[January 8, 2008]

As part of the closeout of the University of California's contract with the Department of Energy to manage Lawrence Livermore National Laboratory (LLNL), UC President Robert Dynes will seek Regents' approval of two agreements between the University and the Department of Energy /National Nuclear Security Administration (DOE/NNSA) regarding the transfer of University of California Retirement Plan (UCRP) assets and liabilities associated with LLNL UCRP service and DOE/NNSA's ongoing funding obligation to UCRP. The Regents will consider the agreements at their regular business meeting on January 15-17 in Los Angeles.

The funding agreement clarifies DOE's ongoing obligation to reimburse UC for contributions made to UCRP to maintain a target funding ratio of 100% in the Retained LLNL Segment. The segment includes the assets and liabilities associated with the benefits of LLNL employees who became retired, disabled or vested inactive members prior to October 1, 2007, including beneficiaries. The transfer agreement establishes the methodology for determining the amount of assets to be transferred to the Lawrence Livermore National Security LLC (LLNS) defined benefit pension plan to provide funding for the pension liabilities of former University employees who elected to have their basic UCRP benefits transferred to the LLNS defined benefit pension plan. These actions are similar to those taken by the University in its closeout activities associated with Los Alamos National Laboratory and the Department of Energy.

Both agreements must be approved by The Regents and officials at DOE/NNSA before either will become effective. In addition, the IRS has been requested to provide approval that the proposed transfer of assets and liabilities meets any requirements of the Internal Revenue Code that may apply. Once all approvals are obtained, the asset transfer is planned to occur on or before April 1, 2008.

These agreements have no relationship to or effect on The Regents' current plan to restart employer and employee contributions to UCRP. The UCRP assets and liabilities associated with the Retained LLNL Segment within UCRP will be carefully tracked and accounted for, and any underfunding will be addressed by the funding agreement with the DOE/NNSA. The Regents' decision to restart contributions will not affect any UC retired and inactive members, including LLNL retired or inactive members retained in UCRP.

For more information about the UC-DOE agreements, see the Fact Sheet [PDF]) and the Regents website.

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