UC Manhattan Project Legacy Potentially Blows Up Over Issue of Retiree Health Care

For many years, going back to the Manhattan project, UC Regents were in charge of the "nuclear labs." Various scandals revolving around lab security arose and the management system was eventually shifted to a consortium involving UC and others. At the time, there was concern about the UC pension implications. Lab employees had been part of the basic pension plan. The question was essentially how the assets of the plan (and the liabilities) would be split off to cover them.

There was less attention paid to the issue of retiree health care, an unfunded liability for which, unlike the pension, the official position of UCOP is that there is no guarantee. In theory in this view, the Regents could end the retiree health care program or modify it in any way. (Some observers have disputed that view.)

Apparently, the lab liability issue is coming back to haunt us with regard to retiree health care. CaliforniaWatch has an article describing a lawsuit by lab employees. Excerpt below.

Livermore Lab retirees demand University of California health benefits

October 14, 2010, CaliforniaWatch, Erica Perez

Four former employees of the Lawrence Livermore National Laboratory whose retiree medical benefits changed after the lab's management changed in 2007 are suing the UC Board of Regents, saying they have a right to the university-provided medical benefits they were promised. Plaintiffs and Livermore Lab retirees Joe Requa, Wendell G. Moen, Jay Davis and Donna Ventura filed a petition for writ of mandate in August in Alameda County Superior Court and the first motions are scheduled to be filed this December. Requa and his fellow retirees began working at the Livermore Lab as scientists, engineers and support staff in the 1960s and 1970s. At that time, the UC managed the lab on its own, through a contract with the U.S. Department of Energy. Requa, Moen, Davis and Ventura all retired between 1999 and 2006, after which they received UC retiree medical benefits. It was in 2007 that the Department of Energy awarded the Livermore Lab contract to a new operator, Lawrence Livermore National Security LLC, a private consortium that still includes UC but also includes Bechtel Corp., The Babcock & Wilcox Company, Washington Group International and Battelle.

According to the UC, the Department of Energy required the consortium to sponsor all medical benefits for Livermore lab retirees. That group includes about 5,000 people, the retirees' lawyers said. Since the switch, monthly premiums and copayments for medical visits and prescriptions have increased for some of the retirees, according to the complaint.

After Requa found out the consortium would be taking over retiree medical benefits, he says he showed up at the open enrollment meeting with a straw hat and a stack of business cards. "I didn't think it was right for them to be in charge of my medical," the retired computer scientist said. "I went down and did a little rabble-rousing and found a few folks that would listen to me."

Requa and others started a website and a fundraising drive, raising $150,000 for a legal defense fund. Now, their lawyers contend that the Regents breached the contract with the retirees by shifting their benefits to the new entity. They say the university improperly separated them from the larger population of UC retirees…

Full article at http://californiawatch.org/watchblog/livermore-lab-retirees-demand-university-california-health-benefits-5724