ALBUQUERQUE, N.M. -- Pensions were a hot-button issue in negotiating the settlement between striking workers and Sandia National Laboratories officials.
Roughly 500 members of the Atomic Projects and Production Workers Metal Trades Council, a group of 11 unions representing machinists, electricians, painters and other workers at the nuclear weapons lab, went on strike Aug. 1 seeking greater pension benefits, higher pay and resolving job classification issues.
What they received was only part of what they wanted, according to Robert Kaneshiro, secretary/treasurer of the union.
On the defined benefit side, there will be an increase in benefits for all union employees. For example, a lower tier employee would see a 3% increase in benefits in the new contract, which expires July 31, 2002.
Employees also would have a quicker vesting period of three years, reduced from five years. Under the new contract, members also will be able to contribute for the first year of employment, although Sandia would not be contributing to the plan.
"It's a starting point," Mr. Kaneshiro said.
"We have a problem with the pension plan. It is very overfunded. It can give employees an increase without participant contribution," Douglass Wilfon, president of the Atomic Projects and Production Workers Metal Trades Council said during the strike.
No one at Sandia would discuss specific funding of the defined benefit plan, but there is a surplus, said company spokesman Rod Geer.
Company officials were not available to comment as to whether the pension benefit increases would have an effect on asset allocation for the pension fund.
As of Sept. 30, 1998, Sandia's $4.1 billion in retirement assets included $2.8 billion in defined benefit plan, according to Pensions & Investments' annual survey of the largest pension funds in the United States (P&I, Jan. 25). The corporation did not contribute to the pension fund in the year ended Sept. 30, 1998.
An earlier contract rejected by the union group also included increases in pension benefits.
"The pension benefit that was offered was an increase over previous contracts. It was one of the most generous pension benefits offered to Sandia employees," Mr. Geer said.
For some union members, pension benefits under the rejected contract would have risen by between 8% and 18%.
After their three-year contract expired July 30, the union group turned down a new contract, calling its pension packages and pay raises inadequate.
On Aug. 5 Sandia officials and members of the union group agreed to meet with a federal mediator. An agreement was reached Aug. 13.
The union will be looking into more pension changes in the future, including benefit increases, Mr. Kaneshiro said.
