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| Pension Adjustments |
Pension
Adjustments.
Why are pension adjustments the fair and right thing to do for retirees of Oak Ridge DOE contractors? Why aren't the pension benefits of all DOE contractors the same? (1) This is a serious issue for Oak Ridge retirees who receive one of the poorest defined benefit pensions of any of the major DOE laboratories (pension are based upon years of service x salary x a multiplier). This multiplier for all Oak Ridge retirees before July 2004 was 1.2 -- lowest in the DOE complex and nearly half of Sandia (2.0), LANL (2.5), LLNL (2.5) and LBNL (2.5). When you start out so far behind, inflationary adjustments are critical to keep from losing even more ground. Solution: Be fair and honest. (2) It has been an implicit historic commitment by the contractors since the 1960s to make periodic adjustments to pensions to protect their value from the ravages of inflation. The pensions of Oak Ridge retirees currently have recovered less than 50% of inflationary losses. Many older retirees receive pensions whose value is less than half of their initial value. Solution: Offer the 2% flat rate spousal option to retirees effective July 2004, the same date it was offered to employees, and adjust retiree pensions either with inflation or with the average wage increase of employees. (3) The last adjustment for BWXT-UT/Battelle retirees was in 2001, but those retiring after April 1998 were excluded. They haven't seen an adjustment in 8 years. And pension income above $40,000 was excluded. Should the Pension Fund treat different classes of workers differently? In July 2004, BWXT and UT/Battelle improved retirement benefits for current workers, but ignored retirees completely. Solution: Treat employees and retirees equably when using the pension fund surplus. (4) The Pension Trust Fund for BWXT and UT/Battelle has a $600 M surplus. Why is not possible to do something for retirees? The contractors have not contributed to the Fund since 1984. Investment income has compensated for the increased liabilities of employees who receive raises every year (retirees don't get raises). But the surplus exists, in part, because of the meager adjustments to retirees' pensions. Solution: Allocate some of this surplus to retirees' needs. (5) Former Lockheed-Martin employees who were transferred to Bechtel-Jacobs and Wackenhut were grand-fathered under the same pension plan. Separate Pension Funds were established at both Bechtel-Jacobs and Wackenhut. But they do not have the 2% option nor the removal of the 30-yr cap on their years of service. So, when retiring they don't have these benefits. DOE is making contributions to at least one of these funds. Solution: DOE should fund these pension plans sufficiently well as to offer the same benefits to these grand-fathered employees as do BWXT and UT/Battelle. |
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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: 14 March 2007 |