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for week ending December 21, 2002
- Associated Press: More
Than Half of Paid Workers Have No Retirement Savings, Congressional
Study Says. Excerpt: "The report 'highlights the lack of retirement
security millions of Americans face,' said Rep. George Miller of California,
ranking Democrat on the House Workforce and Education Committee. He
cited the Treasury Department decision this week to pursue new government
regulations that would help companies avoid age-discrimination lawsuits
when they convert traditional pension benefits to different arrangements
called cash-balance plans." ... "Unlike a traditional pension
plan, the worker isn't guaranteed annual benefits after retiring. Critics
say cash-balance plans hurt workers nearing retirement. President Bush
'should read this report before he decides to undercut what little retirement
security is left for hardworking Americans,' Miller said."
- Business Week: Is
This the Reformer the SEC Needs? William Donaldson has the right
credentials to head the commission. He'll need a lot more than that,
though, to change Wall Street's ways. Excerpt: "The crisis in Corporate
America demands serious reforms -- and on many key issues, Donaldson's
long career record is silent at best. Last spring, when lawmakers were
hammering out new codes to guide corporate governance, Donaldson was
a director at Aetna, defending limits on shareholder rights that a Harvard
University professor termed "dictatorial." Donaldson "has
not been an exemplar or an advocate of good corporate governance,"
says Nell Minow, editor of The Corporate Library, a corporate governance
- New York Times: Treasury
Nominee to Get Big Pension. Excerpts: "When the CSX Corporation
calculates pension benefits for its chief executive, John W. Snow, nominated
by President Bush last week to be Treasury secretary, he will receive
credit for 44 years of service to the company, though he has worked
there just 25. Moreover, Mr. Snow's benefits will be based not just
on his salary, or even his salary and bonus, but also the value of 250,000
shares of stock the CSX board gave him. Getting credit for years not
worked, and having virtually all compensation counted toward pension
benefits, are two of the newest trends in pay for senior executives,
said Judith Fischer, managing director of Executive Compensation Advisory
Services. She calls such deals 'the eternal wealth syndrome.'"
If link is broken, view
Adobe Acrobat version [PDF--19 KB].
"As Treasury secretary, Mr. Snow would be in the middle of pension
policy-making as the subject heats up in Washington. He would oversee
new pension rules announced by the Bush administration last week that
experts say can be expected to strip benefits from older workers while
benefiting younger workers and saving companies money. The new rules
will make it easier for companies with traditional defined-benefit pensions,
which pay a monthly sum to retirees for life, to shift to so-called
cash balance plans. Under the traditional plans, pension benefits are
primarily based on a worker's final, and often highest-paid, years of
employment. The new plans, by contrast, build benefits evenly over the
course of a worker's career. Cash balance plans are a boon to younger
workers, but critics say older workers could lose as much a third of
their benefits. As a matter of principle, President Bush declared at
a conference on retirement savings earlier this year, "What's fair
on the top floor should be fair on the shop floor." But an array
of rules and customs have put a distance between the retirement benefits
of average workers and those of top executives." ... "In addition,
CSX changed its policies, effective this coming Jan. 1, so that newly
hired employees will no longer be promised lifetime health care benefits
unless they work under a union contract providing such benefits."
Questions Treasury Secretary Nominee's Fitness for Job. Excerpts:
"Rep. Bernard Sanders (I-VT), a senior member of the U.S. House Financial
Services Committee, today launched an effort to halt the confirmation
of Bush’s Treasury Secretary nominee John W. Snow unless Snow
would commit to protecting the pensions of American workers. That commitment
would have to include withdrawing controversial proposed IRS regulations
that would green light so-called 'cash balance' pension plans. Sanders
said these assurances were needed in light of the reports that Snow
is receiving an extravagant pension from CSX, the company where he was
the CEO, while at the same time that company was cutting back on the
retiree health benefits of its workers. According to published reports,
Snow is receiving a $2.47 million per year retirement benefit for life.
This amount was calculated through gimmicks that give him credit for
working 44 years when he really only worked 25 years and by factoring
in stock benefits he received as regular income, instead of just salary
as is the common practice. Those same reports note that CSX is cutting
the future retiree health benefits of its workforce."
"Sanders, a vocal critic of cash balance plans continued, 'It’s
no secret that the culture of greed that dominates corporate America
is costing shareholders of companies like Enron and WorldCom billions
of dollars while top executives made out like bandits. But what people
don’t know is that all across America these pension scams are
part of the same phenomenon. Those at the top looting the company while
employees are left and dry when they retire. We need a Treasury Secretary
whose going to fight the looting, not one that participated in it.'"
- Katelynn Rayme, an Associate Producer of PBS's Nightly Business Report,
is "looking for someone who has either benefited or been hurt when
their company changed their pension plans to cash balance pensions.
This is in regard to a story we are working on regarding the Bush administration's
proposed regulations which would make it less difficult for for companies
to change pension plans, thus reducing pension liabilities." Ms.
Rayme's contact information is shown in this
Yahoo! message board post.
- Los Angeles Times Editorial: Pension
Fund Is About to Go the Way of Your 401(k). Bush administration is helping
to replace nest eggs with lumps of co al.. Excerpts: "It's
the holiday season, boom time for pickpockets. We're busy, we're distracted
and we're in a mood to think about fellowship, not felonies. Everything's
right for Light-Fingered Louie making his move in Washington. We barely
notice until later that we've been robbed. Merry Christmas. The Bush
administration and its pals in the corporate suites are pulling off
just such a filch right now. In a truly mean-spirited retreat from the
principles of hard work and loyalty, they're setting up a raid on middle-class
pensions." ... "At stake are the futures of millions of American
families and billions of dollars they thought they earned. But unless
they are attentive, they might not notice what's missing for a few years.
By then the perpetrators would be lounging at their private yacht clubs
and island resorts. Business executives call their dodge the 'cash-balance'
pension. It works something like this: They get the cash, and we get
the balance." ... "There was a time, and it wasn't so long
ago, when conservatives voiced the idea that American values meant keeping
faith with those who, as Ronald Reagan put it, 'worked hard and played
by the rules.' Makes you nostalgic, doesn't it?" If link is broken,
view Adobe Acrobat version [PDF--35
- Washington Post: What
a Pension Shift Would Mean to You. Excerpts: "The Treasury
Department's view, announced last week, that 'cash balance' pensions
do not violate federal age discrimination laws may open the floodgates
to these hybrid plans. Employer groups applauded cautiously, noting
that other uncertainties remain for companies seeking to convert their
traditional pensions. But it seems likely that conversions, which were
on the rise until a Clinton administration moratorium in 1999, will
resume when the Treasury's new regulations become final. That is expected
next year. This is a controversy that every worker should pay attention
to. Pension benefits almost always depend heavily on the passage of
time, and decisions that workers make in their youth -- or that employers
make for them when they're in mid-career -- can have an enormous impact
on retirement income." ... "The result has been an explosion
of litigation, much of it charging age discrimination. While a court
could still decide that the Treasury is wrong, the agency's position
in the new regulations will make those cases much harder to win. 'What
the Treasury did was, they took us off at the knees,' said Kathi Cooper,
the lead plaintiff in a class-action suit against IBM that accuses the
computer giant of age discrimination in shifting to a cash-balance pension
plan." If link is broken, view
Adobe Acrobat version [PDF--27 KB].
- Newsday: No
Fan of Pension Conversions. Excerpts: "For many years, Harold
Morch, a manager at North Shore University hospital in Manhasset, nursed
a dream of retiring at age 62 to a quiet farm in northern Pennsylvania.
But in 1999, the hospital and most others in the North Shore-Long Island
Jewish Health System shifted from a traditional pension plan to a controversial
new type of plan that tends to reduce the monthly benefits that older
workers had expected. Now Morch is 62, and still working. He says he
can't afford to leave because the new 'cash balance' plan would provide
him with nearly 29 percent less than the traditional pension plan, or
$947.26 a month compared with $1,330.89 under the old plan. If he waits
until 65 to retire, Morch, who began working at the hospital in 1977,
will receive nearly 14 percent less than he would have under the earlier
plan at the same age, according to documents Morch says he obtained
from North Shore's benefits office." ... "Cash balance plans
are expected to become even more widespread under a new set of proposed
rules issued by the Bush administration last week that would make it
harder for them to be challenged for age discrimination. Of the 945
largest U.S. employers, 22 percent now offer the new plans, up from
3 percent in 1990, according to Hewitt Associates. Such a switch can
help employers save money on pension costs, improving their bottom line.
But the new plans can cost workers older than 40 up to one-half of their
expected pensions when the conversion is made, according to advocates
for workers and employers. That's because they use a formula allowing
workers to build up retirement benefits evenly throughout their careers,
rather than basing benefit amounts heavily on end-of-career earnings."
If link is broken, view Adobe Acrobat
version [PDF--15 KB].
- Chicago Tribune: Rules
disturb cash-balance foes. Excerpts: "If you like having your
own retirement savings account at work, probably called a 401(k), you
should love having your own pension. Maybe not. 'Millions of Baby Boomer
employees are going to be devastated by this,' said Kathi Cooper of
Bethalto, Ill., north of St. Louis. Watch out, says Cooper, if you get
a notice from your boss that says you're being offered thousands of
dollars to start an individualized pension. Cooper, 52, is the lead
plaintiff in a class-action suit against her employer, International
Business Machines Corp., challenging IBM's decision to convert its traditional
pension to a so-called cash-balance pension." ... "Cooper
says the IBM conversion would cost her $400,000 in retirement income.
The issues are complex--so complex that a few years ago consultants
promoting cash-balance plans to employers as cost-cutting schemes boasted
that workers would seldom figure out the losses they faced. Those days
are over. Extensive press coverage, congressional hearings, increasingly
knowledgeable employees and plaintiffs lawyers--not to mention numerous
Web sites and chat rooms devoted to cash-balance complaints--have diminished
chances for stealth pension conversions." If link is broken, view
Adobe Acrobat version [PDF--17 KB].
- New York Times: It
May Be Time to Plumb Your Pension's Depths. Excerpts: "At least
23 million Americans work for companies that offer traditional pension
plans — the kind that provide a fixed monthly income based on
length of service. For many of them, the pension regulations proposed
last week by the Bush administration pose a threat to their future retirement.
The new rules would make it easier for cost-conscious companies to switch
to another type of pension plan that would shrink their pension liabilities,
reducing some employees' benefits." ... "Hundreds of companies
made conversions to these plans in relative obscurity in the 1980's
and 1990's — until 1999, when older workers at I.B.M. realized
midway through a conversion that the company was stripping them of anticipated
retirement benefits often worth hundreds of thousands of dollars each.
The issue remains tied up in court. The I.B.M. workers rallied. Congressional
hearings and age-discrimination suits followed. Amid the outcry, the
Internal Revenue Service, which as part of the Treasury Department regulates
corporate pension plans, stopped approving conversions while it studied
the legal issues. The moratorium did not stop all companies from converting
pensions, but the uncertain legal environment made them move much more
cautiously, and to sometimes offer sweeteners."
"'We've had employees who have had to purchase time from an actuary,
which is about $500 an hour,' said Kathi Cooper, 52, an I.B.M. accountant
and the lead plaintiff in a pending suit against that company's pension
conversion. She calculated that I.B.M.'s pension changes would cost
her $400,000. 'It's easy for people like me to figure this out, because
I graduated magna cum laude, University of Texas, in accounting,' Ms.
Cooper added. 'If the Treasury really wants to help American employees
today, they've got to make regulations that will force employers to
disclose this stuff in eighth-grade language. There are millions and
millions of employees out there that don't have a clue what's going
to happen to them.' Ms. Cooper also has advice for employees who cannot
afford to hire an actuary: go to the Internet and start learning about
how pension conversions work, and how your company's conversion measures
up against industry norms. A good starting place for employees is the
Web site cashpensions.com, which was created by I.B.M. employees and
explains certain technical issues. It also offers sample letters to
regulators and elected representatives, asking for more protections
for workers, and provides news on pending pension litigation and links
to other sites with benefits calculators." ... "'When I first
filed suit against I.B.M., of course I was afraid,' she added. 'But
I was more afraid of retiring and eating cat food. That was my impetus.'"
If link is broken, view
Adobe Acrobat version [PDF--23 KB].
a message board posting (full excerpt): Question:
Above you said that it doesn't hurt people who left IBM before 1995,
it only has the potential to hurt those who left since 1995. Can you
please explain how? In my case I only left a year ago and started to
draw my monthly DB (Editor's note: "defined benefit", the
original pension scheme used by IBM before the 1999 cash balance conversion)
checks right away. Every month they show up now until I die and then
they continue for my spouse. So how can this change hurt in this situation?
The checks will keep coming, and coming. I may not get a COLA (cost
of living adjustment) but I don't think this bill will allow IBM to
reduce a DB pension once you start to draw it."
You are now a certified member of a class action lawsuit, Cooper v. IBM.
This lawsuit asserts that the hybrid plan IBM converted to in 1995 was
age discriminatory, based on the ERISA laws. If the Treasury is allowed
to issue regulations declaring that cash balance formulae are not age
discriminatory, the court could conceivably leap to the conclusion that
the government no longer intends to enforce the age discrimination rules
in ERISA. While this would not reduce the pension you are currently collecting,
it might eliminate any chance of Cooper v IBM of resulting in a settlement
that would amend your pension upwards. We need to tell the government,
loud and clear, that we want the current age discrimination rules in ERISA
fully enforced. The Treasury has no business shutting down current lawsuits
and EEOC charges! More details about Cooper v IBM are available at http://www.cashpensions.org/IBMCertFAQ.htm
Answer from Janet Krueger:
- Has your company already converted your pension to a cash balance
plan? Do you think you've already been burned once and that the new
Treasury Department proposal won't do you further harm? Think again.
Dave Finlay's message board posting "Cash Balance Conversions - better
the second time." Full excerpt: "Is 6% a reasonable interest
rate? For those who enjoyed their cash balance conversion, it gets even
better. Under the proposed IRS rules it is legal for a company to convert
your cash balance again. Suppose you are a 40 year old employee admiring
your $100,000 cash balance account. Suppose your company decides they
would rather not contribute to your pension fund for a while. So they
project your $100,000 forward to age 65 at the current (for 2003) interest
rate of 2.7% and get $194,653. They convert it to an annuity at a generous
rate of 6% to project an annuity of $18,318 per year, then convert it
back to cash at the same interest rate to get the same cash, $194,653.
And now the magic: your $194,653 is discounted back to today at the
reasonable interest rate of 6%, and you have a new cash balance of $45,354.
You get a 5 year wear-away, and it follows all the IRS rules. So, is
6% a reasonable interest rate?"
wrote a letter to Congress and President Bush to protest the newly-proposed
Treasury Department rules that would legalize cash balance conversions.
Excerpt: "Until 10/31/02 I had worked as an engineer for IBM in Endicott,
NY for over 23 years. In June of 1999 IBM decided to switch us to a
cash balance pension plan. IBM's stated opening balance for my cash
balance plan was $69K after 20 years of service, (less than one years
pay), and approx. 42% less than the present value I had earned to that
date under the prior DB pension plan." ... "Now the treasury Dept.
wants to legalize this organized financial plunder of an entire generation
of Americans? Until recently, (2-3 years ago), I considered myself a
Republican. No longer. What kind calamity will our nation experience
10-20 years in the future when baby boomers are retiring by the millions
and wake up to find they have no pensions, no retirement medical coverage
and possibly no social security. I truly believe from all I've read
and seen that it is largely the Republicans allowing and supporting
US corporations to plant this time bomb.Wake up, some of America's most
dangerous enemies carry briefs cases filled only with paper."
- Newsday (courtesy of the Seattle Times): Proposed
pension rules raise red flags: Older workers could see major loss of
benefits. Excerpts: "But labor advocates said the proposed rules
would help corporations save money at the expense of workers in their
40s, 50s and 60s, who can lose up to 50 percent of their expected benefits
when traditional plans are converted. The proposed regulations issued
for comment by the Treasury Department Tuesday 'give a green light to
a tremendously unfair practice that robs older employees of benefits
they had counted on getting,' said Karen Ferguson of the Pension Rights
Center, a worker-advocacy group in Washington, D.C." ... "But even
some younger workers are finding the new deal unpalatable. Jeffrey Zitz
is 38-year-old senior engineer at IBM's East Fishkill, N.Y., facility
who specializes in computer modeling. So when IBM announced plans in
1999 to convert to a cash-balance plan — and said the average
employee would lose 20 percent of their pension benefit — Zitz
made his own computer model. 'I was sure they were taking money off
the table, but I didn't know how much,' he says. To Zitz's horror, he
learned his loss would be closer to 65 percent. Using IBM's own numbers,
he figured his monthly pension at age 65 would drop from $14,465 to
just $4,542, and more recent changes have driven the figure even lower.
IBM has since allowed workers as young as 40 to stick with the old plan,
but that doesn't help Zitz. 'Honestly, there's not much I can do about
getting that money back,' says Zitz, who says he would have to sock
away $20,000 a year in after-tax income to make up the shortfall."
... "'It's unfair to say to people who have been at a firm a long
time, and have made their retirement plans based on what they will accumulate
under the existing plan, "We're taking away the old plan,"'
said Alicia Munnell, director of the Center for Retirement Research
at Boston College'." If link is broken, view Adobe Acrobat version
- AON Consulting report: Age
Discrimination Proposal Affects Cash Balance and Other Plans [PDF--115
George Miller (D-California) Says Bush Administration Plans to Weaken
Regulation of Pension Plans and Reduce Payments to Older Workers.
Excerpts: "'Once again, the Bush Administration has decided that
what is good for the captain is not necessarily good for the sailor,'
said Miller. 'This proposed change to pension rules will result in average
employees losing ground in their pensions while top company executives
will continue to receive lavish treatment."'Lifting the restriction
on pension plan conversions is the latest in a stunning series of actions
by an Administration that obviously has no compunctions against siding
with corporate interests over employees and families every time,' said
Miller. 'They aren’t satisfied with refusing to raise the minimum
wage, extend unemployment benefits, or grant a full cost of living raise
for federal workers. Now they are going after pension security, too.'
The rules change would lift a ban imposed by President Clinton in 1999
that prevented the government from approving a shift from a defined
benefit (company financed) pension plan to plans where most employees
will receive a smaller pension. So-called cash balance pension plans
were permitted initially by the first Bush Administration in 1991. Since
that time, as many as 700 of America's largest companies have adopted
them. Under the proposed rules change, the Administration would allow
companies to establish all the terms of the cash balance plan, include
the rates of return on the new plan and the estimated rate of return
used to estimate the value of an employee’s benefit under the
old defined benefit plan."
by the Honorable George Miller (D-CA), December 10, 2002, Regarding
New Bush Pension Plan [PDF--38.4 KB].
Full excerpt: "This is the latest example of the tin ear President
Bush and his Administration have for average employees. Workers who
are playing by the rules and raising families and looking forward to
a secure retirement are now having the rug pulled out from under them.
This is a devastating blow for employees who are in secure pension plans
today at good companies and who still have another 5 or ten years left
before retirement. The Bush Administration is implementing the wish
list of big business with a total disregard for the financial losses
average employees are going to suffer from it. Older workers, many with
families, many with dreams of a secure retirement, should be very concerned
about this change, because they are going to suffer big financial losses
from it – thanks to the Bush Administration. Employees have already
seen huge losses in their 401k plans. Now they are going to see losses
to their traditional pension benefit plans at top companies across the
country. The defined benefit plan is the last pillar of private pension
security and it has just taken a severe blow under this proposal. The
only way to stop this now is for employees to make their concerns know
– to their employers, to the elected representatives and to the
President. Congress could stop it, if it were not under the control
of the Republicans who are unlikely to come to the rescue of average
employees against the President’s wishes."
- Los Angeles Times (courtesy of the Miami Herald): Return
eyed for criticized pension plan by Kathy Kristof. This article
has a short question and answer section that is useful for people unfamiliar
with cash balance pensions and the way they work. Excerpts: "The
Treasury Department recently proposed rules that would end a three-year
moratorium on conversions to a complicated and controversial type of
pension that has been criticized for depriving older workers of promised
benefits. The new rules are aimed at clarifying whether converting traditional
pensions to so-called cash-balance plans discriminates against older
workers. As proposed, the rules would slightly modify, though largely
allow, many practices that have made the plans controversial. 'The immediate
impact of these rules, if they go into effect, will be to substantially
slash the pensions of older workers throughout the country,' Rep. Bernie
Sanders, I-Vt., said. 'Millions of workers will see a reduction in the
pensions that they anticipated. This will be a disaster for them and
|A bit of (very interesting)
- Letter to IBM Employees
[PDF--7.0 KB] from Tom Bouchard,
Senior Vice President, Human Resource announcing "changes
to two of our U.S. benefit plans--the IBM Retirement Plan and
the IBM Retiree Medical Plan." May 3, 1999. This is what
got it all started!
note written by an IBM employee from notes taken during a Pension
Plan meeting conducted by Phil Webber, Vice President of HR, held
on June 23rd, 1999 [PDF--39 KB].
(Editor's note: This is a must read if you're interested in the
history of IBM's 1999 changes to its pension and retiree medical
plans. The name of the writer of this Lotus note has been removed
from the document linked to here).
- After much protest from IBM employees, pressure from Congress,
and negative press, IBM announces that employees over 40 years
of age with at least 10 years of service may choose to stay with
the "old" pension plan. (September 17, 1999). (These
employees are commonly referred to as "second choicers").
(No changes were made to the devastion of the retiree medical
plan, however. Many employees consider the loss of lifetime retiree
medical to be even greater than that of the cash balance pension
Thomas Bouchard's e-mail to employees announcing the change [PDF--16KB].
- United States
General Accounting Office (GAO): Private Pensions: Implications
of Conversions to Cash Balance Plans (September 2000, 70 pages).
|Call to action: As you already
know, the Treasury put out regulations recently that would legalize
cash balance conversions, even if they don't provide a choice for
older workers and trigger long periods of wear away. This is simply
We have until March 13 to make our voices heard in Washington --
if we lose, and the regulations go into effect as currently proposed,
two bad things will happen:
- Companies who still have good pensions in place will have a
green light for reducing them -- millions of baby boomers will
be forced to pare back their retirement plans substantially, and
thousands of them won't figure it out until they retire and see
how little the get.
- Hundreds of open EEOC charges and pending lawsuits against
companies that have already slashed pensions through cash balance
conversions will most likely be closed out with no help for the
employees who already saw their promised retirements slashed.
Why you should care if...
- You're a young employee: The new Treasury Department
rules allow IBM and other employers to change financial assumptions
multiple times throughout your career to retroactively reduce
your "cash balance". Read
Dave Finlay's analysis of how companies can do so. (also linked
to higher on this page).
- You're a "second choicer": IBM relented
and gave you the choice to stay with its traditional pension.
Some have speculated they did so since the legality of cash balance
pension plans was not clear. The Treasury Department proposal
makes it clear that such conversions are legal, and indemnifies
corporations against charges of age discrimination. Given a green
light from the Treasury Department, IBM could easily force all
employees into a cash balance plan.
- You're a "first choicer": As with
"second choicers", given a green light from the Treasury
Department, IBM may force all employees into a cash balance plan.
- You're already retired: As Janet Krueger stated,
a class-action lawsuit, Cooper v. IBM asserts that "the hybrid
plan IBM converted to in 1995 was age discriminatory, based on
the ERISA laws. If the Treasury is allowed to issue regulations
declaring that cash balance formulae are not age discriminatory,
the court could conceivably leap to the conclusion that the government
no longer intends to enforce the age discrimination rules in ERISA.
While this would not reduce the pension you are currently collecting,
it might eliminate any chance of Cooper v IBM of resulting in
a settlement that would amend your pension upwards."
Write to the Treasury and tell them no! By law,
the Treasury must accept public comments through March 13, 2003.
Tell them you want a pension that will not decrease as
you get older. Tell them you want to receive your promised pension.
Tell them you want your pension protected, not reduced. Tell them
there are 80 million baby boomers out there that are retiring at
unprecedented speed, and that you vote. Tell them your pension is
the most important thing to you and your family's future.
Make 5 copies. Mail the original to:
Internal Revenue Service
CC:ITA:RU (REG-209500-86) Room 5226
Ben Franklin Station
Washington, DC 20044
Using your copies, send each to your two Senators and your Representative
in Congress. Send the last one to your local paper as a letter to
(Editor's note: The easiest way to find your senators and representatives
is to "search by ZIP Code" on
this page. We highly recommend you write (using postal mail)
or fax your senators and representative. Congress receives so much
e-mail that it is largely ignored. Old fashioned "snail mail"
receives more attention).
We don't need to be formal. We don't need lots of analysis, although
analysis is happening, and will be posted on www.cashpensions.org
when it is available. We don't need overkill. We don't have a minute
to waste. We only need to get a couple of million baby boomers to
write the Treasury and just say NO.
If you've got questions, give me a call.
507 289 9030
In other news this week:
- Kiplinger's Personal Finance: Shortchanged
by Mary Beth Franklin. Did you get a lump-sum payout from your pension
plan? Check the numbers.
Excerpt: "'Anyone who has participated in a traditional defined-benefit
pension plan or a cash-balance plan and has taken a lump-sum distribution
within the past ten to 15 years should be suspicious,' says Katz."
- Humor (Macromedia Flash animation): Mark Fiore Presents How
to be part of the Jobless Recovery!
- Annex Bulletin:
Lou Gerstner’s Book: Who Says Elephants Can’t Dance? Gerstner
Spills the Beans…Unwittingly Boasting about IBM Board’s
Courtship in 1992, He Reveals How IBM Board Misled the Public. Excerpt:
"Hopefully, the former Big Blue emperor has a better grasp of his
own executive compensation. As you saw in “Sir
Lou OutLayed Lay” (April 2002), Gerstner outdid even the Enron
chairman in insider selling. With the help of the (new) IBM Board members
- his pals whom he had appointed, the former IBM CEO took home nearly
half a billion dollars in aggregate executive compensation. Gerstner’s
nine years at the IBM helm will be remembered as the “Era of Greed.”
They are unprecedented in IBM corporate history when it comes to plutocratic
self-dealing by the top Big Blue brass. But that’s not something
about which Gerstner is boasting in his book “Who Says Elephants
Can’t Dance?” Self-enrichment while manipulating the stock
through stock buybacks is another conflict-of-interest practice that
the new SEC chairman may want to look into. If he really means business,
- Minneapolis Star Tribune: Editorial:
'Class warfare' / Who's victim, who's aggressor? Excerpts: "'Waging
class warfare' is an accusation often and easily thrown at people who
object to federal tax and spending policies that favor the wealthy.
Sometimes that accusation has the ring of truth, but sometimes it better
fits those who make it than those it is meant to describe. Now is one
of those times. Consider these recent developments and then decide:
Who is waging class warfare on whom?" ... "The White House
is floating trial balloons on a new approach to tax cuts for next year
which would argue that the affluent bear too much of the federal burden
and low-income Americans too little. In order to make this argument,
the White House focuses exclusively on the income tax. It argues that
payroll taxes -- paid to finance Social Security and Medicare -- are
not taxes at all, but fees. This, of course, would skew the tax picture
dramatically because the payroll taxes take an especially big bite out
of the incomes of less-wealthy Americans. That argument is going to
be a hard sell, a devious word game. What should make it even more difficult
are the statistics on wealth accumulation in the United States, which
belie the notion that onerous tax burdens are impeding the wealthy."
... "The results of that growth are stunning. Fed figures show that
in 1998, the top 1 percent of wealthiest Americans held 38.1 percent of
the nation's net worth. The top 10 percent held 70.9 percent. The bottom
40 percent held not even one-quarter of 1 percent."
- Toronto Star: CNN
is Such Good Fun. Excerpt: "The trouble with Canadian news, with
all its earnestness and gravitas, is that it's kind of boring. It's
filled with fish and wheat fields and wood and water and policy wonks.
It's not the presentation on the CanNets that bugs me. Canadian anchors
and reporters tend to be hairdos and shoulders above their more highly-paid
U.S. counterparts. I'll take a puffy Mike Duffy over a chiselled John
King anytime. It's just our news is so full of, you know, issues that
affect our daily lives and stuff: the environment, the economy, the
government, and other deadly dull topics. I mean, why can't we have
plagues on our cruise ships? Why don't our politicians dick around with
interns? Why don't our weapons inspectors dress up in leather boxers,
studded collars and rubber hoods? Do you realize that, unlike the U.S.
where they can pick and choose their shooting stories, just about every
single murder in Canada is reported? And how come we're never having
a 'showdown' with a brutal dictator? And don't get me started on foreign
news, eh? Canadian news networks are all over international stories
the way Larry King is all over his female guests. We Canadians are subjected
to elections in Argentina, oil slicks in Spain, elections in Israel,
all kinds of things happening over somewhere. And thank God too because
otherwise we'd be stuck with the ho-hum headlines from home."