Lab staff face leaner retirement

Privatization of Livermore's gilded pension plan may prompt retirements
By Ian Hoffman, STAFF WRITER
Article Last Updated: 06/22/2007 02:39:55 AM PDT

The message in 40 pages of bland green slides hit research engineer Grace Clark like a body blow — after more than 30 years at Lawrence Livermore Lab, about a fifth of her future retirement benefits are at risk of vanishing, just like that.

She and thousands of workers at the nuclear weapons lab learned Thursday in a PowerPoint presentation that privatization of the lab under a new corporate partnership could mean a leaner retirement.

Their gold-plated pensions from the University of California — coveted by everyone from Silicon Valley software engineers to scientists at other labs — are being cashed into new plans, one a similar-styled but unproven pension plan and another, a basic 401(k), offering about 20 percent lower retirement benefits. All new employees must take the 401(k).

"They're dumbing down our benefits package to private industry standards," Clark said. "They call it market-based standards, but I haven't heard anything yet about raising our salaries" in compensation.

Executives for the lab's new management are worried, too. Thinner benefits make it harder to keep the older workers who know the most about a nuclear arsenal more than 20 years old — and to recruit the best and brightest to learn from them.

Physicist George Miller, president of Lawrence Livermore National Security LLC, complained to federal weapons officials at the National Nuclear SecurityAdministration that the leaner plan could persuade Livermore
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employees that the federal government isn't committed to maintaining "world-class talent at the laboratory."

"Under such conditions, many more employees will consider retirement and leaving the laboratory now," Miller wrote.

Under pressure from Congress, the nuclear agency put the lab's management up for competitive bid and decided to fix a few historical problems along the way. Among them were numerous audits that suggested the federal government was overpaying the University of California for pensions at three federal labs that it manages — Lawrence Livermore, its sister lab in Los Alamos, N.M., and Lawrence Berkeley Lab. Whoever won the Livermore contract, the agency said, would have to provide two separate, new retirement plans. Current employees could join one as close as possible to the university plan or they could choose the 401(k), which the agency said could pay benefits no greater than 105 percent of the market value for benefits paid by like employers.

The same thing happened at Los Alamos weapons lab two years ago, but the resulting cut in retirement benefits was smaller. By 2007, it appeared that several of the many major research-intensive companies used to size up Livermore's peer market — AT&T, Hewlett Packard, Northrop Grumman, Honeywell International, Motorola, IBM and others — had cut back on their benefits.

As Livermore workers learned Thursday, private industry is getting more tight-fisted on retirement, and so is the lab. Until a new comparison is done in two years, that means one of Livermore's retirement plans will pay considerably less than a similar plan created two years earlier at Los Alamos. One worker complained aloud at a lab meeting that "in the competition for the best and brightest, we now can offer 93 percent of what Los Alamos can."

Consultants also explained that Livermore workers were deemed to get "greater value" out of their lower benefits, simply because of access to the Kaiser health plans. Kaiser delivers more services for patient dollars than most other health-plan providers, translating into more value for lab workers, according to federal and lab benefits officials.

Nevertheless, by Thursday afternoon lab workers were flooding congressional offices with complaining e-mails and phone calls, seeking high-level pressure on the federal government to change its requirements.

Rep. Ellen Tauscher, D-Alamo, said she would do "everything in my power" as chairwoman of the House strategic forces subcommittee to make sure the National Nuclear Security Administration "gets this right."

"Anything but a congruent benefit package among the labs is not in the interest of national security, scientific advancement or the spirit of fairness," she said in a statement.

Contact Ian Hoffman at ihoffman@angnewspapers.com or (510) 208-6458.