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Working to Obtain Fair Treatment of Retirees of DOE Contractors in Oak Ridge
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Talk to Revenue Committee,
Anderson County Commission September 10, 2007 By David E. Reichle CORRE President Failure of the Pension Program for Retirees from DOE Contractors in Oak Ridge (and the loss of potential income to Anderson County) Good afternoon. I am Dave Reichle, President of the Coalition of Oak Ridge Retired Employees (CORRE). With me is Bob Keil, Anderson County resident and Vice-President of CORRE 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 Anderson County –through the: (1) salaries of residents who work there, (2) pensions of residents who retired from there, and (3) economic impacts of their income on the businesses and tax base of Anderson County. Let me give you a few statistics to illustrate this economic impact: (1) DOE and DOE contractors in 2003 had 3,539 workers who lived in Anderson County. Their salaries totaled $224,440,107. (This does not include SNS construction!) (2) The 3,678 Anderson County retirees brought in another $56,008,544 in 2006. The UT School of Business uses a 2.1 multiplier to calculate the economic impact of salaries and pensions as they are spent and “trickle down” through the local economy ( "The Economic Benefits of THE U.S. DEPARTMENT OF ENERGY for the State of Tennessee, 2006"). So the $280 million tax base of salaries and pensions amounts to an economic impact of over $588 millionEVERY YEAR! Of course, 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, even slight improvements in the financial well-being of retirees can be significant. Retirees are an economic asset to the county. Every little increase in the pension benefits of retirees helps them – and it helps all of Anderson 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 giving 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 that practice will cease – they can’t afford it!!!! The pensions are paid out of a Pension Trust Fund to which contribution 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 in June 2007– and DOE says they can’t afford it? The proposed pension improvements requested by CORRE would increase pensions of Anderson County retirees by $14,125,355 per year, with an economic impact in Anderson County of $29,663,245 each and every year. And this benefit can be covered by the more than ample surplus in the Pension Trust Fund. No new federal monies are needed! So what is wrong with this picture? Nothing! That’s why in 2004 the Anderson 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 – actually, to ignore all of us. What more can you do to support the DOE Contractor retirees in their struggle? If you agree that helping retirees residing in Anderson County also helps the economy of the County, then join in partnership with your colleagues in adjacent counties, such as the Roane County Commission and County Mayor Mike Farmer, to petition DOE to help retirees. And, in Anderson County --
We would welcome you to our Annual Meeting on September 26 at 2:00 PM at the Heritage Fellowship Church on North Illinois Avenue in Oak Ridge. 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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