05.09.06

Cantwell Continues to Question Planned Cuts to Basic Retirement Security for Hanford Workers

WASHINGTON, DC – U.S. Senator Maria Cantwell (D-WA) continued her call for the Bush Administration and the Energy Secretary to abandon a proposal that would exclude new contract workers at Hanford from participation in the Department of Energy’s guaranteed defined-benefit pension plan. Under the proposed policy, current Hanford contract workers could continue participating in the existing pension and health care program, but all new contract employees would be ineligible and would have to enroll in their respective employers’ packages. In a letter sent Monday to Energy Secretary Samuel Bodman, Cantwell called for the rejection of the proposed policy.

Cantwell continues to express grave concerns about the proposal, which would not only undercut the government’s commitment to Hanford cleanup workers, but could also hamper clean up efforts at the site. Last month, Cantwell met with Hanford workers in Tri-Cities to discuss potential changes to their pension plans, and, last week, joined a coalition of other senators in a separate letter to the President’s urging him to abandon the proposal. Monday’s letter highlights the specific impacts of the proposal on Hanford workers.

[The text of Cantwell’s letter follows below]

May 8, 2006

Dear Secretary Bodman:

In light of the Department of Energy’s April 27, 2006 announcement to change its policy for contractor benefit reimbursements, I am writing to again express my concern that the Department’s on-going restructuring of contractor pension plans and medical benefits will adversely impact the retirement security of all contract workers at the Hanford Nuclear Reservation in Washington state.

First, I am aware that for all new contractor employees, the DOE will no longer reimburse contractors for defined benefit pension plans and medical benefit plans. Instead, new contractor employees will be covered by different, 401 (k)-style benefit plans. Second, it is my understanding that the DOE intends to divide two expiring contracts held by Fluor Hanford and CH2M Hill Hanford Group into three new contracts. Details of similar RFPs in the past involved complicated changes to pension plans that have resulted in general confusion from Hanford site workers about the security of their pension benefits. I urge the DOE to abandon any plan to transition from the site-wide Hanford Pension Plan to a two-tiered pension system.

According to the American Academy of Actuaries’ Pension Practice Council, the Department’s new policy would be “seriously detrimental to the interests of American workers…” The Academy objects to this new policy, arguing that it essentially bucks the nation’s retirement security policy from traditional defined benefit plans, a guarantee of retirement benefits that workers and their families can count on, no matter what. The Academy also states that this new two-tiered policy would basically deny government contractors the ability to choose among retirement plans, which is fundamental to our voluntary private retirement system. The Academy believes that retirement plans can be designed to “create costs at any level,” and that defined contribution plans do not inherently provide costs savings relative to defined benefit plans.

As you are well aware, atomic workers, including those at the Hanford site in Washington State, are exposed to one of the most hazardous worksites in the world. Given the unique complexity of the clean-up effort at Hanford, the retention of a skilled workforce is a vital element for success. Given the unique complexity of the clean-up effort at Hanford, the retention of a skilled workforce is a vital element for fulfilling the moral and legal obligation of the federal government to cleanup America’s nuclear legacy at the site. In the past, the site-wide Hanford Pension Plan, a uniformed pension benefits program, was an incentive for recruiting qualified and experienced workers to remain at the Hanford site. Preservation of the site-wide Hanford Pension Plan is critical for a stable workforce on long-term projects. The Plan was touted as a way to provide cost savings to the taxpayers and to the DOE through the consolidation of contractors’ contributions into a single plan that would also be more user-friendly for employees.

Since that time, there have been many contractors at Hanford. However, each of them have been providing continuity and defined benefits to Hanford employees through this site-wide, multi-employer pension plan. For employees, defined benefits plans such as the Hanford Site Pension Plan represent a promise from the employer as to what the worker will receive from their pension upon retirement, given their years of service and their salary upon retirement. Not only would a two-tiered pensions system for future clean-up work provide workers different benefits for identical work, it disincentives workers from making a long-term commitment to work on such clean-up projects.

I am extremely proud of the contributions that were made by workers here at Hanford, both in support of this nation’s war efforts during World War II and the Cold War. Now we must continue to work together to address the environmental legacy of these contributions to our national defense and not undermine their sacrifices by eroding worker benefits. Thank you for your attention to this important matter. I look forward to your timely response.

Sincerely,

Maria Cantwell
United States Senator

###