"This is really pretty significant; we’ve been trying to achieve this for a long time," says Labs Deputy Chief Financial Officer Ralph Bonner, speaking of the significant changes to the non-represented employees’ pension plan and other retirement benefits.
Ralph, along with Mark Biggs and Bruce Criel (both 10310), have spent a good portion of their waking life over the past year putting together the new provisions of the Labs pension plan.
Ralph is no stranger to demanding tasks. Before taking on the Herculean labor of trying to improve the pension plan, Ralph spearheaded the profoundly non-trivial Oracle implementation project. Indeed, his recent career at Sandia calls to mind the old Army US Corps of Engineers motto: "The difficult we do immediately; the impossible takes a little longer."
When Labs President C. Paul Robinson gave Ralph, Mark, and Bruce the go-ahead to rework the pension plan, he laid down several guiding principles:
- Substantially improve the benefit formula while taking into consideration the company match to the 401k plan.
- Try to build in some Cost of Living Adjustment (COLA) provision.
- Devise a plan that encourages employees to stay in their Sandia careers longer.
- Assure the plan is financially stable and fiscally responsible.
"Fundamentally, we’ve achieved almost everything Paul asked for," Ralph says.
The Labs pension plan has been subject of frustration among imminent retirees for a long time. At employee dialogue sessions and other occasions where employees can ask questions of senior management, the issue of the pension always, always comes up. Over the years, several attempts have been made to upgrade the Labs’ pension plan, each time ending in frustration. As recently as April of 2000 Paul published a letter in the Lab News announcing that the Labs was withdrawing its then-latest pension plan proposal from consideration by DOE.
"There was a lot of disappointment," Ralph recalls, "but as we approached the fall of 2000, Mark [Biggs] and I talked about maybe going back to the drawing board and trying again."
Last Dec. 19, Ralph continues, he and Mark sat down with Executive VP Joan Woodard and went through an analysis of the issue, presenting several "straw approaches" they might take to advance the pension plan changes.
The question of the day was "Do we want to make another attempt?"
Joan and Paul, bruised but not broken by the previous pension attempts, said, Nike-style, "Just do it." The pension team of Ralph, Mark, and Bruce ran countless computer models, what-if scenarios, simulations to arrive at the golden mean: a plan that met Paul’s guidelines in every particular — save one.
"We weren’t able to put in an automatic COLA," Ralph says. "We ran a number of scenarios around that, we looked at a multiplicity of options. We worked it as hard as it could be worked, but we couldn’t make it work." An automatic COLA, he says, would place the plan under an unacceptable level of financial risk.
Despite the disappointment about the COLA issue, Ralph notes that Sandia has a long and good track record of making ad hoc increases to retirees’ pension benefits, including the latest 15 percent ad hoc increase that takes effect at the beginning of the new year.
"This change would not have happened under our previous operating contractor," says Ralph. "After the plan change in 1975, the policy was to have the same benefit structure as AT&T. As a result, AT&T was very inflexible in accepting differences, both in the formula or in passing through additional changes of the type just made for retirees. Lockheed Martin, at a time when they are seeking to consolidate their operation, was willing to accept differences at Sandia. Mike Camardo deserves a lot of credit for taking the initial position to accept the proposal and strongly supported it within Lockheed Martin."
"As you can tell this has truly been a team effort," added Ralph. "Employees should appreciate how hard Paul and Joan worked on this change, the excellent work by Don Blanton and Frank Figueroa with Lockheed Martin, which strongly pushed for the change, the tremendous effort by Les Shepard and TJ Allard in the Executive Staff organization, the great support from Rick Glass and all the folks at DOE/AL, and the approval by Gen. John Gordon. This list would be incomplete without including the early and ongoing exceptional help from Senator Domenici, Senator Bingaman and Congresswoman Heather Wilson. This was a long journey, but well worth the time and effort."