Dec. 15, 2004

Pensions and the draft RFP

In the draft Requrest for Proposal, Section H-36 (f) (1) (pension plans) it says "The contractor shall maintain a separate pension plan(s) ... that preserves accrued benefits and recognizes service credit earned under the predecessor contractor's retirement plan, the University of California Retirement Plan (UCRP)." The problem here is that it seems to imply, should UC not retain the Laboratory management contract, that funds be paid by UCRP to the successor contractor to cover the implied liabilities.

In my view, pensions are simply a form of deferred compensation. There is no logical reason that the agreement people made when they hired on, including pension rights, should be abridged. I think that every bit of this form of compensation should, upon retirement, be paid by UCRP and not by some successor contractor if UC should not retain the management contract.

I hope and trust that this misperception in writing the draft RFP for the Lab will be corrected in the final RFP.

--George A. Baker