NNSA Briefing to LANL Employees Los Alamos National Laboratory by hcj

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									     NNSA Briefing
  to LANL Employees

Los Alamos National Laboratory
  Management and Operating
          Contract

      June 10, 2005
                                 1
      SEB Chairman
  C. S. Przybylek
     (Tyler Sha-bell-ik)

Human Resources Specialist
 Roberto Archuleta
    Contracting Officer
    Michael Loera
                             2
                 Agenda
• Status of Current Contract

• Path Forward

• LANL Employee Benefits

• Q&As

                               3
    Status of Current Contract
• Current Contract scheduled to expire
  Sep 30, 2005
• NNSA has received DOE Headquarters
  approval to negotiate an extension
  – NNSA seeking a not-to-exceed 12 month
    extension
     • 8-month extension taking the current contract expiration
       date from Sep 30, 2005 to May 31, 2006
     • Option(s) that can be unilaterally exercised by the
       Government to extend the expiration date to Sep 30,
       2006, if needed
• Contract modification subject to UC and
  NNSA HQ approval
                                                              4
    SEB Path Forward on New
            Contract
• May 19, 2005 - Final RFP issued
• July 19, 2005 - Proposals due
• August/September 2005 – SEB evaluates
  Proposals
• October 2005 – Finalize SEB Report
• November 2005 – Selection & Contract Award
• December 1, 2005 – Transition Period
  commences
• June 1, 2006 – New Contractor commences
  Management & Operations
                                               5
                    Timing of Decisions
                                  Transition Period - 6 Months
                            NOTE: Dates shown below are proposed and not firm.


 Dec. 05             Jan. 06             Feb. 06            Mar. 06              Apr. 06       May 06



Winner of the competition proposes a new compensation
package for Transferring Employees and submits
substantially equivalent Pension Plan One for NNSA      Sixty day window during which         Transition
Contracting Officer approval.                           current employees will have the        Activities
                                                        opportunity to chose which approach   Completed
Winner of the competition proposes a new compensation   best fits their needs and plans
package for New Employees and submits Pension Plan
Two for NNSA Contracting Officer approval.




                                                                                                            6
    LANL Employee Benefits
• What we heard and what we did in the final RFP
  – “Comparability” changed to “substantially equivalent”
  – Protect Current Employee Benefits – RFP
    establishes separate Pension Plans (One & Two)
  – Employment Guarantee – Expanded to include
    inactive vested transferring employees
  – Need time to consider options – Provided an
    extended transition period so employees can consider
    their options related to UCRP and employment at
    LANL
  – Provide for Retirees (current and future) - Continue
    retiree medical coverage under new contract
    including coverage for current retirees

                                                        7
   LANL Employee Benefits
• Stand Alone Pension Plan
  – Benefits Substantially Equivalent to current LANL
    employees benefits
     • Include UCRP age factors
     • Preserve accrued benefits earned under UCRP
     • Recognize service credit earned under UCRP
  – Plan funding is backed by US Government
  – De-links plan from corporate-wide coverage
  – Allows for site-specific actions based on needs at
    LANL
  – Will facilitate smoother transition in future contract
    awards
                                                             8
            Pension Plan One
           (Covers Transferring Employees)

• Substantially Equivalent to the University of
  California Retirement Plan (UCRP)
• Current LANL Employees bring their accrued
  service credit and leave balances with them
• Includes UCRP age factors
• Pension Plan One is not subject to the corrective
  action requirements of the ben/val process
• Contractor will consider amending Pension Plan
  One to incorporate changes made to the UCRP
  during the course of the contract
• To be developed during the transition period

                                                  9
            Pension Plan Two
   (Covers New Employees including Inactive Vested
 Transferring Employees and UCRP Retiring Employees
                hired by the Contractor)
• New total compensation package that is market-
  driven
• Geared toward the recruitment and retention of
  needed critical skills
• Pension Plan Two is subject to the corrective
  action requirements of the ben/val process
• To be developed during the transition period

                                                      10
                    Current Employees                    Current LANL
                                                          Employee
                    have Three Choices
                                             1                 2                3
                       Transferring                     UCRP Retiring                   Inactive Vested
                        Employee                          Employee                   Transferring Employee


                                                 Seek to Continue             Elect to             Desire to Continue
                                                 Working At LANL            Leave LANL             Working At LANL




Employment                                          If Rehired by Successor,             Automatically hired by Successor,
                      Automatically hired
Status with                                        Becomes “New Employee”                   Becomes “New Employee”
                        by Successor
Successor

Status of Leave          Carried Over                      Start New                               Carried Over
Balances

Status of Accrued        Carried Over                       Start New                                 Start New
Service Credit


                        Covered by                         Covered by                             Covered by
Pension Plan
                      Pension Plan One                   Pension Plan Two                       Pension Plan Two


Employee’ s             Rolled over to                  Employee Receives                     Employee is an Inactive
Status in UCRP        Pension Plan One                   UCRP Benefits *                     Vested Member of UCRP *         11

                                            * Employees encouraged to contact UC/LANL regarding requirements and benefits.
                   Questions on the RFP
Please explain H-36, Section B-H, p.26,(a) (2) (i) of the RFP. Does
it mean that employees have six months from June 1, 2006, to Dec.
1, 2006, to determine their permanent status? If so, I'm confused
because elsewhere, the Fact Sheet states: "May 31, 2006,
Transition period ends."

     Response: The employees must exercise their option to retire
or become an inactive vested participant of UCRP by May 31, 2006.

The RFP wording was intended to cover those employees who may
be asked by the incumbent contractor to perform “phase-out”
support should the “Continuity of Services” clause under the
predecessor contractor’s contract become effective. Should such a
situation arise, the Contracting Officer will deal with this situation on
a case-by-case basis under the new Contract. To avoid further
confusion, the SEB is considering amending the RFP H-36,
subparagraph (a)(2)(i) as follows: ““Transferring Employees” are
those employees who transfer from employment with the
predecessor contractor to employment with the Contractor on June
1, 2006.”
                                                                        12
                        Questions on the RFP
Paragraph (a)(2). In the LANL RFP there appears to be an inconsistency on page 35, Section H-
36. This is where the RFP states:
   (2) Definitions
       (i) “Transferring Employees” are those employees who transfer from employment with the
       predecessor contractor to employment with the Contractor within six (6) months after
       June 1, 2006 and without a break in their employment at LANL.
       (ii) “Inactive Vested Transferring Employees” are transferring employees who do not elect to
       retire under the University of California Retirement Plan (UCRP) prior to June 1, 2006 and who
       remain vested participants as “inactive members” of the UCRP.
       (iii) “UCRP Retiring Employees” are employees of the predecessor contractor who elect to
       retire under the UCRP prior to June 1, 2006.
       (iv) “New Employees” are those employees hired by the Contractor on or after June 1, 2006,
       who are not Transferring Employees.

It appears that there is no transfer period for employees to decide whether to retire with UCRP or not,
since they must retire before June 1, 2006. Essentially, the Transferring Employees do NOT have 6
months to decide whether to transfer to the new contractor or retire with UCRP or to go to Inactive
status under UCRP. Basically, the only option available to them is to transfer from employment with
UC to employment with the new contractor (or quit altogether). They can NOT elect to retire with
UCRP or go inactive with UCRP during the 6 months that are allotted to the Transferring Employees
since these options must be elected prior to June 1, 2006. Is this correct? Is this what you intended?
If this is correct, what is the point of giving the LANL employees 6 months to decide whether to
transfer or not if the two most important options are not available to them?

      Response: The new benefits packages will be rolled out during the
transition period allowing the employees at least 60 days to evaluate their
options. Employees will have to exercise their options prior to the end of the
transition period, May 31, 2006.                                               13
                      Questions on the RFP
I have a basic question on Section H-36, part (d) (6) (ii) on page 40 of Section B-H of my Word
file. It says (and I quote): When the total RV and/or per capita cost exceed the comparator group
by more than 5 percent, as required by the Contracting Officer, the Contractor shall submit for
approval corrective action plans, including a timeline, to achieve a net benefit value and per capita
cost not to exceed the comparator group by more than 5 percent. Does this apply to existing
pensions of transferring employees? In other words, does this mean in one year after the award
of the contract that the new contractor has the possibility of substantially reducing a LANL
employee's pension based on what the current market is for pensions? Or does this only apply to
non-pension benefits? It seems to me that this is in direct opposition to Section H-36, part (e) (3)
(i) that states that: Pension Plan One. The Contractor shall consider amending Pension Plan
One to be consistent with any changes made by the Board of Regents of the University of
California to the UCRP during the term of this Contract. For Transferring Employees (not including
Inactive Vested Transferring Employees), Pension Plan One shall include UCRP age factors,
preserve accrued benefits and recognize service credit earned under the predecessor contractor's
retirement plans including the UCRP. In this paragraph, it clearly states that transferring
employees will be guaranteed UCRP age factors. Nowhere does it state that this only applies for
the first year of the contract. Is this guarantee only for one year or does it apply to the contract
lifetime of 7 years? Any help you can give me would be greatly appreciated.

       Response: Paragraph (d)(1)(i)(II) states in part that Paragraphs
(d)(6)(ii) – (iv) below do not apply to evaluating the reasonableness of
benefits for Transferring Employees. Thus, the corrective action plans
associated with the ben/val study and per capita cost survey are not
applicable to Pension Plan One for transferring employees. With regard to
the question related to the guarantying pension benefits, the actual benefits
will be negotiated between the new Contractor and the Contracting Officer
during the new contract’s transition period.
                                                                                                  14
           Questions on the RFP

Regardless of what organization is awarded the
LANL contract, will LANL employees who retire
before the current contract expires on 9/30/05
remain in the University of California Retirement
Program (UCRP) after the new contract takes
effect or will they be transferred into some other
pension plan?
    Response: LANL employees who retire
before the current contract expires will remain in
the University of California Retirement Program
(UCRP).
                                                 15
               Questions on the RFP
Will ALL those UC employees currently eligible to retire from UC
with medical benefits continue to receive such coverage under the
new contract. Specifically, there is a tiered level of medical
coverage for employees with less than 20 years of service. For
example, for someone with 15 years of service, the UC employer
contribution will be paid at 75% and the UC retiree pays the
difference. If someone retires under that condition, what will happen
with a new contractor when the medical coverage is taken over?

    Response: Retiree health care will be provided by
the successor (new) contractor. See Clause H-36,
paragraph (i) “Post Retirement Benefits.” The benefits
under the new contractor’s plan are required to be
“substantially equivalent to those provided by the
predecessor contractor.” The actual benefits will be
negotiated between the new contractor and the
Contracting Officer during the new contract’s transition
period.

                                                                   16
         Questions on the RFP

The RFP is very unclear about retiree
health care. I am already retired from
LANL under UCRP. Will future retiree
health care be provided by UC or will it be
provided by the new contractor?
     Response: Retiree health care will be
provided by the successor (new)
contractor. See Clause H-36, paragraph
(i) “Post Retirement Benefits.”

                                          17

								
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