Since all of you at LANL have been through this and we at LLNL are to receive our benefits packages in about 15 days, can you help answer these questions? I need answers very soon!
1. In your dealings with the new contractor were you allowed to take your 403b and dump it into their 401k in order to kick start it?
2. Were you able to continue to contribute the max allowable contribution (in my case $22,500 per year)?
3. Did you receive the 6% matching fund from LANS too?
4. Was there also an additional 5% contribution from the new contractor on top of that matching 6%?
5. Were there any maintenance fees associated with the contractors 401k that the contributors will have to pay out of their pocket?
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The 401(k) is administered by Fidelity. I chose it because it gives more freedom to leave the lab, as opposed to the defined benefit plan. Answers to #3 and #4 are yes. Don't know the rest of the answers, but the fidelity website might be helpful. One major downside of the 401k is the extremely limited offerings. I'll email the offerings to P& the B.
With data from 200 people, the answers to questions 1-4 are yes. The answer to 5 is no.
The comparison between the defined benefit plan and the defined contribution plan is more complex than K. Boland suggests. You have to compare not only nominal yields but also realities and risks in those nominal yields.
The 401K situation is much more favorable than K. Boland suggests. The details of how to make it more favorable are complicated and vary from person to person.
I selected the plan 2 or 401K with match and service based non-elective contributions. No LANS pension for me. This is my opinion and hope it helps you research the LLNS benefits when they are released.
1) I would not want to tansfer any money out of the 403B accounts into the Fidelity 401K because 1) the choices are very very limited 10 stock funds, 3 bond, and 11 blended. Also you can never add more money to your 403B (or DCP) accounts. The UC funds have lower fees and many more fund options. Even though you can no longer contribute you can move your 403B balance into more fund choices.
2) The max. employee contributions from the IRS as I understand them are $15,500 under age 50 and $20,000 for over 50.
3) Again you only get any match by NOT selecting the TCP1 pension plan. They match up to 6% on each paycheck. Although recall that the TCP2 definition requires a market based adjustment annually, BEN VAL study. On the DOE page the national average match is 3.2%.
4) Again 5.5% non-elective match is only if you do not select the pension. This non-elective match was made the last day of Feb. 2007 for pay earned in 2006. The employee loses the interest on this money with it being delayed. This one day delayed contribution also puts you at risk for market variations on a one day purchase.
5) No additional out of pocket expenses but I think the 401K fees are higher than UC 403B fund fees. Study this before you move anything out of a 403B fund.
So TCP2 (401K only) has a pretty good match BUT this could be reduced to market in the future. But the other choice is to turn all your service and pension from UC into the new company pension backed by the PBGC.
If LANS goes out of business, you may want to know that the waiting line at PBGC is 44,000,000 people and PBGC has no reliable source of money. Congress does not fund it. Companies that are going out of business do.
A point of information.
Getting these pensions choices right has been worth more than $10,000 per person per year for the rest of a person's life for LANL staff. (This is an average over 500 LANL folk).
Making the right choice takes about 6 hours of an employee's time if they can learn from very experienced folk.
If a person tries to learn it themselves, it is not clear how much time it takes since I do not know of anyone who completed the analysis on their own. They got to the complicated part, gave up, and accepted the loss of their assets.
I have to give a strong second on the advice to leave all your existing funds in the UC 403b's, regardless of whether you go with the new pension or the new 401k with employer match.
The choices in the UC lineup are stellar, and some of the choices are not offered to investors unless they have a huge amount to invest, but the UC moniker allows the little guy to get in without a problem. I greatly miss not being able to put new mutual fund money into the UC funds. With careful selection, I'm currently making twice the return on my UC 403b funds compared to what I can make using the meager LANS offerings. LANS promised more choices on funds, but so far they can't come close to matching the choices that UC offers.
So Eric is now pimping to serve as a financial advisor to people way out at LLNL? He must be pretty good if he can handle that one!
So, tell us, Eric, how many paying customers did you gather over the last two years in Los Alamos? 200? 20? 2? And what distinquished financial powerhouse do you work for in this regards? Merrill? Prudential? Smith Barney? Have you earned a CPA? What are your educational creditionals for being a financial advisor? Just curious.
I see that Eric is trying, yet again, to run a blog at:
http://workingatlanl.blogspot.com/
Go take a look. Funny thing is, not one single person has bothered to leave a single comment. Not one. Yet, Eric says he is swamped with work helping folks at LANL, and now SNL and LLNL to sort out their financial problems. What a crock.
But, hey, better hurry, because Eric says...
"For readers who do not want their careers and lives to go down the tubes with these events, I would suggest calling or emailing me soon. My time helping others is already filling my calendar but I will make room for anyone who references this post and who has the courage to talk to me. For the first five respondents, I will give a discount."
Eric is offering discounts!!! Better act quickly while he can still fit you into his busy calendar!
(For the first time in my life, I am considering recommending censorship.)
Eric - Since you can't seem to take a hint from the lack of activity on your blog and the reaction you get from so many on this blog, let me be clear: PLEASE, PLEASE, stop the blatant self serving commercialism. If LANL is to succeed, it is obvious to the readers that it will be without you. If LANL is to become a corpse, then let it die in peace!
As an LLNL emlpoyee who feels like he's about ready to get the shaft having seen the investment options line up given to LANS,LLC and except nothing better from LANS,LLC; Ca we not elect to use any of LLNS,LLC proposed funds and start our own 401k and still get them tax difference,or are we stuck with putting our money into funds that aren't necessarily so good. In order words can we elect to make our own 401k and have the funds from our checks put into that instead of theirs whereby I have found much better places to gain a steady earnings on my money
12:32 aka the Budding Censor -
If Eric's smarmy self-promotion makes you "consider censorship", I think we really ARE in trouble.
He's pretty easy to ignore really, don't you think?
Just to be fair, I presume you were being "dramatic" by suggesting censorship.
What, so have you all been asleep at LLNL the past couple of years? You all didn't think any of what occurred to us in Los Alamos would have an impact you, so you didn't give a damn at the time? The questions you're asking were debated and addressed a thousand times over during the excruciating changing of the guard at Los Alamos. If you, like so many of my bone-head colleagues, were relying on official Laboratory pronouncements to prepare you for the rectal exam you were about to receive, you probably weren’t too prepared for the insertion that occurred. If you were reading the LANL blog however, you might have been better prepared. Read your own blog if you want to be in the know, maybe then you won't have be asking such dumb questions here.
I don't think LLNL has a blog and the ne that I have seen doesn't have a damn thing on it of importance nor does it adress the question asked. I for one do feel that the people at LLNL have been brain dead for the last two years and probably will remain that way. Most will go TCP-1 just as did the brain dead people at LANL becasue the figures at the end looked good, and gee the goverment will never let me down. Stand by my friends, stand by.
Going TCP1 (the new LLC pension) will lock you into your current workplace so you'll never be able to leave, no matter how badly your new LLC decides to treat you. Choose wisely.
I can't think of a reason you'd need to "kick start" your LLNS 401k.
Unlike others, I am not particularly offended by the limited Fidelity 401k offerings. Most reputable financial publishers (e.g. the Wall Street Journal) are now recommending "lifecycle" funds (i.e. Fidelity's Freedom 20xx funds) for the vast majority of retirement investors.
Historically another reason to stay in your 403b was the significantly greater flexibility, e.g. you could take out a loan for just about any "hardship." I believe this is being tightened up under new legislation, but the edge may still go to the 403b.
I don't understand the "lower fees" claim for the 403b. Both types of accounts are held by Fidelity, and some of the fund offerings are exactly the same. I would like to see some evidence for the claim that the 403b has lower fees than the equivalent 401k investment.
Please explain why LANS,LLC or LLNS,LLC did not give the people the option of putting their funds in the DFA EMERG MKTS INST listed on the fidelity site. Check out their performance and their rating then get back with me.
I chose TCP2 because I don't trust LANS over the long haul (20+ years). That's a lot of potential contract changes, a lot of unknowns. The payoff for TCP1 appears higher under most scenarios, but only if workers are never required to pay in as they go.
Baby boomers' mileage may vary.
I'm not sure where Eric is getting his "yes" answer to the OP's question #4, but I'd check with the powers that be prior to acting on that answer.
How an employer structures a 401k plan (or a 403b plan, for that matter) is largely a matter of the IRS code (section 401k, coincidentally!). So if you have questions about what an employer can do, see the link below, and also IRS publication #560.
In regard to investment choices, it's usual for a large employer to buy a turnkey 401k package from an investment house (Fidelity, Merrill Lynch, etc.) These vendors charge the employer to administer the plans, so, surprise! Most employers pick the low-cost bid. In other words there is a reason Fidelity is the custodian of many employers' 401k plans and it's that they are the low-cost solution.
Typically the custodian offers a menu of mutual funds and money-market funds in which you can invest your 401k dollars, and the choice is not infinite. They ordinarily offer you a choice among 6-10 funds that run the gamut from conservative to aggressive investment styles. I've not seen a 401k that lets you pick just any investment you like (such as individual stocks). There may be such a plan, but Fidelity won't offer it.
One thing y'all have going for you is that many corporate 401ks only invest the company match in the company stock. Your plan, presumably, will not have that restrication.
http://www.irs.gov/taxtopics/tc424.html
Things are about to change I think very soon. I just read that the UC has conceded that they need 16 % contribution to the UCRP in order for the fund to stay at 80%. 11% will be paid for by UC and 5% will be taken out of the employees checks. I am assuming that this will include all LANS, LLC and all LANS,LLC starting July 15th or so. For me I can not take that type of cut in pay so I am going TCP-2, retiring on Oct 2nd and then going to make a go at trying to make my own 401k. I would almost bet that the 5% contribution will slowly but surly change in to 1% increases to the employees year by year until eventually UC's contributions is 0% and the employees is 16%. That's one hell of a pay cut per month people. If any knows for sure that the pension contributions do not apply to any of these LANS or LLNS please state so with factual information. I don't recall ever seeing anything that people who go TCP-1 will be exempt from this.
Opps forgot to give URL for the lastest on UC pension plan findings or should I say need for contributions.
http://atyourservice.ucop.edu/news/retirement/0705-ucrp_update.html
The comments above are fascinating.
The attacks seem to be against the person's self created avatar of who I might be. They say much more about the commenter than they do about me.
Maybe they should be called "Attacks without facts."
Here are a few facts:
More than 150 customers on transition counseling from age 25 to 75, from 1 year at the Lab to 33 years at the Lab, from income of $40,000 a year to income of more than $150,000 a year, techs, TSMs, SSMs, group leaders and more.
50 man years experience in financial counseling and 17 years experience in how the Lab works and doesn't.
As to working for a large company, we don't do it because brokers for such a company usually make money by taking it from you in commissions when you are not looking. And, they know little about how weapons labs work or about the world view of experienced weapons lab workers.
To us, working for a commission and not for the benefit of the client is a conflict of interest, so we don't do it.
My main question is why, if these commenters anonymously attack a person they don't know with facts they don't have, they would expect anyone to listen to them.
I will listen to anyone with the courage to become a real person with a real name, real substantive financial and Lab information, and real contact information who has the courage to contact me. I do not intend to listen to anonymous annoyances.
As before, I invite any attackers to meet me in person. The last time that I made this offer and even offered to buy them coffee no one had the courage to show up.
I am sorry that the commenters are so angry that hurting the lives of their friends and colleagues and the families of these friends and colleagues is the commenters best use of their time.
My growing guess is that these attackers do not work at a national lab and do not have a career and a lifetime's assets on the line. A friend suggested that the anonymous attackers are probably boys who will, with luck, be in eighth grade next year.
If they are actually suggesting that their own colleagues should lose their life savings and their careers and not do any learning in order to minimize the loss, then I do not understand why such a suggestion is responsible adult behavior on the part of the commenters. Such behavior might give the anonymous commenter an adrenaline rush for a minute or two, but it is not responsible, empathetic, nor caring.
Thanks for giving me a chance to say these things.
Now lets get back to having a productive blog as Pinky and the Brain have been trying to do for months now.
Pinky and Brain,
Why don't you start selling ad space? Oh, I forgot, Eric currently gets unlimited ad space for free . . .
(Eric, attacking those that question the business ethics of using this blog commercially is probably counter-productive.)
How about equal time for Eric's competition? He is not the only finacial advisor out there. There are nationally reocognized head huters avaialable, too.
"Now lets get back to having a productive blog as Pinky and the Brain have been trying to do for months now."
A productive blog? Where is that one?
"...if these commenters anonymously attack a person they don't know with facts they don't have, they would expect anyone to listen to them."
Because that is what this, and all of the LANL blogs are about.
Okay... I want to know more about this Anonymous said...
Opps forgot to give URL for the latest on UC pension plan findings or should I say need for contributions.
http://atyourservice.ucop.edu/news/retirement/0705-ucrp_update.html
6/10/07 3:10 PM
I want to know if the people in TCP-1 at both labs are now going to have to start contributing 5% of my pay check per month. Can anyone find out where it says the people at both labs that went TCP-1 are exempt from this donation. My feeling is that once they get their claws into you they will just keep taking more as the years go on.
LANS pension under TCP1 is not controlled by UC, it is controlled by LANS (at least that was my understanding, but I went with the 401k so I what do I know about it). They are seperate entities. If mandatory contributions are to be implemented it would be at the direction of LANS, not UC.
I bet Eric is Pinky or the brain.
Eric may have a mental problem. No joke, I'm serious. I highly doubt he has 150 paying customers from the Los Alamos community. He's making it up as he goes along. Unfortunately, he doesn't even realize it's all a great big fantasy created within his own mind. If you don't believe me, take a look at his own blog. He seems to think people are listening to him, when, in fact, he's only talking to himself. He's probably delusional. Of course, many could say the same thing about most of the people now working at LANL.
Have to agree with you, poster 2:38pm. The DFA EMERG MKTS fund rocks! Most small investors never get a chance to invest in funds like this one. Thanks to the UC connection, those with 403b funds can put part of their investment in funds like this one. With the dollar dropping like a rock and the BRIC (go look it up) countries on a roll, this fund has been doing fantastic over the last few years!
Eric's idea of a productive blog is the Lab's Reader's Forum.
Contributions to UCRS will come from UC employees. Now, since June 1st, 2006, how many of us at LANL have been UC employees? Almost none.
TCP1 participants are LANS employees with a brand new LANS pension plan (whose interests in UCRS were transferred to LANS in the one-time distribution, underfunded or not). TCP2 participants are LANS employees and inactive vested participants in the UCRS who UC says will not be contributing to the plan as long as they remain inactive.
I personally opted for TCP2 for several reasons but one primary reason was maintaining the lump sum distribution option offered by UCRS and not available with TCP1 - too many uncertainties and in that light liquidity is your best position.
With regards to LLNS, LLC one should first make absolutely sure the contract and benefit plan will be identical to LANS, LLC before taking advice from one or the other - they are not going to be the same contract, nor same corporation, and will not necessarily contain the same benefit package.
The LLNS contract was posted on the NNSA contract competition website last week. The same provisions for Inactive Vested Transferring Employees as in the LANS contract remain:
- UC service credit counts for vacation and sick leave accrual, retiree medical premium contributions, and 401(k) employer contributions and matches.
- Sick leave can be retained with UC for determining UCRP service credit if the Inactive Vested Transferring Employee retires within 120 days of separating from service.
- Except for Key Personnel, LLNS is required to offer current workers in good standing (including Flex Term employees) jobs at their current salaries - this also includes Inactive Vested Transferring Employees.
Per the LLNL transition website, LLNS has already submitted their proposed benefits package to NNSA/LSO (Livermore Site Office). The proposed benefits package will be published for public comment before it is finalized.
6/10 12:00 pm:
"Going TCP1 (the new LLC pension) will lock you into your current workplace so you'll never be able to leave, no matter how badly your new LLC decides to treat you. Choose wisely."
Not exactly. TCP1 will lock you into the current LANL (or in the case of the left coast), LLNL contractor, whoever that may be either now or in the future. In evey contract change to come, TCP1 will mean that you'll be waiting to see what DOE requires the "new" contractor to do with those "leftover" employees who used to be, long ago, UC employees entitled to a UC retirement. I'd hate to be the last employee in that fund - maybe $1.50 left for my retirement?? If you took TCP1 at LANL and think you made a solid, defensible choice, look and think again. Do you trust LANS to be around and to do the right thing? If not, do you trust DOE to continue strict requirements to take care of all those "left over" UC employees?
Tyler Przybylek of NNSA promised everyone during the RFP Townhall meetings that DOE/NNSA would always be around to protect our pension benefits. We have nothing to worry about. In fact, I'm sure Tyler's pension promise is every bit as good as Mike's incessant promises of "no RIF, no plans for a RIF" Right?
from 12:32 - I am a veteran and I spent my share of time in harms way (life before LANL). I also have a sense of humor that you seem to have missed, but at the same time, Eric's willingness to share his wisdom with us is a little tiresome. Chill dude.
P&TB
The LLNS website now (as of June 21) includes their proposed benefit package.
(http://www.llnsllc.com/file/Employeebriefing062007.pdf)
Under TCP2, for service-based contributions, the 401(k) company contribution for LLNL employees is significantly less than for LANL employees:
0-9 years is 1% vs. 3.5%
10-19 years is 1.75% vs. 4.5%
20+ years is 2.75% vs. 5.5%
No doubt this is a result of a BenVal study, which caps benefits at 105% of benefits at comparable companies. I'd tend to believe this reduction will be reflected in the LANS benefits as well, maybe LANS TCP2 employees will see this reduction for their CY2007 company contributions to be distributed at the end of February 2008.
Because the original post is buried pretty far down, and because it may be the next thing to hit LANL employees, can you please bring this to the top? It could be important to many employees at both labs.
Hi,
Have you guys seen the Segal report detailing the demographics of LANS employees? I don't have it on this computer, but will post the link tomorrow.
You'll see that LANS employes went TCP1 2 to 1. And the average age of TCP1 employees was 44 years old.
Clearly most are betting on LANS to guarantee pension payments, even the young employees.
I'm using a couple of spreadsheets that originated a LANL. Thanks to the authors. There is clearly way more money in TCP1, provided it pays off. TPC2 leaves me with a nontrivial shortfall, just considering 403(b), pension from UCRP and 401(k).
Tough choices.
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