Letter to Congress Members
Thursday, November 22nd, 2007Kenneth Cook has sent the following letter to Representative Davis, Senator Alexander and Senator Corker:
I am a retired Bechtel Jacobs Company (BJC) employee. As you know, BJC is a subcontractor to the Department of Energy (DOE) Oak Ridge Operations (ORO) Office Environmental Management (EM) Program for the Oak Ridge Reservation.
Prior to retirement, I spent thirty-two years working within the DOE complex at the Paducah Gaseous Diffusion Plant, the Oak Ridge Gaseous Diffusion Plant (K-25), and the Oak Ridge National Laboratory (X-10). I worked in both the diffusion and centrifuge uranium enrichment programs and the environmental restoration program. When I completed all the requirements for a full pension, I retired in 2002. I am currently sixty years old, i.e. a “pre-65 retiree.”
On Friday, November 16, I received an information package from BJC presenting information on various benefits. This is usually standard practice this time of year. The package usually contains information about the pension plan, miscellaneous health care benefits and any premium increases for the coming year by the healthcare provider, i.e.
Although a rate increase of possibly 10% was included, this package contained a change in cost sharing between the retirees and BJC. The change was from a 25% retiree – 75% BJC share to a 50% retiree – 50% BJC share. This is actually a 100% increase in the retirees’ premium. BJC stated that this is being done in order to be in compliance with their contract with DOE and DOE Order 350.1. This will increase what I currently pay for retiree healthcare coverage by over $400.00 per month. As you may be aware, our pension plan does not have cost-of-living or any other planned increases associated with it. This action effectively reduces my pension by $400.00 per month…a huge impact with respect to a fixed income.
I have included a copy of the announcement received by the retirees. As you read this announcement, please notice the following:
- The cost sharing is targeted toward retirees only. Current employees are not affected with respect to cost sharing. Why not? This action could possibly be construed as age discrimination;
- Who were the “DOE approved competitors” that were benchmarked? I can’t speak for the entire retiree population but I would like to know who these “approved competitors” were. For instance, did they include UT-Battelle, the current (X-10) operating contractor, or BWXT Y-12, the current contract Y-12 operating contractor. These contractors would have the most similar competitive packages to that of BJC. If UT-Battelle and BWXT are both DOE contractors, why are they not subject to the same cost sharing? It would seem that the same DOE Order 350.1 would apply. It does follow however, that should BJC be successful with this action, DOE will expect these contractors to follow suit placing other retirees at risk. Although not confirmed at the writing of this letter, it appears that DOE has recently required BJC to re-classify itself as a construction company, which clearly they are not, and benchmark against that industry.
- Unfortunately, this is the typical way BJC deals with its employees. It sends out time-sensitive announcements of this type on a Friday in many cases just prior to a holiday. It makes it very difficult to get in touch with anybody at BJC. I tried to make contact Friday but was routed to an answering machine. You should also notice the short period of time allotted for retirees to make any changes in their medical or dental coverage. We have until November 30 to decide if we want to keep our healthcare coverage, make changes, or cancel…as if that were truly a viable option at this time. Notice that the “Open Enrollment” extended from November 12 through November 30 and we received the notice on November 16 effectively losing four days. Whatever decision we make must be made during this Thanksgiving week or the next.
This does not seem to be an equitable action. There is also some question with respect to profit motive. BJC is a cost-plus-incentive fee contractor which means that they are reimbursed for normal operating costs and receive an additional fee based on their performance against some baseline. My understanding is that healthcare cost is reimbursable to BJC, and is not fee bearing. However, if there is a cost savings, the funds can then be reprogrammed back into the DOE ORO EM operating budget which can then be utilized by BJC via additional work to obtain additional fee. At best, this has the appearance of an indirect way for BJC to profit from this action and, in the worst case, the retirees are subsidizing EM’s operating funds.
The Oak Ridge DOE complex was once managed by one subcontractor, i.e. Union Carbide Nuclear Division and then Lockheed-Martin Energy Systems. Since then, DOE has split the management of their programs among several contractors, i.e.
Our fractured pension plan, which is currently spread out among the various contractors, should also be reconstituted and managed by an independent party. This independent party would balance the needs of DOE and the retirees. The size of the existing fund (which has not received any new funding in several years) is too great a temptation to the contractors to further their own interests at the expense of others.
I ask that you look into these matters and provide any assistance possible. There has to be a better way. As I stated before, the BJC cost-sharing change will be devastating to the retirees as it is neither equitable nor reasonable. A 100% increase in premium cost to the retiree will have negative quality of life impacts.
I look forward to your response and I thank you for your time and consideration.
