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 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—September 24, 2005
- Yahoo! message board
post by Kathi Cooper. Full excerpt: My name is Kathi Cooper and I am the
Cooper in Cooper v. IBM. I am grateful that bipartisan pension legislation written by the Senate
Committee on Health, Education, Labor and Pensions (HELP) preserves employees rights to pursue
their hard-earned benefits in the courts in existing cases. For six years, I have fought for my
company to honor its pension commitments to hundreds of thousands of IBM employees like me. Thank
you for standing up for our retirement security.
I am also confident that as the Senate merges the Defined Benefits Security Act of 2005 and the National Employee Savings and Trust Equity Guarantee (NESTEG) Act Republican and Democratic members of the Senate HELP Committee will keep working together for employees' rights to seek justice. A pension reform bill that recognizes how cash balance plans have harmed older workers is a fair compromise for helping the corporations by changing the law to legalize cash balance plans.Unfortunately, my case is not unique. In the late 1990s, IBM joined the rush to convert their reliable and solid defined benefit plan to a cash balance plan. Today more than 7 million employees across the country have cash balance plans. Many loyal employees have worked most of their lives for corporations that have taken away promised pension benefits when they are most needed at the end of their careers. Any meaningful pension reform should prevent employers from breaking promises to employees to manipulate earnings even though they knew the design like violated ERISA's age discrimination provisions.Sincerely, Kathi Coopercc: Senator Richard Durbin of Illinois and Senator Barack Obama of Illinois
- In a Yahoo!
message board post, Janet Krueger responds to an "IBM apologist".
(Ms. Krueger's comments are in a normal font. The "apologist's" comments are in italics).
So ... given the fact that corporations can no longer afford to fully sponsor traditional pension plansWHY is that a given fact? Because the corporate lobbyists say so? It is a proven fact that it is more economical for companies to sponsor [and fund] traditional pension plans than 401K plans!!!The problem is that during the 90s, companies got used to contributing nothing to their pension plans, while continuing to promise pension benefits. When it became clear they could no longer continue those promises without contributing to the plans, they decided it was more economical to convert promised benefits downwards, through hybrids like cash balance plans, than resuming plan contributions.The next time you hear someone say a company 'can no longer afford' a traditional pension plan, ask why the executives of that same company are receiving higher executive pension promises than ever before, in addition to huge raises and even higher bonuses.This is NOT a question of affordability!!!Nor is it a question of whether traditional plans can be created and maintained with relatively low, and economical, contribution plans.It is purely a question of executive and corporate greed, paired with a question of whether Congress should force companies to honor their promises.And please don't tell me some cockamamie story that corporations should restore old-fashioned pensions and fully fund them.WHY is this a cockamamie story? Because the corporate lobbyists repeated the mantra so often that you believe them? That is a silly reason...The business model has changed. If you owned the company ... or if you were a major stockholder, you wouldn't feel any differently.Again, I don't buy your hypothesis. As a stockholder, I find it offensive that such a high share of profits is being siphoned into executive pockets. In most corporations, the contributions being made to the 'special' executive pension funds could easily support and fund traditional pension plans for the full base of employees!The bottom line fact is things ain't what they used to be.Again, who made you swallow this particular bottom line??? You've been fed a story, hook, line, and sinker, and you don't even seem to know it...Companies can't afford traditional pensions any more.Repeating it again still doesn't make it so...And I agree that the US taxpayer shouldn't have to shoulder the burden either.Congress has the ability to force corporations to live up to their obligations without handing a bill over to the US taxpayers. There is no one on this board advocating that our pensions be paid by US taxpayers. So WHY are you using this question to repeat the song and dance corporate lobbyists are feeding us???So what's the answer?
- Strengthen and enforce ERISA without taking the age discrimination rules out or watering them down.
- Strengthen the plan funding rules in ERISA.
- Add some teeth to the ERISA enforcement clauses allowing courts to charge corporate offenders with both damages and plaintiffs' legal fees.
- When companies like NWA declare bankruptcy, allow the employees, the retirees, and even the PBGC a place at the front of the line in the creditors' queue.
Not one of those 4 options would cost the American tax payer a dime. But they sure would increase retirement security a lot more than legalizing cash balance plans! And in the process, it would lesson the number of corporate retirees who end up living on public assistance at the end of their lives... - In a Yahoo!
message board post, Janet Krueger provides advice to an IBM employee
considering a pre-retirement leave of absence. Full excerpt: Be very, very careful here...
Don't base your decision on guesses and estimates. Write a letter to the IBM pension administrator
with your questions. Make your questions as detailed as possible, and wait for answers in
writing.
Don't rely on verbal answers from the pension help desk; answers from Fidelity subcontractors have no more legal standing than answers from the IRS hotline. Send a letter to the pension administrator with the information you received and ask for written verification.Also, make sure you understand all the details about the LOA you are arranging. Will you be credited with service time for each day you are gone? Will you receive health benefits while you are gone? If IBM terminates your job for some reason while you are gone, or eliminates the department you were with when you left, or reorganizes your area out of existence, or sells your division to an outside company, will you be allowed to finish your LOA, or will you be terminated? Will the months/years you are not paid be averaged into your final average pay? Get the answers IN WRITING. These are NOT academic questions -- apparently IBM has 17 varieties of LOA/Bridge programs they can put a worker into, and many are NOT to the worker's advantage...
- In a Yahoo!
message board post, "bozemansmith" comments on his leave of absence
and pension calculation experience with IBM. Full excerpt: I had a very similar situation this
spring. IBM wanted me to leave 2 months prior to my 55th birthday (which was how I would qualify
for early retirement, since I was at 28+ years of service). I took a "Pre-retirement Bridge
LOA" for the two months. This bridge specifically states that the bridge period will count
for service credit -- thus effectively letting me retire two months early. This is a very specific
leave described in the USHR119 document which will allow you to bridge up to one year prior
to retirement, but you have to retire -- no coming back. (This should eliminate the concerns
about having your job disappear, etc.)
You can download the latest version from the IBM HR website since you are still active. I qualified for FHA and all the rest as if I had worked to my early retirement date. I was nervous as hell about taking that thing and getting screwed somehow, so I read it a dozen times and asked all kind of questions and finally decided it was ok. It worked out for me.[Note that there was some loss here vs. working to my actual retirement date: the two months' salary (duh!), the 60 month calc used two months from 5 yrs ago instead of those two months of what would have been a higher salary, the lost 401K contribution and match, and some smaller (tiny) impact to the amount in my FHA, etc. But I also got to start on the rest of my life two months early too!]I too tried to get them to do the pension calculation for me including the bridge before I accepted it and they consistently said they could not. In fact they did not get me a final number until just this month when I got my first pension check, having left IBM in April and retiring in June.Note that any sort of calculation you try to do with a separation date BEFORE you qualify for early retirement, automatically disqualifies you for the early retirement subsidy and you see those 18% drops in payment! What I did was simply to expect the payment curve to be "smooth" in the vicinity of my retirement date, so I did a series of calcs first separating on my retirement date, then separating on the retirement date plus two months, then retirement date plus 4 months. I could then "back extrapolate" to estimate what I was "leaving on the table" by going two months early. The net is that the difference was pretty small -- maybe a half of a percent or so in the size of the monthly annuity. The pension calculation they actually did covered the last 60 months I was paid, since those were the highest months.While that half percent is not zero, to be sure; given the environment I was in at the time, locking up the leave and insulating myself from any more "churn and burn" going forward seemed attractive. YMMV.Good luck hanging in until you enter the magical window one year prior to your earliest retirement date, and know you can bridge out if required. (Assuming, of course, IBM doesn't change the rules before then....)
- In a Yahoo!
message board post, Janet Krueger responds to an IBM apologist. (Ms. Krueger's comments
are in a normal font.) Full excerpt: I don't like executives making tons of money while
I am losing out on a traditional pension either. But ... Show me through some type
of objective evidence that there is a direct association between an increase in executive
compensation and the disappearance of traditional pension plans. Then, I'll believe it.
During discovery, the Cooper legal team found a 1994 IBM BoD presentation showing that the amount of money saved with the 1995 plan change could be directly used to fund an executive SERP (Supplemental Executive Retirement Plan). The logic presented was that IBM executives were 'underpaid' but that the BoD could not justify increasing their compensation so drastically with a direct hit to the bottom line, so they needed to 'cut' employee benefits somewhere else...I'm sorry I don't have a copy of the presentation to post, but if you go back and look at the 1995 annual report, you'll see that IBM spent the same amount on the newly established SERP as they saved with the pension plan changes that were implemented that year. You can also find that IBM did not offer their executives a SERP before then.The fact is that the executives that you mention were being well compensated long before this issue arose.Didn't you just complain about people emoting without facts??? Not only are you guilty of that here, the facts you are quoting don't exist. Until the 1990s, the difference in pay between IBM executives and IBM employees was relatively minor -- IBM made a big deal about the dual ladder that allowed the top technical people to get the same pay and benefits as the top executives... That concept, just like the IBM basic beliefs, was tossed out the window.No one ever "promised" me a pension, or any benefit for that matter.Clearly, then, you're not an IBMer but a contractor without benefits! I'm not going to bother echoing or refuting the rest of your executive-worshipful speech, as it is clear you are not here to listen or debate...
- In a Yahoo!
message board post, "retired_in_89" responds to the same
apologist. ("retired_in_89's" comment is in a normal font). Excerpt: No
one ever "promised" me
a pension, or any benefit for that matter. There was no contract.
Perhaps YOU weren't promised a decent pension WITH COLAs, but for over 37 years I WAS! Did I have a contract? Hell no! Why not? Because Watson's word was as good as gold! Was I a fool for trusting him? In retrospect--yes. Would I do it again? Yes, if I ever find a leader of his caliber again.As much as it is my loss because GREED has become the only driving force behind corporate America my age will limit my future pain. But YOU, sir, are doomed to spend many more years in a purgatory of your own choosing because you have the lack of respect for the sufferings of IBM workers and retirees, along with the gall, to defend the nefarious activities of today's robber barons.
- World Socialist Web Site: Northwest
and Delta executives to make millions from bankruptcies.
By Jerry Isaacs. Excerpts: Over the last several years the top corporate executives at Northwest
and Delta airlines negotiated retirement packages guaranteeing them millions in the event the
companies declared bankruptcy and defaulted on their pension payments to employees. Both companies
filed for Chapter 11 bankruptcy protection last Wednesday, in large measure to escape their
pension obligations and seek the bankruptcy court’s backing for sweeping cuts in airline
workers’ jobs,
wages and benefits.
Since 2000, Delta has lost $10 billion, slashed 23,000 jobs and cut pay for pilots, managers and other employees. Three years ago the company spent more than $44 million setting up trusts to protect executives’ pension benefits from creditors in case of bankruptcy, saying the perk was needed to retain executives in hard times. Because transferring money to bankruptcy-proof trusts typically triggers big tax bills for the executives, Delta inflated the amounts to compensate for the extra taxes.Retiring CEO Leo Mullin, who was paid $13 million in compensation in 2001, was given 22 years of instant seniority—although he worked for Delta for only five-and-half years—boosting his retirement package to $16 million. While incoming CEO Gerald Grinstein took a ceremonial pay reduction to bolster the company’s demands for sweeping employee wage and pension cuts, behind the scenes other executives were cashing in on the benefits of their golden parachutes.
- CNET News: IBM looks to ensnare more graduates. Excerpt: IBM plans to launch a new online job-matching tool on Friday designed to pair recent college graduates with jobs at IBM and its partners. Students who've passed an IBM Professional Certification test will be able to post their resumes to the Web-based system, where they will be made available to thousands of potential employers, the company said. The program is an effort to address the fact that fewer students are entering the computer science field, creating a "gap between skilled IT professionals and the increased number of technology jobs," the company said.
- Yahoo!
message board post by "drbeaker2". Excerpt: As with a flock of sheep,
there has occasionally been a black sheep in the IBM management family - the few higher level
managers in IBM who cared about their workers. But of course, no good deed goes unpunished.
Around 1996 or so, there was the head of what was then called Santa Teresa Lab, who didn't want to participate in the 5th (or so) round of layoffs, during a greatly improved economy, with tight product deadlines for products making a lot of money. He said the layoffs were not necessary and would be harmful. Needless to say, he was gone very quickly. I'd put his initials here but anyone at Santa Teresa at the time knows who I mean. I'd appreciate any more details or corrections to the story. (His replacements had no problems continuing the layoffs.)And sometime after 1996, there was the head of research and development at the San Jose plant site (disk drives, etc.) A big product announcement had to be delayed a few months until the product was ready. Apparently Big Lou called this manager and told him to fire the lead technical people as punishment. The manager said something to the effect that he couldn't do that because there wouldn't have been any product at all without that handful of people. So Lou fired him right then over the phone. Again, name and initials are not required. Anyone at the San Jose plant site in the late 1990's should know that story. And again, I'd appreciate additions and corrections to this story without using names, etc.But the fact that these stories are legendary and remembered so many years later just shows how few such stories there have been. Most IBM middle and higher level managers toe the company line, but occasionally one or two act like real men until they themselves are removed and replaced.
- New York Times: Bring
Back Warren Harding. By Frank Rich. Excerpts: THERE are
no coincidences. On Monday, as L. Dennis Kozlowski was slapped with 8 to 25 years in jail for
looting Tyco International of some $150 million, the feds were making their first arrest of a
high-ranking member of the Bush administration. The official was David Safavian, the chief of
White House federal procurement policy who once worked for Jack Abramoff, the sleazy Republican
lobbyist whose disreputable client list, in another noncoincidence, included Tyco. While it's
an accident of timing that Mr. Safavian was collared at his suburban Virginia home just as Mr.
Kozlowski was sent to the slammer in New York, the two events could not better bracket a corrupt
era worthy of the Gilded Age.
Ours will be remembered as the Enron era. Enron itself is a distant memory - much like all that circa 2000 talk of a smoothly efficient C.E.O. presidency led by a Harvard M.B.A. and a former chief executive of Halliburton. But even as American business has since been purged by prosecutions and reforms, the mutant Enron version of the C.E.O. culture still rules in Washington: uninhibited cronyism, cooked books, special-favors networks, the banishment of whistle-blowers and accountability. More than ideology, this ethos has sabotaged even the best of American intentions, whether in Iraq or New Orleans. Unchecked, it promises greater disasters to come.
- InformationWeek: IBM,
Amid Layoffs, Scours Globe For IT Talent. Excerpts: Even
as IBM completes plans to lay off 14,500 workers, Big Blue is continuing to scout for new IT
talent and hiring professionals around the world. Though the company is long past the tough
times of the early 1990s, it nevertheless remains in the midst of what former employee relations
director Harry Newman characterized in a 2003 Webcast to IBM executives as "unprecedented
transition." Newman
and the company's other human resource executives foresaw that globalization would be one of
the most important factors in the restructuring of the world's largest information technology
company through 2006. Big Blue's employment peaked around 1985, when it had about 405,000 workers
who were acclimated to a long tradition of lifetime employment. In 1992, the company suffered
a $4.97 billion loss, the largest annual corporate loss in U.S. history to that time. By 1994,
the workforce had shrunk to 219,207. [...]
Less than 50 percent of current employees have been with the company more than five years, according to Alliance@IBM, a chapter of the Communications Workers of America. [...]While opportunities for IT professionals in Europe are scarce, IBM announced plans last month to double the number of employees in Brazil to 8,000 by the end of next year. The company also plans to add about 14,000 programmers in India, where it currently employs nearly 40,000 workers, according to Communications Workers of America. IBM also appears to be focused on emerging markets in Russia, China, Brazil and India -- areas where the economy is expanding and labor is inexpensive. Overall revenue was at $96 billion in 2004, with 75 percent revenue growth in Russia. In India, revenue rose by 45 percent. In China, it shot up by 25 percent, and, in Brazil, revenue grew by 15 percent. [...]The strategy is drawing some criticism from union organizers. "It's clear that IBM is systematically eliminated good paying, skilled technical jobs in the United States in order to expand its operations in India," said Lee Conrad, national coordinator for Alliance@IBM. A recently released survey by the Society for Information Management showed that one-third of IT staff positions will be outsourced by 2008, and a growing number of reports state that IT workers are jittery about the job market.
| Vault Message Board Posts
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