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• National Public Radio: IBM Wins Case Involving Pension Change. By Wendy Kaufman. Excerpt: A federal appeals court ruled earlier this week that IBM did not discriminate against older workers when it changed its pension coverage in the 1990s. The case involved 140,000 older employees who were affected when IBM converted to a "cash-balance" pension plan.
• Littler Mendelson's Benefits Practice Group: Cash Balance Comeback - New Opportunities for Employers in Wake of Court Decision and New Legislation. By Steven J. Friedman. Excerpts: For these reasons, employers have been, in a fairly robust manner, converting their traditional pension plans to alternative plan designs, such as cash balance plans and pension equity plans. However, in 2003, a ruling out of the District Court for the Southern District of Illinois put a halt to this robust migration to cash balance plans. Specifically, the court held in Cooper v. IBM that the benefits provided under IBM's cash balance plan discriminated against older workers. The holding also implicated pension equity plans. This caused many employee benefits professionals to question whether cash balance (and pension equity) plans were legally viable alternatives to traditional plans. Two very recent developments have now bolstered the legal alternatives to traditional plans. Two very recent developments have now bolstered the legal viability of these types of plans.
  IBM Decision Reversed: Employers feared that Cooper would spell the end of cash balance and pension equity plans when employers were seeking a means to provide alternatives to traditional pension plans. On appeal, however, the Court of Appeals for the Seventh Circuit reversed the district court and found that the structure of IBM's plan was not discriminatory. The court stated that the district court improperly treated the time value of money as age discrimination. The court held that benefit accruals under IBM's cash balance plan should be measured by looking at the amount of the employer's contributions (which were clearly age neutral) rather than the value of such contributions after they have accrued earnings from the date of the contribution through the plan's retirement date. Accordingly, as long as an employer provides credits which are uniform percentages of pay to all participants, the Code and ERISA prohibitions against not reducing accruals to a participant on account of his or her age would not be violated.
  Pension Protection Act Also Boosts Cash Balance Plans: The Pension Protection Act, passed by Congress on August 3 and signed into law on August 17, 2006, provides that "hybrid" plans, which are account-based defined benefit plans, such as cash balance (and pension equity) plans are not discriminatory so long as participant's accrued benefit, determined as of any date, is greater than or equal to that accrued by a similarly situated, younger participant. Accordingly, this new legislation explicitly approves typical cash balance and pension equity plan designs.

• Fort Worth Star-Telegram: No pension worries - at least for execs. By Mitch Schnurman. Excerpts: Traditional pensions have been fading away for almost 25 years, and last week's pension bill is likely to speed along their demise.
  Except for the executive class.
  It seems almost a law of nature that CEOs will get theirs regardless of changes in tax laws, securities regulations and public disclosure. Executives have been racking up millions in guaranteed retirement money in the past few years even while a growing number of companies froze or terminated their pensions. [...]
  Supplemental retirement plans, in particular, allow companies to pay out much higher sums and shift the tax burden to the corporation, making them even more attractive to executives. The researchers cite examples including Robert Nardelli, who joined Home Depot in December 2000. Three years into his tenure, Nardelli was eligible for retirement payments of $3.25 million a year beginning at age 62. If he leaves the company then, he will get $4 million in retirement money for every year he worked there, the report says -- and that assumes no increase in salary or bonuses.
  It used to be ailing companies that gave up their pensions. But in the past few years, 17 large, financially healthy companies have frozen their plans, including IBM, Verizon, Hewlett-Packard and Alcoa. They say the programs are too expensive and the costs too uncertain, and like most other companies, they have shifted their focus to defined-contribution plans like 401(k)s. Those cost about half as much, and the expense is predictable because the plans are not tied to stock-market performance or changes in life expectancy. [...]
  But traditional pensions pay out much more, especially to those in middle age, and they provide a stable alternative to market returns. Executives understand their appeal, which is why their supplemental plans are usually structured as pensions, based on their final salary and years of service. Union leaders have always valued them highly, too, and many workers realize what they stand to lose when their plan ends.
  Pensions, like most employer-benefit programs, used to be guided by a great democratizing principle: What was good for the boss was good for the little guy, too. That notion flourished in the 1970s, when a CEO earned 40 times more than the average worker. Today, with the pay multiple closer to 400, the connection is slipping away.
• U.S. News and World Report: Retirement: Mixed views on pension legislation. By Emily Brandon. Excerpt: But Bradley Belt, former executive director of the Pension Benefit Guaranty Corporation, stressed what the new legislation would not do. "It's not going to save the defined-benefit system," Belt said at the eighth-annual conference of the Retirement Research Consortium. "It was not an explicit goal of the administration. It will not insure against future loss of benefits under defined-benefit plans. It will not in itself ensure financial security." He also said it would not restore the PGBC to financial solvency but acknowledged that it would be a modest improvement to current law.
• Dallas Morning News: Pension legislation puts the workers in control. By Pamela Yip. Excerpts: The intention is to improve the health of corporate pensions, which have suffered low investment returns thanks to the bursting of the stock market bubble and low interest rates. However, experts say that the bill also will speed the disappearance of traditional pension plans because companies will find them much more expensive to keep up.
  "It's going to probably dampen what remaining employer support there is for defined-benefit plans," said Norman Stein, a law professor at the University of Alabama and an expert in pension law. Those that keep defined-benefit plans are expected to move toward cash-balance plans. The pension legislation created a legal framework to convert traditional pensions into cash-balance plans.
  "The floodgates are open," said Janet Krueger, spokeswoman for a group of current and former employees who challenged IBM's cash-balance plan. "Other people are going to be converting."
  Shortly after the pension bill passed Congress, a federal appeals court ruled that IBM didn't commit age discrimination when it converted to a cash-balance plan. The ruling "definitely will help a lot of companies which were waiting for clarity from both the courts and Congress," said James A. Klein, president of the American Benefits Council, which represents employers. "In a matter of a few days, both the courts and Congress have confirmed that these plans are legitimate, non-age-discriminatory plans, so the efforts to convert can resume."

• Economic Policy Institute: Employers shift health insurance costs onto workers. By Lawrence Mishel. Excerpts: Fewer employees receive health insurance through their employers now than in the past, as coverage has declined from 61.5% in 1989 to 58.9% in 2000 and down to 55.9% in 2004 (the latest data available). Less well known is the fact that those who still receive employer-provided coverage are now paying a larger share of those insurance costs.
  One dimension of this trend can be seen in Figure A, which shows, for both single and family coverage, the share of employees who are required to contribute their own money to help cover insurance premiums. In 1993 about half (54%) of workers in the private sector with individual coverage were required to pay for some of the insurance costs; by 2005 that share had risen to 76%. Almost all workers with family coverage (88%) are required to pay some of the insurance premium out of their own pockets. [...]
  How much more employees pay now than in the past for health insurance premiums is answered in Figure B, which details the employee share of health premiums for all (both individual and family) coverage in 1992 and 2005. The employee share rose from 14.0% in 1992 to 22.1% in 2005. We estimate that this shift in cost-sharing caused employees to pay for half of the growth of employer-provided health insurance premiums over the 1992 to 2005 period. This shift onto employees for basic premium costs does not include any of the higher deductibles or co-pays paid by employees that also have occurred over this same time period.
• Chicago Tribune: Pricing health care? It's not that easy. Experts say you should shop for the best deal, but hospitals give patients scant information. By Judith Graham. Excerpts: When Margaret Zilm needed cataract surgery, she wanted to know what it would cost. Her medical policy has a $5,000 deductible, and her money was on the line. "I thought I should figure out the impact on my budget," said Zilm, of Kansas City, Mo. But one eye doctor's office told Zilm it had no idea what her insurance company would pay. The insurer wouldn't give out the information. And an official at Missouri's Department of Insurance said such figures were confidential under medical providers' contracts with insurers. "I felt like a criminal for even asking," Zilm said. [...]
  Jodi Bloch is a vice president of the Wisconsin Hospital Association, whose medical plan now has a much higher deductible. Wanting to see how her new insurance would work, Bloch wondered late in her pregnancy what she and her husband would pay for their child's birth. "I thought, OK, I'll be an intelligent consumer and ask the company," said Bloch, who lives in Madison, Wis. To her dismay, Bloch learned that the insurer wouldn't disclose its negotiated fees in advance. "And I'm like, how are people supposed to make good decisions if you won't give them information?" she said.
• Doctors Taking Less (sic) Medicaid Patients. By Kevin Freking. Excerpts: Many people who rely on government health insurance for the poor have to search harder to find a doctor and increasingly are going to large practices, a study shows. Officials say Medicaid's reimbursement rate is the biggest reason that it is getting more difficult to locate doctors who take new patients under the program. On average, reimbursements are 69 percent of what Medicare pays and even lower compared with what private insurers pay.
• Milwaukee Journal-Sentinel: Doyle proposes tax break for health care. Under plan, workers who help pay their premiums would get deduction. By Steven Walters. Excerpts: Democratic Gov. Jim Doyle on Wednesday proposed a tax deduction for workers who share in the health care premiums with employers - a tax break he said would cost $50 million a year but help up to 637,700 families or individuals. If the proposal became law, Doyle estimated it would save an average of $236 a year for a family now paying $300 a month to be in their employer's health care plan.
• Washington Times: Medical miasma. By George H. Lesser. Excerpts: The last time I sought medical help in Italy, I suffered from gastrointestinal distress to such an extent I wasn't eating. If I can't eat in Italy, that is serious. The night before I was due to fly to Washington, I was in a hotel near the Milan airport. I wanted to see my doctor in Washington as soon as possible, so I telephoned him to make an appointment. He questioned me about my symptoms and told me I was too sick to fly. We argued, and then he said I could fly, but only if I got a doctor to prescribe ciprofloxacin ("Cipro") and metronidazole ("Flagyl") for me to start taking that evening.
  I asked the hotel for a doctor. They said it would be faster to go to the clinic at the airport. I followed their advice and found a doctor. He wrote out two prescriptions for me, but said the airport pharmacy had just closed. He directed me to the nearest town with an open pharmacy.
  I couldn't find the drug store. I did find a hospital. I parked in the parking lot, walked in, and asked if I could get the prescriptions filled. The lady got testy and informed me this was a hospital not a pharmacy. I asked for her advice. She told me: "This is a hospital. We practice medicine. If you would like us to treat you, take a seat in the waiting room." Unable to think of a better course, I went out to my car, grabbed my book, went back into the hospital and settled in for a nice, long read.
  After at most five minutes, a male nurse interrupted me. I assumed it was to wrestle with insurance forms in Italian. Instead, the fellow escorted me into a hospital room, where we were joined immediately by a doctor. He spoke English about as well as I speak Italian, so we spoke my language until he ran into problems, then switched to his language until I couldn't find a word. He questioned me closely about my symptoms. He had me lie down on the bed and started poking and asking me how it felt. He had the male nurse draw some blood, and he ran some other tests. He took a medical history and inspected parts of my anatomy that seemed to have nothing to do with the problem.
  I was there six hours. The nurse was in the room with me for all but a few minutes. The doctor was there almost all the time. After a while, he got the test results, which showed I did not have food poisoning, but he wanted to observe me a while longer. Eventually, he concluded I had contracted some kind of intestinal bug, and he gave me a couple of days supply of Cipro and Flagyl.
  I checked in with the waspish lady at the front desk to ask how much I owed. She asked me if I had parked in the hospital parking lot. I said yes. She said I owed one euro and 50 pence ($2). I asked how much for the medical care and the medicine. She said that was free. When I got back to Washington, I saw my doctor. He had a few tests run in the office, gave me full prescriptions for Cipro and Flagyl, and billed me $1,000.
  Most Americans I talk to have a lot of screwy ideas about medical care. They think Americans have "The Best Health-Care System in the World." They think "socialized medicine" doesn't work, because people have to wait too long to get care, and the care isn't very good and they don't have any choices.
  We have many wonderful doctors, hospitals and pieces of equipment in the U.S. However, statistically, we don't do so well. Life expectancy, infant mortality, how long people live with a disease after it is diagnosed: You name the criterion, and we don't compare well with any of the countries that have national health care. And we spend a whole lot more for a lot less health care.
  Here are a few comparisons between the U.S. and France. According to the Organization for Economic Cooperation and Development: French women live 3-1/2 years longer than American women; French men live just over three years longer than American men. Our infant mortality rate is 72-1/2 percent higher than theirs. And 30 percent more Frenchmen smoke than we do, and they consume almost twice as much alcohol. Who knows how much more butter, cheese and fois gras?
  Worried about waiting for a doctor? Or a hospital bed? The French have 37-1/2 percent more doctors than we, and way over twice as many hospital beds, per capita. Worried about choice? French hospitals are 65 percent government run and 35 percent privately run. Take your pick. The health-care system pays. You also get to choose your doctor.
  The difference in the quality of service is difficult for Americans to comprehend. In France, doctors routinely make house-calls. Patients aren't thrown out of hospitals because the insurance companies decide when it is time to go. They stay until doctors decide it is time to go. The French government pays 75 percent of all health care costs. Most of the rest is paid by private insurance. If somebody can't afford private insurance, the government makes up the difference. The bottom line: We pay 43 percent more for health care than the French do, and we get a whole lot less for our money.

• IBM Pension Lawsuit FAQ about Cooper v IBM (Updated 8/8/06)
• From the Job Cuts Status & Comments page
  • Comment 8/13/06: Expect a significant "resource action" for field SSR's in the not too distant future. Those who did not go over to Qualex will see the axe swing -Anonymous-
  • Comment 8/14/06: Today's 'State of the Business' meeting w/ Colin Parris stated the facts as bluntly as possible, "Resource Actions" & "Resource Reductions". To what extent, that remains to be seen. But the cold hard fact is true...there will be a reorg including some cuts. It seems reminiscent of the early 90s; another time when the initial action was to 'request' development go to some field or lab support position shortly before the slashing that we remember none too fondly. -Anonymous-
  • Comment 8/14/06: Resource actions in Global Services Integrated Technology Delivery May 30 and July 6, 2006. 146 employees cut. Jobs going to India -Anonymous-
  • Comment 8/16/06: Endicott STG-- a contractor hit of 10 people the last 2 weeks and today we find out we got 2 new hires. Also, rumor of regular employee's being resourced are coming this week or next. Just hope were still getting severance and the 1 year bridge. Last year the VM group in Endicott laid off a bunch and they claimed it was a performance action instead of a Resource action and the people only got 13 weeks severance. The games IBM plays! -Anonymous-
  • Comment 8/17/06: Yes, they want to move all internal jobs overseas and even some external ones if the external customer agrees to it. The jobs left in the US will indeed be face to face jobs for those doing actual work for US customers who demand on-site presence....meaning 100% travel jobs, in most cases. Then, there will still be lots of paper-pushing BSers who sit in meetings on phones all day and don't produce anything real and don't have skills beyond "schmoozes well with others". Once again, IBM is losing track of the fact that the innovators are the technical people doing the work, not the management schmoozers. IBM is preaching innovation but losing jobs that will grow our future innovators. Innovation will not be sustainable in this business model....at least, not in the USA. This will not bode well for the USA. But I suppose that in this new global market world, there is no loyalty toward any country, only to the multi-national corporation. It's not just IBM....it's many of our once great AMERICAN corporations. It's a scary future for the USA. Vote accordingly in November, Folks. -Anonymous-
  • Comment 8/17/06: RTP SWG is playing the numbers game. Downsize 4 high paid long time employees and hire 2 low paid college graduates to make people think IBM is hiring instead of firing. Don't be fueled by the deception. RTP SWG will be 30% transferred to India/China/Brazil by end of 2006 and 100% by end of 2007. -Anonymous-
  • Comment 8/18/06: These will all be small resource actions. Anything larger and they will trip the labor laws and incur larger reductions costs.. So it will be a few 100 here.. a few 100 there every few months to get around the laws protecting workers.. Look it up on the dept of labor web page.. it's all there! -Anonymous-
  • Comment 8/18/06: IBM's 5 year strategy is to reduce US labor to no more than 20% being provided in this country; with the remainder being in India, Brazil and China. Yes folks, meaning the 125K workers presently in the US will go down to 25K. All service deals are having this automatically imbedded in them today. Global Resources are about 1/5 of US cost. So think about it. In the next 5 years 8 out of 10 people will lose their jobs. That needs to be everyone's mindset now. Join the Union NOW...!!! It's the only hope for the US IBM'ers today. Young or old. This is it.-Anonymous-
• From the General Visitor's Comment page:
  • Comment 8/13/06: laid off ibm'er - the latest IGS utilization targets for 2007. Not sure if this goes under ‘general comments’ section or ‘layoffs’.. Just thought you should know that the new IGS utilization requirements are increasing AGAIN. It looks like for 2007 that the target for IGS’ers will be 107%. That comes out to about 2220 hours per year to be worked, which if you have 4 weeks vacation, and take NO sick time and NO education, you still MUST do about 10 hours per day, every day, all year long. What makes it even more absurd of course, is that even then, there’s still little to no raises, poorer PBC reviews, zero bonuses, at best you get a ‘Thanks’ award so you can go buy yourself a blue gorilla stuffed animal, or perhaps one of those insipid “thank you email” as a reward for weeks, months, or years of worked overtime to achieve ridiculously set deadlines in grossly understaffed projects, etc, etc, etc... -Anonymous-
• Pension Comments page
  • Comments 08/17/06: The judge that ruled in IBM's favor in our pension case is a Reagan appointee. So all you people who voted for Reagan and thought he was the best thing for this country--guess what--you cut your own throats. Voting has consequences. -Anonymous-
  • Comments 08/18/06: Hey 2nd choicers out there: Now with the legislation and current appeal ruling, I doubt there is anything to stop IBM from converting all of you from the DB to CB plan. It could happen real soon, even well before the planned 1/1/2008 pension big freeze. IBM will cheat you out of your pension benefits once again and you will not have a 3rd choice. If we have collective bargaining rights we might be able to stop this from ever becoming true by negotiating protections in a union contract. It is never too late to join the Alliance and to protect your current benefits and employee rights! -Anonymous-
• IBM employees on employee raises
  • Comment 8/13/06: I too have been greatly disappointed by the damn greed of our Management. Was dropped from a band 6 to a 4 due to reclassification. Was told it would not affect my chance to get a better position - MY ASS! Last 4 yrs have been trying to get a better position and have all the credentials and experience and can't even get a friggin hello due to this BS buddy system in IBM. Why post jobs when they have someone stuck to their ass already sucking away for the position. I have been looking outside since it appears they don't want the best, but just their friends. Wow! Sam, how can you live on a 29% salary increase? I mean, that raise alone is probably more than my annual pay. Thanks IBM! -PJ-