Welcome to IBM Employee News and Links
"News and links for IBM employees, retirees, ex-employees, and persons interested in pension, retirement, off-shoring and corporate governance issues."
Search:
Web This Site

Quick Links:
  Get involved!
  Press articles
  Important Links
  Insider trading
  Lou's Contract
  Total Compensation
Subscribe:
  Add or delete ID
  Change ID
  Contact site owner
Previous Highlights:
  Current
  April 21, 2007
  April 14, 2007
  April 7, 2007
  March 31, 2007
  March 24, 2007
  March 17, 2007
  March 10, 2007
  March 3, 2007
  February 24, 2007
  February 17, 2007
  February 10, 2007
  February 3, 2007
  January 27, 2007
  January 20, 2007
  January 13, 2007
  January 6, 2007
  December 30, 2006
  December 23, 2006
  December 16, 2006
  December 9, 2006
  December 2, 2006
  November 25, 2006
  November 18, 2006
  November 11, 2006
  November 4, 2006
  October 28, 2006
  October 21, 2006
  October 14, 2006
  October 7, 2006
  September 30, 2006
  September 23, 2006
  September 16, 2006
  September 9, 2006
  September 2, 2006
  August 26, 2006
  August 19, 2006
  August 12, 2006
  August 5, 2006
  July 29, 2006
  July 22, 2006
  July 15, 2006
  July 8, 2006
  July 1, 2006
  June 24, 2006
  June 17, 2006
  June 10, 2006
  June 3, 2006
  May 27, 2006
  May 20, 2006
  May 13, 2006
  May 6, 2006
  2006 Stock Meeting
  April 22, 2006
  April 15, 2006
  April 8, 2006
  April 1, 2006
  March 25, 2006
  March 18, 2006
  March 11, 2006
  March 4, 2006
  February 25, 2006
  February 18, 2006
  February 11, 2006
  February 4, 2006
  January 28, 2006
  January 21, 2006
  January 14, 2006
  January 7, 2006
  December 31, 2005
  December 24, 2005
  December 17, 2005
  December 10, 2005
  December 03, 2005
  November 26, 2005
  November 19, 2005
  November 12, 2005
  November 5, 2005
  October 29, 2005
  October 22, 2005
  October 15, 2005
  October 8, 2005
  October 1, 2005
  September 24, 2005
  September 17, 2005
  September 10, 2005
  September 3, 2005
  August 27, 2005
  August 20, 2005
  August 13, 2005
  August 6, 2005
  July 30, 2005
  July 23, 2005
  July 16, 2005
  July 9, 2005
  July 2, 2005
  June 25, 2005
  June 18, 2005
  June 11, 2005
  June 4, 2005
  May 28, 2005
  May 21, 2005
  May 14, 2005
  May 7, 2005
  April 30, 2005
  April 23, 2005
  April 16, 2005
  April 9, 2005
  April 2, 2005
  March 26, 2005
  March 19, 2005
  March 12, 2005
  March 5, 2005
  February 26, 2005
  February 19, 2005
  February 12, 2005
  February 5, 2005
  January 29, 2005
  January 22, 2005
  January 15, 2005
  January 8, 2005
  January 1, 2005
  December 25, 2004
  December 18, 2004
  December 11, 2004
  December 4, 2004
  November 27, 2004
  November 20, 2004
  November 13, 2004
  November 6, 2004
  October 30, 2004
  October 23, 2004
  October 16, 2004
  October 9, 2004
  October 2, 2004
  September 25, 2004
  September 18, 2004
  September 11, 2004
  September 4, 2004
  August 28, 2004
  August 21, 2004
  August 14, 2004
  August 7, 2004
  July 31, 2004
  July 24, 2004
  July 17, 2004
  July 10, 2004
  July 3, 2004
  June 26, 2004
  June 19, 2004
  June 5, 2004
  May 29, 2004
  May 22, 2004
  May 15, 2004
  May 8, 2004
  2004 Stock Meeting
  April 24, 2004
  April 10, 2004
  April 3, 2004
  March 27, 2004
  March 20, 2004
  March 13, 2004
  March 6, 2004
  February 28, 2004
  February 21, 2004
  February 14, 2004
  February 7, 2004
  February 1, 2004
  January 18, 2004
  December 27, 2003
  December 20, 2003
  December 13, 2003
  December 6, 2003
  November 29, 2003
  November 22, 2003
  November 15, 2003
  November 8, 2003
  November 1, 2003
  October 25, 2003
  October 18, 2003
  October 11, 2003
  October 4, 2003
  September 27, 2003
  September 20, 2003
  September 13, 2003
  September 6, 2003
  August 30, 2003
  August 23, 2003
  August 16, 2003
  August 9, 2003
  Pension Lawsuit Win
  July 26, 2003
  July 19, 2003
  July 12, 2003
  July 5, 2003
  June 28, 2003
  June 21, 2003
  June 14, 2003
  June 7, 2003
  May 31, 2003
  May 24, 2003
  May 17, 2003
  May 10, 2003
  2003 Stock Meeting
  April 26, 2003
  April 19, 2003
  April 12, 2003
  April 5, 2003
  March 29, 2003
  March 22, 2003
  March 15, 2003
  March 8, 2003
  March 1, 2003
  February 22, 2003
  February 15, 2003
  February 8, 2003
  February 1, 2003
  January 25, 2003
  January 18, 2003
  January 11, 2003
  January 4, 2003
  December 28, 2002
  December 21, 2002
  December 14, 2002
  December 7, 2002
  November 30, 2002
  November 23, 2002
  November 16, 2002
  November 9, 2002
  November 2, 2002
  October 26, 2002
  October 19, 2002
  October 12, 2002
  October 5, 2002
  September 28, 2002
  September 21, 2002
  September 14, 2002
  September 7, 2002
  August 31, 2002
  August 24, 2002
  August 17, 2002
  August 10, 2002
  August 3, 2002
  July 27, 2002
  July 20, 2002
  July 13, 2002
  July 6, 2002
  June 29, 2002
  June 22, 2002
  June 15, 2002
  June 8, 2002
  June 1, 2002
  May 25, 2002
  May 18, 2002
  May 11, 2002
  2002 Stock Meeting
  April 27, 2002
  April 20, 2002
  April 13, 2002
  April 6, 2002
  March 30, 2002
  March 23, 2002
  March 16, 2002
  March 9, 2002
  March 2, 2002
  February 23, 2002
  February 16, 2002
  February 9, 2002
  February 2, 2002
  January 26, 2002
  January 19, 2002
  January 12, 2002
  January 5, 2002
  December 29, 2001
  December 22, 2001
  December 15, 2001
  December 8, 2001
  December 1, 2001
  November 24, 2001
  November 17, 2001
  November 10, 2001
  November 3, 2001
  October 27, 2001
  October 20, 2001
  October 13, 2001
  October 6, 2001
  September 29, 2001
  September 22, 2001
  September 15, 2001
  September 8, 2001
  September 1, 2001
  August 25, 2001
  August 18, 2001
  August 11, 2001
  August 4, 2001
  July 28, 2001
  July 21, 2001
  July 14, 2001
  July 7, 2001
  June 30, 2001
  June 23, 2001
  June 16, 2001
  June 9, 2001
  June 2, 2001
  May 26, 2001
  May 19, 2001
  May 12, 2001
  May 5, 2001
  2001 Stock Meeting
  April 21, 2001
  April 14, 2001
  April 7, 2001
  March 31, 2001
  March 24, 2001
  March 17, 2001
  March 10, 2001
  March 3, 2001
  February 24, 2001
  February 17, 2001
  February 10, 2001
  February 3, 2001
  January 27, 2001
  January 20, 2001
  January 13, 2001
  January 6, 2001
  December 30, 2000
  December 23, 2000
  December 16, 2000
  December 9, 2000
  December 2, 2000
  November 24, 2000
  November 17, 2000
  November 10, 2000
  November 4, 2000
  October 28, 2000
  October 21, 2000
  October 14, 2000
  October 7, 2000
  September 30, 2000
  September 23, 2000
  September 16, 2000
  September 9, 2000
  September 2, 2000
  August 26, 2000
  August 19, 2000
  August 12, 2000
  July 29, 2000
  July 22, 2000
  July 15, 2000
  July 1, 2000
  June 24, 2000
  June 17, 2000
  June 10, 2000
  June 3, 2000
  May 27, 2000
  May 20, 2000
  May 13, 2000
  May 6, 2000
  April, 2000
 

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 for week ending June 21, 2003
  • The Observer (United Kingdom): IBM paid Revenue £700m over tax evasion'. Excerpts: IBM paid the Inland Revenue an estimated £700 million to settle claims of tax evasion in 2001, says a disaffected former employee of the US computer giant. If the allegation is true, the payment would almost certainly be the largest of its kind in Revenue history. IBM declined to confirm or deny the claim yesterday, calling it 'rumour and speculation'. ... In 1999 Churchhouse claimed that IBM UK had transferred artificially high royalties to its loss-making American parent in the early Nineties, in an attempt to reduce the group's global tax bill. He said that this alleged 'transfer pricing' allowed the company to evade up to £330m in UK taxes.
    • "har_philby" comments. Excerpt: Maybe the reason IBM did so well under Gerstner was because they didn't pay their foreign taxes for many years and suddenly faced a tax bill that could only be paid if the pension fund was raided? Destroying employee loyalty always comes to roost!

  • Dow Jones Business Wire: Long-Standing IBM Pension Lawsuit May Be Nearing Endgame. Excerpts: The suit alleges that International Business Machines Corp. (NYSE:IBM - News) treats its older workers unfairly under two pension plans, one started in 1995 and another in 1999. Kathi Cooper, a 52-year-old Illinoisan who works for IBM, is the lead plaintiff in the suit, which also represents 140,000 other employees in the U.S. Cooper and the others will get larger annuities when they retire if their suit succeeds, according to Doug Sprong, a benefits lawyer at Korein Tillery in Belleville, Ill., who is representing the plaintiffs. ... A key part of the case involves IBM's conversion in 1999 of one its traditional defined-benefit pension plans to a cash-balance plan. Cash-balance plans, in general, have been a flashpoint for employee anger, and have spurred such a controversy that the Internal Revenue Service declared a moratorium on new cash-balance pensions in 2000. Employee activists don't like cash-balance plans because they say they're less rewarding to longtime employees. The plans don't calculate benefits based on salary during final years of service, as do traditional defined-benefit plans. Another criticism is that when companies convert old plans to cash-balance they often freeze older workers' benefit accrual for a period to bring them into line with younger employees.
    • Editor's note: Last week's highlights link to several other articles pertaining to the Cooper v. IBM lawsuit.

  • Telegraph Forum (Bucyrus and Crawford Counties, Ohio): Pension suit alleges age bias. Editor's note: This is a duplicate of a Binghamton Press & Sun-Bulletin article referenced in last week's highlights but this version includes a photograph of lead litigant Kathi Cooper.


  • New York Times: Pension Reserve: What's Enough? Excerpts: Accounting is a dismal science, pension accounting even more so. But it is increasingly important to penetrate the fog today, when companies are using complex and sometimes hidden tactics to change the way they pay for their pension plans. For the roughly one in five workers in the private sector whose employers have established pension plans, those changes could significantly affect the way they live in retirement. ... Companies in several industries say that rules requiring big contributions to underfunded pension plans must be changed. The shortfall for General Motors is so daunting that on Friday it said it will have to sell $13 billion in bonds, with most of the proceeds going to reduce deficits in its American pension plans. In Washington, varying relief mechanisms are being sought, but all would have the same effect: to reduce the amounts that employers set aside today for benefits due in the future. The long-term effects of that could be harmful. Federal officials have spent the last quarter-century prodding companies to fully fund their pension plans; they say that ballooning pension deficits show a need for more contributions, not exemptions. ... "We're going to create this whole class of people 30 years from now that's going to be dependent on the government, because corporate America has decided that it's not their responsibility. It's going to be a big, huge problem," he said.
    • Janet Krueger comments. Excerpt: One thing she doesn't mention is that if the Wall Street perception of tragedy whenever a company has to contribute to its pension fund is part of what stopped the distribution of COLAs to retirees...

  • Wall Street Journal: GE's Proposed Labor Pact Sweetens Retirement Benefits. Excerpts: The proposed contract negotiated between General Electric Co. and its 14 unions last weekend, the terms of which were disclosed Wednesday, includes significant increases in pension benefits and more early-retirement slots for the company's graying manufacturing work force. ... GE's future retirees also would receive gains. GE would increase guaranteed pension benefits for long-service employees by as much as 35% over the four-year period. The company also would increase the supplemental payments that a retiree of at least 60 years of age receives for up to three years until he or she is eligible to receive Social Security. The previous three-year contract estimated that pension benefits increased 10% to 15% over the prior pact. ... After the talks were completed, GE executives told the unions that they would also authorize an extra pension check this year to current retirees. ... In addition to the wages and pension issues, GE's unions were looking to increase the number of available slots for workers to take a special retirement package. The last three-year contract allowed for 850 workers -- both nonunion and union -- to do so. Under the new contract, 1,020 union workers would be permitted to retire early, with 600 this year and an additional 420 employees in 2005.


  • Wall Street Journal: Pensions Fall -- Not CEO's Bonus. Companies Shift Compensation Formulas To Preserve Payouts to Their Top Officers. Excerpts: Corporations have been feeling the pinch as ailing pension plans cut into their profits. But several large firms are making sure that one item doesn't suffer: the bonuses paid out to top executives. For much of the past decade, pensions helped fatten the bottom line at many companies thanks to an accounting quirk, indirectly boosting executive bonuses and incentive compensation, which are typically tied to a company's financial performance. Now that the up-and-down stock market has made many pension plans a drag, not a boost, on earnings, some companies including General Electric Co., Delta Air Lines and Verizon Communications Inc. have started removing pension effects from their executive compensation formulas. In some instances, companies are dressing the maneuvers up as corporate-governance reform. ... But corporate governance experts say this phenomenon underscores how, at many companies, bonuses are becoming an entitlement, regardless of company performance. "This pattern where pension surpluses are included for bonuses but pension expenses are excluded just underscores how these incentive programs can be manipulated in order to maximize payouts," said Carol Bowie, director of governance research at the Investor Responsibility Research Center, a Washington research and advisory firm for institutional investors.


  • Alternet.org: Washington to Nation: Drop Dead on the Job. Excerpts: Americans are already working more hours than at any time since the 1920s. Some 63 percent of Americans log more than 40 hours a week, according to a new survey by the Internet travel company Expedia.com. Two other polls found that nearly 40 percent of Americans work more than 50 hours per week. We work 2.5 more weeks a year on the job than the Japanese and up to three months more than the Europeans. The average middle income family now puts in four months more on the job in total hours each year than in 1979. For my money, the biggest threat to family values is the hostile takeover by work of every inch of our lives. ... But we refuse to see the problem, blinded by an obsession that work style -- how long, how hard, how torturously -- is more important than what we accomplish. We somehow think that long hours will translate into higher productivity. But Europe had a higher productivity rate than the U.S. for 14 out of the 19 years between 1981 and 2000, according to the U.S. Federal Reserve Board. The evidence from Europe and enlightened companies in the U.S. shows that you can be productive and have a life.


  • Australian Broadcasting Corporation: US wage gap widens. Excerpts: COMPERE: In the United States, the fat cats are getting fatter, with top executives ranking in wages in the hundreds of millions of dollars. A survey of wage rates in the United States shows the gap between the average worker and top corporate executives has widened to an enormous gulf in the nineties. Agnes Cusack reports from Washington: AGNES CUSACK: Corporate profits in the United States are estimated to have increased by 108 per cent in the nineties. Pro-Labor think tanks have set out to find who's gained. They say the average American worker's pay has risen by 28 per cent in the past decade - barely above the inflation rate, while salaries for chief executive officers have increased by 481 per cent. ... CHUCK COLLINS: The compensation process in the United States is set by committees at the corporation level, and these compensation committees tend to be made up only of other CEOs and other very high paid executives, and so they really don't have a lot of incentives to critically look at this growing disparity. AGNES CUSACK: If the average pay of a production worker had risen at the same rate as CEOs salaries in the nineties, he or she would be earning $173,000 a year rather than the current $45,000. The minimum hourly rate would be $34 rather than $8. Unemployment is low in the United States, but Chuck Collins says the tight labour market hasn't helped the average worker.


  • "stanleyfogel" comments on IBM retirement plans, past and current, and provides details on IBM's retirement plan for executives. Excerpt: In addition, the B/C/D/E (aka E1/E2/E3/E4 and even before that 71/72/73/74) executive pay levels generate an automatic 66% retirement pay based on total base pay. The executives get 66% no matter what happens. They get it even if they get laid off or fired the next day after they sign the papers since they become immune to the 30 year rule. ... The fact is that when you become a real IBM executive-a member of the Senior Management Team (there are many Band 10's that have ersatz executive titles) you get to leave anytime without any pension penalty, you get 66% of your salary, and you get to keep whatever you've saved.

    Throw in the special medical plan I hear that's coming, the free annual laptop, extra discounts on purchases, special fares and memberships to rental car/airline and other deals, things are that bad for the IBM senior management team retiree. They probably have lots of time to post on boards like this! That's why many will sell their souls and their integrity to get to that level. You're almost immune from anything. Editor's note: The IBM Executive Deferred Compensation Plan (EDCP) for the 2003 Plan Year is available in Adobe Acrobat [PDF--569 KB] format.


  • Janet Krueger asks Dave Finlay: "What I find sad is the way the cash balance plan penalizes high performers. Could you please show us what the numbers are if the employee in question started at the same date and had the same starting salary, but had average pay raises of 10%?" Dave Finlay replies (full excerpt): Here is the table redone with an average wage increase of 10%. The change of 5% to 10% is accomplished by adding 5% to the increase for each age. That method works fine for changing from 4% to 5% to 6%, but I have no data to indicate that it works for 10%. That said, here are the results:

    With an average raise of 10%:
    Retirement Age: 55 60 65
    1980 SEF Plan 33.5% 43.7% 50.2%
    1995 PCF Plan 34.5% 44.3% 44.9%
    1999 Cash Balance Plan 8.7% 10.8% 13.4%

    Several things have changed. The 1980 SEF uses a 10 year salary average; so at higher pay increases, the pension looks smaller compared to the final 5 year average. The 1995 PCF rewards higher paid employees with 'excess points'; so those numbers increase as pay increases. As expected, the 1999 CB decreases. Also, by age 65 this person is paid over $700,000.


    So, here it is with a 6% average raise:
    Retirement Age: 55 60 65
    1980 SEF Plan 36.2% 47.3% 54.3%
    1995 PCF Plan 32.5% 41.6% 42.3%
    1999 Cash Balance Plan 12.2% 16.3% 21.7%


    It doesn't take much of a change to see the difference.

    Editor's notes:
    • An earlier posting by Dave Finlay explains that the figures in the above tables show pension income as percent of final 5 year average pay for the three major iterations of IBM retirement plans at age 55 with 30 years service, age 60 with 35 years, and age 65 with 40 years.
    • Dave Finlay has created a spreadsheet you can use to compare your pension benefits under IBM's retirement plans, including the cash balance plan. See for yourself how much you may have lost! Download Microsoft Excel format. Download Lotus 1-2-3 format.


  • Boston Globe: Wal-Mart Ordered to Recognize Union; Workers Win Historic Bargaining Order; Company Ordered to Turn Over Information to Union. Excerpts: When meat cutters at a Jacksonville, Tex., Wal-Mart voted for United Food and Commercial Workers Local 540 representation, the company refused to recognize the union -- and suddenly changed the job functions of the meat cutters with a change to case-ready meat. Wal-Mart believed it had successfully circumvented the UFCW's first victory at one of its stores -- until a National Labor Relations Board Administrative Law Judge ordered the company to recognize and bargain with Local 540 over the effects of the change to prepackaged meat. This order comes more than three years after the original union election. ''Changing the way all of its stores sell meat shows the extent to which Wal-Mart will go to keep the union out of its stores,'' says UFCW Executive Vice President Mike Leonard. ''Anytime management concocts a scheme to ratchet down people's livelihoods, it says a lot about the real nature of the company.''

Coverage on H1-B and L1 Visa and Outsourcing Issues

  • Press Associates Union News Service, courtesy of WashTech.org: White collar job exodus to increase, panelists warn. Excerpt: Information technology workers in Connecticut saw their work sent to Bermuda. Massachusetts General Hospital transmits CAT scans of patients by computer for examination by radiologists--in Bombay. Workers in India entered New Jersey's welfare recipients' paperwork into computers, until an uproar brought those jobs to Newark, employing nine people. But New York City's parking tickets are sorted by computer techs in Ghana. And General Electric engineers, represented by IFPTE Local 147 in Schenectady, N.Y., saw some of their jobs transferred to Mexico--and that's despite the fact that they're unionized. These and other examples point up a growing trend: An exodus of white collar jobs overseas, just as factory jobs migrated to developing nations in previous decades, witnesses warned a House panel on June 18. And the transfer abroad of white-collar jobs leaves those jobless workers in the U.S., like their blue-collar colleagues, with few prospects here at home. "How do you retrain a chemical engineer?" one panelist asked the Small Business Committee.


  • BBC News: Union warns of India jobs 'decimation'. Excerpts: The UK Government has been urged to tackle an alleged social and industrial "earthquake" caused by the export of IT jobs to India. White collar science and engineering union Amicus wants ministers to set up an independent commission to investigate the issue. It warns Britain will turn into a nation of "fat cats and hairdressers" unless action is taken. The unions' words are unlikely to be well received in India, which is already fighting anti-outsourcing proposals from several US states. ... Amicus, which opened its annual conference in Blackpool on Saturday, predicted that 200,000 UK jobs were likely to be lost unless something is done about the crisis in IT and finance. Whole communities are being asked to face the nightmare of the 1980s once again. It said the sector was facing the biggest industrial collapse since manufacturing was "decimated" in the 1980s.
    • Linda Guyer comments. Excerpt: I realize this topic is not about pensions (directly) - but if we don't wake up and smell the coffee on this we will have NO JOBS left in high tech in this country. I have heard from a very good source that IBM is planning to shift 30,000 jobs in the next year to other countries like India. (That's 25% of US employees). The IGS strategy is to outsource every single job that currently works on an internal account.

  • Hindustan Times (India): Outsourcing to India can grow fivefolds: Research firm. Excerpts: Outsourcing of IT jobs to India could grow fivefold to $50 billion by 2008 if it can overcome a US labour backlash, says a report by investment-analyst firm Brean Murray Institutional Research. But despite the assurances the US administration gave to visiting Indian Commerce and Industry Minister Arun Jaitley to allay his country's fears on this, indications are that political opposition to offshore outsourcing is still high among the uncertainties that could slow that projected growth, according to the study. During his visit to Washington this month Jaitley raised the issue of state legislation banning outsourcing of technology jobs to India with US Trade Representative Robert Zoellick, who assured him that the federal government considers these measures as a "bad policy" and "is trying to resist it".


  • eWeek: Lawmakers Look To Curb L-1 Visas. Excerpts: pair of Congresswomen this week raised questions about the L-1 visa and promised to fight abuses of the program, which some say has cost the jobs of American IT workers. Rep. Rosa DeLauro (D-Conn.) announced plans to introduce legislation that will, among other things, place an annual cap of 35,000 on L-1 visas and will require L-1 workers to be paid prevailing U.S. wages. The bill would also deny L-1s to any company that has laid off an American worker in the six months before or after filing an L-1 application. "At a time when domestic employment is at an all-time high and tens and thousands of jobless tech workers and others are looking for work, it is important to close the loopholes that disadvantage American workers," DeLauro said in a press release. ... "In some cases the American worker was instructed to train the new arrival only to be summarily dismissed and replaced by the foreign worker," Johnson said.
"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.