The Hanford pension plan for nonunion workers is being changed in 2014 to reduce benefits accrued that year and later.
Mission Support Alliance is administering the change, but said the decision to alter the plan was made by the plan's administration committee, made up of 22 current Hanford contractors and subcontractors.
The change does not extend to workers for the Hanford Atomic Metal Trades Council and the Hanford Guard Union. However, the change for nonunion workers was made as HAMTC negotiations with contractors are expected to get down to business now that the national election is over.
"The pension plan committee reviewed the pension plan and is making adjustments to better align with competitive nationwide standards," said Todd Beyers, Mission Support Alliance vice president for human resources.
The contractors are stewards of taxpayer money, and many companies nationwide have eliminated pension benefits, he said.
The 1,691 Hanford workers who are affected were sent letters this week. In addition, the plan has 426 workers who have accrued benefits in the past but are not yet drawing pensions.
Under the changes that take effect Jan. 1, 2014, the multiplier that determines pension benefits will be reduced. Pensions now are calculated by multiplying 1.6 percent by the five highest years of compensation by the total years of service.
Benefits accrued for most workers will be frozen for time worked until 2014 and for service going forward the multiplier will be reduced from 1.6 percent to 1.2 percent.
However, there will be some relief for workers with 15 years of pension credit who are at least 50. They will not have the five highest years of compensation in the formula frozen for the service eligible for the 1.6 percent multiplier.
Also changing in 2014, workers on long-term disability no will longer accrue pension service credit while on disability.
And in a third change, numerous options will continue to be offered for how pensions are paid out on retirement. However, the default option for workers who do not choose another one will be an option that provides no pension payments to a spouse or other beneficiary when the retired worker dies.
Employees in the pension program will continue to receive a 401(k) contribution of up to 4 percent of their wages, depending on how much of their money they contribute.
The changes to the pension plan will not affect those who already are drawing a Hanford pension, Beyers said.
Many Hanford workers hired in recent years are not eligible for a pension after the Department of Energy has limited reimbursement to contractors in new Hanford contracts to "market-based" retirement plans. Instead, new workers are offered 401(k) plans, with workers handling investments themselves and not receiving a set amount of money monthly.