[September 18, 2006]

As part of the implementation of the new management and operations contract at LANL (which became effective June 1, 2006) and consistent with the requirement set forth in the University's contract with the Department of Energy, UC is required to transfer University of California Retirement Plan (UCRP) assets at a rate sufficient to meet the cash flow requirements of the Los Alamos National Security LLC defined benefit plan (LANS Plan). In May 2006, the UC Board of Regents authorized the President to transfer UCRP assets to the LANS Plan trust on a monthly basis to the extent necessary to fund the LANS Plan's current claims.

On September 21 at their regular business meeting in San Francisco, the UC Board of Regents will receive an update on the discussions with the Department of Energy/National Nuclear Security Administration regarding the transfer of assets to the LANS Plan trust. In addition, The Regents will take action on an item that will allow the University to make an initial transfer of $10 million in UCRP assets to the LANS Plan, and supplemental transfers not to exceed a combined total of $50 million, to facilitate and expedite the payment of benefits to former UCRP members and/or their beneficiaries who are entitled to benefits from the LANS Plan and to cover plan administrative costs.

This action will in no way weaken or reduce the solvency of the UCRP. Any interim or supplemental transfers of UCRP funds will be accounted for in the final reconciliation of UCRP assets and liabilities that will be eventually transferred to the LANS Plan trust.

This action proposed by the President will not affect Los Alamos National Laboratory retired and inactive members retained in UCRP who will receive the benefits to which they are entitled under the UCRP. Discussions regarding the final transfer of assets and liabilities to the LANS Plan as required under the UC contract with the Department of Energy (W-7405-ENG-36) are ongoing. Initial meetings have occurred. UC administrators will continue to update The Regents and the LANL and UC community throughout the process.

This action does not affect LLNL employees who are members of UCRP.

The University has prepared a fact sheet regarding this action which can be found online at http://atyourservice.ucop.edu/ under "Current News".

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