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    Highlights for week ending June 9, 2001

Call to Action: Lobby for HR 1322

Note: This is a U.S. worker issue, not isolated to IBM employees and retirees.

IBM is quickly reducing retiree health care benefits for both active employees and retirees. In 1999, IBM set up a Future Heath Account (FHA) for employees more than 5 years from retirement. This was a replacement for lifetime health care benefits. Once they retired, employees could use the FHA fund to buy insurance until it ran out; then they would be on their own. Many employees felt they lost more with this change than with the pension reductions. This year, IBM retirees who left IBM with promises of non-contributory health insurance for life have been asked to pay twice as much as active employees for their health insurance, even if most of their health care is being paid by Medicare.

Is it fair or ethical for IBM to break promises they made when they hired people? Should it be legal? If most other corporations that promised their employees lifetime health insurance are doing the same thing, does that make it OK? Should we expect government to come to the rescue of retirees abandoned by their life-long employers?

If you agree the answer to these questions is no, please contact your legislators in Congress and tell them that when corporations voluntarily make promises about retirement benefits, they need to be forced to keep them. Ask them to cosponsor HR 1322, the Emergency Retiree Health Benefits Protection Act of 2001, a bill proposed by Rep. Tierney from Massachusetts. Send them a copy of the article below, and ask them to help!

MSN Money Central: Broken retirement promises? You can fight back. Excerpt: "Many employers are paring benefits and changing other provisions in their retirement plans, spurring retirees to organize and ask Congress for help. A lot of retirees aren't happy. In fact, a growing number of them are, as the old movie said, mad as hell. And they're not just taking it quietly anymore."

"The issue is retirement benefits that many employers are trimming back or eliminating entirely to meet Wall Street demands for increasing profits. When retirement benefits are cut, retirees' plans and budgets can be thrown into disarray."

"The people who are angry aren't just retirees and current employees of small businesses, who tend to have less structured and less comprehensive retirement benefits Some of the country's biggest companies have been accused of breaking their promises to retirees, including General Electric, General Motors, IBM, Sears Roebuck, Textron, the old Bell Telephone companies, Walt Disney and other household names."

Read the entire article here...

  • See summary of the principal benefits provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001. Excerpt: An excise tax of $100 per day per participant is imposed on a pension plan that fails to notify individuals and employee organizations in writing of a plan amendment resulting in significant reduction in the rate of future benefit accrual, including elimination or reduction of an early retirement benefit or retirement type subsidy. The notice must be designed to be "understood by the average plan participant and shall provide sufficient information (as determined in accordance with regulations prescribed by the Secretary) to allow applicable individuals to understand the effect of the plan amendment." Except as provided in the regulations, the notice must be provided within a reasonable time before the effective date of the plan amendment.

  • Plansponsor.com: US Workers Come Up Short in Vacation Time. Excerpt: "Workers in other countries have as much as three times more vacation than workers in the US, according to Hewitt Associates." ... "Many US companies allow vacation days to be carried over and unused days to be paid out in cash. And many award a bonus week of vacation to reward employees after long service anniversaries."

  • More analysts looking at pension games. From Pg. 61 of the JUNE 2001 Issue of Worth Magazine, under the heading of "NET WORTH STOCKS TO AVOID": "IBM is showing positive net income, despite a drop in annual operating income, by including gains from it's PENSION PLAN, and by accelerating depreciation to lower it's tax rate. The recent stock price, at 23 times 2001 earnings, is loftier than it should be." "Fair Value $65.00 Selling at $114.00"

  • "Leaving Momma and Pappa IBM": A 22-year IBM veteran talks about his difficult, but ultimately wise, decision to leave IBM.

  • Plansponsor.com: A California Superior Court judge has certified almost 4,000 Hewlett-Packard retirees as a class in a lawsuit against their former employer.

  • Andy Lang responds to a person advocating personal insurance savings accounts (similar to IRAs) as a solution to the retiree medical problem. Well worth reading. See part 1 then press the "Next" links to read the rest.
  • Network World: IT workers need a union. Excerpt: "But if you are any good, you shouldn't have any problems with the terms or conditions of your employment, right? If you work hard and keep your skills up, you will be treated fairly and be highly compensated."

    "In some cases it works out that way. But in many cases, years of 60-hour weeks and taking classes on your own dime to keep up with technology leave you in the unemployment line, after being laid off with no notice. In other cases, you may be the best contract XML programmer around but still find yourself coerced into signing lopsided noncompete agreements imposed by staffing agencies to obtain employment. Or you may be content with your current job but tired of legislative attacks on overtime pay - attacks that single out hourly computer workers for exemption from labor laws."

  • New York Times: Boeing Hiring Creative Engineers Who Are Trapped in Post-Soviet Slump. Excerpts: "The Boeing Company has taken advantage of the collapse (of the Soviet Union). Its Moscow design center, which it opened with 10 Russian scientists in 1992, now employs about 650 engineers, scientists and computer specialists from Russia's biggest aircraft design bureaus." ... "Rich Plunkett, a contract administrator at the Society of Professional Engineering Employees in Aerospace, the union that represents many Boeing engineers, estimates that a Moscow engineer costs Boeing $46 an hour, far less than an American."

  • Chicago Tribune: More IT workers say age discrimination is increasing factor in denial of jobs. Excerpt: "'Old' in the IT world starts as early as 35, Matloff said. 'The bias just gets more visible after 40.' The market has become more difficult for older workers since Congress passed a bill in 1998 that doubled the number of foreign high-tech workers from 65,000 to 115,000 that could be brought into the country under 'H1-B' work visas, Matloff said. The cap has since been raised to 195,000."




"The test of our progress is not whether we add more to the abundance of those who have too much; it is whether we provide enough for those who have too little." — Franklin D. Roosevelt
This site is designed to allow IBM Employees to communicate and share methods of protecting their rights through the establishment of an IBM Employees Labor Union. Section 8(a)(1) of the National Labor Relations Act states it is a violation for Employers to spy on union gatherings, or pretend to spy. For the purpose of the National Labor Relations Act, notice is given that this site and all of its content, messages, communications, or other content is considered to be a union gathering.