reichle talked about the recent DOE Public Meeting and his response. Copy of his presentation is attached to these minutes. Copies of his letter to legislators setting the record straight on information presented at the meeting were available for pickup following the meeting and a copy is also on our website at www.corre.info. He answered questions from the audience. Pete Lotts introduced the candidates in the upcoming election, who had been invited to speak. Present and speaking were candidates Ralph McGill and Terry Stulce. Staff members spoke for Congressman (and candidates) Lincoln Davis, John Duncan, and Zach Wamp; and for candidate Ed Bryant. Copies of a form letter to legislators were available for pickup after the meeting. Copies of letters later received from Congressmen Davis and Wamp and candidate Bryant may be seen on our website. Several reporters were present, and all subsequently had good writeups in their newspapers. A clip was shown on the 6:00 o’clock news of Channel 10. Failure of the PA system caused considerable disruption of the meeting. (Cost to CORRE for the meeting room was $730.) The meeting adjourned at 3:25 p.m.
Mary Helen
Rose, CORRE Secretary/Treasurer
CORRE
2006 ANNUAL MEETING
Opening Remarks David Reichle I am Dave Reichle, President of the Coalition of Oak Ridge Retired Employees, representing the nearly 12,000 retirees of DOE’s Oak Ridge Contractors. Please note on the back of the agenda our Treasurer’s report, showing cash-on-hand of $40,745.15 and dues-paying membership of 2,662 retirees. First, I want to thank each CORRE member for your support and participation. In the past, DOE has tried to marginalize CORRE by saying that we were just a few “rabble-rousers,” implying that most retirees were content and quiet. Well, with nearly 3,000 dues-paying members, DOE now knows they different! With around 11,500 retirees, their spouses and adult children, there are at least 50,000 voters in the five-county region who have a keen interest in retirees’ welfare – much less the added economic impact of our adjustment request that would put an additional $74 million annually into this five-county region. Secondly, CORRE’s thanks go out to those elected officials who have supported us, their representatives who are here today, and to the candidates for office who have come today. We appreciate your concern for our retirees’ welfare. Thirdly, CORRE’s appreciation is extended to Channels 6 and 10 in Knoxville, Cable 12 in Oak Ridge, the Knoxville News Sentinel, The Metro Pulse, The Farragut Press, The Oak Ridger, and The Oak Ridge Observer – all who have supported us on their editorial pages. Lastly, for the benefit of the retirees, I want you to know how dedicated the CORRE board has been, and the commitment of time and effort that they have devoted to working on your behalf. Let’s show everyone our appreciation. (Applause) Our pension concerns are few and simple: (1) fair and equitable treatment, with an adjustment to compensate for inflationary losses in pension value, and (2) a flat-rate 2% spousal option just like that given to employees in 2004. But, behind these requests lie many details that can be confusing – especially when the issues and facts have been misrepresented by DOE. Some retirees have misconceptions; many others understand the issues well but ask for specific information. So, the CORRE Board has asked me to spend 15 minutes to summarize the issues, so that we all are working with the same information and assumptions. CORRE was formed by retirees in 2000 to block a 420-fund transfer attempt by Lockheed-Martin. This was an attempt, approved by all parties (both Contractor and DOE) in Oak Ridge, to transfer dollars out of the Pension Fund for purposes other than for the benefit of retirees, specifically to construct buildings at Y-12. This was finally stopped at the level of the DOE Secretary in Washington. Within a year, UT-Battelle was again proposing a 420-fund transfer for construction at X-10, which CORRE also opposed. Remember these attempts to “raid” the Pension Fund, when DOE and the Contractors say that they can not give us retirees anything because they must protect the assets in the Pension Funds. CORRE, with Zach Wamp’s help, succeeded in 2001 in obtaining a 15% pension adjustment (average) for retirees – the first one in over 11 years. But, DOE excluded the last three years of retirees from receiving this adjustment, so no one retiring after April 1998 has ever received an adjustment (that’s now 6_ years ago!). But, even with the 2001 adjustment, there were still retirees at the poverty level on food stamps. What a disgrace! That proved how far the Contractors had allowed our pensions to deteriorate due to inflation. Again, with Zach Wamp’s help and DOE/OR support, CORRE successfully negotiated a “minimum pension” of $600/$400/month in 2003, which affected ~ 10% of retirees. CORRE asked for “fair and equitable” treatment. In July 2004, BWXT & UT/Battelle negotiated their union contract by offering a flat-rate 2% spousal option and by removing the 30-year cap on the new 1.4 pension multiplier offered to employees in 2001. These new retirement benefits were immediately offered to the salaried workforce as well. This resulted in a cost of $113 million being taken from the Pension Fund surplus. What did retirees get? Nothing! For the first time in history, retirement benefits were offered to employees without also offering something to retirees. Fair treatment? And where did the money come from for these benefits? They came from the MEPP Pension Fund surplus! This was the last straw. This is when retirees got mad. This is when retirees realized that their former employer didn’t care. This is when we realized that our only means of support were our elected officials. All of us retirees receive a defined-benefit (DB) pension, funded by assets in Pension Trust Funds. There is a Multi-Employer Pension Plan (MEPP) for all contractor retirees before 2000, that now covers workers retiring from ORNL (UT/Battelle) and Y-12 (BWXT). And, after 2000, there are separate Pension Funds for grandfathered employees at Bechtel Jacobs and Wackenhut. The MEPP has assets of $2.9 billion; the others are in the range of several hundreds of million of dollars. The MEPP and Wackenhut are over-funded at around 120% of liabilities, and Bechtel Jacobs at almost 100%. All retirees retiring before July 2004 had a pension calculated from years-of-service x 1.2% multiplier (making it among the poorest DB plans in the DOE complex). This is one reason why periodic adjustments are so critical. A Pension Trust Fund has (1) assets = amount paid in + accumulated investment earnings, (2) liabilities = payout obligations for the actuarial lifetimes of both current retirees and current workers when they retire, and (3) under-funding/surplus = the difference between assets and liabilities. The MEPP, for example, has a surplus as of June 30, 2006 of about $425M – nearly one-half billion dollars. CORRE’s request for the flat-rate spousal option would be a one-time cost of $51 million or only 9% of the surplus. Our adjustment request of ~1.3% for every year of retirement is estimated at $145 million, or about 26% of the surplus. For the past 3_ years CORRE’s officers have met with management and staff of local DOE and their Contractors. We have been pushed off, saying alternatively “We can’t afford it.” And we say “what about the huge surplus?” Then they say, “We must protect future Fund assets.” And then we ask, ”Where was your concern when you raided the surplus in July 2004?” Then they say, “We must await the DOE Secretary’s guidance.” And now we have it – DOE Notice 351.1, which was entirely about future pensions for current employees, except for a clause that said in the future it would require federal legislation before any adjustments would be made in existing benefits for retirees in DB plans. Zach Wamp persuaded DOE to answer CORRE’s request for a public forum to discuss the Oak Ridge pension issues. Over 600 of you were at DOE’s public meeting at Pellissippi State on June 22, 2006. DOE came purportedly to get retirees’ input. They made a presentation that misrepresented the facts and used faulty assumptions about retirement age and 401(k) participation. They told us how we were receiving 90% of our salaries in retirement. They said that they had studied our request and that “the answer was NO!” Then, after the fact, they asked for our opinion, which we had been giving them all along. You heard CORRE’s reaction communicated to DOE at the meeting, and you expressed your personal opinions. We have heard nothing since. Copies of CORRE’s response to the DOE meeting was mailed to DOE, the Contractors’ Managers, and all TN Congressional offices; copies for your information may be picked up as you leave from the table outside the meeting room. Also, the letter is on CORRE’s web site. You need to understand some basic facts. (1) DOE, through the contractors, has not paid a cent into the MEPP Fund in over 22 years – they have made some contributions to the Bechtel Jacobs Pension Fund, which would not have been necessary if it had not split off from the MEPP. (2) The MEPP Fund surplus exists because of good investment returns and the fact that very little of it has been used to benefit retirees by way of adjustments. (3) Every employee hired in the past 22 years will have their entire pension benefit paid from the MEPP Fund without a cent having been contributed in their name! (4) ORNL is not supporting better treatment for retirees because they want, and need, the surplus to cover future employees’ pension benefits without having to pay in anything! In other words, being unwilling to pay into the Pension Fund, ORNL and DOE expect to pay for future employees’ benefits by short-changing retirees. (5) ORNL desires to split the MEPP Pension Fund from Y-12 so it can be independent, while wasting some of the Pension Fund surplus to meet costs of establishing a separate fund. Now you can rightly ask what next? CORRE will continue to press DOE and the Contractors for a positive response. CORRE continues to work with the entire TN Congressional Delegation for their support. (Note: The entire E TN Congressional Delegation voted to support Zach Wamp’s amendment to the Energy & Water Appropriations Bill to prohibit DOE from using appropriated funds to implement DOE Notice 351.1) CORRE will take the facts about DOE and the Contractors’ to the public. CORRE, and the retirees, will not give up until we receive fair and equitable treatment, and until DOE and the Contractors begin to tell the complete truth. Meanwhile, what can you do? (1) Sign up for e-mail announcements. (2) Ask retired friends to join CORRE. Membership is important. (3) Write/e-mail/call your elected officials and let them know your feelings (include copies to Gerald Boyd (DOE/OR) & George Dials, (BWXT) & Jeff Wadsworth (UT-Battelle)). (4) Send letters-to-the-editors to local papers (one should be appearing every day). (5) Contract your Senators and urge them to support Senate Bill S.2794, “Department of Energy Contractor Employee Equitable Treatment Act of 2006.” Remember: check www.corre.info to keep abreast of what is happening. Addresses for you to use in writing to officials are on the CORRE web site. As a courtesy to our busy guests, I want to defer your questions to the end of the program. I and the CORRE Board will remain to answer questions at the end of the program. I will now turn the program over to CORRE’s Legislative Committee Chairman, Pete Lotts, who will introduce our special quests. Mary Helen Rose, CORRE Secretary
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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: 13 March 2007 |