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OR pension queries posed


Seeking to correct what they say is decades of neglect resulting in millions of dollars lost due to unfair Department of Energy pension adjustment distributions nationwide, members of the Coalition of Oak Ridge Retired Employees made sure U.S. Sen. Lamar Alexander [R-Tenn.] got the message.

The message, which one prominent CORRE member from Farragut said has been ignored by the Senator, was hammered home in a public forum during Alexander’s speech and question-and-answer session in Farragut Town Hall Wednesday, Oct. 10.

A.L. Pete Lotts, Oak Ridge DOE employee for 31 years, including division director of research and reactors at Oak Ridge National Laboratory, told Alexander the DOE’s Multi-Employee Pension Plan “has a surplus of $800 million [$3.2 billion budget] … there’s money in there for an adjustment, and that needs to be done.”

Lotts then provided Alexander with a copy of a letter outlining in detail CORRE’s request — $200 million of the surplus to be distributed to approximately 10,500 retirees, mostly in East Tennessee.

Lotts also gave the Senator a CORRE-prepared chart illustrating the positive economic potential for East Tennessee if the pension increased are granted, listed at $78,427,843 annually in a six-county area where a sizable majority of retirees reside [Knox, Anderson, Blount, Loudon, Morgan and Roane counties].

Alexander said, “It’s not an easy one to fix, I’d like to tell you I could just do it. … I’ve taken a number of steps with the Department of Energy. I have a number of inquiries out to contractors now to get their side of why they can’t spend the $800 million.

“I’ll be your advocate to try to get as much as I possibly can for the retired employees of Oak Ridge.”

Charlie Kuykendall of Farragut, a former division director at ORNL who worked at the lab 41 years, stood up and said, “This is not a private pension fund. This money is completely government money. … It’s set aside for pensioners, and nothing else.

“What we’re asking for simply is a continuation of what the practice of Union Carbide was,” Kuykendall added about that company’s five pension adjustments, between 1969 and 1984, while contractor at ORNL. “We just want the Tennesseans to be treated as well as they’ve been treated in other states.”

Kuykendall later said, “The system we had is no longer being honored. … has been ignored in Oak Ridge, and part of the reason is our politicians have ignored it.”

That includes Alexander, Kuykendall said. “He’s not speaking up, period, and we’ve had a [heck] of a time getting his attention.

“We expect Alexander to start taking up for us like [U.S. Rep. Zach] Wamp [R-Tenn.] has done. We expect Alexander and the other Congressional people to say, ‘Wait a minute, we know the Tennessee people haven’t been treated like everybody else. Do something for ’em. They used to get adjustments.’”

Kuykendall said Oak Ridge-DOE employees living in the six-county Knox area, plus their families and friends, add up to around 100,000 people affected.

The bottom line, according to Kuykendall: “We’re working for people who retired 15 years ago, 20 years ago, 25 years ago, and they were hourly roll workers, janitors, laborers, pipe-fitters, machinists and secretaries. Those are the ones that were hurt.”

Kuykendall said things might be changing with Alexander. “Now we think we’re about to get his attention,” he said. “Just this past week, [CORRE leaders] had a chance to sit down with his staff and fully explain what we’re doing. And Alexander is beginning to fully understand.

“We’ve been on him for at least two years,” he added. “But now he’s up for re-election. He’s a lot more interested in us, all of a sudden.”

At the meeting, Alexander said, “You have differences of opinions with actuaries [managers who calculate retiree life expectancy into pension projections]. It’s a graduated amount depending on how many years ago you retired.”

Lotts, CORRE chair of it government relations committee, labeled Alexander’s answers “pretty good,” but added the Senator “maybe doesn’t have a good understanding of … what the actuary requirement is.

“The actuaries are saying that the fund is now funding at 135 percent of what is required,” he said. “I don’t understand where the Senator is coming from when he says there’s some disagreement about the actuary part.”

Of the $800 million, “Committing $200 million of that, that’s the actuarial value [based on anticipated life expectancy of around 10 to 15 years for all current retirees],” Kuykendall said. “That would cover any retiree who has retired from the company to date. The older retirees, they would go back and figure out their losses, and they would get more, a higher percentage increase.

“The future retirees are already covered.”

Retirees since 2004 are paying only a two-percent spousal penalty rate [percent of rate a retiree signs over to spouse upon retirees’ death] versus the average of eight percent paid by those retiring before 2004, Kuykendall said.

Personally, Kuykendall said the disparities in spousal penalties alone — eight percent versus two percent — “has probably has cost me a $1,000 a year on average.”

When Martin-Marietta replaced Union Carbide in 1984, “They were not a single company, but what is called a limited liability group put together just to bid on the contract and make money,” Kuykendall said. “They were not interested in retirees. As so, they didn’t have any [pension] practice. So Martin-Marietta kinda adopted Union Carbide’s practice, and continued it. … They honored it for a couple of adjustments.

“B-W-X-T [contractor for Y-12 who also manages ORNL pensions] has honored one adjustment [2001], but we practically had to shoot holes in the wall to get ’em to do it.”

Kuykendall said recent changes in contractor and DOE management in Oak Ridge, “decided there would be no adjustments, period, for people like us in Tennessee.

“They point out to us that there were written procedures for the way University of California [facilities, including Los Alamos, N.M.] were handled. They get an annual cost of living adjustment.”

David E. Reichle, CORRE president, is quoted on a DVD distributed by the retiree organization that “these pensions have already deteriorated by 23 percent,” he added. “Needs of the retirees are urgent.

“D-O-E now proposes to revamp its contractor pensions for future retirees, and Congress is getting involved. But no one is yet worrying about those who have already retired, and to whom the damage has already been done.”

Reichle said discrepancies in pensions are “nearly two-fold,” adding Oak Ridge is “among the poorest in the D-O-E system.”

Unlike Union Carbide, Martin-Marietta, from 1984 to 2000 “made only two adjustments to retirees’ pensions,” Reichle said.

He said the situation grew worse by 2000, “with more small contractors and limited liability corporations involved. … In a sense the responsibility for retirees became irrelevant … retirees became forgotten.”

In 2000, “Lockheed-Martin Energy Systems at Y-12 actually proposed, with local D-O-E approval, to raid the pension trust fund to build buildings at Y-12,” Reichle said. “U-T-Battelle [current ORNL contractor] also thought this a good idea to support new facilities at X-10.

“This was an unbelievable lapse in the … responsibility to retirees,” he added. “That was the last straw for retirees,” prompting the formation of CORRE.

With Congressional help, CORRE stopped the contractor raids on the pension fund, Reichle said. “And with help from Zach Wamp in 2001, CORRE got adjustments for retirees.

“But no one retiring after April 1998 has ever received an adjustment.”

 

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