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Highlights—October 30, 2004
- "i_be_mad_as_heck" comments on the reduced choices and increased cost of IBM's retiree medical
plan. Excerpt: Take this as a warning. In recent years, you have seen what IBM has done to the retirement
health plan. You will only see things get worse in the future. Sit back and look at the reasons
why IBM set up these plans in the
first place. It was not just out of the kindness of its "heart". It
was to attract and retain the most competent work force. Now, time shift back to today. The company
only sees retirees as
overhead expense, with no benefit. What retiree health benefits do
current new hires get? NOTHING! Paying for health benefits for
retirees doesn't buy them one bit of loyalty from the current
employees and new hires. Watch the retiree health benefits increase
in price every year until no retiree's can afford them. I warned retirees before the last ASM that
it was one chance to make
their concerns visible to the executives. Until retirees make a big
stink (ala "10,000 maniacs"), you can only expect to get lip service
from the company. They will continue to say "We feel your pain", at
the same time they double your rates for health insurance, or drop
you all together.
- Wall Street Journal: Retiree
Groups Mobilize to Fight Deep Cuts in Health Coverage, by Ellen Schultz
and Shawn Young. Excerpts: Retiree groups are trying to draw more attention to the steep cuts they
have faced in company-sponsored health coverage this year, making a last push before the elections
to try to get more seniors to the polls. "Elderly Americans have to vote like their lives depend
on it," said
Edward F. Coyle, executive director of the Alliance for Retired Americans, a nationwide organization
that advocates on behalf of seniors. Stung by steep increases in premiums, or even the elimination
of coverage altogether, groups representing both management and union retirees have set up voter
registration drives, written lawmakers, attended rallies and have even taken out advertisements in
major newspapers criticizing companies for cutting retiree benefits while boosting executive pay. "A
growing fear and even anger about broken retiree health-care promises is mobilizing thousands of
Michael Calabrese, director of the retirement security program of the New American Foundation, which
is a nonpartisan policy institute in Washington.
Most retiree groups, as nonprofit organizations, aren't allowed to endorse presidential candidates.
But the Alliance for Retired Americans, affiliated with the AFL-CIO, has endorsed Sen. John Kerry.
The group, which represents three million retired union workers, has organized registration drives
to boost senior turnout in such battleground states as Pennsylvania, Ohio and Florida. The elections
coincide with the annual enrollment periods, when retirees are being notified of increases in costs
for benefits in 2005. Retirees from International Business Machines Corp., Boeing Co., Lucent Technologies
Inc. and dozens of others have been comparing and complaining about the changes on retiree Web sites.
If link is broken, view Adobe Acrobat version [PDF--26 KB].
- Forbes: IBM Board OKs $4 Billion Buyback.
- Associated Press: IBM Chief in India
on Low-Profile Visit. Excerpt: IBM Chairman Samuel J. Palmisano,
who is traveling in India on a low-profile visit, discussed expansion plans Thursday with India's
information technology minister, news reports said. "It was just a casual talk. He discussed
IBM's expansion plans in India with me," Communications
and Information Technology Minister Dayanidhi Maran told reporters, according to the Press Trust
of India news agency. "He had met Prime Minister Manmohan Singh yesterday. They have ambitious
plans for India."
- Pensions and Benefits — The International Newspaper of Money Management: Kerry
responds to Pension Forum questions on
retirement policy [PDF]. Excerpt: The next administration will face
many key decisions on retirement policies in the next four years, regardless of whether President Bush or
Sen. John Kerry wins the presidential race on Nov. 2.
Twelve organizations representing employee benefits professionals and Pensions & Investments submitted questions for the
candidates on issues ranging from pension plan regulation to cash balance plans to national
The questions were gathered by Sam Gilbert, president of The Pension Forum and of United Plan Administrators,
Westlake Village, Calif., a consulting organization that works with small businesses that have retirement plans.
Mr. Kerry’s campaign answered the questions; Mr. Bush’s representatives declined to
respond “due to time constraints.”
The organizations submitting questions were the American Academy of Actuaries; U.S. Chamber of Commerce;
National Institute of Pension Administrators; American Society of Pension Actuaries; The Pension
Forum; National Small Business Association; Profit Sharing/401(k) Council of America; Small Business Council of
America; National Association For the Self-Employed; Employers Council on Flexible Compensation;
National Association of Women Business Owners; and Society of Professional Business Administrators.
Editor's note: As stated in the Pensions and Benefits article, President
Bush's campaign declined to respond to questions concerning cash balance pension plans "due to
time constraints." However,
Mr. Bush's views on cash balance plans might be ascertained from the following sources:
- GeorgeWBush.com: September 13, 2004.
The Bush Line: The President's Health Care Proposals For The Future. Excerpt: "This world
of ours has changed. ... Yet the most fundamental systems, the tax code and health coverage and
pension plans and worker training, were created for the world of yesterday, not the world of tomorrow.
We're going to transform those systems. We will change those systems, so all citizens are equipped
and prepared and thus, truly free, to make your own choices so you can pursue your dreams."
- GeorgeWBush.com: August 07, 2002.
President Bush Outlines Plan to Protect Worker Pensions. Excerpt: And speaking about that,
we've got to do more to protect worker pensions. Right now, too many workers are locked into
plans that force them to hold a large portion of their accounts in their company stock. There
are a lot of plans that won't let people diversify. And that's not right. I believe workers
ought to be able to diversify after three years in their company's plan. I think we ought
to trust workers with their own money. Right now, workers get an update every year.
They ought to get updates every three months on their plan. They should be able
to get sound investment advice. After all, it's their money. I proposed these reforms months
ago. The House acted. The Senate hasn't. The Senate leadership, those who are
running the Senate now ought to bring these worker reforms forward. They ought to get this
pension reform bill up and to my desk as soon as they get back from their vacations.
- From the January 11, 2003 highlights:
Orlando Sentinel: Changes may shrink nest eggs.
Excerpt: IBM Corp. was the poster child for criticism of such plans. It announced its intention
to convert its existing pension to a cash-balance plan in 1999. Workers rallied to oppose
the effort. Some sued the company. The computer maker relented and allowed older employees to
remain in the conventional pension. Concerns about age discrimination sparked the Clinton administration
to impose a moratorium on cash-balance plans three years ago. Companies can still adopt the plans,
but they do not receive the approval of the Internal Revenue Service -- meaning they could be
subject to back taxes or penalties. The Bush administration's new proposal, which could take effect
by mid-year, would lift the IRS moratorium and make it legal for companies to offer cash-balance
plans even if older workers' benefits are reduced.
The proposal also gives companies the right to temporarily stop contributing to the pensions
of older workers so younger workers in cash-balance plans can 'catch up.'
'I think this will be a huge raid on the pensions of millions of workers,
who will end up receiving 30 percent to 50 percent less than what they anticipated,'
said U.S. Rep. Bernie Sanders, I-Vt., who has been a leader in Congress criticizing the plans.
'Unless we stop this, a whole lot of middle-class families are going to be hurting big time.'"
- From the December 21, 2002 highlights:
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
- Also from the December 21, 2002 highlights: Statement
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."
- FamiliesUSA: Approximately Half of
Americans in Medicare Are at Risk of Losing Coverage When the New Law
Is Implemented [PDF]. Excerpt: According to recent surveys, seniors
are generally disappointed with the drug benefits in the new
Medicare law that will begin in 2006. The combination of premiums, deductibles, and copayments—and
especially the huge coverage gap euphemistically called the “doughnut hole”—will
beneficiaries exposed to large and unaffordable costs. Moreover, since the new legislation does
precious little to contain drug costs, and since beneficiaries’ out-of-pocket expenses will
year commensurate with the program’s unrestrained costs, seniors will be required to spend
considerably more for their prescription medicines with each passing year.
A careful analysis of the new Medicare law, especially in the context of the Administration’s
proposed regulations, shows that the new program will not, however, simply be a disappointment.
A review of the statute and proposed regulations demonstrate that approximately half of
America’s Medicare beneficiaries are at risk of being worse off than they are today. Those
of being worse off include the following...
- Janet Krueger answers
several questions about cash balance pension plans. Excerpts: Everything you claim you want
to do, as a new or small company, can be
implemented as a defined contribution plan, which is already legal and
well-defined -- Congress does not need to take any action to create
them. Everything you claim you do NOT want to do, i.e. CONVERT from pensions to
cash balances, is already ILLEGAL. Unless, of course, Congress decides
to change the law. Please note that if Congress creates Cash Balance
plans as a new form of defined benefit plans, they will, in the
progress, completely gut the age discrimination protections that are now
included in the defined benefit portion of ERISA. That is why I have been adamant about saying
that *IF* Congress feels
compelled to legalize cash balance plans, they need to create a brand
new section and classification in ERISA. And they need to do so in a
way that leaves rigid walls between the plan types, so that employers
cannot freely convert from one style of plan to another, screwing some or
all of their employees in the process.
|Coverage on H1-B and L1 Visa and Off-Shoring
- OursourceOutrage.com: While America has lost 1 million jobs since 2001, employers have
been outsourcing hundreds of thousand of jobs to other countries in order to lower their costs.
And they've moved millions more to low-cost contractors in the U.S. that provide services on
the cheap by paying low wages and providing few or no benefits to employees. Not only is the
Bush Administration not helping the workers and families devastated by these job losses, they
think outsourcing is a “good thing” and “a plus for the economy.” But workers,
families, and communities who've felt the effects of outsourcing know better.
- Included on the OursourceOutrage site is a short video clip titled "Outsource This!" starring
Jason Alexander ("George" on Seinfeld).
- Policy paper from John Kerry, courtesy of WashTech: The
Kerry Plan To Keep High-Paying Jobs in America. Excerpt: America confronts a new competitive challenge. The very sectors that drove
the American boom of the 1990s are now being threatened by offshore outsourcing. Outsourcing
is not just a problem confronting manufacturing workers. Today, American's innovation workers
- software programmers and other professionals - are seeing their jobs outsourced to lower wage
countries around the world. The Bush Administration refuses to acknowledge the extent of the challenge
facing America's innovation-intensive services - a key engine of our 21st century economy.
George Bush has even pronounced outsourcing "a plus" and has refused to take measures
to defend America's competitive advantage or to help white-collar professionals displaced by the
new wave of offshore outsourcing. This is not only insensitive to the needs of American families.
It is short-sighted, blunting our competitive edge and putting the futures of even more Americans
on the Alliance@IBM Site:
- Pension Lawsuit Questions & Answers.
Read this to determine how this lawsuit affects you. Updated 10/24/04. Excerpt: Below
is a list of frequently asked questions about the class action lawsuit against IBM's
1995 and 1999 pension plans. On July 31, 2003, a federal district court judge ruled
in favor of the employees in this case. IBM has said it will appeal the judge's decision.
On September 28, 2004, IBM and the legal team on Cooper v IBM announced that an agreement has
been negotiated that settles some of the claims and sets the amount of damages that
IBM will pay to the class if IBM's appeal of the district court's age discrimination rulings
- ThinkTwice for October/November
2004 [PDF]. Articles in this issue include:
- Sold to IBM: A Tale of 2 Companies. Welcome to IBM: "A Rational Software Perspective,"
and "Once We Had Camelot" (Lotus)
- Justice for IBM CEs/SSRs
- Alliance@IBM Hails House Passage of Pension Protection Amendment
- Settlement Sets Damage Amounts for Impacted IBMers If IBM Loses its Appeal on Pension Age Discrimination
| In Politics—
Note: The views expressed in the news articles and
editorials in this section are those of their authors. They may or may not reflect the
views of the editors of www.ibmemployee.com.
- The American Conservative magazine's presidential endorsement: Kerry’s
Excerpts: Bush has behaved like a caricature of what a right-wing president is supposed
to be, and his continuation in office will discredit any sort of conservatism for generations.
The launching of an invasion against a country that posed no threat to the U.S., the
doling out of war profits and concessions to politically favored corporations, the
financing of the war by ballooning the deficit to be passed on to the nation’s
children, the ceaseless drive to cut taxes for those outside the middle class and working
poor: it is as if Bush sought to resurrect every false 1960s-era left-wing cliché about
predatory imperialism and turn it into administration policy. ... George W. Bush has
come to embody a politics that is antithetical to almost any kind of thoughtful conservatism.
His international policies have been based on the hopelessly naïve belief that
foreign peoples are eager to be liberated by American armies—a notion more grounded
in Leon Trotsky’s concept of global revolution than any sort of conservative
statecraft. (Editor's note: This article is a must read for thoughtful conservatives).
- The Economist magazine's presidential endorsement: The
incompetent or the incoherent?
With a heavy heart, we think American readers should vote for John Kerry on November 2nd.
- New York Times commentary by Paul Krugman: A Culture of Cover-Ups
- New York Times commentary by Bob Herbert: For Bush, Bad News Is Bad News
- New York Times commentary by Nicholas Kristof: Pants on Fire?
- AFL-CIO: Can America Afford Four More Years? [Flash movie, approximately 1 minute]
- New York Times commentary by Maureen Dowd: Will
Osama Help W.? Excerpt: The Bushies'
campaign pitch follows their usual backward logic: Because we have failed to make you
safe, you should re-elect us to make you safer. Because we haven't caught Osama in
three years, you need us to catch Osama in the next four years. Because we didn't bother
to secure explosives in Iraq, you can count on us to make sure those explosives aren't
used against you. You'd think that seeing Osama looking fit as a fiddle and ready for
hate would spark anger at the Bush administration's cynical diversion of the war on
Al Qaeda to the war on Saddam. It's absurd that we're mired in Iraq - an invasion the
demented vice president praised on Friday for its "brilliance" - while the
9/11 mastermind nonchalantly pops up anytime he wants. For some, it seemed cartoonish,
with Osama as Road Runner beeping by Wile E. Bush as Dick Cheney and Rummy run the
Acme/Halliburton explosives company - now under F.B.I. investigation for its no-bid
contracts on anvils, axle grease (guaranteed slippery) and dehydrated boulders (just
- New York Times editorial: John Kerry for President
- Denver Post editorial: George W. Bush for president
- Honky Tonkers for Truth: Music City is full of singers, songwriters, players,
and producers who support our troops overseas, believe in family,
faith and freedom, and who deeply love this country. HOWEVER.....they can see that
the plans and policies of the
current president are not working. They want to make sure that all
the mistakes don’t continue for another four years. More
importantly, there are millions of Country music lovers who
feel the same way. Any common sense working man or woman
can tell you..."when the boss hasn't been doing his job,
he needs to be fired and replaced." It’s as simple as that.
(Editor's note: Country music fans (and even people that hate country music!) are encouraged
to listen to the song Takin' My
Country Back on this Web page).