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Highlights—October 8, 2005
- Yahoo! message board post by Kathi Cooper:
Letter to Senators re Senate Bill 1783. (Editor's note: This is a lengthy letter, but is a must read if you're interested
in gaining insight concerning the successful Cooper v. IBM lawsuit directly from the lead plaintiff.) Full excerpt:
The following letter was sent to Grassley, Enzi, Baucus, Kennedy, Bayh, Chafee, Coleman, Collins,
Hatch, Johnson, Landrieu, Lieberman, Lincoln, McCain, Shelby, Snowe, Specter, and Ben Nelson today. This was Enzi's copy.
October 4, 2005
The Honorable Mike Enzi
Chairman
Committee on Health, Education, Labor and Pensions
219 Dirksen Senate Office Building
Washington, DC 20510
Dear Mr. Chairman:
RE: Senate Bill 1783
I am Kathi Cooper and I am representing approximately 275,000 current and former IBM workers in the
case of Cooper v. IBM Personal Pension Plan. The case is almost 6 years old and is currently before the United States Court
of Appeals for the Seventh Circuit in Chicago. The case will likely be argued in the first quarter of next year and decided
a few months later. As you probably know, IBM has agreed to a remedial model that will provide increased pension benefits
of more than a billion dollars if the Court of Appeals affirms the District Court's ruling that IBM's cash balance formulas
violate ERISA section 204(b)(1)(H), the so-called age discrimination provision of ERISA. While this would be a very meaningful
recovery for the workers, keep in mind that it represents about 3% of the total assets in the IBM Plan.
I am writing to you to respond to several misstatements contained in the September 30, 2005 letter
sent to you by Mr. Bruce Josten of the Chamber of Commerce. In that letter, Mr. Josten claims that "employers have,
in good faith, believed that hybrid plans are a valid and legal plan design." I assume Mr. Josten was not properly briefed
on this issue before he wrote his letter, because this statement is simply untrue.
In the course of the Cooper litigation, we learned that the companies, their actuaries and their
lawyers have known since the late 1980's that the cash balance plan design violates section 204(b) (1)(H), but believed
they could lobby either the Treasury Department or Congress to bend the law in their favor. A 1991 memorandum submitted
to the IRS by the Cash Balance Practitioners Group ( 1) candidly admitted that "a number of practitioners quite strongly
believe that [a cash balance plan that guarantees interest credits to the date of distribution as does the IBM plan] does
not comply with a literal reading of" the age discrimination prohibition in ERISA section 204(b)(1)(H). As a result,
the group concluded that unless they could dissuade the Internal Revenue Service from a literal application of the statute
or a "legislative
fix" could be obtained from Congress such plans faced significant risks.
The memo further explained that "many practitioners believe that there is a very significant
risk that the Service will ultimately take the view that it cannot avoid a literal interpretation of" ERISA 204(b)(1)(H).
Moreover, many members of the Cash Balance Practitioners Group were not optimistic about a "legislative fix," particularly
if "it is generally conceded that these plans literally violate Code section 411(b)(1)(H)." That pessimism caused
the Cash Balance Practitioners Group to conduct "an analysis of the exposure under Code section 204(b)(1)(H)," which
concluded that "most practitioners are of the view that the exposure is measured by the cost of bringing every participant
in the plan up to the benefit accrual rate of the youngest participant. In given cases, actuaries have estimated a 4 to 5
times increase in plan liabilities."
As early as 1992, industry began lobbying the Treasury Department to exempt cash balance plans from
ERISA section 204(b)(1) (H). In a June 24, 1992, letter to the IRS, Kwasha Lipton's Theresa Struchiner (a member of the Cash
Balance Practitioners Group) argued that cash balance plans should be deemed to comply with Section 411 (b)(1)(H) because
it satisfies a rule applicable to defined contribution plans. Kwasha Lipton made numerous other submissions to the IRS requesting
exemptions for cash balance plans from the requirements of Sections 411 and 417(e). See 95 TNT 87-37 (May 4, 1995); 95 TNT
146-37 (July 27, 1995).
Our attorneys deposed an actuary named Larry Sher in another pension matter, Berger v. Xerox Ret.
Income Guarantee Plan (where the Seventh Circuit found that the company had illegally underpaid lump sum distributions
to over 10,000 retirees). Under oath, Mr. Sher admitted that he and his firm at the time, Kwasha Lipton, ( 2) had been
developing a comprehensive analysis of various compliance issues, including age discrimination under Code Section 411(b)(1)(H)
relating to cash balance plans prior to 1991. In fact, Mr. Sher made a February 1991 submission to Richard Shea (one of IBM's
attorneys and then a political appointee to Treasury) stating that Kwasha Lipton had already "devoted a good deal of
time and thought in addressing compliance issues." Later, in the letter's list of compliance issues upon which Mr. Sher
wanted to make a formal presentation, the first Code Section listed is Section 411(b)(1)(H).
Similar warnings of the design's illegality were expressed in a wide variety of publications in the
employee benefits community before IBM adopted either the 1995 or the 1999 plan amendments that are at issue in this case.
For example, in 1993 Paul Strella, an attorney at William M. Mercer & Company, addressed a session of the Enrolled Actuaries
Meeting. In his discussion of IRC section 411(b) (1)(H)'s and ERISA section 204(b)(1)(H)'s prohibitions against decreases
in the rate of benefit accrual, Mr. Strella stated "that's exactly, arguably, what a cash balance plan does if you take
the position that the future interest is the part of the current accrued benefit. ( 3) A serious issue." Later, he pointed
out that if he structured a defined benefit final pay plan to provide decreasing benefit accruals exactly the same way
a cash balance plan does, "I think everyone would agree that violates 411(b)(1)(H)." We know Mr. Strella advised
IBM in connection with the adoption of the plan amendments found illegal, but we do not know the substance of the advice
given because IBM refused to produce documents sent to or from Mr. Strella under claims of privilege.
In a 1995 memorandum to the Treasury Department, Judy Mazo, a prominent actuary and Washington-based
senior vice president for actuarial consulting firm Segal Company, echoed the employers' theme. Ms. Mazo told Treasury cash
balance plans were "too big to fail," that business did not feel obliged to comply with "statutory constraints" it
believed made no sense, and that cash balance plans "evolved outside the penumbra" of the statutory constraints
Congress saw fit to impose on defined benefit plans. As she put it, imposing defined benefit rules on cash balance plans, "is
a bit like dropping a herd of kangaroos into the Amazon rain forest."
Ms. Mazo repeated this mantra in 1999 when The Wall Street Journal quoted Ms. Mazo as confidently
stating that the giant corporations were no longer worried about their cash balance plans being exposed as illegal. "Companies
who now have these plans are sufficiently powerful, sufficiently big and have enough clout that they could get Congress to
bend the law ... to protect their plans," she said.
Mr. Josten also claims that the Treasury Department somehow misled employers into believing that
cash balance plans were legal by issuing "approval letters" and by establishing "rules and regulations that
specifically contemplate and, thus affirm, the hybrid plan design." These statements are also highly misleading. By "approval
letters," I assume Mr. Josten is referring to IRS (not the Treasury) determination letters relating to the income tax
qualification of retirement plans. Some plans did receive these letters prior to the 1999 IRS freeze placed on the issuance
of such letters involving cash balance plans. Missing from Mr. Josten's letter, however, is any acknowledgment that all
IRS determination letters specifically state that "[t]his letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other federal or local statutes." In fact, the federal
courts repeatedly and continuously deny employers' attempts to rely on IRS letters to defeat claims by plan participant
that the plan violates the law. ( 4) It is inconceivable that the employer community relied on the issuance of a limited
number of determination letters when the law so clearly holds that the letters provide virtually no protection or guidance
whatsoever and that an employer is not entitled to rely on them at all.
By "rules and regulations," I assume Mr. Josten is referring to a proposed 1991 non-discrimination
(with respect to highly paid employees, not age) regulation whose preamble mysteriously contained a sentence suggesting that
cash balance plans did not violate section Code section 411(b)(1)(H). The General Accounting Office reviewed the preamble
sentence and found "Treasury should not have opined on whether cash balance plans were age discriminatory in a public
manner without having coordinated that position with DOL and EEOC." GAO letter to Senator Tom Harkin (March 21, 2001)
[ http://www.gao.gov/new.items/d01511r.pdf]. The IRS regulation was subsequently withdrawn and re-issued in 1993 without the
preamble sentence, obviously affirming that it was improper and incorrect. Again, it is inconceivable that the employer community
relied on a sentence in a preamble to an unrelated regulation that was never finalized, withdrawn, and then re-issued without
the sentence.
He may also be referring to Treasury's regulations on cash balance plans, which were not proposed
until December 2002, and then withdrawn after Congress enacted legislation prohibiting their finalization. Ironically, the
proposed regulation was prospective only and very similar to the bi-partisan Senate bill that you have worked to craft.
The only other "rule" to which Mr. Josten could conceivably be referring is IRS Notice
96-8, which ruled that many employers with cash balance plans were systematically undervaluing lump sum payments in violation
of Code section 411, a position later adopted by three federal circuit courts. Hardly a ringing endorsement of the cash balance
design. The Notice also underscores why the design is illegal under section 204(b)(1)(H), namely, that interest credits are
considered a part of the accrued benefit and must be taken into account when determining a participant's retirement annuity
and applying the Code. Thus, far from emboldening employers, Notice 96- 8 further advised them of the inherent illegality
of the cash balance design.
I appreciate the hard work you and other members of the Finance and HELP Committees have put into
this complicated issue. While I cannot say, from a policy perspective, that I believe cash balance plans and their age discriminatory
design should be prospectively blessed, I recognize that the safeguards you have included in the Senate bill are designed
to ameliorate the horror stories of the past, where career employees with no place to turn had their pension gutted, typically
by employers whose plans were over-funded by hundreds of millions (and often billions) of dollars. In the end, I trust you
will maintain a bi-partisan compromise that protects employees from the most egregious practices of the past while allowing
the employer community flexibility to offer cash balance plans. I also trust that you will not be misled by misstatements
and threats from special interest groups or employer lobbying concerns, like those of the Chamber set forth in Mr. Josten's
letter.
Sincerely, Kathi Cooper
Footnotes:
- The group was a virtual who's who of benefit consultants and attorneys who developed and implemented cash balance plans.
- Kwasha Lipton developed the first cash balance plan.
- Treasury and the federal courts have unanimously held that the interest credits are a part of the accrued benefit.
- "The law permits plan participants whose rights are violated by the terms of a plan (or a plan amendment) to recover
benefits-even if the plan has received a favorable ruling from the service." Hearings on Hybrid Pension Plans Before
the Senate Comm. on Health, Education, Labor and Pensions, 106 Cong. (1999) (prepared testimony of Stuart Brown, Chief
Counsel, IRS).
- The Hill: Chairmen scrap
for upper hand with pension reform. By Elana Schor. Excerpt: There are going to be lot of hard choices to come in
conference, he said, particularly on cash-balance plans, the hybrid pensions that have become increasingly popular among
companies exiting the traditional defined-benefit system. Neither the House nor Senate pension bill addresses benefit
retroactivity for workers whose employers have already converted to cash-balance plans. At least one senator, Judd Gregg
(R-N.H.), has indicated support for Boehner’s push to include retroactivity language, but unions and other employee-interest
lobbyists are certain to resist it.
“We can’t go retroactively blessing plans that have been discriminatory and deny people
benefits,” said David Certner, federal-affairs director at AARP. Even though he is gearing up for a fight, he echoed
predictions of two October votes: “Once the Senate completes its bill, there will be incredible pressure on the House
to act.”
- Yahoo! message board post by Janet Krueger. Full excerpt: As I've stated repeatedly, the PBGC only insures your age 65
annuity. The first thing it does when it takes over a plan is remove early retirement subsidies from the pensions of all
who have already retired. This means that if you retired before age 65, and the PBGC takes over your company's plan, your
pension WILL BE SUBSTANTIALLY REDUCED *EVEN IF* you are now way past the age of 65!!!
Part of what the corporations are lobbying for so heavily in the Pension Reform Act of 2005, which
will likely be taken to the senate floor tomorrow, is the 'freedom' to take the same actions the PBGC would take on your
pensions without entering into bankruptcy.
All of you who think you are 'safe' because you already started collecting your pension and IBM
is not tottering on the edge of bankruptcy, THINK again. Then call Congress and tell them NOT to reduce the protections
currently in place in ERISA law for your pension. The existing protections need to be strengthened, NOT weakened!!!
This means:
- Early retirement subsidies, once being collected, should be fully protected.
- Wear away through pension conversions should be illegal.
- Cash balance conversions should not be legal, but if Congress feels compelled to legalize them, do not do so retroactively,
include protections for older workers, and institute sensible funding rules based on the promised cash balance, NOT on
a fictitious age 65 annuity that workers are not allowed to work long enough to collect.
- Don't give corporations, if and when they pay out lump sums, the freedom to select between multiple interest rates based
on which one most disadvantages the worker who is retiring.
There are more points you could make, but if you call TODAY and convey just that much, it will help...
It is important for your senator to know that you care about this issue, that you are a worker or retiree and NOT a corporation,
and that you VOTE!!!
P.S. If you're afraid to call because you are afraid they might ask you questions you cannot answer,
please feel free to refer them to me. My phone number is 507 250 5568.
- Letter from U.S. Representatives
Bernard Sanders, Gil Gutknecht, George Miller, and Maurice Hinchey,
courtesy of Janet Krueger on a Yahoo! message board post. Full excerpt: Current co-sponsors: Sanders, George Miller, Gutknecht,
Hinchey, Emanuel, Danny Davis, Barbara Lee, Tim Bishop, Woolsey, Murtha, Gene Taylor, Bordallo, Oberstar, Robert Brady,
DeFazio, Maloney, Sherrod Brown, and Holt.
PROTECT THE PENSIONS OF AMERICAN WORKERS AGAINST UNFAIR CASH BALANCE SCHEMES!
Please Co-Sponsor the Pension Benefits Preservation and Protection Act
Dear Colleague:
Over eight million workers in more than 300 companies throughout the U.S. have seen their pensions
slashed by as much as 50 percent as a result of transitions to cash balance pension schemes.
Two years ago, a federal district court ruled that IBM's cash balance pension plan was age discriminatory.
And, other federal courts have ruled that Xerox, Georgia Pacific, Bank of Boston, and AK Steel illegally slashed the pension
benefits of more than 20,000 workers by over $350 million through cash balance pension schemes.
We do not tolerate discrimination based on race, disabilities, gender, or religion and we must
not tolerate discrimination based on age.
Unfortunately, the Education and Workforce Committee recently marked-up a so-called pension reform
bill that includes a provision to legalize actions similar to IBM's. This is wrong.
Congress has a responsibility to provide immediate protections to millions of workers who have
had their benefits slashed as a result of cash balance pension schemes. Therefore, we hope you will join us in co-sponsoring
the Pension Benefits Protection Act. This legislation, which has been endorsed by the AARP, the AFL-CIO, and the Pension
Rights Center would:
- Require companies converting to cash balance plans to allow workers who are either at least 40 years old or have at
least 10 years of service the choice to remain in their traditional defined benefit pension plan.
- Provide increased disclosure to enable employees to make an "apples to apples" comparison between the traditional
defined benefit pension plan and the new plan to ensure that they make the best choice possible.
- Require the Secretary of the Treasury and Department of Labor to enforce the pension age discrimination laws that are
already on the books.
When a company makes a promise to its employees regarding their pension benefits, it must not be
able to pull the rug out from under its employees by cutting their pension benefits in mid-stream. Companies receive over
$100 billion in tax incentives per year to set up and maintain these pension plans. Given that reality, Congress must allow
older workers or those with at least 10 years of service the option to remain in their traditional defined benefit pension
plan.
This bill would protect workers like Larry Cutrone, a 54-year old employee from New Jersey, who
worked for AT&T for 28 years, and woke up one day to find that his pension had been slashed by over 50% as a result
of a cash balance conversion. And, 40-year old Mike Murphy, who worked for the Niagara Mohawk Corporation, had this to
say about his cash balance conversion: "I planned on retiring when I was 58, and at age 58, under the old plan, that
I no longer participate in, my pension would have been $372,000. Under the new plan, it's $216,000."
Workers like Mr. Cutrone and Mr. Murphy should not be forced into cash balance conversions. They
should have the choice to remain in their traditional defined benefit pension plans that were promised to them when they
started working for their companies.
To co-sponsor this legislation, please contact Warren Gunnels in Rep. Sanders' office at 5-4115
or Eric Keber in Rep. Gutknecht's office at 5-2472.
- In a Yahoo! message board post, Janet Krueger answers questions concerning the proposed
Pension
Benefits Preservation and Protection Act. Full excerpt:
Q: Is there any feel if there will be GOP support for this bill?
A: Gil Gutknecht, one of the primary sponsors, is a Republican from Minnesota's 1st district, including
Rochester. I don't know if there are any other Republicans on the list; does anyone recognize them? If your representative
is on the list, put in a call to DC and say "Thank you". If your representative is NOT on the list, put in a
call to DC and ask "Why not???" This is bi-partisan bill!!! As far as when it will get a number, or how it will
proceed, ask your representative in DC when you call. Let them know that any pension reform bill that does not contain
clauses like this bill is completely unacceptable.
Q: Will ERIC consider the bill to be a serious threat?
A: I'm sure ERIC is working as hard as they can against the bill... Should that cause us to give
up and go home? Especially since we did convince the senate Finance committee to pass equivalent language? I sure hope
not! Our representatives can still be swayed to look beyond the money if they see real votes at stake...
Q: In what committee will this bill probably be placed?
A: Any pension legislation in the house has to get through both the Ways and Means Committee and
the Education and Workforce Committee *OR* offered as an amendment to a bill that makes its way through those committees.
Q: Is there enough time in this year to expect any useful action? Or perhaps it is posturing
for next year?
A: It is posturing for the introduction of Boehner's pension reform bill to the house floor. *IF*
there is time yet this year for Boehner's bill, then there must be time for this bill as well... CALL your representative
and tell them so!!!
- Yahoo! message board post by
Janet Krueger. Excerpts: I don't claim to fully understand exactly what
all the clauses are that the corporate lobbyists are looking for, nor do I have a complete list of possible corporate
bad behaviors those clauses might enable.
What I do know is that a lot of the lobbyists running around the halls in Washington, DC do not
care about things that will benefit you or me... And I know it is tempting for our representatives to listen to those who
can grow their campaign coffers. While some of our representatives are ethical enough to worry more about their constituents
than about their campaign coffers, most are realists who understand they won't stay in Washington without money to run their
next campaign... SO, it is important for those of us who vote to let our representatives know exactly what issues we care
about and that we are watching.
The only way to counteract those corporate lobbyists, especially once we understand that some of
what they are wishing for might not be put down on paper until during the conference committee that determines the final
language, is to TELL our representatives that pensions are important to us, that we rely on ERISA protections, and that
we will be extremely angry and vocal if those protections are taken away and our pensions are reduced as a result.
The only way to counteract those corporate lobbyists, especially once we understand that some of
what they are wishing for might not be put down on paper until during the conference committee that determines the final
language, is to TELL our representatives that pensions are important to us, that we rely on ERISA protections, and that
we will be extremely angry and vocal if those protections are taken away and our pensions are reduced as a result.
- Yahoo! message board post by
"ol_pops". Full excerpt: PBGC limits If your pension plan is terminated,
the maximum annual benefit you can get is capped at the following: Pension benefit limits If you retire at age: Your annual
pension is capped at 55: $20,965; 60: $29,649; 62: $36,035; 65: $45,614.
- Yahoo! message board post
by "ibmaccountant". Full excerpt: There are 2 seminal events in business history,
both resulting from the creation of the entity we know of as the "Corporation". The first was the creation at
the highest levels of business education, government, law and ethics that breaking the law is OK as long as it's for the
corporation and not for an individual, unless the individual is one of many profiting from the corporation. Some references:
- "The Corporation: The Pathological Pursuit of Profit and Power" by Joel Bakan ISBN 0-7432-4744-2
- "Why Be Honest if Honesty Doesn't Pay", Harvard Business Review, September-October 1990, P121 by Amar Bhide
and Howard H. Stevenson
The other seminal event was the creation of "Human Resources" as a business function,
replacing "Personnel". This allowed personnel people to think of personnel, people as accounting resources and
removing the personal element and human ethical values part from the corporate thinking. It also allowed for HR to replace
line leadership in many organizations. You'll notice at IBM, GE, Xerox the concept of an HR background person (PDM)
that legally runs the show now. We have effectively replaced leadership with management in most large corporations.
To IBM and every large American Multi-national, people are nothing but tools to be recruited, bought,
used and discarded. They are even talking about "resource farming" and "rodeos" like we are cattle to
be bred, educated (see the IBM initiatives?) to meet corporate objectives.
The most secret part of the impact of globalization to America is that elsewhere in the world the
value and appreciation of human life is not as high as in America and some other countries like Sweden and the UK. Globalization
means global uniformity and for Americans in the name of the corporation and global uniformity means the de- valuation of
the human life.
The real danger of Chief Justice Roberts is not Roe v. Wade. That's important to some, but it wasn't
the real objective. Even the religious right is going to be hoodwinked on this one. The real danger of Roberts is that no
one asked him about his blatant record supporting the corporation over the individual. He wasn't the social reform nominee,
he was the business nominee.
- Computerworld: IT
groups push Congress to raise H-1B visa limits. The 65,000-visa cap was reached in
August. By Patrick Thibodeau. Excerpts: There's now a push by high-tech industry groups to get the cap adjusted by Congress
before it adjourns this year. But whatever happens is likely to be part of a broader immigration reform package, according
to industry lobbyists and others seeking changes. Among the ideas that may appear in legislative proposals is a flexible
cap that would provide a method for increasing the annual H-1B limits once a certain level is reached. That would allow
the number of new visas to "rise as needed," said Lynn Shotwell, executive director of the American Council
on International Personnel, a Washington-based group that represents companies on immigration issues.
- CNET News: Salary
concerns renew H-1B visa opposition. By Ed Frauenheim. Excerpts: As offshore outsourcing boomed in recent years,
the protracted controversy over the embattled H-1B immigrant labor program finally seemed to subside as U.S. jobs were
exported overseas and theoretically lessened the need for foreign workers. Yet nearly 15 years after its inception under
the Immigration Act of 1990, the program remains in full force and headed for new battles. Just last month, the Indian
government made a proposal to the World Trade Organization, demanding that the annual cap for H-1B visas be raised from
65,000 to 195,000. [...]
Concerns about the program are being raised anew after a recent study examined federal data to rank
the lowest-paying employers of H-1B computer workers last year. The Programmers Guild, an advocacy group for U.S. technology
workers, claims to have found new evidence indicating that H-1Bs in computer occupations are being paid relatively little
by a lot of employers--raising the prospect that visas are being used to hire cheap workers who threaten U.S. jobs and
wages. [...]
The median annual wage paid in the United States to workers in computer and math occupations was
$62,620 in May 2004, according to the Department of Labor. Among companies seeking at least 100 H-1B visas last year,
many employers planned to pay substantially less than that amount, according to the Programmers Guild report. Of 100
employers in the category that planned to pay the lowest salaries, the report said, none intended to offer more than
an average of $48,355 a year. Seventy-four of these companies pledged to pay an average salary of less than $45,820--a
figure in the 25th percentile for U.S. math and computer workers. [...]
Circa the dot-com boom, the H-1B system was rocked by reports of corruption. Technology staffing
firms, sometimes called body shops, allegedly were trafficking workers from other countries. The Programmers Guild sees
its study as a sign that body shops abusing the program are alive and well--even as American tech professionals are trying
to recover from years of layoffs in what seems to be a tepid hiring climate.
Moreover, the guild said, the study reinforces the notion that the H-1B program benefits primarily
India-based employers operating in the United States, not American companies. The organization's report says the lowest-paying
companies are "disproportionately run by Indian nationals." It added that some Indian-run firms are "hiring
almost exclusively young Indian nationals to displace American workers in our own country."
The research shows that nearly 37 percent of H-1B approvals in 2003 were for workers born in India.
Berry estimates that 18 or 19 of the 20 lowest-paying employers, among companies seeking at least 100 visas, are led
by Indian citizens or U.S. citizens of Indian descent. [...]
Others insist that the use of guest worker visas by India-based tech firms has helped promote offshoring.
Members of the Indian-American community have learned to use the H-1B program to do tech work through the visas and send
some of the work offshore, said Ron Hira, a professor at Rochester Institute of Technology and co-author of the book "Outsourcing
America." "There's a clear connection between the Indian diaspora in the United States, the use of H-1B and offshore
outsourcing," said Hira, who is of Indian descent.
- San Jose Mercury-News: What's
causing health car's rising costs? By Mark Schwanhausser. Excerpts: It's
a common question these days as workers enter the season to sign up for ever more costly, pared-down health insurance
through their employers. Premiums have risen 73 percent since 2000 -- nearly five times faster than inflation and wages.
The cost -- eclipsing $10,000 for a family of four for the first time last year -- is stretching the budgets and patience
of consumers, employers and taxpayer-funded health programs.
- Washington Post: A
Little More Blood. Doctors Use Annual Fees to Pay Them What Insurance Won't. By Don
Oldenburg. Excerpts: Take two aspirin and pay our new annual fee in the morning. An increasing number of doctors are telling
their patients something along those lines. With health care economics what they are today, to get a clean bill of health,
you may have to pay a second bill -- a fee that helps your doctor pay his bills. Sometimes called a "concierge
fee," it's sort of like slipping a couple of Jacksons to the maitre d' to get a good table. [...]
Preston says the increasing costs of doctoring and decreasing reimbursements from medical insurance
are forcing some doctors to seek this kind of relief -- or go out of business. "The reason that we are starting to
see this is that managed care is just squeezing physicians in a rising cost environment so they simply can't afford to
perform services without charging," he says, adding that's especially the case for family practices and internists. "Physicians
don't want to antagonize their patients, and they don't like pursuing these strategies, but there's no choice."
- New York Times: Medicine's Sticker Shock.
By Nicholas D. Kristof. Excerpts: One of the bumper stickers attacking the Clinton plan read: "If You Like the Post Office, You'll Love National Health Insurance." That
wouldn't work today: the Postal Service runs a system that is manifestly more rational and efficient than our health care
system. For starters, imagine a postal system that refused to deliver letters to or from 45 million Americans - except
on rare occasions, by ambulance. [...]
There are four main problems with the existing system. First, it leaves out 45 million uninsured
Americans, and their number is rising. Second, it is by far the most expensive in the world, costing 15 percent of our national
income, yet our outcomes are awful - U.S. life expectancy is worse than Costa Rica's. Third, our business competitiveness
is undermined when, for example, medical expenses add $1,500 to the sticker of each General Motors car. Fourth, our system
is catastrophically inefficient: according to a study in The New England Journal of Medicine, health administrative costs
are $1,059 per capita in the U.S., and just $307 in Canada.
- Yahoo!
finance board post by "idoubtitagain". Excerpts: By this statement above you have proven without
a doubt that you have never worked for IBM, additionally let me assure you that IBM layoff's include high performers and
that the IBM term "skills rebalancing" has absolutely nothing to do with skills level rebalancing, rather a
layoff of experienced highly, skilled employees that know how to get the job done and a shift to a resource that usually
has less skills, but, and this is the most critical factor to an executive, skills rebalanced resources cost less by gross
headcount, this allows the company to "pump" the numbers to the street and keep executive stock options at a
higher value.
Skills rebalancing costs have multiple negative impacts to company internals, customer support,
service levels (SLA), process execution, that are not seen by investors nor are they illustrated on glossy slick freelance
presentations viewed by analysts and investors during quarterly conference calls.
- Yahoo!
finance board post by "idoubtitagain". Full excerpt: "Your YOUTH is why the stock
is 80 and it used to be hundreds." The old IBM: paternalistic, with a high degree for respect for the employee, focus
on employee retraining as required and skills and knowledge retention and a corporate giant with a stock price in the
100'S. The new IBM , a focus on short term quarterly results, a perception of employees as disposable tools of production,
layoff's R IBM executive policy resulting in high degrees of loss of knowledge base AND A STOCK PRICE PERFORMANCE THAT
HAS STUNK OVER THE PAST 4 YEARS.
- Forbes: Venezuela Orders Shutdown of
IBM, Others. Excerpt: Venezuela's tax agency said Wednesday that it
had imposed fines and ordered the temporary closure of several foreign companies, including International Business Machines,
due to tax irregularities. The Seniat agency ordered the 48-hour shutdown of U.S. computer company IBM Corp.'s office in
Caracas, as well as auto parts company Bosch Rexroth Corp., for bookkeeping irregularities related to the value added tax,
the agency said in a statement.
Vault Message Board Posts
- "How they treat you when
you leave" by "bigblueblows". Full excerpt: How does big blue treat you when you leave? 1-send
you a letter from the slimy corporate lawyer threatening to file a police report on you for theft of their lousy
thinkpad computers when the f*ing company rec'd the computer before the letter is even dated. 2-send you a letter saying
you owe a sign on bonus when it's already been deducted from your vacation payout 3-conveniently forget to pay for
your last week of work. Big Blue Blows on every facet--treatment of employees, treatment of clients and quality of
work.
- "One
more thing they do" by "bigblueblows". Full excerpt: They take forever to process your Cobra
request. If you are taking expensive prescription medication, make sure you have a 60 day supply before you leave.
I had good feelings, all things considered, when I left IBM. I didn't know I was going to get screwed so badly
on the back end. IBM sucks and I will never, ever in my life use your consulting services. In fact, I will do everything
within my sphere of influence (which is large) to disparage IBM.
- "IBM is the
worst company I've ever worked for" by "ibmgrunt". Full excerpt: I had something similar
happen. They forgot to pay me my final paycheck (finally came in 7 weeks late after multiple calls), they miscalculated
vacation hours, and billed me for benefits for the month after I left the company (i.e. I left in January and they billed
me for February cause they still thought I worked for them). When I called their payroll they didn't know who I was
supposed to talk to about my paycheck and they couldn't figure out why I was being billed. It’s been 8 months
and I am still having problems with them billing me for benefits. They are horrible to their employees. Management is
extremely arrogant.
Now, I am a decision maker for an extremely large client of theirs. Their sales department has
been lousy when we were looking to spend FY06 money. They were arrogant, rude and in some cases would not even send us
a quotes. They lost out on a few huge (read hundreds of millions worth) software, hardware, and service purchases this
year. Serves them right. This company is the worst to deal with at multiple levels.
- "oh the nail's
head should be hurting" by "Old_Project_Manager". Full excerpt: ABC, you've hit a big
nail square on with your comment about the bitter enmity between SO and ITS marketplace since the hunting grew scarce.
As long as there were serious dollars to be made by both of those two groups could at least avoid each other and cooperate
between snarls. Once the pond dried up though, the conflict over revenue recognition became as memorable as the fight
over, say the TracPoint nipple on the PCs. We all know what's best for the company, stockholders or Customers pales
into microscopic insignificance compared to turf, measurements and prime seating at the bonus trough in the spring of
the year.
I've seen mixed results since BCS came onto the field. The P&G HR win seems to playing out
reasonably well. I still think Circuit City will revert to an HP fiefdom once their management turns their back
and their IT staff reasserts itself. I've said enough about Sprint PCS to out myself so no more talking about how up
to date things are in Kansas City.
Lest anyone from BCS take umbrage from the above paragraph, SO dug its own cesspool at Banc One,
JP Morgan, Kodak and Motorola, et. al. and ad infinitum. As Dose mentioned several weeks ago the Blue Pig Brand
can chug on forever with a combination of blaming Delivery (at internal reviews) and their customary control of the press
(external reviews).
- "Crossover
- Cross Back" by "Dose of reality". Excerpts: These are all the equivalent of the IBM 180 – 220k
advertisement you read. It is attention-grabbing hype, and nothing else. I lost count of the number of threads
I have seen here where the candidate moaned about an offer that was 20%+ below the figures previously quoted by
the recruiter. They will always find reasons why you are not the candidate that is worthy of the quoted figure, “but
we like you and want you to come in so we can give you a chance to prove yourself….”. No matter how much
proving you do, your future compensation will stagnate and your bonus will be a small fraction of your target.
Since you are coming in with “only” industry experience and no consulting experience or Rolodex, you are
an easy target for a lowball offer. [...]
Also, keep in mind that your quality of life will go to hell if you move from industry to consulting,
unless you like being on the road 75%+, staying in cheap hotels, and living on a shoestring meal budget. If you have
an amazing job in the pharma industry, why would you consider a move? Pharma is one of the few remaining industries
where job security and opportunity is still good. As long as you produce, people usually do very well.
- "Careful
with expectations" by "ey_ore". Excerpts: Having recently been offered a work-release
option to continued residence at Danbury FCI, I caution you about the use of prisoners as consultants. In my experience
their expectations may not align well with IBM travel policies.
- They expect 3 meals a day
- They get a clothing allowance
- Exercise Club is fully paid
- They expect suitable overnight accommodations they don't might doubling up and in some cases prefer
it.
- "Salary Band
9 Federal" by "ddellilo". Full excerpt: Title: Managing Consultant (Band 9); Salary: 110k/year
+ 8k bonus; Consulting Experience: 7.5 years; Education: MBA & MA Sector: Federal. I know I am below the median Band
9 salary.
- "Don't do it !!" by "nollag". Full excerpt: The culture here in Southbank (England)
is awful. Everyone is leaving, because staff are treated like dirt. For a more UK focused discussion, have a look
at the consultant's forum on www.top-consultant.com. Staff turnover was
running at 40% last year, with us just having to recruit people to stand still, let alone grow. Talk to any of the
thousands of ex-PwC consultants now working for the competition to see just how cr*ppy the atmosphere is like in IBM.
- "Managing
Consultant (Band 9) Job Offer" by "IBM_Or_Not?". Full excerpt: I am currently employed by
IBM-BCS and I am in the process of relocating to the US. I have just received a job offer from BCS as a Managing
Consultant (Band 9). I have 8 years of SAP and consulting experience, a professional accounting designation and an
MBA. The offer is $139k per year. No signing bonus and no relocation package. I have been a band 9 for over 3 years
and have significant project management experience. Since I will be living and working in Southern California this
offer seems low and not in keeping with the California market for similar positions and qualifications. Thoughts?
- "Rumor" by "ancientblueconsultant".
Full excerpt: I'm on the outside now, but some of my ex-colleagues have been dusting off their resumes once again.
It is normal operating procedure to have a routine resource action at year's end in all segments of the company, thus
refreshing the workforce even if it doesn't need it. I assume the flood of new reqs may be partially a reflection of
this. The employee surveys I hear were once again memorable. Maybe now the strategy is to blame the business leads
and partners to protect the HR PDM's and others of their ilk. The new manager rating initiative now gives the powers
to be new ammunition and new fields of sacrificial sheep. It also helps identify the dissent so that they can be disposed
of as well. Very efficient and well done. Ask the throngs for something and the cattle came back with a tool to definitively
identify the informers and the management to be blackmailed.
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New
on the Alliance@IBM Site:
- Alliance@IBM: Attention IBM employees:
IBM is blocking e-mail to and from the Alliance@IBM e-mail address endicottalliance@stny.rr.com from
inside the company. Please send your job cut information and other correspondence from
your home e-mail. You can also contact us the following ways: Phone 607 658 9285 or Fax
607 658 9283.
- IBM Pension
Lawsuit FAQ about Cooper v IBM, Updated 6-21-05. Excerpt: Below is a list of frequently
asked questions about the class action lawsuit against IBM's 1995 and 1999 pension
plans. The answers are my personal opinions, have not been verified with either IBM
or plaintiffs’ counsel, and should not be construed as legal advice. On July
31, 2003, a federal district court judge ruled in favor of the employees in this case.
IBM will appeal portions of the ruling. On September 28, 2004, IBM and the legal team
on Cooper v IBM announced that an agreement had been negotiated that settles some of
the claims and set the amount of damages that IBM will pay to the class if IBM's appeal
of the district court's age discrimination rulings is unsuccessful. Click on any question
to jump to the answer. Or scroll down and read them all.
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