Union 1 Communicator

Members will NOT be able to carryover vacation from 2009 into 2010. Vacation carryover will be allowed as of 1/1/2010, so that you can carryover up to 40 hours from 2010 into 2011.

Members may borrow up to 40 hours and Purchase of up to 40 hours from 2010 is allowed for 2009. This was agreed to in 2008 to compensate for the need to save 4 vacation days for the 2009 Shutdown. Purchased vacation is processed as a “no pay” situation in the pay period in which the Purchased vacation falls.

Carryover, Borrow and Purchase will also be allowed contractually each calendar year subject to management’s approval beginning 1/1/2010.

Highlights of the Tentative Agreement with Electronic Systems
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August 31, 2009

Subject to Ratification

Northrop Grumman and the SEA Reach Agreement: Pay increased, pension retained, life insurance and disability plans improved

This newsletter covers the details of a tentative agreement reached Friday, August 28, 2009 between negotiators of the SEA and Electronic Systems. The proposal is subject to our ratification and is the result of a seven-week-long process of intense bargaining on complex subjects and issues between the SEA and the Company.
This six-year agreement keeps our people’s pay and benefits among the best, and at the same time supports the ES effort for continued success in a rapidly changing market place. We, your negotiating committee, believe this agreement deserves the support of our membership.

AGREEMENT HIGHLIGHTS

Pay – Comprehensive Package

The wage package during the six-year agreement includes six general increases and eleven cost of living increases over the contract term.

Pension Plan

Effective 1/1/10 all employees hired before 1/1/05 remain in the current Union Represented Employees Pension Plan. Employee contributions increase to 3.5% beginning 1/1/12.

Effective 1/1/10 all employees hired between 1/1/05 and 12/31/09 move to the Northrop Grumman Modified Standard Cash Balance Schedule.

Effective 1/1/10, all new hires will participate in the Northrop Grumman Defined Contribution retirement plan.

Health Care Provisions

Effective July 1, 2010, our members will have a modified selection of healthcare carriers for medical benefits.

Life Insurance Plans

Life Insurance Plans remain unchanged.

Disability Benefits Gains

All salaried employees on the roles effective 12/31/09 retain their current salary continuance and short term disability programs. All new hires effective 1/1/2010 move to a new salary continuance/short term disability program.

Employee Security and Protection Plan

Relocation increased from $2000 to a one-time payment of $5000. Additionally the educational benefit under the Educational Opportunity Program has been increased from $2000 to $5000.

Savings

Roth 401K option added beginning 1/1/2010.

WAGE PACKAGE

Six General Increases and eleven COLAs over six years.

The SEA and ES have negotiated a comprehensive wage package for our new six-year agreement. A total of six general increases and eleven Cost of Living Adjustments (COLAs) will boost members’ pay over the term of the contract. Increases to base pay will also increase the value of many other benefits as well as our pension upon retirement.

General Increases

The wage package includes pay increases comprised of six general increases plus eleven COLAs.

Schedules for general wage increases are:
August 31, 2009 3.5%
August 30, 2010 3.0%
August 29, 2011 3.0%
August 27, 2012 3.5%
August 26, 2013 3.5%
August 25, 2014 4.0%

COLA Benefit

Substantial inflation protection will be provided through the cost-of-living adjustment. There are eleven scheduled cost-of-living adjustment reviews over the length of the contract. The COLA formula adds one cent ($.01) per hour to employees’ base rate for each full .012596 increase in the National Consumer Price Index (CPI-W; Base 1982-84-100).

The schedule of eleven COLA review dates is:

May 31, 2010 Nov 29, 2010
May 30, 2011 Nov 28, 2011
May 28, 2012 Nov 26, 2012
May 27, 2013 Nov 25, 2013
May 26, 2014 Nov 24, 2014
May 25, 2015

HEALTH CARE BENEFITS

Employee contributions for health care, dental, vision and Personal Accident Insurance continue to be on a pre-tax (tax advantaged) basis. In addition, our members will continue to have the option of depositing pre-tax payroll contributions in a special account to pay for health care and/or dependent care (child/elder care) expenses.

• New Medical Plan Options available effective 7/1/10

 Preferred Provider Organization (PPO) options
- Preferred Medical PPO Options (Anthem BC/BS)
- Premium Medical PPO Options (Anthem BC/BS – available only to current participants)
 Consumer Driven Health Plan (Anthem BC/BS)
 Health Maintenance Organization (HMO) option: Kaiser Mid-Atlantic
 Executive Provider Organization (EPO) option: Anthem EPO BC/BS

• Dental Options available 7/1/10

 Delta Premium Dental PPO
 Delta Preferred Dental PPO
 Delta Preventive Dental PPO
 CIGNA Dental HMO

• Vision Plan – administered by Vision Service Plan (VSP) – this plan provides eye exams and lenses once every benefit plan year starting 7/1/10.

Recognizing the continuing national trend of increased health care costs, reasonable increases to medical, dental and vision costs will occur during the term of the contact commencing after the enrollment period in 2010.

DISABILITY PROGRAMS – Effective 7/1/10

• Short Term Disability (salaried employees)

Retain current Salary Continuance and Short Term Disability Program for all employees on the rolls effective 12/31/09.

All new hires effective 1/1/10 participate in the modified Salary Continuance/Short Term Disability plans.

• Long Term Disability

Employees will pay the current negotiated rates until the Corporation renegotiates with the carrier at which time the new rates will be capped at no more than a 4% increase over the current rate. The coverage levels are 50%, 60%, and 70%.

VACATION

Effective 1/1/10 SEA represented employees will be able to carryover, borrow and purchase up to 40 hours.
Additionally, the following vacation schedule will become effective 1/1/10:

< 1 yr: 10 days
1 yr -15 yrs: 15 days
15 yrs – 20 yrs: 20 days
20 yrs +: 25 days

Current SEA represented employees with 30 or more years of service as of December 31, 2009 will retain their 6th week of vacation for the duration of their employment.

OPTIONAL INSURANCE – Effective 7/1/10

• Accidental Death and Dismemberment (AD&D) Insurance

 Optional AD&D coverage continues to be available for members and their families.
 Employees will pay the Corporate negotiated rates. These rates are renegotiated periodically.

• Life Insurance

 Optional life coverage continues to be available for members and their families.
 Employees will pay the Corporate negotiated rates. These rates are renegotiated periodically.

PENSION PLAN

Effective 1/1/10 all employees hired before 1/1/05 remain in the current Union Represented Employees Pension Plan. Employee contributions increase to 3.5% beginning 1/1/12, in line with the next date for company pension funding..

Effective 1/1/10 all employees hired between 1/1/05 and 12/31/09 move to the Northrop Grumman Modified Standard Cash Balance Schedule.

All new hires effective 1/1/10 move to the Northrop Grumman Defined Contribution retirement program.

SAVINGS PROGRAM

Effective 1/1/10, members will be eligible to participate in a Roth 401K option.

SENIORITY PROTECTION

All non-represented employees hired on or before August 30, 2009, who transfer into the SEA from an ES Maryland location, will begin to accrue seniority at zero for the first 4 years of the transferred employee’s employment for purposes of increase and decrease in employment; after 4 years the employee will recapture prior seniority in accordance with the Agreement.

All ES, Maryland based represented employees will continue to transfer their seniority for purposes of increase and decrease in employment.

All non-represented employees hired on or after August 31, 2009, who transfer into the SEA will begin to accrue union credited seniority beginning on the effective date of transfer into the bargaining union for purposes of increase and decrease in workforce.

MARCH INCREASE

SEA-represented employees who are not at the top of their respective rate ranges may receive an increase of 4% pursuant to Section VI – Salaries of the Agreement.