Friday, June 30, 2006

Service-based match to 401(k)

Ok to post w/ my name. As you might guess, the Newsbulletin declined to publish it.
Thank you so much for your service to "the rest of us" and good luck in your new ventures.

Date: Mon, 26 Jun 2006 09:37:09 -0600
From: "David W. Thomson" <>
Subject: Service-based match to 401(k)

Ian Philp and Ralph Stevens (newsbulletin letters) may have discovered something that has been troubling many of us about the LANS management contract. One of the premises of the contract award was that LANS would bring "modern management" to LANL business processes. Could this be the first indication of how they intend to do that?

Back of the envelope calculations show that LANS will have to reduce LANL headcount by perhaps 400 people ($100M/$250K per head) to balance the budget. One would suppose that LANS was counting on a wave of retirements to eliminate the oldest and most highly-paid employees, freeing up funds for GRT, increased management fee, and the vastly expanded LANS management/overhead structure.

When the expected hundreds of retirees didn't do so, LANS is now caught in the proverbial "cash flow bind" and must take steps to defer expenses into next year. Two logical steps are not making bi-weekly contributions to the employee's 401(k) contributions until next fiscal year, and stretching out accounts payable. Indeed, if they can delay payables until after 1 October, they will hit next year's budget, protecting this year's fee. Next year they can go to Congress for an emergency appropriation to avoid layoffs at the lab and fund the promised 401(k) contributions.

It's a clever move.

Plutonium pits and "clever" accounting tricks--does this remind anyone of Halliburton (Cheney) and Enron (Kenny-Boy Lay)? Any wonder why privatizing LANL gives me a sense of foreboding about the future?
Comment added on behalf of John Horne:

And Global Crossing (Terry McCauliffe). I reiterate my point, they are all corrupt, Republican and Democrat.

John Horne
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