Estimated Cost of the CORRE Proposals for Pension Improvements
Sandra Adkins, a BWXT Y-12 retiree asks:
How much of the $750 million pension fund surplus would the CORRE proposals for improved benefits consume?
Bob Worrell, a CORRE Board member, answers:
Towers Perrin, the plan actuary, priced the 2% spouse reduction at $51.3M as of 1-1-06. It would cost less now since it applies to a diminishing population. The reduction was approved for all active employees in July, 2004, so anyone retiring after that date is already getting the benefit. Towers Perrin also priced the general increase, as of 1-1-06, at $95.4M, but we believe that understates our actual request. We believe a more realistic number would be about $150M, but would obviously depend on how the Company structured the increase. I think you could reasonably estimate a total cost of $200M , but be sure to note that the number is a rough estimate.
Incidentally, I just yesterday got an updated total plan asset value which raises the surplus to about $800 million