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    Highlights for week ending September 13, 2003
  • ERISA Industry Committee (ERIC): ERIC Urges House Defeat of Sanders Amendment in H.R. 2989. Excerpt: The ERISA Industry Committee (ERIC) is urging members of the House of Representatives to defeat an amendment to the Transportation/Treasury Appropriations bill (H.R.2989) that would hurt the pension plans of millions of workers in the United States. The amendment is expected to be offered on Tuesday, September 9 by Rep. Bernie Sanders (I-VT) and would prohibit publication of regulations regarding age discrimination that take a position contrary to the Cooper v. IBM district court decision. In Cooper v. IBM Personal Pension Plan, the court held that IBM's cash balance pension plan violates the provisions of ERISA prohibiting age discrimination in retirement plans. If the amendment passes and ultimately becomes law, the publication of anticipated final age discrimination regulations could be delayed beyond October 2004 creating further uncertainty regarding the rules surrounding hybrid plans as well as traditional plans.


  • According to "Almost30Yrs", ERISA and others put a full page advert in the NY Times today (September 9, 2003) headlined Don't Destroy America's Pension System: Vote "No" on the Sanders Amendment to HR 2989. "The Sanders Amendment to the Treasury Appropriations Bill threatens to outlaw vast numbers of pension plans ... prevent pension plans from protecting employees' pensions against inflation ... [and] drive employers out of the pension system by requiring them to pay billions of dollars in additional liabilities."


  • Who is ERISA? From http://www.eric.org/public/who/overview.htm: Since 1976, The ERISA Industry Committee (ERIC) has remained the only organization in Washington exclusively committed to the employee benefits interests of America's major employers. ERIC represents only employer interests. Our action on legislation, regulations, and other matters is determined solely by our members who are directly responsible for benefits policy within their companies. As a result, ERIC has been extremely influential and successful in its efforts and its mission.


  • Wall Street Journal: House Moves to Prevent Proposed Pension Rules. Excerpts: In an unexpected move that involved possibly doctored Treasury documents, an expensive full-page advertisement in the New York Times and a lot of heat over cash-balance pension plans, the House passed an amendment that could prevent the Treasury from issuing controversial pension regulations. Rep. Bernie Sanders, a Vermont independent, offered the amendment, which was tacked on to an appropriations bill, to stop the Treasury from issuing final regulations on cash-balance pension plans -- regulations that have been on the drawing board for more than 15 years. The vote passed 258 to 160, with 65 Republicans and 192 Democrats in favor. Cash-balance plans are controversial because they usually cut pensions for older workers. In late July, a federal district court in Illinois concluded that International Business Machines Corp.'s cash-balance plans had discriminated against older workers. Mr. Sanders and his co-sponsors, who include Reps. Gil Gutknecht (R., Minn.), George Miller (D., Calif.) and Maurice Hinchey (D., N.Y.), say the Treasury regulations would have reversed the court's decision in the IBM case. "The court found that IBM knew that older workers would lose up to 47% of their pensions under the cash-balance conversion," Mr. Sanders said. "Now the Treasury is about to help employers make an end run around the courts and illegally cut pensions."

    On Monday, an IBM lobbyist, Susan M. Siemietkowski, sent a document she called the "Treasury's statement of opposition" to various lawmakers' staffs, including Mr. Gutknecht. The Treasury document, on official Treasury letterhead, noted "Treasury Strongly Opposes the Sanders Amendment" and advised lawmakers to oppose the amendment, which it said "will weaken the defined benefit system." Tara Bradshaw, a spokeswoman for the Treasury, said the agency didn't issue the document. "It is a Treasury generated fact sheet stating our position on a set of [past] amendments that were never offered. However, they were not sent in the format you provided and, therefore, appear to have been doctored." She said the Treasury had prepared an earlier document pertaining to an amendment offered by Mr. Sanders last year, but that the original document was "designed for informational purposes and was not formally released," she said. "We were not aware the document had been circulated beyond a very limited number of select staff." If link is broken, view Adobe Acrobat version [PDF--47 KB].


  • Are you interested in how your Congressperson voted on the Sanders amendment? The roll call voting results are available here from the Clerk of the House of Representatives. Votes by party are as follows:
      Ayes Noes Not Voting
    Republican 65 156 7
    Democratic 192 4 9
    Independent 1    
    Totals 258 160 16

  • Wall Street Journal: Many Ties Link Pension Lobby To Regulators. Excerpt: The retirements of millions of Americans could hang partly on the relationships between those who regulate pension plans -- and are drafting regulations -- and pension lobbyists and consultants hired by employers and financial firms. The relationships are social as well as professional. Consider a recent party at the Washington home of William F. Sweetnam Jr., a lawyer at the Treasury Department who is playing an important role in drafting regulations for what are known as cash-balance pension plans. The party was thrown to welcome a new congressional staffer working on pension issues. It was co-hosted by Brian Graff, a lobbyist for the American Society of Pension Actuaries, a group representing those who make a living running employer-sponsored pension plans, which has lobbied in favor of cash-balance plans.

    Not invited were any of the few lawmakers and congressional staffers who have staked out strong positions against cash-balance plans, which offer financial benefits to employers but can reduce payments to older workers .Instead, among the invited guests -- aside from a smattering of congressional and Treasury staffers who work on pension issues -- was a long list of lobbyists representing employers on pension and retirement matters. They included individuals from the Erisa Industry Committee and the American Benefits Council, whose members include International Business Machines Corp., AT&T Corp. and hundreds of other large employers with a financial stake in the outcome of the pension regulations Mr. Sweetnam is drafting. If link is broken, view Adobe Acrobat version [PDF--41 KB].


  • Wall Street Journal: Inspector General To Look at Reports On IBM Lobbyist. Excerpt: The Treasury Department asked its Office of Inspector General to look into reports that an International Business Machines Corp. lobbyist distributed a document that may have been doctored to show Treasury opposed controversial pension regulations, said Treasury spokesman Rob Nichols. ... An IBM spokesman acknowledges that the company "reformatted the document" but says that it did so only to "clearly identify it as a document from Treasury" and that "our intent was not to misrepresent the document." He says IBM believed the document to be public. If link is broken, view Adobe Acrobat version [PDF--26 KB].

  • A photograph of Susan Siemietkowski, an IBM lobbyist who has been accused of doctoring Treasury Department documents, is available at the IBM Governmental Programs Web site.


  • San Francisco Chronicle: Congress rebuffs Bush, gives labor rare victories. Excerpts: Some congressional Republicans skittish about the political fallout from an economy hemorrhaging jobs turned back administration proposals to rein in overtime pay, shift government work to the private sector and allow pension changes that cut benefits for older employees. ... Further, 65 House Republicans crossed over to approve an amendment that would prevent the Treasury Department from issuing final regulations on cash balance pension plans. Companies have converted their traditional pension plans to cash balance plans, which often cut expected benefits for older workers nearing retirement. Treasury's proposal last year said cash balance plans would not be subject to age discrimination rules.


  • We at www.ibmemployee.com offer our sincere thanks to brave columnists such as Ellen Schultz and Theo Francis at the Wall Street Journal who have played an instrumental role in exposing the cash balance pension plan fiasco imposed on American employees by companies such as IBM. For example, Ellen Schultz's December 29, 1999 article How a Single Sentence By the IRS Paved the Way to Cash-Balance Plans was groundbreaking in exposing how (and why) cash balance plans came to be. If link is broken, view Adobe Acrobat version [PDF--56 KB].


  • We also give our heartfelt thanks to Representative Bernie Sanders for his unrelenting support of IBM employees in their battle against IBM's pension shenanigans. Thanks for serving not only your home state of Vermont, Bernie, but all justice seeking Americans.


  • Representative Sanders' Web site: Sanders Hails House Passage of Pension Protection Amendment. Excerpt: Sanders said, “This vote sends a strong message to the Bush Administration and the Treasury Department that the time has come to finally protect workers who have seen their pensions slashed through cash balance conversions by immediately withdrawing their proposed cash balance regulations. In addition, it also sends a message that Congress supports the federal court ruling declaring that cash balance plans are age discriminatory.”


  • Representative Sanders' Web site: Sanders Seeks Treasury Dept. Investigation into IBM Lobbying Practices [PDF--217 KB]. Excerpts: I appreciate the opportunity during today's Financial Services Committee we had to discuss, however briefly, the very distressing revelation that it appears "doctored" Treasury Department documents were used to lobby Members of Congress in opposition to the cash balance amendment which the House overwhelmingly adopted yesterday. Combating this type of fraud, in my view, goes beyond partisan differences people may have in general or more specific differences you or I or any one else may have with respect to cash balance pensions. What is at stake here is the integrity of your Department and the legislative process.

    No one is surprised when important issues involving billions and billions of dollars such as cash balance conversions are hotly contested or that many corporate lobbyists and other corporate resources are brought to bear. But the distribution of phony documents purporting to be from the Treasury Department goes beyond even the very loose ethical rules that lobbyists too often seem to follow in Washington. Therefore, I was gratified when you committed to looking into this matter personally.


  • "bonbon6_98" reports on changes in compensation for some IBM Canada employees. Full excerpt: I work for IBM up here in Canada. We have just been notified that band '7's' will no longer get time and a half for overtime worked, only straight time. Also, the shift premium is being cut from 10% to 5%. Are the same things happening there? What can I do about it?u


  • New York Times: Clouds in Silicon Valley. Excerpt: It was a special occasion, a dinner party at Le Papillon restaurant to celebrate Ron Loanzon's 50th birthday. Everyone was having a great time until Mr. Loanzon dropped his fork. This was on March 16, 1999. The fork fell to the floor and Mr. Loanzon tried to reach for it. But he couldn't. He just stared at it. He didn't say anything, just stared with a peculiar expression that frightened his relatives. "In his mind, he was bending and reaching for it," said his wife, Cora, in an interview a few days ago. "He was trying, but nothing happened." The relatives waited for this odd moment to pass, but it didn't, and Mr. Loanzon had to be taken to a hospital. A malignant brain tumor was discovered. Nine months later Mr. Loanzon, an I.B.M. employee who worked with the highly toxic chemicals used in electronic manufacturing, was dead. If link is broken, view Adobe Acrobat version [PDF--26 KB].


  • New York Times: Early Warnings. Excerpt: The I.B.M. study was conducted by Johns Hopkins University, and it found a big link between miscarriages and exposure to E.G.E.'s. "Women with the highest exposure potential," the study said, "had a threefold increased risk of spontaneous abortion compared to female employees with no potential for direct exposure to E.G.E." The study said, "We also found evidence that the work on processes with direct exposure to E.G.E. was associated with an increased risk of subfertility in female employees and a suggestion of a similar effect in male employees and their wives." ... I.B.M. stopped using E.G.E.'s in all new processes in 1992 and finally stopped using them altogether in 1995, a decade and a half after the warnings began circulating. No one knows how many workers may have been harmed in that period. A spokesman for I.B.M. said in an e-mail message yesterday that "finding suitable alternative materials for processes in semiconducting manufacturing is a complex process." A peculiar thing about the I.B.M. study was that while it focused on reproductive processes right up until the moment of birth, it did not study the health outcomes of newborns — to what extent, for example, they might have suffered from birth defects. In the damage suits that have been brought against I.B.M. by more than 200 of its employees are a number of cases of hideous birth defects that the plaintiffs allege were caused by exposure to toxic chemicals, including ethylene glycol ethers. I.B.M. has already thrown in the towel in one case, that of Zachary Ruffing, a teenager who was born blind and extremely deformed to parents who had both worked in the company's plant in East Fishkill, N.Y., in the 1980's. If link is broken, view Adobe Acrobat version [PDF--18 KB].


  • Reuters: Health Premiums Swell, U.S. Public Worried - Poll. Excerpt: Politicians take note: Americans fret more about the soaring cost of health insurance than being a victim of a terror attack, according to a poll released on Tuesday.

Coverage on H1-B and L1 Visa and Outsourcing Issues
  • CIO Magazine: Back Lash. Excerpt: A CIO at a famous Fortune 100 manufacturer has a recurring nightmare: As he continues to lay off American IT workers and move their jobs offshore to places such as India, never to return, American public opinion suddenly swings violently against globalization. He and his company are demonized, and Americans boycott his company's products. "Public perception isn't always accurate, but it counts for a lot of things," he says, after insisting on anonymity. "We don't want a situation where the public sees us as a malevolent force and takes it out on our products." Other CIOs are becoming similarly cautious about publicly endorsing offshore outsourcing. Of the dozen CIOs contacted for this article, only two agreed to talk completely on the record. Though all believe that the offshore outsourcing trend will continue, some are privately worrying about carrying out the inevitable in a sick economy and wondering if it isn't happening too quickly. It's not hard to find reasons for CIOs to worry. "Do you want to do business with companies that take away jobs for U.S. citizens by outsourcing work to foreign countries?" asks The Organization for the Rights of American Workers (Toraw), a group of displaced, angry American workers laid off by Connecticut insurance and financial services companies.


  • TechsUnite: Unions and Workers to Protest High Tech Offshoring. Excerpt: On Tuesday, September 16th at 8:30 am, the Communications Workers of America, with a coalition of laid-off high-tech workers and labor supporters, will demonstrate against the “off-shoring” of IT jobs (information technology) out of the United States. The demonstration will take place at a conference at SFO’s Hyatt Regency hotel where outsourcing specialists will be trying to convince even more Silicon Valley employers to dump local employees and ship tech jobs to Russia. ...

    Nationally, CWA has convinced congressional leaders to order a GAO study of the ramifications of this bleeding of American jobs. CWA also has legislative initiatives on several fronts including changes to the H1-B and L-1 visas as well as opposition to FTAA and other trade deals. CWA activists have generated over 10,000 letters to congress on this issue. Says Kathy Forte, an employee at IBM’s Silicon Valley Lab and member of the Alliance@IBM/CWA, “How will I support my wonderful son if my job disappears? There are no jobs to replace those white collar jobs that are moving.”
This week on the Alliance@IBM Site:
"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
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