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Working to Obtain Fair Treatment of Retirees of DOE Contractors in Oak Ridge
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Presentation to the
Rotary Club of Harriman August 30, 2007 Failure of the Pension Program for Retirees from DOE Contractors in Oak Ridge Good afternoon. I am Dave Reichle, President of the Coalition of Oak Ridge Retired Employees (CORRE), and a Roane County resident. I want to talk to you today about the failure of the pension program for retirees from the DOE plants in Oak Ridge and why you should care about this problem. How many of you have worked at, or are retirees from, the DOE contractors in Oak Ridge, or have family members who work there or are retired from there? This doesn’t surprise me. The DOE facilities in Oak Ridge have a huge impact on Roane County – through: (1) the salaries of residents who work there,
(2) pensions of residents who retired from there, and (3) the economic impacts of their income on the businesses and tax base of Roane County. Let me give you a few statistics to illustrate this economic impact: (1) The RCUW budget for 2007 was $342,590.
60% of that came from employees and companies at ORNL, Y-12, and K-25 (that’s $191,529) (2) DOE and DOE contractors in 2003 had 2,215 employees who lived in Roane County. Their salaries totaled $131,048,904. (3) The 1,668 Roane County retirees brought in another $20,027,275 in 2006. The UT School of Business uses a 2.2 multiplier to calculate the economic impact of salaries and pensions as they are spent and “trickle down” through the local economy. So the $151 million tax base of salaries and pensions amounts to an economic impact of over $330 million in Roane County -- EVERY YEAR! This revenue doesn’t come without “costs” to the county of school and municipal services and infrastructure to support these citizens. The finances of the county and its municipalities are hurting. In the absence of an in lieu of tax payment or any other economic assistance from DOE, you should care about the financial well being of retirees. They are an economic asset. Every little increase in the pension benefits of retirees helps them – and it helps all of Roane County. Now let me tell you about the problems retirees are having with DOE over their pensions. Retirees from the DOE facilities in Oak Ridge receive pensions, which were a part of their total compensation package. The pension program for these retirees is the poorest in the DOE system across the entire country (a question which we keep asking our legislators is “how have they let this happen?”). For nearly 50 years, DOE contractors have given retirees periodic “adjustments,” or cost-of-living adjustments. Never enough to make up for all the impact of inflation, but anything helped. Now DOE says that practice will cease – they can’t afford it!!!! The pensions are paid out of a Pension Trust Fund to which contributions had been made annually. Meager payouts to retirees enabled the Trust Fund to grow from the interest off investments. The interest income has been so great that DOE has not had to make a contribution to the Trust Fund since 1984 – none in over 23 years! Every employee hired since 1984 will receive a pension paid for, not by employer contributions, but by interest earnings. These interest earnings have accumulated, in part, because there have been very few cost-of-living adjustments for retirees. Today, retirees from DOE contractors, on average, have lost 50% of the value of their pensions due to inflation. So, DOE is funding the pension program for current workers off the backs of retirees. While retirees hurt financially, the Pension Trust Fund surplus (assets in excess of lifetime liabilities for retirees and current workers when they retire) was $811 million – and DOE says they can’t afford it? In 2004 the Roane County Commission, along with 9 other counties and municipalities in E. TN as well as the TN State Assembly, passed resolutions supporting these retirees. To date, DOE in Washington has chosen to ignore them. What can you do? Support the Roane County retirees in their struggle.
You can learn more, get addresses for all the above, and sample letters from the CORRE web site, www.corre.info/ Thank you. |
Copyright © 2007 CORRE- All Rights Reserved
Working for Fair, Equitable, and Competitive Benefits
for
12,000 Former K-25, Y-12, and ORNL Employees
Coalition of Oak Ridge Retired Employees
P.O. Box 4266, Oak Ridge, Tennessee 37831-4366
Email: service@corre.info
Comments and corrections on the CORRE web site: webmaster@corre.info
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