Join your fellow employees who are fighting for your benefits -
Join the Alliance!
Retirees, Vendors, Contractors, Temps, and Active Employees are all eligible to become members of the Alliance.
Highlights—February 5, 2005
- "United Healthcare
-- an oxymoron?" by "rjg_41". Full excerpt: Regarding the switch to United
HealthCare let me tell you what I
have discovered. I wrote to Mr. Palmisano and got a reply from Dr.
Jane Barlow, Well-being Director, Health Benefits Operation at IBM.
I have responded to her letter. Well, here's some things you might find interesting.
- Under UHC I too was hit with about 50% fewer doctors here in
Florida and no in-network doctors or hospitals anywhere within a 100
miles of our upstate NY summer home. On that Dr. Barlow
stated: "..we knew that some IBM participants would be affected
by 'provider disruption'..." "While that number is less than
5%..." I replied to her that "I don't know where the pluses are but
I sure know where the minuses are".
- If you live in certain areas of the country you are still covered
BC/BS not UHC.
- The UHC and BC/BS plans are NOT the same. BC/BS coverage is
superior. I have verified and re-verified with both companies the
information below. Based on the reply I got from Dr. Barlow they
don't know about yet or aren't admitting it. I am sure they will
try to fix it but I am pretty sure they can't for 2005. Under UHC should a covered individual
need emergency medical
attention at a out-of network provider you will be reimbursed at in-network rates ONLY if
UHC decides based on the diagnosis, it was an
emergency. If determined not to be an emergency, if PPO, you will
be reimbursed at out-of-network rates and if EPO, in the words of
the UHC person, "You are on your own". BC/BS handles it the same way only if you had
the option of an in-network provider. However, should someone seek ANY medical
treatment in an area with no in-network provider the individual will
be reimbursed at in-network rates regardless of whether it is an
emergency or not and regardless if they are PPO or EPO. If within
the US you must call first and get permission. If outside the US no
phone call is required. This applies even within a specialty. I
have the BC/BS position in writing.
- Because of this plan difference, those covered by BC/BS have
another significant cost benefit option. With BC/BS the only
significant reason for selecting PPO is if an individual wishes to
go to a significant number of out-of –network providers in an area
where in-network providers are available. Since BC/BS covers more
areas and has an extensive number of choices in the areas that they
cover and since BC/BS covers an individual even under EPO, when no
in-network provider is available, EPO gives the individual virtually
all the same coverage as PPO, at a lower contribution, no
deductible, low fixed co-pays for hospital and emergency room, no
charge for some services, etc.
- Ever with BC/BS being a better plan, the employee contribution in
my case whether I was covered by UHC with Florida as my legal
address or covered by BC/BS with my NY home as my legal address, are
- Despite the fact that Westchester County and surrounding areas,
where most IBM HQ people likely live, have an extensive network of
UHC providers, that area remains part of BC/BS. Considering the
advantages noted above, this is an appearance problem at the very
- Unlike what we have been use to when we call BC/BS, where the
people are knowledgeable and dedicated to the IBM contract, in
contacting UHC I have been hit with some less than polite people and
mostly people not knowledgeable of the IBM/UHC program. The IBM
Dedicated Service Center for UHC is dedicated phone number only, not
the people. Unlike BC/BS phone calls are routed to people who
handle many other contracts. In one case I was given totally
incorrect information. I have had to request a supervisor to get
someone who could answer questions. On the plosive side I shared
the details of problems I have had with a UHC call center supervisor
who was very concerned about what was happening and assured me he
would take it to his management. Hopefully it will get fixed but
certainly not a well executed implementation.
- Consulting Magazine: Best
Firms to Work For, 2004. The
Best Places to Stay 2003. (Editor's note: There's aren't many
IBM approved hotels on this list!)
- New York Times: Taking
the Wheel Before a Pension Runs Into Trouble.
By Mary Williams Walsh. Excerpts: Their misfortunes raise important questions for the millions
of workers and retirees who participate in company pension plans: Who stands to lose when a plan
fails? How big are losses likely to be? And, just as important: If you find that you are not
fully insured, what can you do? [...] A basic rule of thumb is that the government covers benefits
of up to about $45,000 a year for people who retire at 65; this maximum rises each year with
inflation. But the guideline can be misleading: it is a little like saying that your homeowner's
policy pays a maximum of $450,000 before you know if it covers floods, fires, theft or other
losses, or if possessions like antiques are handled in some other way. In reality, few people
caught in a pension collapse happen to be 65 when their plan fails. For those who are younger,
the maximum coverage is lower. For a 45-year-old whose plan fails this year, for example, the government
covers a maximum of $11,403 a year, even if he has earned a larger pension. But for a 75-year-old,
the government covers benefits of up to $138,665 a year. A list of the figures can be found at
the Web site of the pension agency, www.pbgc.gov/news/press_releases/2004
- Washington Post: A
Reign On the Wane? By David Ignatius. Excerpts: The American shadow this
week isn't Iraq, surprisingly enough, but the ballooning U.S. trade and budget deficits -- which
are seen by the Elizas as evidence that old Henry has finally lost it for good. You hear griping
about the deficits from European finance ministers, economists, bankers and hedge fund managers.
They talk about the Bush administration sometimes as if it were a runaway train, but they recognize
that an American financial crack-up will hurt Europe and Asia almost as much as the United States.
The concern about U.S. fiscal imbalances is shared as well by most of the American business leaders
and economists I talked to here. Indeed, it's hard to find anyone who isn't concerned, except
the eternal optimists who inhabit the White House.
The basic analysis runs like this: Thanks to aggressive fiscal and monetary
stimulus, the United States is consuming about 6 percent more than it produces, resulting
in a $600 billion trade deficit last year. To finance this extravagant over consumption, America
is in effect selling off claims on its future income, in the form of U.S. Treasury securities
that are purchased by the rest of the world. It may sound like a sweet deal for America, a bit
like a group of skinny guys pooling their money to buy candy for the fat man at the head of the
table. The problem is that it's unsustainable. America's debt to the rest of the world is already
about $3 trillion. In another 10 years, it could total about $11 trillion. Just paying the
interest on that debt will cost over $500 billion a year. But that's assuming the skinny guys
will be willing to keep buying goodies for the fat guy -- which they won't.
- New York Times: Corporate
Welfare Runs Amok. Excerpt: Earlier this month, Johnson & Johnson became one of the first
major American corporations to sign on for a one-year "tax holiday" - a government-sponsored
opportunity for American multinationals to bring their foreign profits back to the United States
at a puny tax rate of 5.25 percent, compared with the normal corporate rate of 35 percent. Johnson & Johnson
intends to repatriate $11 billion. And that is just the beginning of what is shaping up to be
an unprecedented government giveaway. [...] The nation's corporate tax rules - combined with
spotty enforcement by an underfunded and outmuscled Internal Revenue Service - provide strong
incentives for American companies to shift their profits from the United States to low-tax havens,
such as Ireland and Luxembourg. Once there, the profits are allowed to grow untaxed by the United
States until they are repatriated. That tax deferral is a hugely munificent gesture - as if the
country's biggest businesses had been granted their own special I.R.A.'s. But it wasn't enough
for many companies that have piled up excess cash abroad. The Homeland Investment Coalition, a
roster of dozens of America's largest corporations, lobbied vigorously - and successfully - for
a tax holiday before deigning to repatriate their overseas profits.
- New York Times: When
Gray Heads Roll, Is Age Bias at Work? By Norm Alster. Excerpts: SEVERAL weeks after being laid off last spring by Best Buy, the consumer
electronics retailer, Lynette M. Steuck, a software project manager, showed up for a résumé-polishing "outplacement
session" of the sort commonly offered to employees recently shoved out the door. As Ms.
Steuck, 51, a divorced mother, surveyed the sparely furnished conference room, she said she was
struck by something. "It was shocking," she recalled recently. "There
were probably 25 to 30 people in the session. And there were only three or four people under
the age of 40." By the end of December, when Ms. Steuck and 45 other laid-off Best Buy
workers sued the company in federal court, accusing it of age discrimination, she and her lawyer
had concluded that almost two-thirds of recently terminated employees - 82 out of 126 - were
at least 40 years old. The plaintiffs contend that this was out of proportion with the ages
of Best Buy's work force over all, citing a newspaper interview in which the woman who leads
the company's work-life programs said the average age of its 5,000 employees was 29.
The economic incentive for dismissing a worker with a high salary and expensive
health care can help a company defend itself against bias, lawyers and others said. "It's
not the blatant: 'Jones, you're too old. We're firing you,' " said Tom Osborne, a senior attorney
at AARP and a co-counsel for plaintiffs in the Sprint case. Instead, he said, companies might adopt
new employee-valuation systems that happen to reverse the career-long high performance rankings
of older employees.
- Los Angeles Times: Healthcare
Overhaul Is Quietly Underway. By Ricardo Alonso-Zaldivar.
Excerpts: Emboldened by their success at the polls, the Bush administration and Republican leaders
in Congress believe they have a new opportunity to move the nation away from the system of employer-provided
health insurance that has covered most working Americans for the last half-century. In its place,
they want to erect a system in which workers — instead of looking to employers
for health insurance — would take personal responsibility for protecting themselves and
their families: They would buy high-deductible "catastrophic" insurance policies
to cover major medical needs, then pay routine costs with money set aside in tax-sheltered
health savings accounts. Elements of that approach have been on the conservative agenda for
years, but what has suddenly put it on the fast track is GOP confidence that the political
balance of power has changed. [...]
"My view is that this is absolutely the next big thing," said
former House Speaker Newt Gingrich, whose consulting firm focuses on healthcare. "You are
going to see a continued move to trying to get people involved in the process by owning their
own health accounts." Critics say the Republican approach is really an attempt to shift the
risks, massive costs and knotty problems of healthcare from employers to individuals. And they
say the GOP is moving forward with far less public attention or debate than have surrounded
Bush's plans to overhaul Social Security. Indeed, Bush's health insurance agenda is far more
developed than his Social Security plans and is advancing at a rapid clip through a combination
of actions by government, insurers, employers and individuals. [...]
Critics say that Bush's vision represents wishful thinking at best, and
at worst, a perilous new direction in national health policy. "One danger with this is that
people will not get needed care because they want to save a few thousand bucks," said Rep.
Pete Stark (D-Hayward), a leading lawmaker on healthcare. "Healthcare isn't like buying a
Chevrolet," Stark added, disputing Bush's assertion
that individual patients can be empowered to control costs. "You can go to Consumer Reports
and read about the new Malibu, but if I asked you to describe a regimen of chemotherapy for
someone who has colon cancer, you'd be out of gas. "We are talking about highly technical
services that 99% of the public doesn't even know how to spell the names of," he said. "Secondly,
there is no uniformity within the medical community as to what services ought to be used. It's
a 'by guess and by gosh' sort of practice."
- New York Times: Employers
Can Get Medicare Subsidies for Lower Benefits. By
Robert Pear. Excerpts: The Bush administration has touched off a furious debate with new rules
allowing employers to collect billions of dollars in federal subsidies for prescription drug
benefits less generous than what many retirees were expecting under the new Medicare law.
- CWA Committee on Political Education: New
Drug Rules Benefit Companies. Excerpts:
The Bush administration proposed new rules under the new Medicare drug bill that allows employers
to collect billions of dollars in federal subsidies while cutting prescription drug benefits
for their retirees. JoAnn C. Volk, a health policy analyst at the AFL-CIO, said, "The rules
allow an employer to get the subsidy for a benefit that is less valuable to retirees than what
they would receive if they signed up for the Medicare drug benefit and the employer dropped coverage
altogether." The policy adopted by the Bush administration is almost identical to one proposed
by the American Benefits Council and the United States Chamber of Commerce.
- New York Times: Our
Battered Constitution. By Bob Herbert. Excerpts: The Constitution?
Forget about it. Only about half of America's high school students think newspapers should be
allowed to publish freely, without government approval of their stories. And a third say the
free speech guarantees of the First Amendment go "too far."
- National Public Radio: Study:
Medical Bills Spur Slew of Personal Bankruptcies.
Excerpt: According to a new study from Harvard University, half of all personal bankruptcies
filed in 2001 by Americans resulted from people being unable to pay their medical bills. Researchers
say even more surprising is that most people who declared bankruptcy had health insurance.
- New York Times: 4
Networks Reject Ad Opposing Bush on Lawsuits.
By Robert Pear. Excerpts: An advocacy group, USAction, said on Monday that four television networks
had turned down its request to run an advertisement opposing President Bush's effort to clamp
down on medical malpractice lawsuits. The group wanted to run the spots just before Mr. Bush's
State of the Union address on Wednesday. But networks said the advertisement violated their
standards for advertising on controversial issues. [...] Mr. Bush has proposed strict limits
on medical malpractice litigation, including caps on damages for pain and suffering, as part
of a campaign for sweeping changes in the nation's civil justice system. In the television
advertisement, Dylan Malone of Everett, Wash., says his son Ian suffered severe brain damage
at birth, as a result of "medical errors," and died before his fifth birthday. "President
Bush is siding with the insurance, H.M.O. and drug companies, trying to end what they call
frivolous lawsuits, while 100,000 Americans like Ian die each year because of medical errors," Mr.
Malone says in the spot. "Mr. President, let's fix the health
care mess, but please stop blaming the victims. My son's life was not frivolous." In an
interview, Mr. Malone said that he had received more than $1 million in a settlement with a clinic
where his son was born. But, he said, much of the money was used to care for the child, who died
last May. Business groups, including the National Association of Manufacturers and the United
States Chamber of Commerce, plan media and lobbying campaigns in support of Mr. Bush's proposals
on civil litigation.
- Los Angeles Times: Healthcare
Isn't a Tomato. Excerpt: The idea that Americans
should purchase healthcare much as they do groceries or auto insurance — on their own,
without any strong-arming by government or employers — has been around for years, and goes
roughly like this: Because people have unique healthcare needs, they should be free to buy insurance
policies tailored for themselves. And because most Americans typically shift jobs every few years,
they, and not an employer, should control the policies. Consumers should also pay more out of
pocket, so they would be motivated to do research and get the best deal for health services,
which would help drive down prices. In theory. [...]
Congress has already agreed to a cornerstone of the president's "consumer-directed" healthcare
plan: health savings accounts, which are tax-exempt accounts similar to 401(k) plans in which
people can deposit up to $5,000 a year before taxes. There is a built-in unfairness in these
accounts, in that only a minority of taxpayers are wealthy enough to profit from the full tax
savings. There is also danger in making people decide between their savings and their health,
because deferred healthcare is more costly than prevention. And how would patients balance
the price and quality of chemotherapy? [...]
In announcing his health proposals last week, Bush said, "I happen
to believe the best healthcare system is one where the consumers, the patients, make the decisions." But
as Princeton health economist Uwe Reinhardt put it: "It's difficult to imagine how any informed
patient can effectively shop around for cost-effective care because of the now widespread price
discrimination practiced by the providers of healthcare. Individual hospitals, physicians and other
providers of healthcare now are free to charge and are known to charge different payers different
fees for the same services, with the highest prices charged individual self-pay patients who have
no market clout."
- Washington Post: Calif.
Pension Plan Faces National Fight. Excerpts: Democratic
officials from five states launched a nationwide campaign Wednesday to fight Gov. Arnold Schwarzenegger's
plan to privatize California's public pension systems. California Treasurer Phil Angelides, who
is leading the effort, called the Republican governor's proposal a major assault on the movement
to reform corporate America following a wave of scandals. Angelides said Schwarzenegger's plan "is
part of a concerted effort to break apart the powerful voices of public pension funds that have
stood up for ordinary investors in corporate boardrooms." [...] Public pension funds have
campaigned for curbs on executive salaries, boundaries between the research and sales departments
of investment banks and new rules that allow shareholders to nominate their own company directors.
That activism has triggered a growing backlash from corporate interests who say the funds have
pushed too far into their operations.
- New York Times: Class-Action
Lawsuits. Excerpts: Tort reform is in the eye of the beholder. In the name of reforming the
nation's civil justice system, and with scant public debate, President Bush and Congressional
Republicans are racing to reward wealthy business supporters by changing the rules for class-action
lawsuits. Their real objective is to dilute the impact of strong state laws protecting consumers
and the environment and to make it harder for Americans to win redress in court when they are
harmed by bad corporate behavior. [...] The ability of ordinary citizens with similar injuries
to band together to take on powerful corporate interests by utilizing the mechanism of class-action
lawsuits is one of the shining aspects of the nation's civil justice system. That reality tends
to be overlooked amid all the overwrought spinning by the president and others who are trying
to drum up concern about a litigation "crisis" and to pressure Congress to usurp proper
state authority and weaken important protections for ordinary Americans.
|Vault Message Board Posts
- In "How
to get laid off repost", "Dose of reality" suggests how to get laid
off by IBM. Full excerpt: Conventional road:
- Work nine to five - no exceptions. You can't
be forced to work overtime.
- If you are not staffed, resist strongly any opportunities
that come your way - be professional but tenacious in your resistance, make sure all
of your communications are in writing and keep good records.
- Cut your productivity
by 30% - you may have to ease into this one over 3-4 weeks so it is not prosecutable.
- If you go on client interviews be resourceful about finding out what they are looking
for and be something else.
- Refuse to travel - cite family reasons, again be firm.
Unconventional Road - need a combination of these to be effective
- Don't shower for a month
- Wear tie-dye shirts and jeans to the client
- Format the hard drive on your laptop every
- Send a blast E-Mail to everyone in BCS complaining about the excessive
emphasis on diversity
- Put EDS logos on all of your client deliverables
- Imitate Austin Powers whenever you are
- If a client asks your opinion, tell them that you first have to check
with your mommy - this won't be too much of a stretch for some of the current troops
at least an hour a day on Monster.com - be conspicuous.
- Load a Barney screensaver
on your laptop.
- Send love notes to our fearless leader and propose marriage -
in today's world this is a gender neutral suggestion!
Leopards and Spots" by "Dose of reality". Full excerpt: One thing I have
noticed observing both people and companies over the past few decades is that every one
has a "go-to" approach to dealing with problems and adversity. It is a core generic
way of handling situations that is used regardless of severity, history, context, or
the presence of other resources and tools that are more appropriate.
For instance there is the analyst - the guy who will just have to
gather all the facts, document and organize them and finally get to the right conclusion.
This works great in complex situations with long term implications and intricate dependencies.
However the analyst will also apply the same approach to choosing a restaurant, or
even a spouse.
Then there is the assertive, decisive, no turning back visceral decision
maker. There are lots of them in the corporate world, since the APPEARANCE of leadership
and infallibility is a key qualification for getting promoted. Better for your career
to present this fiction than to ultimately make the right decision. Especially since
this type inevitably has the companion skill set - the CYA backfill maneuver. Again, great
for restaurant choices, but a real misfit with business strategy or project execution.
There is also the consensus builder - get everyone in a room and facilitate
a solution that is acceptable to everyone, even if it is not the best solution. This
may be appropriate for true negotiating situations where there are centers of power
to contend with, but it is misapplied if used where the knowledge and expertise to
make the right decision rests in one or two people, like managing an organization.
Now what does all this have to do with your observation about the
shift in resources? The key point here is that no one approach fits every situation,
but due to human (and corporate) nature, people only seem to apply the approach they
are naturally most comfortable with, regardless of whether it fits the situation. IBM
has only one mode of dealing with adversity, and that is to add a layer of oversight, bureaucracy
and control. We are having trouble generating sales, so we need a layer of BD folks
to spend all of their time on generating sales. Instead of conducting a root cause analysis
to ascertain where the organizational gaps are (like the fact that we have lost our best people,
killed motivation, and haven't invested in the practice), we create new positions to
try to squeeze more blood out of a hopeless stone.
The other reason for the resource shift is the simple fact of rats
deserting ship - usually what happens when the water comes up over the bulkheads and
they sense that it will soon go under. "Senior folks" need to get out of the positions
that are on the hot seat for delivery and get a fresh start in a new role. Even though
the new roles may eventually come under fire for delivery, they will at least have
bought themselves another year or so until they are held accountable. I believe ABC
uses the term "Lilly
The end result is that we have management that wants to layer additional
buffers in the process and managers that need to migrate away from their past failures.
Everybody's a winner. They don't call us Incredible Bureaucratic Morass for nothing!
Selling and Lilly Pads" by "ancientblueconsultant". Excerpts:
There's also the real corporate strategy behind the BCS image. The strategy, IMHO, is
to get rid of all of the client facing higher priced employees. As the market commoditizes
and products allegedly simplify, the future is NOT in being client facing. Client facing,
in the eyes of the very high level blue pig leadership, is for those lower life forms
that just don't get it or adrenalin junkies. The new value is in the "orchestration" and
development (to use a new re-naming of some old blue pig products) skills and not the
delivery skills. There's work in strategy at the blue pig led by "chicken little" that
already presages the end of the human consultant. Hard to believe, but the REAL true
analyst must have a mind that even accepts this possibility. Maybe not in the next 5
years, or even 10, but the pig always thinks in terms or 10-15 years, just like the Kremlin
once did. There always the possibility that the current new crop of MBA's has just been
had and they won't know it until they are too old to do anything about it. Consulting
becomes perform services through methods, then it becomes process....then our Russian,
Indian services partners can do the work. Don't forget. Even if you have an MBA or a
PhD, by joining a company like the blue pig, you're nothing more than an employee.
legal and other groundwork for leaving" by "silentskeptic".
Full excerpt: Have been a lurker for a long time here, hence my name. But the "silent" part
of my name has finally reached its endpoint.Ive finally had about three "final
straws" hit in the past month, and have
hit the point where I have to leave for "health reasons"... I get sick just
thinking about IBM and my wife is going nuts watching me torture myself. A few questions
as I prepare...
- This "2% bonus retraction" thing has me concerned, both as an item itself and
because of other **** IBM might pull. QUESTION: Has anyone retained a lawyer who
has dealt competently with IBM-escape issues? I'd like to get some names/contact
info to get things laid out in advance. I'm only starting to look now, so I'm expecting
I've got 2-6 months to be adequately prepared for whatever they throw at me.
- I'm approaching my fifth anniversary this summer. While it's close enough that I could
tough it out, I don't want to, particularly if a good opportunity arises now. From
what I understand, the ONLY thing I stand to lose the "pension benefit" I would
vest in (as an ex-PwCer, it's less than 20K, nothing to sneeze at but not really
ball and chain range. Is that true? Are there other benefits/things owed me (other
than getting my soul back) that I should be aware of that take place at the five-year
- Also, in terms of this "pension benefit", am I worrying about something I'm not
going to get anyway even if I tough it out another few months? Can you get it lump-sum?
I'm not quite 40, so I've got a ways to go before I'd see an annuity, and I frankly
don't trust these people anymore.
- Finally - this will come as a shocker to you - I have gone nowhere in terms of salary or
position since the merger. Has anyone found any interviewers (new jobs, in industry
or consulting) to hold that against you, or is there a sense of understanding out
there of the bog that IBM has become? I know it's tough to generalize, but if anyone
has any tales of problems or sympathetic interviewers (who didn't work at IBM before!),
that would be helpful.
- "Get ready
for some deja vu" by "Dose of reality". Excerpt: If you had been at BCS for the past year
you wouldn't have gotten any reward or promotion, and in the previous three years would have seen the
same thing. Raises were negative across the board in 2002 and 2003, and virtually flat the past two years.
Similarly bonuses were not given out despite the fact that double digit bonus targets were communicated,
and many staff had 100+% utilization and significant sales credit. Utilization targets are around 90%.
As you might expect, all of the best talent has left or are leaving, there is no turnaround in sight,
and we are increasingly moving toward an offshore commodity resource model. You will likely come in
at band 6, which is the lowest client facing band. It usually takes 3 – 4
years to move up to band 7, but since no one stays for that long, promotions are extremely rare.
If you want to come in and work your a$$ off for a few years, getting thrown into whatever project
that could use you when you become available, and performing the most mundane work imaginable, with
no salary increase, bonus, or other reward, then come on in. As you will see in many of the recruiting
threads, we are taking anyone that is breathing and can string two sentences together.
opinion - BCS is a joke for strategic consultants" by "bluenomore5". Full
excerpt: I think this theme has been missing from this board and I thought I’d bring it
up to see what others think. I believe strongly that IBM is a product (not services) company.
I think a dialog on this topic may be helpful to those in the consulting (especially strategic
consulting) profession who are STILL considering coming to IBM even after what they read here.
When IBM 1st bought PwC in Oct 2002, I watched for signs that I would
be pressured to sell (regardless of what is best for the customer) IBM hw & sw products
through my consulting engagements. I have to admit that I didn’t see these signs at first.
But, it soon became obvious. Finance told me that they would back out revenue from non-IBM products
from my account (but of course they would count this same revenue in the financials at higher
levels of the organization). My management told me that I shouldn’t focus on consulting
engagements that are of strategic importance to our clients and tend to command very high margins.
Rather, they told me to focus on selling/delivering high-volume, low-margin, widget-based engagements
(typically back-office infrastructure) to push IBM products. Also, there was pressure directly
from Sales & Distribution and the Software Group to push IBM products regardless of price
and what was best for the customer.
Meanwhile, we got the 4% pay cut and small-to-no increases/bonuses (regardless
of performance). These actions don’t seem like they’re designed to encourage “Heritage
PwCers” to stay at IBM. Hmmm. I wonder why they would buy us and then encourage us to
leave? Maybe it’s because the whole BCS idea is a joke and the primary reason IBM is interested
in having a consulting business is to sell their products? (Of course, there are some exceptions
made for consulting accounts that are very large and profitable.) In general, my theory is that
if a consulting engagement doesn’t include or directly lead to a large product play, BCS
and higher-level IBM management will never be very excited about it.
Now I’m getting to the main point I want to make to consultants
that are looking at IBM BCS as a potential career move – If you want to do consulting
that is strategic or focused on business performance/process improvement, rather than consulting
that is focused on infrastructure (typically back-office) technology implementations, my advice
is do not come to IBM. If strategic services is your thing, IBM BCS cannot be a good long-term
fit for your career. IBM will place a much higher value on a high-revenue widget-based engagement
than on a slightly lower-revenue, but just as profitable strategic consulting services engagement.
So, for all you strategic consultants out there – I hope that you will find an employer
who will get excited about the same things that excite you the most. If you get the biggest
kick out of helping clients with strategies or human capital issues or business performance/process
improvement issues, I do not think that IBM BCS is the place for you.
Where else are employees assigned “serial numbers” as if
they themselves are widgets? “Employee numbers” would make more sense at any organization
that wasn’t primarily focused on pushing widgets. If you think IBM is a services-led company,
I have some beautiful swamp land to sell you. What is your opinion? Dose? ABC? C2L? deep_eye?
- "ah, my kind of question" by "CONsulting_2_long". Full Excerpt: A few
random thoughts. 1) IBM has historically been a products company, and the people used
to selling and managing products -- including products that are commodities.
2) I never saw any pressure to push products that did not make
sense. That may be because I spent my time at integrated accounts where hardware and
software were either in or out based on lots of other factors. I did see attempts to
develop 'solutions' that bundled our product breadth with services, and I think that
is a reasonable strategy to pursue as a marketing ploy.
3) The recognition of which software/hardware is revenue and
which is expense pass through can be frustrating, but I assure you, GR would like to
count it all. So if you couldn't, it was due to accountants and not some IBM plan.
Remember, the stock price is down primarily to not hitting revenue numbers. If we
could pass GAAP and SoX AND get more revenue, someone in Armonk would figure it out.
4) I believe that IBM truly wanted to convert BIS into the
PwCC model. Many in BIS viewed the PwCC transaction as a 'reverse acquisition.' That
said... I believe that the execution was fair to bad on the integration. Too much
was a compromised mish-mash of the two worlds and too many hard choices were deferred
for over a year leading to a hyper-political environment and culture that even long
time IBMers find appalling.
4.5) The whole pay reduction thing for staff was about as short-sighted
and de motivating as one can imagine. The reality is that staff costs had to be cut
to keep the entire PwCC pay parallel to BIS. Staff was given cuts to make up for the
higher partner base comps which were nearly 2-3x of the comparable BIS executive. There
is still much resentment of the typical PwCC partner base comp from old-blue and while
there is a ramp-down occurring, the bitterness remains. It is ironic that PwCC staff
blames IBM when it was their partners who did not adjust their comps to match the new
organization. Much of your bitterness is misdirected.
5) I agree on your main point. BCS is not for management consultants.
BCS is for software implementers. The fact is less to do with moronic management, although
they are a convenient target. If you were GR sitting atop of BCS and Sam told you to
increase revenues, you would have to add a lot of revenue to move the needle. Selling
100 more $500k strategy jobs will only net you $50,000,000, not enough to even matter.
Plus the trouble and cost selling and servicing these small engagements. Have you ever
tried to open up a job in Raleigh? or seen the B&P cost of sales for a strategy
job? I disagree with Dose in that the strategy model does not scale to the size that
IBM/BCS needs. It is more prudent to focus your strategy resources on closing a 10
SAP mega-deals at $10milllion each to get $100,000,000. Or better yet, sell 10 BTO/SO
deals at $50million+ for incremental revenues of $500million. Now that moves the revenue
That has been what has been occurring. You may not agree with
it. You may not enjoy it. But it makes sense at the BCS p/l level. Personally, I did
not enjoy a sales bogie of over $10 million as a strategy lead. It forced me into a
conflict. Push client into sub-optimal solutions (implement SAP) and achieve my sales
bogie OR give objective advice and miss my bogie and be threaten to be fired every
quarter. Ultimately, my personal reputation is greater than any compensation (which
is indeed imaginary at BCS). I ultimately left BCS for much greener pastures.
But then again, I may have been CONsulting_2_long.
|Coverage on H1-B and L1 Visa and Off-Shoring Issues
- CNN: The global
outlook on outsourcing. By Lou Dobbs. Excerpts: While the shift of manufacturing jobs
from developed nations to cheaper labor markets has been well documented, a major study
of the forces shaping the world economy is now acknowledging outsourcing's effects on the
service sector. The report, from the Central Intelligence Agency's National Intelligence
Council, is the first in its series to specifically mention outsourcing and to link it
directly to the changing global landscape. The report also warns that outsourcing's growing
role in globalization is detrimental to the middle classes in Western nations. [...]
The CIA's semi-annual survey attempts to predict global trends for the
future, and its authors' view of the path to the year 2020 contains some additional threats
to job security. China and India's integration into the global economy is creating a
huge, low-cost labor force, the report states. And as more companies take advantage of
this labor, "the
transition will not be painless and will hit the middle classes of the developed world
|Coverage on Social Security Privatization
- Washington Post: White
House Social Security Briefing. Excerpt: Following is the transcript of Wednesday's
White House Background News Briefing on Social Security.
- New York Times: Many
Unhappy Returns. By Paul Krugman. Excerpts: The fight over Social Security
is, above all, about what kind of society we want to have. But it's also about numbers.
And the numbers the privatizers use just don't add up. Let me inflict some of those numbers
on you. Sorry, but this is important. Schemes for Social Security privatization, like
the one described in the 2004 Economic Report of the President, invariably assume that
investing in stocks will yield a high annual rate of return, 6.5 or 7 percent after inflation,
for at least the next 75 years. Without that assumption, these schemes can't deliver
on their promises. Yet a rate of return that high is mathematically impossible unless
the economy grows much faster than anyone is now expecting. [...]
Social Security privatizers usually defend their bullishness by saying
that stock investors earned high returns in the past. But stocks are much more expensive
than they used to be, relative to corporate profits; that means lower dividends per
dollar of share value. And economic growth is expected to be slower. Which brings us
to the privatizers' Catch-22. They can rescue their happy vision for stock returns
by claiming that the Social Security actuaries are vastly underestimating future economic
growth. But in that case, we don't need to worry about Social Security's future: if
the economy grows fast enough to generate a rate of return that makes privatization
work, it will also yield a bonanza of payroll tax revenue that will keep the current
system sound for generations to come. Alternatively, privatizers can unhappily admit that future
stock returns will be much lower than they have been claiming. But without those high returns,
the arithmetic of their schemes collapses. It really is that stark: any growth projection that
would permit the stock returns the privatizers need to make their schemes work would put Social
Security solidly in the black.
- New York Times: Gambling
With Your Retirement. By Paul Krugman. Excerpts:
A few weeks ago I tried to explain the logic of Bush-style Social Security privatization:
it is, in effect, as if your financial adviser told you that you wouldn't have enough
money when you retire - but you shouldn't save more. Instead, you should borrow a lot
of money, buy stocks and hope for capital gains. Before President Bush's big speech,
a background briefing by a "senior administration official" made it clear that
the plan calls for exactly the "borrow, speculate and hope" strategy I described
- not just for the system as a whole, but for each individual. Here's the money quote: "In
return for the opportunity to get the benefits from the personal account, the person
forgoes a certain amount of benefits from the traditional system. Now, the way that election
is structured, the person comes out ahead if their personal account exceeds a 3 percent
rate of return" - after inflation - "which is the rate of return that the trust
fund bonds receive. So, basically, the net effect on an individual's benefits would be
zero if his personal account earned a 3 percent rate of return." [...]
Experts usually tell people to plan for their retirement by investing
in a mix of stocks and bonds. They disapprove strongly of speculation on margin: borrowing
to buy stocks. Yet Mr. Bush wants tens of millions of Americans to do exactly that.
Meanwhile, what does any of this have to do with the ostensible purpose of the whole
thing: saving Social Security? Here's the senior official again: "In a long-term sense,
the personal accounts would have a net neutral effect on the fiscal situation of Social
government would have to borrow huge sums up front to create the personal accounts
- $4.5 trillion in the first two decades - but it would supposedly make up for all
that borrowing with offsetting cuts in account holders' benefits many decades later.
Do you believe that we should replace America's most successful government
program with a system in which workers engage in speculation that no financial adviser would
recommend? Do you believe that we should do this even though it will do nothing to improve
the program's finances? If so, George Bush has a deal for you.
- New York Times: Talk
of Taxes, Social Security and Blog's at G.O.P. Retreat. By David Kirkpatrick.
Excerpts: Republican members of the House and Senate turned their attention to the politics
of changing the tax code and the lessons of President Bush's campaign on Saturday,
the second day of a party retreat here. Party leaders and White House officials who
gathered at the Greenbrier resort also discussed a new rhetorical twist in their campaign
to remake Social Security. In meetings on Friday, Treasury Secretary John W. Snow and
Representative Bill Thomas of California, chairman of the House Ways and Means Committee,
discussed redirecting public attention on 2008 as an imminent danger point for the Social
Security trust fund because baby boomers will begin retiring, people present said. Even the
most dire analyses say the fund will remain solvent for a decade or longer after that.
- Washington Post: Neglect
That Spells Retirement Ruin. By Albert B. Crenshaw.
Excerpts: Just as President Bush and other Republicans are plowing ahead with plans
for personal Social Security accounts and other individualized investment vehicles, employers
operating 401(k)s and similar plans are becoming increasingly fearful that their workers
aren't up to the job of managing those accounts. A new survey by Hewitt Associates LLC,
a big benefits consulting firm based in Lincolnshire, Ill., finds that only 18 percent
of large employers are confident that their employees will retire with enough money to
see them through. And only 12 percent think their workers even understand their retirement
benefits and are taking responsibility for their future. "Many employees are just
not actively using the retirement programs that are available to them. Either it's not
a burning [issue for them], or they don't feel up to the task," said
Lori Lucas, Hewitt's director of participant research. Companies, having started down
this path by terminating, freezing or never having offered a traditional pension, have
little choice but to redouble their efforts to persuade workers to invest and to try
to do it intelligently.
- New York Times: Inherit
the Windbags. By Maureen Dowd. Excerpts: I misunderestimated this ambitious president.
His social engineering schemes in the Middle East and America are breathtakingly brazen.
He doesn't just want to dismantle the 60's. He wants to dismantle the whole century - from
the Scopes trial to Social Security. He can shred one of the greatest achievements of the
New Deal and then go after other big safety-net Democratic programs, reversing the prevailing
philosophy of many decades that our tax and social welfare systems should equalize the
distribution of wealth, just a little bit. Barry Goldwater wouldn't have had the brass
to take a jackhammer to that edifice. The White House seems to think Social Security was
corrupt from the moment it was enacted in 1935. It wants to replace it with private accounts
that will fatten the wallets of stockbrokers and put the savings of Americans who didn't
inherit vast fortunes at risk.
- Center on Budget and Policy Priorities: President
Portrays Social Security Shortfall As Enormous,
But His Tax Cuts and Drug Benefit Will Cost
At Least Five Times As Much. By Richard Kogan and Robert Greenstein. Excerpts: The
President’s comments were made in response to a question as to why he was taking
on Social Security now and not Medicare, when the budgetary pressures from Medicare will
be far greater than those from Social Security. The President’s dismissive comments
about Medicare’s financing gap were in tune with the broader White House campaign
to focus on the Social Security shortfall and to portray it as so massive that it threatens
to destroy Social Security and to engulf the budget. Basic budgetary realities, however,
are not consistent with the picture that the President and the Administration are painting.
- Washington Post: Bush
May Back Curbs on Accounts. President Courts Critics Of Social Security Plan. By By Jim VandeHei and Jonathan Weisman.
Excerpts: President Bush is privately expressing support for limits on the cost and
risk of partially privatizing Social Security, in an effort to mollify nervous Republicans
and win over dubious Democrats, according to White House aides and congressional Republicans.
Bush, who plans to make Social Security the centerpiece of tomorrow's State of the Union
address, has privately told GOP lawmakers and aides that he would support phasing in
changes to the system to keep deficits under control over the next several years and
push individuals who opt for private accounts into more conservative investments, such
as bonds, as they near retirement to mitigate long-term risks, the sources said.
- Washington Post: Workers
Under 55 Would Need To Save More Under Proposals.
By Albert B. Crenshaw. Excerpts: So what do you do if you're 54? President Bush pledged
in his State of the Union speech Wednesday not to reduce Social Security benefits for
workers 55 and older. And for the better part of a century, Americans have been able
to look forward to a government-guaranteed retirement income. But the system is running
short of money, and it is likely that guaranteed benefits will be reduced for those 54
and younger if some form of the president's plan is enacted. Workers would be invited
to put some of their payroll tax money into investment accounts designed to produce retirement
income. But their value would depend on the success or failure of the underlying assets.
- New York Times: 6
Key Democratic Senators Oppose Bush Plan on Benefits.
Excerpts: ix of the seven Democratic senators from the states where President Bush plans
to campaign this week for his Social Security plan say they are unalterably opposed to
his main principle of diverting tax money into personal investment accounts. Senator
Bill Nelson of Florida takes an unequivocal stand typical of what the others have expressed
in interviews and public statements. "I will oppose diverting money
from the Social Security trust fund," Mr. Nelson said Monday in a speech at a
luncheon in West Palm Beach. "I will fight against cuts to Social Security benefits," Mr.
Nelson said. "I
will fight against any plan that relies on massive borrowing and increases the debt.
And I will fight to protect this program that provides a safe and reliable source of
retirement income for millions of Americans.
- New York Times: GOP
Sees Short Time to Sell Soc. Sec. Plan. Excerpts:
President Bush and his allies have about three months to sell the public on his proposals
to change Social Security, the chairman of the Senate Finance Committee says, as Republicans
continue their search for Democrats who might come aboard. [...] he key now, he said, is
for the president to continue convincing people the problem is real. Bush appears to
have made some headway. A CNN/USA Today/Gallup poll found that 66 percent of people who
watched his State of the Union speech said his Social Security proposals will move the
country in the right direction. That's up from 51 percent of Americans surveyed before
the speech. Three in four said Bush made a "convincing case" that the government needs
to take action in the next couple of years to change the system.
- Social Security Network: Back
to the Future: The Harsh Reality Underlying a Proposed Change in Social Security. By
Bernard Wasow, Martha Paskoff Welsh, The Century Foundation. Excerpts: Bernard Wasow and
Martha Paskoff Welsh demonstrate how price-indexing (as proposed by the President's Commission
to Strengthen Social Security) would negatively affect standards of living for retirees.
They calculate how benefits today would be altered if price indexing had been introduced
in past years. For example, if price indexing had been instituted beginning in 1983,
they find a retiree claiming benefits at 65 today would see their annual benefit reduced
from the current level of $13,896 to $10,884—a reduction of 21.6 percent. Even
with the addition of private accounts, they find future benefits would be reduced under
the Commission's Model as compared to guaranteed Social Security benefits. [...]
Suppose the commission's price-indexing proposal had come into effect
at the beginning of the career of someone who began working in 1959 and retired in 2003
at the age of sixty-five. The proposal would, in essence, transport sixty-five-year-old
retirees back to the economy that existed at the end of the Eisenhower administration,
assuring them of only the purchasing power that a retiree had at that time. Today, American
households broadly own and benefit from all kinds of products and services that were
considered luxuries, or were nonexistent, forty-six years ago: color television, reliable
and effective air conditioning and heating systems, microwave ovens, home computers,
and a myriad of vastly improved prescription drugs and medical procedures. There are many, many
other examples. Not only invention but rising purchasing power has converted such 1959 luxuries
as color television and automobile air conditioning into necessities today. [...]
How about the returns from the private account? Adding in the value
of the Treasury bonds raises total benefits to $1,175, a little better than the basic
$1,098 guarantee. If the couple were willing to take on the risks of the stock market,
the Social Security actuaries predict that they should each expect to take home retirement
benefits of $1,437 per month. Although the assumptions in these forecasts about the rate of
return to stocks are much more optimistic than their assumptions about economic growth warrant,
the Social Security Actuaries' forecast for average benefits still come in lower
than the $1,478 guaranteed under today's Social Security system. Many workers will
do worse than the expected return on stocks, some much worse. Those who are unlucky or unskillful
in investing will have only the whittled down guarantee of $782 per month to fall back on.
The addition of private accounts adds enormous risk and still leaves expected benefits below
those of today's Social Security system.
- Economic Policy Institute: Social
Security privatization's motherhood penalty. Excerpt: Privatization proponents at the
Cato Institute have argued that Social Security's family benefit formula favors high-income,
single-earner families over dual-earner families and single workers. That's because married
women who stay at home to provide child or elder care receive benefits based on their husband's
earnings. Cato argues that the family norm of a male breadwinner and a stay-at-home mom
no longer holds today. Therefore, Cato proposes lowering Social Security benefits for single-earner
families and offering voluntary private accounts that reward individual earnings more.
Cato argues such a change would be fairer to the modern working woman. Unfortunately, Cato's
privatization solution is not fair to today's working women who still take on the majority
of child rearing and who have much lower employment rates than men, particularly in their
twenties. Private accounts exacerbate earnings differences for workers who, for whatever
reason, have spells of unemployment when they are young. This group includes women with
children who are often either completely out of the labor force or working part time when
their children are young. Workers with lower earnings at the outset of their career have
significantly lower savings accumulated in their private account because of the power of
compound interest. [...]
The earlier a person puts money into a private account, the bigger the
effect on their retirement annuity. For example, $1,000 earned at age 18 adds almost twice as
much to a worker's total private account than $1,000 earned at age 40. So, women face a tough
choice if they reduce their earlier years in the labor force. This privatization solution prefers
and subsidizes men, who are better able to enter the labor market early, and punishes women
who take time-out early for child care or more education.
- New York Times: Democrats
Take Aim at Social Security Proposal, Calling It a Risky Gamble. Excerpts: From the moment Mr. Bush turned to the subject of Social Security
in his speech, there was no doubt of the intensely partisan battle his proposal had spawned.
Democrats hollered "no, no!" as a Mr. Bush asserted that the Social Security
system "would be exhausted and bankrupt" in 40 years, making it appear for
a moment that Mr. Bush was standing in the well at the British House of Commons. Democrats
said they would set out to undercut Mr. Bush's proposal with a broad, concerted attack
coinciding with Mr. Bush's trip selling the program across the country. They began with
speeches and statements on Wednesday, and on Thursday Democratic senators plan to hold
a news conference at the Washington memorial to Franklin Delano Roosevelt, the originator
of the program. "The president's plan is so dangerous," said Senator Harry
Reid, the Democratic leader. "There's a lot we can do to improve Americans' retirement
said, "but it's wrong to replace the guaranteed benefit that Americans have earned
with a guaranteed benefit cut of 40 percent or more. Make no mistake, that's exactly
what President Bush is proposing." Representative Sander M. Levin, Democrat of Michigan,
warned that Mr. Bush's proposal would result in "massive benefit cuts and massive
borrowing." "Far from resolving the long-term challenges facing Social Security
in 40 to 50 years, the president's privatization would make it worse, and bring about
the dismantling of Social Security through benefit cuts and massive borrowing," Mr.
- Associated Press: Only
One Side Told in Bush Soc. Sec. Pitch. Excerpts: The devil was in the missing details
Wednesday night when President Bush showcased his Social Security plan and claimed advances
on jobs and against terrorism that don't tell the full story. Bush explained in detail
how, under his proposal, younger workers would be able to divert some of their Social Security
payroll taxes into private accounts "so you can build a nest egg for your own future." Nowhere
in his State of the Union speech did he give the other side of the equation — that
Social Security benefits for those workers would be reduced as a result. He stated "your
account will provide money for retirement over and above the check you will receive from
Social Security," without explaining that check would be smaller. Moreover, he seemed
to issue a guaranteed return on investment for people putting some of their retirement
money in the market, saying: "Your money will grow, over time,
at a greater rate than anything the current system can deliver."
Although his plan promises checks and balances to ensure such money isn't frittered
away on risky investments, it does not come with a guarantee of performance exceeding
benefits of the current system. Declaring Social Security will go broke if nothing is
done, Bush said that by 2042, "the
entire system would be exhausted and bankrupt." In fact, the nonpartisan Congressional
Budget Office (news - web sites) forecasts Social Security as it is would be able to
pay 73 percent of benefits in 2042 and stay solvent for 10 years beyond that.
- New York Times: Introducing
Private Investments to the Safety Net.
By David E. Rosembaum and Robin Toner. Excerpts: Every American born after 1949 would be
confronted with a very different Social Security system under the proposal that President
Bush outlined Wednesday night. The financial safety net that the government promises
the elderly, the disabled and the survivors of workers would be transformed over time
from a program that uses tax money to pay guaranteed monthly benefits to one that allows
workers to put part of their taxes into private investments. [...] The costs of the
proposal would be substantial. Presumably all of it would be borrowed, vastly increasing
a swollen budget deficit. A senior administration official put the cost from 2009 through
2015 at $754 billion - $664 billion to pay benefits and $90 billion for interest on the
money borrowed. Peter R. Orszag, a Social Security expert who served in the Clinton administration,
calculated that the program would cost the government over $1 trillion in the first
10 years the accounts were in place would be over $1 trillion and more than $3.5 trillion
in the second 10 years.
- National Catholic Reporter: Plan
to alter government's role. Bush's 'Ownership Society' neglects common good, critics
say. Excerpts: George W. Bush’s “Ownership
Society,” like Franklin Roosevelt’s “New Deal” and Lyndon Johnson’s “Great
Society,” is about more than mere tinkering with federal budgets and programs.
Indeed, like its predecessor presidential slogans, the phrase encompasses an ambitious
agenda that aims at nothing less than a grand rewrite of government’s role in the
social compact. The difference, of course, is that Roosevelt and Johnson proposed to
expand government programs for the elderly and poor, while Bush’s ownership society
foresees “empowered” individuals
deciding on their own how best to provide for retirement and pay for medical care.
Critics quip that the “ownership society” means “you’re on
your own.” And they point directly to proposals floated by the administration
that would encourage workers to divert a percentage of the payroll tax that funds the
Social Security system into stocks and bonds. Such “personal accounts” amount
to partial privatization of a system that needs bolstering, not undermining, say the
many critics of Bush’s plan. [...]
But will the Bush initiatives bring the “stability and security” the
president promises, or subject the vulnerable to the vicissitudes of an unforgiving
marketplace that rewards winners, punishes losers and, critics emphasize, provides
no guarantees? “People
buy lottery tickets to get rich, or invest in their own businesses to get rich, but
people don’t have a pension to get rich,” said Teresa Ghilarducci,
associate professor of economics at the University of Notre Dame. “Pensions are about
security.” Said Ghilarducci, “Catholic social teaching uses two principles that
the American people understand: solidarity and subsidiarity. Our [overall retirement]
system now actually achieves both goals.” When it comes to solidarity, said Ghilarducci,
the universality of Social Security recognizes that “we’re all Americans, we
all suffer from the risk of living too long.” And when it comes to subsidiarity --
the idea that societal problems should be dealt with at the level closest to the
individual necessary to solve the problem -- the other components of the nation’s retirement
system, such as government-subsidized private pensions and home mortgages, ensure
have dignity and are able to make their own decisions.” [...]
Spiritual objections aside, the former Senate Finance Committee counsel
and author of The Ownership Solution told NCR that the Bush Social Security plan won’t
work. More than 50 percent of the capital gains generated by the stock market build-up of
the 1990s went to just 1 percent of the population, Gates said. Meanwhile, fee-generating
investments controlled by Wall Street money managers rose tenfold over the last 25 years.
Diverting payroll contributions to the stock and bond markets, said Gates, will redound not
to the benefit of retirees, but to the already wealthy and those who will earn fees managing
the infusion of new funds into the markets.
- Workforce.com: Social
Security Reform Could Set 401(k) Participation Back. Excerpt: While the push behind
the proposal is to encourage an "ownership society," by which employees take
charge of their retirement savings, some are concerned about an unintended consequence.
The availability of personal savings accounts for Social Security may cause workers, particularly
those with lower salaries, to stop contributing to their 401(k) plans altogether. "If
you have been working hard to get low-income people to invest in your 401(k) plan and it’s
been tough, but you are starting to get some traction, (then) suddenly, employees see this
money in Social Security and ask ‘Why do I need a 401(k)?’ " says
Dallas Salisbury, president and CEO of the Employee Benefit Research Institute. Getting
employees to contribute, let alone actively monitor and rebalance their 401(k)s, has been
the biggest struggle for many companies. Some have introduced automatic enrollment features
by which employees are automatically put into 401(k) investments selected by their employers.
- MarketWatch: Making
the grade? 401(k) performance raises concerns over Social Security accounts. Excerpts: With the battle
over Social Security individual accounts heating up during President Bush's second term,
many are looking at how 401(k) investors have fared since the early 1990s as a rough
guide to how well individual investors would potentially handle the responsibility of
managing more of their own money. [...] Although they have only been in existence for a
couple decades, examining the performance of 401(k) accounts may provide insight to how
well workers will manage their money if they are allowed to divert a portion of Social
Security into voluntary individual accounts. Research shows that while a good percentage
of participants have done a decent job managing their 401(k) portfolios, a significant
portion has made mistakes at every step along the way, from not diversifying to neglecting
to monitor their investments. Although the economy has recovered recently, the three-year
bear market showed just how costly those mistakes can be, and many workers are still
trying to dig themselves out.
on the Alliance@IBM Site:
Cut Update: Alliance@IBM has received further information from employees on recent job
cuts and resource actions. We don't believe it is complete yet; and we will not list
locations at this time, so that we can protect workers identities. The cuts occurred
in IBM Global Services units. The total number so far, is about 250. We are also getting
reports of employees being given separation packages not related to resource actions;
but in response to PBC evaluations. Many of those cut in resource actions and separations
are being reported as "over 40 years old". Stay tuned for information as we
receive it. See our visitor
comments section for update on RTP.
- Resource Action Alert!! - Alliance@IBM is hearing of job cuts in IGS:
Distribution Sector, Tech Support, Deskside Support Services, Operations and Network
Services. If you have any information, please e-mail us at: email@example.com
- Pension Lawsuit Questions & Answers (updated Jan 12, 2005). Read this to determine how
this lawsuit affects you.
Twice for January/February 2005 [PDF]. (Editor's note: This issue
is a "must read."). Articles in this issue include:
- The Fight Continues...at Lenovo
- Outsourcing Blues
- PBCs and Behavior Modification
- Message From the President