By Annette Cary, Herald staff writer
The Department of Energy is dropping a plan that would have bumped all new employees of DOE contractors nationwide from traditional pension and medical plans.
It made the announcement Friday under more pressure from Congress.
However, DOE still may continue to impose benefit changes case by case, including under the award of new contracts at Hanford.
In April 2006, DOE said it no longer would reimburse contractors for providing traditional pensions to new employees, including those at Hanford and Pacific Northwest National Laboratory. But after the House appropriations bill for the Department of Energy prohibited spending money to implement the new pension policy, DOE announced it would delay changes for a year.
The House does not appear to have changed its mind.
In language attached to the 2008 DOE budget bill released last week in the House, the Appropriations Committee again mandated no spending on the benefit change.
"To date, the department has not provided adequate justification for such a sweeping and ill-defined change of existing policy," the committee said.
If the bill passes, the committee language requires the Government Accountability Office to assess the adequacy of DOE's analysis of pension and medical benefits by the end of the year.
DOE released a statement Friday saying it would not re-issue the suspended policy that would have imposed broad-based changes to contractor pension and medical benefits. It would have required contractors to replace traditional pension plans for new workers with 401(k)-style plans, in which workers would be responsible for investing contributions rather than receiving a predetermined payment each month in retirement. Medical benefits also would have been switched to a "market-based" program.
The announcement of changes a year ago "brought increased visibility to the challenges the department faces due to increases in costs and liabilities associated with these benefits," according to DOE's statement.
In 2006, DOE reimbursed 46 contractors more than $1 billion for contractor employee pension and medical benefits, a 226 percent increase since 2000, according to DOE. In addition, DOE says it owes $11.9 billion in future medical and pension costs that money is not set aside for, a 68 percent increase since 2000.
DOE already has chipped away at its traditional pension plan at Hanford. About 500 workers who were transferred to so-called "enterprise companies" more than a decade ago continue to do Hanford work but are not accruing benefits in the Hanford pension plan.
New workers for the Hanford river corridor cleanup are offered an enhanced 401(k)-style program. DOE also does not allow new workers to sign up for the traditional pension plan under new contracts that will replace those now held by Fluor Hanford and CH2M Hill Hanford Group.
Rep. Doc Hastings, R-Wash., said last year after DOE announced plans to adopt a new pension policy nationwide that existing pension plans must be fully protected. There has been concern that current workers might be bumped from pension plans as they switch jobs at the Hanford nuclear reservation.
DOE will continue to discuss benefit issues with stakeholders such as Congress, labor unions and contractors, said Megan Barnett, DOE spokeswoman.
The House Appropriations Committee suggested that one place to consider cuts might be in the benefits offered by the nation's three nuclear weapons design laboratories. Contracts at Sandia, Los Alamos and Lawrence Livermore national laboratories have benefits far outpacing the DOE work force, it said.
We have received many emails about this report (15.6 MB PDF) from congressman Visclosky of the Committee on Appropriations, Subcommittee on Energy and Water Development. Quoting from page 91:
The Committee notes that the three DOE contracts with dis-
proportionate retiree benefits far outpacing the Federal DOE work-
force are the three nuclear weapons design laboratories—Sandia
National Laboratory, Los Alamos National Laboratory, and Law-
rence Livermore National Laboratory. The Department is directed
to assess reducing the government’s liabilities and normalizing the
pension benefits across the DOE complex by reducing the dis-
proportionately generous pension plans at the NNSA national lab-
oratories. The Committee recommendation includes a request for
the Government Accountability Office (GAO) report assessing the
adequacy of the Department’s analysis of pension and medical li-
abilities. The Committee requests a preliminary report by October
1, 2007 and a final report due by December 31, 2007.