Pinky and the Brain,
Please post anonymously. Thanks.
To: All LLNL Employees
For anyone from LLNL that may be reading the LANL blog hoping to find information about the benefits package please read closely.
Having attended the 3:00 PM presentation today, I immediately found at least four items that I find totally unacceptable and have one question to ask, but first I'd like to point out that the date on the presentation was the 18th of June not the 21st. This may explain why the clock to respond to NNSA started three days ago and you now only have until (high noon) June 28th , 2007 to respond to issues that you dislike or will not accept. If you don't, you will get exactly was presented today and NNSA will be laughing all the way to the bank. Why? Because they could care less about you, your pension or your livelihood. So with that said here are four bullets for you to fire back at them with warp speed.
- All of you that are going TCP-2 and establishing a 401K with LLNS, LLC should note that the matching contributions of 6% and the additional 5 % are almost half of what LANL got. See page 10 of the presentation.
- If you are a new hire and go TCP-2, you will not get medical and dental when you retire (ever).
- The contract allows LLNS, LLC to change the level of contributions, among other things, every two years.
- It was said that all TCP-1 people will be contributing 5% of their salary to the pension plan and that contribution will mirror UC, so you should expect a steady increase in contributions as years go on until eventually the 16% is coming directly out of your pocket.
And now the question to NNSA, DOE and UC that was asked. How do you expect HR to entice anyone to work at this facility with what you have to offer? Anyone with a brain is going to look at this and laugh as they go out the door. I can only assume that your goal is to dismantle all of the DOE facilities, get rid of some of the best people on this planet, and hire those who were previously in the welfare lines to do the work that will secure this nation. To date you have ignored the advice from the MERCER report and done just the opposite. You have successfully proven your ignorance.
For those of you at LLNL who haven't paid much attention because you thought you were going to get the same deal that LANL did, think again. You are getting the shaft. You must take the time to read this presentation carefully, bullet by bullet, and comment on every item of dislike. Unless you "demand" what can be seen on page 54 of the presentation with firmness and give the NNSA no alternative but to implement it, you are going to get what you deserve; "nothing". NNSA / DOE and UC are hoping you are complacent and asleep. The question really is, ARE YOU? Please voice your opinion at www.llnsllc.com, because it counts. Comments are to be directed to this e-mail address: llnlemployeebenefits@doeal.gov
[Download the LLNS employee benefits presentation here.]
235 comments:
«Oldest ‹Older 201 – 235 of 235From 12:05 Just for the benefit of the record when this blog is donated to the Los Alamos Historical society, I am not "upper management." If you knew me, you'd probably call me friend. While I recognize your anger, anger is not going to take this lab where we need it go! How many on this blog encourage rebellion, brag of a work ethic that does not include work or suggests that malicious compliance is acceptable. We attack each other and we belittle the decision makers (inside and outside the lab) who have the ability to decide our future and our funding. Tell me, how does that help us or the lab? An honest question from a concerned employee.
I am told by those who were on the "other" LLNL team that the the benefit package by Northrop was "equal" to LANL's old package and superior in it's retention aspects. Anyone else hearing that?
We attack each other and we belittle the decision makers (inside and outside the lab) who have the ability to decide our future and our funding.
So what is your means to the end. Yeses Boss? There is nothing to explain and nothing good to say to those who made this decision. They have made up their minds and that's that. Now the only thing left for people to do is understand that their future is gone, their plans have been abolished and they will have to settle for less. They are just doing time, as if they were slave labor, and to leave as soon as possible. What was once a position to be proud of has now been reduced to just a job, and one that I'll probably not look forward to coming to. The job is now typical civil service employment. In only one case can I see this to be advantageous. When the pay package came in they all got the same raise. No more discrimination or good old boys club. I doubt however that the new contractor will do away with this. All this with one short stroke of the pen.
NNSA sets the terms for the packages (105% for LLNL instead of 112% for LANL). Not a matter of what Norhtrop or LLNS was suggesting.
Their proposal team did not include a univesity and proposed to jointly operate Nevada Test Site and LLNL. S. Younger to manage both.
As to Northrup, check out how well things are going for the NTS. No Northrop management invovlement there (no managers came from Northrop) and LANS is looking pretty good by comparison. Check out the number of unfilled vacancies on their web page. Vacancies not created by growth, but by significant unhappy employees departing. How many of your friends are happy there? Be careful what you wish for; be very careful.
Well, one of us is right and one of us is wrong. It has been said in this blog that either, or both labs have sufficient brain power to solve any problem - if you get enough of that power focused on the issue. Treat these issues like the profressionals we can be. Less stressful for us, and we actually have a chance of improving things.
Or the other way - keep arguing with them, creating issues, and feeding the media frenzy. You know they'll respect us in the morning (and reward us appropriately).
So if LLNS and LANS are to mirror UCRP do any of you believe this?
Q: What would the potential maximum level of mandatory employee contributions be, if any, to the TCP1 DBP? 15% as on p47?
A: In the benefits plans proposed to NNSA, there are no employee contributions to the LLNS TCP1 Defined Benefit Pension Plan.
Q: Is it true that if I choose the inactive vested status in UCRP, I will not have to contribute to the currently proposed UC employee contribution to the UCRP?, but if I choose TCP1 instead, LLNS must consider ammending the benefit program consistent with future UC changes, and it's very likely that a mandatory employee contribution to TCP1 will be implemented?
A: LLNS is unable to answer questions regarding the administration of the UCRP; this question can only be answered by UC. In addition, LLNS cannot anticipate what changes, if any UC may make to its benefit plans in the future. In the benefits plans proposed to NNSA, there are no employee contributions as of 10/1/07 and the foreseeable future to the LLNS TCP1 Defined Benefit Pension Plan.
Q: 1) If we go to a mandatory pension contribution plan of 5%, will this affect only TCP1 participants, or will this 'contribution' also be required of TCP2 participants? 2) Will there be any chance (or change) so that we can get a 'cash out/lump sum' option with the pension plan in TCP1? 2a) If they will not offer the cash out for TCP1 pension plan, will there be the possibility of changing/designating or assigning a new beneficiary. (For example: you or your spouse die - can the money go to your children?)
A: 1) If employee contributions are ever required for the TCP1 Defined Benefit Pension Plan, it would not apply to the Defined Contributon 401 (k) plan in TCP2. 2) LLNS does not plan to offer a cash-out/lump-sum option in TCP1. 2a) Under the terms of the proposed TCP1 LLNS Defined Benefit Pension Plan, you must designate any natural person or persons as your beneficiary/bene. If you name any beneficiary other than your spouse, you must have your spouse's written consent (witnessed by a Plan representative or notary). These plan provisions and additional details will be communicated to you in a Summary Plan Description after 10/1/07.
A lot more can be found at http://www.llnsllc.com/qa1_5/Faq.aspx
The final version if due out in mid July for people to sign away.
This is a BS statment. The money that you will be contributing to TCP-1 along with the interest that it makes does in fact support all of those who will retire on the system, so if you are the last one in, there my not be anything for you unless NNSA decides so, and with those funds in TCP-1 only being insured by the feds at .33 on the dollar return I'd say you be much better off in TCP-2 where what is in your name is yours to keep. This is a choice and a gamble you have to make very soon. Personally I like 100% returns.
Q: With about 15 years into UC and at least 23 more years of active employment to go, what guarantee do I have that the TCP1 benefits options as currently stated (100% medical/dental + same formulas as UC, etc. ) will really be there in 20, 30, or even 40 years from now (when I'm retired), especially given that no new people will be allowed into TCP1 to keep the money flowing?
A: The question as stated leads us to believe you think the Defined Benefit Pension Plan is funded like Social Security - it is not. Employees do not contribute funds into the plan on behalf of others. ERISA mandates how contributions are calculated and sets the minimum funding levels. The contractor with governing and regulatory body oversight annually calculates the amount required to keep the plan funded to meet legal requirements.
What happened to the proposed 5% contribution to LLNS-TCP1? The above two posts suggest it was dropped?
There's a lot of good questions on the solvency of the pension plan for LLNS-TCP1 at http://www.llnsllc.com/qa1_5/Faq.aspx, "Solvency of TCP1 Pension". To every single question, the carefully worded answer is always the same,
A: This is the coordinated answer between NNSA and LLNS, LLC: The TCP1 pension plan will be funded by transferring funds from UCRP to cover the vested, accrued benefits for Lawrence Livermore National Laboratory (LLNL) employees who elect to participate in Total Compensation Package (TCP) 1 as of October 1, 2007. The new contractor, Lawrence Livermore National Security (LLNS), is a Limited Liability Corporation subject to the Employee Retirement Income Security Act (ERISA) and to other laws that did not apply to the UCRP. These laws require that the assets of the TCP1 pension plan be held in trust for the exclusive benefit of the employees in the plan. If additional funds are needed in the future to fund benefits in the TCP1pension plan, the employer (LLNS) will be legally obligated to make contributions to the plan. LLNS would make the necessary contributions to the plan and would be reimbursed for the allowable costs for those contributions under the contract between LLNS and the National Nuclear Security Administration (NNSA), which is a part of the United States Government under the Department of Energy. NNSA's contract with LLNS also requires that at the end of the LLNS contract, the responsibility for the pension plan be transferred to the entity which is awarded the contract with NNSA or, if there is no such entity, the contract be extended with LLNS for the purpose of reimbursing the costs of continuing the benefits. NNSA thus has a continuing obligation to reimburse the allowable TCP1 pension plan costs in the future.
A lot of legal speak, carefully worded. Let's dissect it some.
. . .to cover the vested, accrued benefits for Lawrence Livermore National Laboratory (LLNL) employees . . .
See post (click here) above. This statement can be misleading, at least as it was applied to Los Alamos TCP1. Funds REMAINED at UCRP to ensure that UCRP-LANL was 100% funded. The rest of the funds available, the "A-B" formula, was transferred to TCP1. Thus the transfer was not made to cover the TCP1 employees, but rather to cover the inactive UCRP-LANS employees. TCP1 got the remainder, and by UC's calculations, it's not enough. See other posts above for references.
the employer (LLNS) will be legally obligated to make contributions to the plan.
They bypass the issue of how much of this cost can be passed onto the employee. See for instance what is happening today at the University of New Mexico in the post (click here) above. They need 22% of payroll to catch up, and employees will pay 8% of that.
See also the post (click here) post above on how California is battling the problem of how much the state vs the employee will pay.
. . . reimburse the allowable TCP1 pension plan costs . . .
It's as simple as DOE declaring that costs past "x%" are not allowable. The employee will have to pay the rest, or the plan will continue to underfund. The pension benefits are also not vested rights, so employees not yet retired could see the age factors and retirement dates changed in order to make the plan more solvent.
Has anyone seen the Summary Annual Report for LANS TCP1? That will be the first indication of how underfunded TCP1 at Los Alamos is, and what ERISA will require to start catching up and staying properly funded.
And none of these responses is legally binding, but for reference only. One of my friends tried recently citing one of these types of answers from last year on the LANS and Los Alamos pages. He was told oops, you're right, we did say that, but it doesn't matter, it's not binding, and we changed our minds.
Is there anyone at LLNL that understands that TCP-1 is a Trojan horse and that TCP-2 is the only avenue to take. I understand that there are some who will have no option but to take TCP-1, but the mass majority can afford to break the ties with LLNS and make their own nest-egg, one that will be there for sure because you have control, not them. The bottom line is, no matter if you go TCP- 1 or TCP2 your remaining time of employment will always be uncertain. Any of us at any time and on any given day should expect to see a pink slip on our keyboards upon arrival or worse yet at the end of the day have two guards show up, ask you to gather your personal belongings and then be escorted out the gate. Knowing that we are all to be _at will_ employees, why would you want your livelihood tied up in TCP-1. I'd want my funds in TCP-2 where I have access to them at any given time, even if I have to pay the 10% penalty for early with draw. BFD. It's going to get ugly, I'm sure and I would expect this type of activity to start shortly after Oct 1st. They will have then have the captured audience of LANL and LLNL, and now may the fun begin. It's kind of like a drag race. Now first up will be LANL to be challenged by LLNL, who will get to the finished line first. What we have today folks are two labs with no mission, one powered by the notorious llns power and one powered by lans power. Both are striving for survival but only one can win. Will it be llns or lans. Here we go. It's llns that turns on the tree first and stages. Lans is turning this into a staging duel. Thirty seconds has gone by and lans is playing games, trying to get under the skin of his opponent. Okay, finally lans stages. Both lights are on and we're ready to go. The light turns green. Who will get to the finished line first. We're all standing there with our mouths open. It's lans in the lead at half track and then boom, lans body blows off and shatters, flames erupting in the drivers face and he loses control and crosses the center divider, crashing into llns. Both cars are destroyed, no body wins and no body get hurt, but everyone loses. What a day. When you think you have seen it all you'll find yourself standing there asking, what's next. Maybe it's going to be a never ending saga of the _best meets best_ as we finally realize that we are just pawns in a chest game being manipulated by politicians who could care less about us as long as the results are, they win, we lose.
8:51 There never was a 5% LLNS TCP-1 contribution issue. That is a UCRP issue/possibility.
Not as simple as "DOE declaring that costs past "x%" are not allowable." Why work so hard at painting such gloomy pictures that are not about to happen, when we have the real here-and-now 105% to deal with? I give you credit for "thinking outside the box", but see UCRP running into trouble before TCP-1 doing so. The Feds have a lot more red tape to get through to do anything that dumb. Also, since I am not an ERISA expert, I would bet such an attempt would run afoul of that bit of legality.
"ERISA was enacted to protect interstate commerce and the interests of participants in employee benefit plans and their beneficiaries, by requiring the disclosure and reporting to participants and beneficiaries of financial and other information with respect thereto, by establishing standards of conduct, responsibility, and obligation for fiduciaries of employee benefit plans, and by providing for appropriate remedies, sanctions, and ready access to the Federal courts."
Anonymous said...
8:51 There never was a 5% LLNS TCP-1 contribution issue. That is a UCRP issue/possibility.
You sir have your butt where the sun doesn't shine and must be one of those guppies talked about earlier. When that bait comes by you make sure you bite on that one ott hook rear hard and right after they set the hook I want to to learn how to say ouch. Say it again, ouch !!
Hey bonehead. LLNS and LANS are to mirror UCRP, so have fun bozo.Do you need any more information.
Anonymous said...
8:51 There never was a 5% LLNS TCP-1 contribution issue. That is a UCRP issue/possibility.
7/3/07 8:56 PM
Oh I forgot. It doesn't exist for now but you wait until after Oct 1st, 2007 and watch that promise or should I say factual information of the day vanish before your eyes. There is nothing in writing that says those promises will be good by tomorrow. But you keep the faith, brother. I surely will not and again I will say I am not in the market of taking any pay cuts or donations to plans that I may never get a dime out of. That is a wrong answer now, and wrong answer for the future; unless you're a sadomasochist or just a dman fool.
I understand most LANL folks took the LANS TCP1 during the LANS transition in 2006. If you had to make the same choice today would you still take TCP1? Hopefully there's more information about these plans now.
Some message boards have a polling feature. Not sure if this one has such feature but it would be interesting to do a poll like that.
8:51 says: Could someone please interpret 9:31’s post for me? I think he meant to insult me, but I think the booze spoke first.
And 9:41, thank you for agreeing with me that the 5% has not been discussed as a LLNS issue. We do disagree about the possibilities that you suggest post 10/1/07. Hasn’t happened at LANS and no rumors that I have heard even suggest that it might. By the way, I am hardly a “dman fool.”
I hope everyone had a sober and safe 4th of July holiday.
I think the question should have been, "I understand most LANL folks took the LANS TCP1 during the LANS transition in 2006. If you had to make the same choice today and understand that LLNS and LANS do mirror UCRP, which will soon require their employees to pay the 5% of the 16% required to keep the pension plan funded at 80%, would you still take TCP1?
Having seen all that has transpired over the last few years at LANL and viewing the substandard package offered to LLNL in conjunction with understanding that most of the pension plans in the United States require contributions from their employees, I'd say that TCP-2 is the only way to go.
A perfect example of what will happen at both LLNS and LANS after Oct 1st, 2007 can be found at another post ( http://lanl-the-rest-of-the-story.blogspot.com/2007/06/listen-learn-react.html#comment-3382190731880544063 ).
Lets face it people there were a few objectives here that resulted in the transition of the labs. One was political pressure from the Whitehouse on down, making DOE and NNSA nothing more than puppets on a string, whose mission was to see that GWB's friends were to make money off the labs for decades to come. In the thick of things UC saw an opportunity to ease the burden on their pension plan and could see that if the people between ages 52-60 were to stay employed for the next five to six years they were going to have to make good on some promisees. So in the back rooms and never to be found in print, DOE & NNSA cut a deal with UC to where they all came out a winner, including the Whitehouse; avoiding any possibility of an age discrimination law suite. Here is how I suspect it went down.
The Whitehouse makes good for their business buddies before his tern is up, both in the USA and Iraq
DOE and NNSA bring the UCRP pension plan down to their standards so that the jealously will subside and to show us whose boss.
UC is relieved of all current and future obligations, saving billion of dollars from this day forward and never having to dole out a dime more, for any new hires, therefore reserving their precious pension plan for the PhD and above only. Soon, a two tier system will immerge whereby all Phd will be under the umbrella of UC having an entirely different pay scale and benefits package than the lowly MS, BS, or technical who will after attrition takes its course will become supplemental labor only.
So again I will ask you. Do you trust the SOB's that concocted this attack on your livelihood well enough to once again put your money into their TCP-1 so that for the second time and for some other drummed up reason, you will once again never get what you were promised, or would it be better to give yourself a 5% to 16% contribution into your 401K with 6% matching funds and possibly 5% on top of that over the remaining course of your employment.
I want you to think real hard on this one, please.
http://llnl-the-corporate-story.blogspot.com/ Not much there but it could be if more than 5% of the people at LLNL cared. Oh well, you get what you allow.
See the links in the (click here) post above. While I enjoy a good evil theory, the real reasons and approaches are much simpler. DOE wanted the excess pension funding as a refund, and they wanted more control over the future, as stated in the 1996 Inspector General memo. It just took them 11 years to get it.
In the meantime, UC ran into it's own problems, as detailed in the Parsky's Party posts. LANL is only $4B of what was once a $60B fund, and now something closer to $40B. They have union strikes and political battles coming soon for the bulk of their plan, as detailed in the other links. So DOE has finally seized the opportunity to contol its own future pension costs, but I think UC in general has much bigger problems.
I don't follow the logic of (7/3/07 9:04 PM) above. Just look at the UNM example posted above. They need 22% of payroll to stay afloat, and the employer is only pitching in 14%. UCRS is already battling the same problem: They need 16% of payroll, and California is balking at paying even 11% of it. Whatever the employer won't cover, i.e. "allowable costs," the employee has to make up. If neither employee nor employer contributes enough, the plan will be remain underfunded.
That's the big open question for TCP1 at both LANS and LLNL, how much will the employee be asked to contribute. For the moment, DOE has pledged to mimic UCRS's requirements (which are currently none), simply as a courtesy to the TCP1 employees.
But under ERISA and the enhanced provisions of the Pension Protection Act of 2006, starting in 2008 employers will have only 7 years to ensure that their pensions are 100% funded. See for instance (click here) for articles on how the PPA will actually accelerate the freezing of Defined Benefit Plans. So expect our Benval group to trend even lower even faster. And ERISA gives DOE a much better club to knock TCP1 costs down fast in the very near future.
This is not thinking "outside the box." This is the box.
They were told and did it anyway. Are we now supposed to take it in the shorts for their failure or in my mind something a lot more involved? TCP-2 and call it good my friends. That is where it is all heading anyway. Get use to it now and it won't be so painful in the future.
http://llnl-the-corporate-story.blogspot.com/2007/07/mercer-report.html
Chipping Away At The Pension Freeze Trend
If that be the case then I'd much rather have my donations in a savings account that makes nothing than to give it to LLNS or LANS TCP-1 program. This tells me that having my money is a Fidelity 2010 plan is still better than depending on an employers 6% contribution. How much simplier can it be put. You must make your own nest egg. For now it will be TCP-2 invested where you want it to be. When that's gone which may be in a few years, oh well, its gone; but in the meantime you control your investments. If you are going to retire within the next five to six years I'd suggest that you do not play the risky stocks. I'd put it in a much more conservative plan so that Fidelity thinks you are going to retire very soon and leave it there.
Gee could this deplete the pot even faster?
They have union strikes and political battles coming soon for the bulk of their plan, as detailed in the other links. So DOE has finally seized the opportunity to control its own future pension costs, but I think UC in general has much bigger problems.
I'd say it's an opportune time to get what is yours and move on. If you wait to long there may not be anything for you to obtain.
Folks, it's time to move on. You have been given a warning and a peek into what the future has to bring. It isn't bright, and if you continue to think that the government is going to bail you out when it comes time for a shortfall, think again. That is reserved for illegal aliens and non US citizens who never paid a dime into the system and sure as hell have no loyalty to the country or concern for your welfare. These are the parasites that the current administration worships, as it has been for many administrations before GWB. Someday, these will be the people that take on jobs such as the gardener, custodial services, plant engineering and security just a few. Why? Because by doing so there a tremendous cost savings in overhead and employee cost. I guarantee you it's only a matter of time, and that time is long before the next revision of the contract comes about. If you get lucky LLNS and LANS may let those who are in the system stay until they retire, but I wouldn't bank on it.
Under the recent DOE UCRP agreement, a segment of UCRP is now designated as UCRP-LANL, and DOE has agreed to keep that segment 100% funded, under the new 7-year funding provisions, until the last annuitant dies, at which time they recapture any remaining funds. The funding transfer from UCRP to LANS TCP1 was done to ensure that UCRP-LANL is already today 100% funded, even though the rest of UCRP is projected to be under-funded, as is TCP1.
So while the rest of the UCRP continues underfunded, with the state and the union negotiating on who will pay what portion, the inactives and retirees in UCRP-LANL are sitting pretty. Meanwhile, LANS TCP1 has yet to calculate its true funding status, and LLNL TCP1 is still conceptual.
So again I am hearing that it's better to freeze your UC retirement and go TCP-2, where you have two choices. You can freeze your retirement until a later date where it will grow by 2% a years and then start drawing your pension, or you can start drawing your pension on Oct 2nd and put it into
a 401k where it will grow at 6% and possibly 5% more. You could also use it to pay off bills in preparations for the RIF that coming due to Bechtel's out-sourcing and salary realignment scheme, all to show that they are in fact making a profit. I wonder if that's how they are going to fulfill they contractual obligation to fund any short falls of TCP-1 in accordance with the RFP. See ( answer from llnlllc Q&A ) @ http://llnl-the-corporate-story.blogspot.com/2007/07/cut-paste-i-still-have-question.html
This question has been asked to LLNS,LLC and they have yet to address it. Could it be because they would have to admit this fact, or could it be that all the shortfalls even though specified will be honored by the employer will in fact be passed on to the employees by means of a 5% -16% contribution from each paycheck to keep those who have retired with a roof over their heads and on vacation. Oh I know, your investing in your future, I promise. Anyone who tells you that you are only contributing to your future when the funds are not going into your own personal account is selling you a bridge 100 west of San Francisco.
This new and improved TCP-1 is only as good as the people that stand behind it and as you can see, they didn't blink an eye at screwing approximately 16,000 employees at two national labs out of 50% of their livelihood. Want to bet they'll do it again at the drop of a hat?
Look people, your UCRP is gone and the labs have now joined the ranks of corporate America. What corporate America does, LLNS and LANS will do. The only ones who will make out are the goons at the top who will slice your throat in a micro-second. For today enjoy that 6% on your 401k that you are getting because it's soon going away . Please visit http://www.investopedia.com/articles/retirement/07/pensionfreeze.asp
The sad part about the transition of the two labs is that I have not seen where it' a win-wins situation for anyone except those at the top,but then again this is how corporate America works. Enron set the pace and now everyone is jumping on the train. How wonderful.
Can anyone see why TCP-1 is to be avoided at any cost regardless of your age.
Okay LLNL and LANL strut your stuff. It's time to see who has a brain and who doesn't. Go to http://llnl-the-corporate-story.blogspot.com/ and anser the question at the poll.
Maybe it time to get some advise from other then those who think they know what they are talking about. try this site http://llnl-the-corporate-story.blogspot.com/2007/07/tcp-1-verses-tcp-2-just-facts.html
As the owner says, not open to anything other than the facts and all else will not be tolerated.
TCP1 vs TCP2 blog site sounds appealing, but you have to realize that this is just yet another Eric Fairfield site.
I try to keep an open mind, but not so open that my brains fall out.
I'll pass on Eric's site.
In case any of you in the near future or during your incarceration at LLNL / LLNS decide that you want to express your opinion, feel abused or wnat to seek legal help please keep the addresses in mind.
Gwilliam, Ivary, Chiosso, Cavalli & Brewer
1999 HARRISON ST.
SUITE 1600
OAKLAND, CALIFORNIA
94612
510-832-5411
510-832-1918 FAX
E-mail:Sandy Jonas ( sjonas@giccb.com )
Web Site :webinfo@GICCB.com
llnlemployeebenefits@doeal.gov
michael.telis@mail.house.gov, - ( congresswomen )
Thomas.Dagostino@nnsa.doe. gov,
The.Secretary@hq.doe.gov,
lseaver@llnsllc.com,
customer.service@ucop.edu
Anonymous said...
Here is why_you_ are going to have to make up the difference with your 5%+ pay check contributions, if you don't want the actuary tables to change.
CHUCK JAFFE
Dark clouds in forecast
Your long-term market assumptions may be all wet
By Chuck Jaffe, MarketWatch
Last Update: 12:01 AM ET Jul 1, 2007
CHICAGO (MarketWatch) -- Everything you know about your financial future could be wrong. That's not a statement on listening to predictions of a dire market crash or following some new theory of the "best" way to invest. It's about what you think you know about stock market returns and how you have planned for them in the future
Paul McCulley, managing director at Pimco and author of the new book "Your Financial Edge," says that investors need to reshape their portfolios to reflect the returns they should realistically expect from the stock market for the next 25 years. Focus on funds, ETFs
MarketWatch offers complete coverage of mutual funds and exchange-traded funds. Highlights:
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It's not the first time someone has suggested that market gains will be lower over the long haul, it's just the rare occasion when someone with so much influence in the industry and such a long track record of being correct as an economist has called for such a dramatic shift.
Most investors and advisers believe that stocks will deliver an annualized average return of about 10% over the long haul, with small-company stocks doing slightly better. They believe this mostly because of the widespread acceptance of research by Roger Ibbotson of Ibbotson Associates.
A few years back, however, Ibbotson started suggesting that the first 75 years worth of research would not be a good indicator of the next 25 years. Instead of 10% on large-cap stocks, Ibbotson said the next quarter century would see the market deliver somewhere in the 8% to 9% range, on average, most likely in the high end of the range..
McCulley, however, is saying that the last 25 years -- a period he described as "a long journey of disinflation" and "irrelevant" to the next quarter-century -- will have no bearing on the future.
McCulley went well past Ibbotson, forecasting a rate of growth in the range of 6% to 8% annually, and said that investors should "remember that it could be at the bottom of that range."
Rest assured that plenty of investment advisers and pros will suggest that McCulley is way off base. They'll say it because to do anything else blows a huge hole in their financial planning.
While it certainly is possible that McCulley is wrong, consider what happens if he is right.
The big matter of a few percentage points
Say your expectation has been set at 10% returns, on average, per year. Using a rough compounding formula, that means your current nest egg -- without any further contributions -- would double three times and be halfway to a fourth over the next quarter century. A nest egg of $100,000 at that rate of growth would be just under $1.2 million in 25 years.
Now cut those returns down to McCulley's predicted range. At 8%, the money doubles three times; at 6%, it doubles just twice. That same $100,000 in savings would be worth somewhere between $400,000 and $800,000. And living on that retirement nest egg would be one heck of a lot harder.
If you believe the studies which suggest that Americans are not saving sufficiently to fund the retirement they are planning on, and pile on the idea that returns on the money they are saving will come in below their expectations, you've got a major problem.
"You can't simply plan to get a 10% return because that's the number you need," McCulley said. "You must plan based on what you expect to happen in the market, and what you should expect is that the next 25 years won't be anything like the last 25."
That leaves consumers with some choices that McCulley acknowledged are ugly.
No good options
Some people will be forced to work longer in order to amass the money needed to get them through retirement. Others will be forced to reduce their expectations and downsize their retirement, giving up some of the comfort, hopes and dreams they could have if the market simply grew faster and did more work.
Finally, people can save more of their current income, which in McCulley's world moves from the "always good advice" category into the "can't live without it" column.
For consumers, McCulley's forecast should be a call to action, even if it doesn't automatically spur one of those results. It should prompt investors to review the assumptions they have made about retirement savings, to adjust their hoped-for returns downward and to see how the future looks if the market is muted for 25 years.
For investors who have a collection of funds, rather than a plan and a realistic expectation of growth for their investments, it's a call to set expectations reasonably and to then react to them by changing financial habits.
Nobody is going to like the message that returns are shrinking and that lifestyle changes -- sooner or later -- are coming, McCulley said, "but if you can't avoid it -- and I don't think you can -- you had better plan for it and react to it."
End of Story
July 8, 2007 8:42 AM
More 401K and pension plan news
http://www.yourwayahead.com/blog/_archives/2005/5/10/669213.html#post_comment
Will the downfall never end?
It's time to meet the new boss and decide. Facts are Facts and power comes in numbers. It's your call.
http://llnl-the-corporate-story.blogspot.com/2007/07/tcp-1-or-tcp-2-that-is-question.html
http://www.universityofcalifornia.edu/regents/regmeet/may06/8cattach.pdf
Having just received offers of employment, LLNL's inquiring minds want to know. We investment savvy baby boomers too young to retire, would elect TCP2, but we're concerned about having to "compete" for our own jobs.
1. In terms of strategy, is it worthwhile to freeze UCRP retirement, accept the LLNS offer, and then cash out within 120 days?
2. What's been the experience at LANL, of having to apply for and compete for your own job? If we elect TCP-2, are we cutting our own throats?
We investment savvy baby boomers too young to retire, would elect TCP2, but we're concerned about having to "compete" for our own jobs.
You do not have to compete for your job as long as you do not retire before Oct 1st.
If you cash out you had better make sure you roll it over tax free and do not take any withdraws before you are 59.5 years old, only the principle.
If you buy an annuity with it, which BTW will yield more than what LLNL is going to pay you make sure it is guaranteed, for your life and your spouse and realize you are on your own when it comes to medical.
I believe that the cash out and get medical access only has been reneged effective a few days ago.
Check the LLNS,LLC web site. Need more info about LLNL go to their web page and inquire. There a quite a few links there for you to read that should be an eye opener for all of you that have been sleeping.
http://llnl-the-corporate-story.blogspot.com/
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