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    Highlights—February 25, 2006

  • Wall Street Journal: Watch Out for Painful Pension Math. By Theo Francis. Excerpts: Recent announcements that General Motors, International Business Machines and Verizon Communications are "freezing" pension plans strike fear into the hearts of many workers counting on regular pension income when they retire. And for good reason. The pension freezes highlight a key aspect of pension math vital to anyone covered by these retirement plans: Pension benefits increase dramatically in the final years of a long career at a single firm.
    That means you could end up with substantially reduced retirement income if your company freezes its plan or if you leave your employer before the traditional retirement age of 62 or 65. Pension freezes can particularly sting people in their 50s, because they are approaching the stage at which benefit growth accelerates.
    Whether your pension benefit is capped because you leave the company or because your employer freezes the entire plan, the result is the same: You'll be hard-pressed to make it up. The 401(k) plans that often replace traditional pensions are of limited help because they are most valuable when you start saving early. [...]
    Many companies improve their retirement-savings plans to make up for frozen pensions. However, for older workers, a 401(k) may be too little too late. A 50-year-old whose pension is frozen and who saves the maximum in a typical 401(k) plan can expect combined retirement income of $21,189 a year by age 62 -- just two thirds of what the traditional pension alone would have offered, the Center for Retirement Research estimates. That assumes you weren't saving anything in the 401(k) already. If you were, it's even harder to make up the lost pension benefit. Even the "enhanced" 401(k) plans offered by some companies don't make catching up easy. A 50-year-old employee who saves 6% of pay each year, plus receives another 10% from his or her employer, can expect retirement income of $28,765 a year under an enhanced 401(k), the Center for Retirement Research estimates.
  • Wall Street Journal: Corporations Await Big Payouts Under the New Medicare Rule. By Theo Francis. Excerpts: The Medicare drug benefit will begin paying U.S. corporations a subsidy later this month for continuing to offer prescription drug coverage for retirees, and the payments will help lop hundreds of millions from their spending, a study says. General Motors Corp., for one, could collect $1.1 billion through 2009. Some big companies will see retiree-benefit spending fall by as much as 37% over four years thanks to the subsidy, according to a report from accounting analyst David Zion at Credit Suisse.
    Congress created the subsidy in late 2003 to encourage companies to maintain prescription-drug benefits for retirees rather than shifting the cost to the fledgling Medicare Part D program. It pays companies 28% of each retiree's prescription-drug costs between $250 and $5,000, up to $1,330 per retiree. The subsidy isn't taxed, and companies earn it not only on their own spending, but on retirees' out-of-pocket spending as well. (Emphasis added by editor of these highlights). [...]
    The subsidy has already burnished the financial statements of many companies that have recognized the accounting effects. The subsidy reduces the obligation companies must report for retiree benefits, which in turn creates paper income even before the subsidy is received. The subsidy reduced the retiree-benefit obligation at GM by $4.1 billion, or 7%, and at SBC Communications Inc. (now named AT&T Inc.) by $1.8 billion, or 6%.
  • New York Times: U.S. to Pay Big Employers Billions Not to End Their Retiree Health Plans. By Mary Williams Walsh. Excerpts: America's largest companies expect the federal government to pay them about $4 billion over the next four years to help keep their retiree health plans alive at a time when such benefits are increasingly on the chopping block, according to a new study by Credit Suisse First Boston.
    The money is due to start flowing to employers this month as part of Medicare's new prescription drug benefit. When Congress authorized the Medicare drug benefit, it also agreed to start subsidizing the drug component of employers' retiree health plans, to keep them from shifting their retirees into the government program. The goal is to save the government money, even after the subsidies, while giving the retirees a better deal than they might get if they were pushed into Medicare. [...]
    The Credit Suisse analysts who conducted the study, David Zion and Bill Carcache, prepared it to show investors how successful, or not, companies had been in shifting the cost of their retiree health plans onto other payers. Companies that fear they have promised more benefits than they can deliver "are actively trying to pass the buck," the analysts wrote. This means trying to shift costs "to anyone who will bear them: their retirees, active workers, the U.S. taxpayer, etc.." "If they succeed," the analysts added, "it's a giant transfer of risk from corporate America to the work force, and retirees."
  • Bankrate.com, courtesy of Yahoo! Finance: A tale of two pension plans: regular vs. CEO. By Barbara Whelehan. Excerpts: Corporate promises for a traditional pension benefit can be easily broken for the average worker, but not so for the top brass. Traditional pension plans for the average Joe are creeping into the Ice Age, as more companies have announced the decision to deep-freeze their pension plans to current or new employees -- or both. General Motors Corp. and Alcoa are among the latest to jump on the frozen-pension bandwagon that includes IBM, Verizon, Sears, Circuit City, Hewlett-Packard, Lockheed Martin, Motorola, Aon Corp. and NCR. Most of these companies are not on the verge of bankruptcy, mind you.
    This freeze phenomenon spells disaster for boomers who had been promised a pension and who have 10 years or more left to retirement. That's because benefits under the traditional pension formula ordinarily accrue at accelerated levels for older employees as they approach retirement. The last 10 years are absolutely crucial. With frozen plans, benefits stop building up altogether. [...]
    But the retirement plans of highly paid executives are not affected at all by these trends. That's because they're a different breed. I mean the retirement plans, not the execs, though I suppose that statement could apply to either. Most top executives have so-called "supplemental executive retirement plans," or SERPs, that are governed by a different set of rules, because they're nonqualified plans. [...]
    SERPs take the form of defined-benefit plans -- yes, the very same plans that are heading toward extinction for the average worker. For these plans, the company promises a specific benefit based on tenure and assumes all investment risk. Except that, for the CEO, tenure is one of those variables that can be fudged. Extra years, in the form of "service credits," can be added on an executive's tenure for the purpose of awarding a larger retirement benefit.
    Time Magazine reported last fall on this phenomenon in its cover story, "The Great Retirement Ripoff." The article pointed out that, for example, Leo Mullin, former CEO and chairman of Delta Air Lines, received service credits amounting to 21 years that were added to his actual tenure of about 7.5 years, an allowance that greatly augmented his retirement benefits. And here's the corker: "Under Mullin's stewardship, Delta killed the defined-benefit pension of its nonunion workers and replaced it with a less generous plan," Time reporters Donald Barlett and James Steele noted.
    Editor's note: Sam Palmisano's SERP will pay from $10,000 to $22,000 per day according to this post.
  • Plan Sponsor Magazine: Ahead of Its Time: Plan Sponsor of the Year. IBM makes a tough decision on its defined benefit plan while adding innovative new features to help protect 401(k) participants. Excerpts: "Lots of companies are more reactive, waiting for problems to arise or to follow other companies," says Karen Salinaro, IBM's vice president of compensation and benefits, about the company's retirement plan choices. "We always try to be very proactive."
    That proactive approach sometimes has made for a bumpy road, such as when it helped pioneer the cash balance plan concept in the late 1990s—and paid for it with a headline-making participant lawsuit. IBM made headlines again just last month when it announced that, as of January 2008, it would stop new accruals in its US defined benefit plans.
    While it has garnered fewer headlines, Big Blue’s proactive approach also has led the company to find innovative ways to offer some of the plusses of a traditional pension plan within the defined contribution context. The company claims that its 401(k) plan participants pay much less than do workers at most comparable employers, and it recently has introduced groundbreaking new features to the 401(k) plan that seem destined to be the wave of the future as the nation’s private pension system increasingly relies on a DC-centric model. In the midst of this change, the company plans a major new participant-education effort in the year ahead. “We ask, ‘What do we need to make our 401(k) plan a leading-edge, socially responsible plan?’” says Kathleen Roin, IBM’s director of global retirement benefits.
    • Janet Krueger comments: Full excerpt: Clearly, IBM's PR machine is working overtime -- they have the world convinced cutting benefits of long term employees is a great thing. Plan Sponsor states in the cover page article below "As we looked back over 2005, it was hard not to be struck by the vision demonstrated by this year's choice - International Business Machines. The elements of the program they rolled out in early 2005 - the addition of an annuity marketplace for participants, disability insurance for worker 401(k) contributions, and a shift in emphasis from a defined benefit plan to an enriched defined contribution model - were, as the title of this month's cover story suggests, ahead of their time."
  • Wall Street Journal: Pension Measures Remain Far Apart. Even the Conference Panel That Will Reconcile House, Senate Bills Is a Matter of Dispute. By Michael Schroeder. Excerpts: After two years of debate, the House and Senate recently passed bills to force companies to better fund their pension plans and shore up the Pension Benefit Guaranty Corp., the federal insurer of traditional company-sponsored plans. Now comes the hard part: reconciling the two measures before sending legislation to President Bush.
    Making the task more difficult is that the two Republicans who pushed the legislation this far in their respective chambers -- Ohio Rep. John Boehner, the newly elected majority leader, and Iowa Sen. Charles Grassley, chairman of the Finance Committee -- are far apart on a handful of critical issues.
    Mr. Boehner, as former chairman of the Committee on Education and the Workforce, was instrumental in putting together a bill geared toward helping the business community and Wall Street. Mr. Grassley, who became interested in pension legislation after the bust up of Enron Corp. wiped out employee retirement savings, has helped craft a more populist bill.
  • ABC News: Are Pension Cuts Snuffing Out Workers' Dreams? Excerpts: Margo Bryerton is looking forward to retirement. She wants to take her granddaughter to Ireland, a place Bryerton always has dreamed of going. "My family came from there," she says, "and I really expected that that would happen after I retired." But now, Bryerton says she can't afford it, because the company where she has worked for 17 years, Verizon, has frozen its pension plan.
    "I believed that I worked for a company that was solid and stable," she says, "and that by keeping my commitments to them that they would keep their commitments to me. And now I find out there never really was a commitment." [...]
    Verizon, IBM and Sears are just a few of the corporations to freeze their pensions in the past few years. Workers still will get their pensions when they leave. But their benefits will be much less because they will no longer be based on their "final years" on the job, when salaries are usually highest. "This spells doom for the retirement security of, particularly, older employees," says John Hotz, deputy director of the Pension Rights Center, a consumer rights organization. [...]
    "I'm afraid that the things that I had dreamed about, the things that I had hoped for, the things that I taught my children, are gone," she said. Millions of Americans may end up facing the same dilemma as Bryerton. Those most at risk are the salaried employees at the companies cutting pensions — especially those in their 40s and 50s.
  • New York Times: Playing With Pension Reform. Excerpts: The traditional employer-provided pension system is in trouble, and Congress is right to be considering reforms that would prevent defaults, or at least mitigate them, while shoring up federal pension insurance. Unfortunately, the bills that have emerged from the reform effort have serious weaknesses that would undercut those worthy goals, and in some cases could make things worse.
  • Washington Post: A Phony Science Gap? By Robert J. Samuelson. Excerpts: It's true that in a "knowledge economy" -- one where new information and ideas increasingly form the basis of useful products and government programs -- nations need an adequate science and engineering (S&E) workforce. But it's emphatically not true, as much of the alarmist commentary on America's "competitiveness" implies, that the United States now faces crippling shortages in its technological elites. Here are some facts...
  • New York Times: In India's Silicon Valley, Partying Like It's 1999. By Seth Sherwood. Excerpts: These are strange times in India's fast-rising high-tech capital, whose abundance of bars and clubs have earned it the moniker Pub City: a law enacted last June has effectively banned dancing in bars and nightclubs and forces them to close by 11:30 p.m. Officially named the Licensing and Controlling of Place of Public Entertainment (Bangalore City) Order, 2005, the law was ostensibly intended to shut down illegal go-go bars. But the police have applied the vaguely worded law's strictures to practically all places of "public entertainment" in this city of some seven million. [...]
    Though it was the first Indian city with electricity, according to the Karnataka State government — and is now a global computer-industry center — Bangalore is still prone to power outages. And for an emerging health-care hub whose large parks and warm climate have inspired the nickname Pensioner's Paradise, many streets brim with garbage, standing water and thick exhaust fumes — as well as goats, cows and people mired in obvious poverty.
  • Baltimore Sun: Nuking the Economy. Forget Iran—Americans Should be Hysterical About This. By Paul Craig Roberts. (Paul Craig Roberts was Assistant Secretary of the Treasury in the Reagan administration. He was Associate Editor of the Wall Street Journal editorial page and Contributing Editor of National Review. He is coauthor of The Tyranny of Good Intentions.)
    Excerpts: Last week the Bureau of Labor Statistics re-benchmarked the payroll jobs data back to 2000. Thanks to Charles McMillion of MBG Information Services, I have the adjusted data from January 2001 through January 2006. If you are worried about terrorists, you don’t know what worry is. [...]
    Over the past five years the US economy experienced a net job loss in goods-producing activities. The entire job growth was in service-providing activities--primarily credit intermediation, health care and social assistance, waiters, waitresses and bartenders, and state and local government. [...]
    The declines in some manufacturing sectors have more in common with a country undergoing saturation bombing during war than with a super-economy that is “the envy of the world.” Communications equipment lost 43% of its workforce. Semiconductors and electronic components lost 37% of its workforce. The workforce in computers and electronic products declined 30%. Electrical equipment and appliances lost 25% of its employees. The workforce in motor vehicles and parts declined 12%. Furniture and related products lost 17% of its jobs. Apparel manufacturers lost almost half of the work force. Employment in textile mills declined 43%. Paper and paper products lost one-fifth of its jobs. The work force in plastics and rubber products declined by 15%. Even manufacturers of beverages and tobacco products experienced a 7% shrinkage in jobs.
    The knowledge jobs that were supposed to take the place of lost manufacturing jobs in the globalized “new economy” never appeared. The information sector lost 17% of its jobs, with the telecommunications work force declining by 25%. Even wholesale and retail trade lost jobs. Despite massive new accounting burdens imposed by Sarbanes-Oxley, accounting and bookkeeping employment shrank by 4%. Computer systems design and related lost 9% of its jobs. Today there are 209,000 fewer managerial and supervisory jobs than 5 years ago. [...]
    Offshore outsourcing and offshore production have left the US awash with unemployment among the highly educated. The low measured rate of unemployment does not include discouraged workers. Labor arbitrage has made the unemployment rate less and less a meaningful indicator. In the past unemployment resulted mainly from turnover in the labor force and recession. Recoveries pulled people back into jobs.
  • San Jose Mercury News: Bush insists outsourcing to India has its benefits. By Jim Puzzanghera. Excerpts: To people in Silicon Valley and around the country concerned about the outsourcing of jobs to India, President Bush on Wednesday offered something to make the practice more palatable.
    Pizza.
    It's just one of the U.S. products that India's rapidly growing middle class is developing an appetite for, Bush said in a speech to the Asia Society as he prepares for a trip to India and Pakistan next month. While acknowledging the individual trauma of Americans who lose jobs when companies move operations abroad, Bush said India's economic growth is an overall plus for the U.S. economy.
    "India's middle class is buying air-conditioners, kitchen appliances and washing machines, and a lot of them from American companies like GE and Whirlpool and Westinghouse. And that means their job base is growing here in the United States. Younger Indians are acquiring a taste for pizzas from Domino's, Pizza Hut," Bush said to laughs from the audience at a Washington hotel. "Today, India's consumers associate American brands with quality and value, and this trade is creating opportunity at home."
  • The Oregonian: IBM to close Hillsboro call center. By Brent Hunsberger. Excerpt: IBM plans by July 2007 to close a 620-person call center in Hillsboro, which fields customer service calls for General Motors Corp. The announcement of the closure comes when GM is scrimping on costs, although it is unclear that GM instigated the Hillsboro move. The automaker plans to cut thousands of jobs, trim employee benefits and reorganize operations to stem losses. An employee of the Hillsboro call center said an IBM subcontractor told workers that the GM work would be sent out of the country.
    IBM spokeswoman Jenny Galitz would not specify where the work would go. IBM, which recently won the contract to operate GM's three U.S. vehicle services call centers, decided with its subcontractors that the work would be better "integrated into our global network of delivery centers," Galitz said. IBM also plans to close a 400-person call center in Tampa, Fla., Galitz said, and reduce staff at a 500-person call center in Austin, Texas. All three centers handle GM's vehicle sales, service and marketing activity in North America. [...]
    Campbell, 50, said he was disappointed that jobs serving GM customers were being sent out of the country. "I talk to four or five people a week who want to know if they're talking to an American in an American city about an American car," said Campbell, an Aloha resident who's worked at the center for two years.
  • New York Times: Senator Introduces Bill Creating Guest Worker Program. By Rachel L. Swarns. Excerpts: The Republican chairman of the Senate Judiciary Committee unveiled draft legislation on Friday that would create a temporary guest worker program that could allow hundreds of thousands of foreigners to fill vacant jobs in the United States for periods of up to six years. [...]
    The proposal would require employers to attest that they had tried to recruit American workers before bringing in additional foreigners from abroad and to pay prevailing wages. The plan would not place a restriction on the number of foreigners who could take part in the guest worker program. Those workers would not have the right to become permanent residents or citizens.
  • Congresswoman Rosa L. DeLauro (Dem-CT): Calculate How Much You Will Lose Under President's Bush's Social Security Privatization Plan.
  • New York Times: How to Survive a Tech Support Call. (Humor). By David Pogue. Excerpt: OK, we all know that the tech-support problem is out of control these days. But just for fun, reader John Stumpf, ex-CIO and now just a "retired geek," wrote up a Guide to Dell Tech Support that's so clever/funny/smart, I had to pass it on. Please welcome substitute columnist John Stumpf. (Editor's note: Highly recommended!)
Pension Update from the Pension Rights Center

Posted by Janet Krueger on the IBM Pension message board. Full excerpt:

Hi everyone: Please read below for details on recent happenings in the pension world.
Pension Reform Bill: The House and Senate are currently in recess and members of the Conference Committee that will reconcile the differences between the two bills have not been selected. We will send you information as soon as the conferees are announced. An article from today's Wall Street Journal discussed differences between the two bills. Though this list of differences is not exhaustive, it does provide a summary of where the House and Senate bills stand on key points.
Pensions in the News: This past weekend, ABC World News Tonight aired a segment about Verizon's decision to freeze its pension plan. Margo Bryerton, a longtime Verizon employee who has had to alter her plans for retirement as a result of Verizon's announcement that it will freeze its pension plans, was interviewed for this story on pensions and recent pension freezes. She did a wonderful job. John Hotz, Deputy Director of the Pension Rights Center was also interviewed for the segment. To view the segment, please use the following link: http://abcnews.go.com/WNT/PersonalFinance/story?id=1636508. As you may recall, we originally thought this segment would air on February 12th, but due to a changing schedule, the program aired this past Saturday instead.
PRC Celebrates its 30th Anniversary: Friday, February 17, 2006 marked the 30th anniversary of the Pension Rights Center. The Pension Rights Center continues to be the only nonprofit consumer advocacy group working solely to protect and promote the pension rights of American workers and their families. In recognition of the PRC's 30th anniversary, Representative George Miller (D-CA) and Senator Tom Harkin (D-IA) entered statements about the work of the Center into the Congressional Record. To view these statements, please click the following links:
Joellen Leavelle
Communications Coordinator and Logistics Manager
Pension Rights Center
1350 Connecticut Avenue, NW Suite 206
Washington, DC 20036
Phone: (202) 296-3776
www.pensionrights.org

News and Opinion Concerning Health Savings Accounts and Medical Costs
  • New York Times: You Think 401(k)'s Are Hard to Manage? Try Health Accounts. By Damon Darlin. Excerpts: Americans were handed — some might say had forced upon them — control of their retirement funds 32 years ago with the creation of the Individual Retirement Account. The 401(k), invented four years later, cemented the idea that individuals must take more responsibility for their financial future. Now Americans may be pushed to take more control of another aspect of their finances, their health care spending. They may face more choices and more direct payment of costs. They will be urged to set up Health Savings Accounts, a 401(k) for medical bills. [...]
    The idea of a consumer-driven health plan is daunting, because most Americans have found it so difficult to navigate the present system. The ill are swamped with hundreds of bills and statements and there is little help available to understand them. They must choose the right treatment, doctor and hospital and hope that their illness won't cause them financial ruin.
  • Washington Post: Military Retirees' Health Care May Rise. By Liz Sidoti. Excerpts: The Bush administration wants many military retirees to pay more for health care, a proposal that could force the Republican-run Congress to choose between savvy politics and budget discipline. Annual health care costs for the military have doubled to nearly $38 billion in the past five years, nearly one dollar of every $12 the Pentagon spends. The price tag is projected to soar to $64 billion by 2015.
    To help contain those costs, President Bush's proposal includes higher prescription drug co-payments for all beneficiaries of military health care except those on active duty, and increased annual enrollment fees for military retirees under age 65.

Vault Message Board Posts
Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC.
  • "The most startling thing about info on demand..." by "Dose of reality". Full excerpt: ... is that they have decided to keep the "on demand" term in the name of the initiative. Of course that fits squarely with our overall "new product" strategy - repackage previously failed or obsolete initiatives due to a lack of new ideas, and an unrelenting personal and career attachment to them from the people who created them to begin with.
    OD (note the similarity to IUD) is nothing more than layering another toolset of vaporware and presumed "out-of-the-box" solutions on top of non-integrated architecture and data, that in many cases we sold to begin with through a long history of slamming in discrete bits of technology to stay within the limitations of project budgets, outsourcing contracts, and overmatched resources.
    There is nothing new here, other than the 10,000 or so outside recruits that we plan to add to sell it. I'd like someone to explain to me why the baseline "management consulting" resources that we currently have on staff don't have the skills to improve information delivery - something that is a part of virtually every project that we do. Where are we going to recruit this "specialized skill" - Google?
    This is nothing more than another empty marketing ploy with a sponsor and a budget. We really should take that $1 billion and spend it on improving our organizational fundamentals instead of trying to make a splash in the market that we can't back up.
  • "Sadly" by "wonderaboutibm". Full excerpt: I must agree with Does and Ey_ore. This is another razzle-dazzle repackaging effort more in a marketing vein than anything else. Getting tired of all this "on-demand" nonsense, because it is nonsense. There isn't much fundamental new value to speak of. I fear the same is true of the so-called "service-oriented architecture" craze. Granted that the b.s. is flying far beyond the IBM fortress, but boy have we latched onto the hoopla. One can see the onrushing train ... help, gotta get out of the way before I am mowed over.
  • "Cynical techies" by "ey_ore". Full excerpt: Those in the tech-know would tell you that "service-oriented architecture" is the equivalent of saying "food-oriented lunch".
  • "On 'On Demand'" by "Frank_Reality". Full excerpt: I can't address the "info" part of the "info on demand" initiative, but to the technical IT people, the On Demand technology is a wonderful thing. Unfortunately, that's where it stops.
    Few large businesses (including IBM) have the agility in their financial decision making procedures to effectively use the On Demand technologies. What good is On Demand technology when it takes 6 to 12 weeks to get the financial approval to authorize the activation of more system resources?
    A well-known non-IBM consultant I know more or less said that On Demand is for losers. It's for businesses who are not the leaders in their sector, businesses trying to play catch up because they are following a more agile leading, cutting-edge business.
  • "Some Ideas" by "ancientblueconsultant". Excerpts: First of all, I want to give you my heartfelt congratulations on your decision. The grass isn't always green on the other side, but you have seen the future of services and where it's heading. I believe you will be very happy and personally satisfied. I think you've been hoodwinked and lied to by HR and your management and have little recourse, but here's some ideas.
    IBM fears 3 things: legal problems, publicity to new prospective employees and publicity to clients. The first immediate step for you is to get this statement from HR in writing. This is crucial. Threaten a lawsuit if you don't get it and go public with it. Once you have it in writing, then you have 2 choices, go to a labor attorney (and print on a PDF the statements from HR on W3, preferably at the attorney's office over a remote link with a witness) or go public in hopes they will settle.
    I ask you to remember just one more thing: Don't ever forget this transgression done to you by an inept management team and make sure everyone you know in the business knows about it. Dealing with IBM is like dealing with a Cobra snake. I didn't realize the huge anti-IBM feelings out there in the market. They are coming to roost, baby.
  • "IBM's motivation to screw you" by "DM Bingham". Excerpts: Your IBM management sees every $ they save on labor expenses as profit to themselves. Every policy is geared to their benefit, not yours. For example, when Resource Action time rolls around, they will look into the herd of departing people and cull all the PBC=3s into a class that will be terminated for poor performance and offered the Reduced Transition Package of 1 week of pay per year of service. The rest of the herd will get the standard 2 weeks of pay pyos.
    When the Blue Pig laid off substantial numbers from the Hard Drive Division a couple of years ago they made everyone's last day 6/28 in order to deny them a partial Variable Pay for that year. Yet all pay periods are supposed to be the 1st and 15th of the month, except when it's cheaper for IBM. HR has become a profit center to BP Sr Management by such sharp practices.
  • "Disagree" by "ancientblueconsultant". Excerpts: In today's environment, loyalty is not considered anymore. The larger firms still use this to instill fear to younger talent. The environment of the last 5 years should not be a yardstick for the future, because demographics are now on the employee side, that's why IGS is beginning to show signs of market collapse. Don't forget that the Blue Pig has a narrow market, and most employees are too focused to understand the total market opportunity and how they choose people. Staying too long at the Blue Pig now is a risk, not an advantage.
    The fact is, if you are good, there's always a market for you and your skills and there is no set time to leave. Stays of less than 6 months are OK, if you came in for a specific deal and the deal was completed. Explain that in the resume and it'll be an asset for you, not a detraction.
    To quote IBM and other large corporate slave machines, "You are your own business" so act like it. They know they can't promote you, so they use the old adage "it'll look bad if you leave" as a way to force you to stay.
  • In "Correction," "Dose of reality" comments on IBM BCS's training program for new hires. Full excerpt: 3 days of moonie type brainwashing indoctrination. Oh, and you do learn how to fill in your time sheets and expense reports and see some really neat graphics about how well BCS is doing.
    2 weeks training in a lot of methods that no one really uses on the job, since they are so arcane and generic as to be totally useless. Add in some idealistic presentation about what consulting is supposed to be (but isn't here), and some concepts about how we go to market and how we make money (which you won't begin to understand until you are on your way out the door in two years), and you should have nothing to show for it except a few days of free meals and access to NY.
    3 days practice area training - maybe, depending on the size of the incoming class, but in most cases no.
    Specialized training - pick the package you are going to implement and attend one of the usual watered-down vendor training sessions which always seem to leave the really useful content for the more expensive follow-on training that you will never receive.
    Just think of it as being paid to go to college and learn a lot about things you will never use, just like college.
  • "Yes, a VERY interesting post" by "wonderaboutibm". Excerpts: Well MoonShiner, maybe you are some kind of shill or maybe you are for real. I don't know. Whatever the case, the message you are trying to convey misses the point your target is trying to convey. Dose certainly does not need me to defend him -- his posts can be remarkably erudite (perhaps almost too much so) -- but I do think his arguments sail over your head. Maybe someday when BCS is tanking, you might finally get it. But I am an optimist -- maybe by dumbing down and oversimplifying the posts from Dose (and from me and many others,) I can give you a glimmer of wisdom, or at least understanding.
    • Work environment: It starts with, sticks with, and ends with utilization, utilization, utilization. Most utilization targets are now in the 90% range (some higher) and BCS management will stop at NOTHING to keep those numbers up, at every conceivable expense to the employee. This is a fact beyond any reasonable dispute. Once upon a time, utilization targets were 70 - 75% in the old BIS. After the dot-com boom, IBM turned into a slave shop. Why? I don't think it is malice or even greed, but just plain stupidity, laziness and lack of management imagination.
    • Training: Are you serious? What training are you talking about? That was the first thing to be cut, and it has never been restored. It would undermine utilization (see above) and horror of horrors, it would cost money. Better to throw a bunch of stuff on web sites and insist that employees slog through it on their own and on their own time. But advanced and precision training? Hahahhaha
    • Pay/benefits: Well, we all know BCS folks are grossly overpaid, so what to do? Clamp back, of course. Nobody in the employee group can possibly be worth more than the market average anyway.
    • Promotion/advancement: Are you kidding? That's plain asking too much. We really don't have the business coming in to reward employees in the first place. And we don't have the imagination to develop the work force. The edict has come down to cut everything so net income can go up so there is cash flow for stock buybacks.
    Hey we put on a good show about how important services are to IBM, but did you see those 89% GMs in Software. Gotta get above 29% GM. Full speed backward.

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.
  • To IBM Canada employees: Concerned about pension changes, declining benefits and working conditions? Please contact the e-mail below to find out how to get involved in working for a better future for IBM Canada employees. allianceibm@tngcanada.org
  • From the Job Cuts Status & Comments page:
    • Comment 2/21/06: I need to talk to the individual who was told he/she was placed on Notified Redeployment. Please contact me or the Alliance directly. It's really important and your story may help others. Steve Bergeron, Alliance@IBM.
    • Comment 2/21/06: Just found out today through a PM, that didn't know this was hush hush, that Ameriprise will be supported from Argentina. The only support that will remain in Minneapolis is hardware people and tape operations in Phoenix. So much for those jobs in Minneapolis. -Anonymous-
    • Comment 2/27/06: There is a planned cut in ITS United States, because Delivery is not making its numbers. Microsoft practice is consistently brought up in conversations as a group with low utilization that will be hit hard. Other individuals, especially sales and principals in the sectors are being scrutinized for targeted layoffs. -Anonymous-
  • From the General Visitor's Comment page:
    • Comments 02/20/06: I was a loyal, hard working, "2" appraised IBM employee for nearly 20 years. I was laid off (i.e. stabbed in the back and fired) based on age discrimination. I am currently part of the pending age discrimination lawsuit and I am convinced that we will win. I quickly got another job with a competitor of IBM and life has never been better. My gain, IBM's loss. Here is my advice to you current IBMers. Listen carefully. Join the Alliance and fight for a union. It is your only hope to cure IBM of AAMS (Arrogant A$$hole Management Syndrom). Best of luck to the current IBMers. You will need it as long as Sam Palmisano is running the company. -Anonymous-
    • Comments 02/21/06: I worked for the company for many years and was abused by many arrogant managers. I am out of IBM and recovering from years of abuse. Join the Alliance to help stop this employee abuse. -Anonymous-
    • Comments 02/22/06: I left IBM last week about 5.5 years. I can concur with the previous comment that IBM makes you feel there is no one out there. I now work for a competitor and there were no shortage of offers. Being a mobile worker, I didn't get a chance to say goodbye to my friends (i.e. not the managers!) who made work life more manageable, as I was exiled away for my notice period on a customer site far away. They got their last pound of flesh out of me right to the end. Still, at least Palmisano will see a bigger bonus than last year partly due to my contribution! He sure as hell didn't let me see a penny in raises for the 80 hour weeks, weekend work and generally seeing more of my customers than my family! I'm sooooo glad to have left! -Anonymous-
    • Comments 02/23/06: News Flash: Many people in IGS SDC (ITS) are being re-leveled. Some are being moved up to say, band 7, and some are being moved down. No salary adjustment. These are not promotions or demotions. I would guess that the Overtime Law Suit is the issue. -Anonymous-
    • Comment 2/24/06: It is clear to anyone who reads the comments on here that IBM is the worst company to work for. The best advice is to update your resume and get out on the market. My whole department now just does the bare minimum as we all got sick and tired of IBM's employee treatment. We have also spread the word among friends and family who are employed by numerous other companies about how bad IBM is as an employer. Let's face it, IBM doesn't care about us so why should we care about it? Any company that outsources to IBM will deserve what they get: bad service and unhappy workers.-Anonymous-
    • Comment 2/24/06: If you want to know where the rewards for all your hard work are going, just look at the insider stock sales since the beginning of the year. It tells you who is being rewarded (I'm sooo looking forward to my laughable yearly Vpay discussion. Yet another "Dog Ate My Homework excuse coming I'm sure). The number of sales also tells you what management really feels about the prospects for IBM stock. Another glowing example of the rape and pillage mentality management has for the stockholders and employees. Way to go Sam! -Anonymous-
    • Comment 2/25/06: Fed up in NINE MONTHS!! After busting my hump to produce as well as I could after graduation, I completed 4 circuit designs about a month early and assisted other team members, many of whom had only 3 designs on their plates. Long story short, I was "awarded" a THREE on my PBC rating, while team members whose work I actually took over during the project's final stages received a 2 or 2+. It's enough to make a man wonder why he even wakes up and walks into work in the morning.
      At my one-on-one with my second line, I specifically mentioned how awful I thought this was, and she said "Well, we have to rank based on production, and you're new so you obviously didn't produce as much as the other members of the team." When I reminded her that, actually, my complaint was not simply that I received a 3, but that I know I PRODUCED MORE than my 2+ co-workers, she actually REPEATED HERSELF!!! That is the day I started looking elsewhere, and I have a competitor interview just next week. I didn't bust my hump in school and for a year at IBM for this kind of treatment. I have never felt so marginalized, frustrated, and unimportant in my entire life. Couple that with my pathetic, quasi-present manager and murmurings of age discrimination and I think one year is about as much as any man needs of that company. Unbelievable... this is not the IBM my parents know and respect, I can tell you that. -Anonymous-
    • Comment 2/27/06: Somebody mentioned offshoring risk in a comment. One really big land mine IBM, HP and the others are overlooking is that of intellectual property. I’ve been working with these offshore people for > 2 years now and we can’t break them of stealing stuff off the internet, borrowing from other programs, integrating others’ work into load libs, copying website code/artwork, decompiling other applications; anything and anywhere they find it. Then they integrate it into our software, firmware, designs, web pages, etc. (One network admin was even using company bandwidth to download music and movies, then burned DVD’s which he sold.) In the past no one sued over it because these companies had no money, but with IBM and the rest owning them, there are deep pockets to go after. Now that the money’s there, it’s only a matter of time before other companies begin creating software to search for breaches of their IP in applications, web sites, firmware and everything else with IP. -Anonymous-
    • Comment 2/27/06: For all concerned IBM employees, I highly suggest each of you obtain a copy of "Corporate Confidential: 50 Secrets Your Company Doesn't Want You to Know" by Cynthia Sharpiro. Reading this book will help to enlighten each employee on the "true" actions and intentions of IBM and IBM management. -Anonymous-
    • Comment 2/27/06: The "bonus" money that you read about is in reference to your variable pay bonus, which is distributed at the end of March. I don't think anybody is being officially informed of their raises yet. Last year, my manager waited until June 30th to discuss raises with her staff. That is one day before raises were implemented. Incidentally, I have never even met my last two managers face-to-face. I wonder if they exist at all. -Anonymous-
    • Comment 2/27/06: As far as I know - IBM doesn't give raises anymore. I received one in 2002 and nothing since then. That was in July of 2002. IBM does not even give a cost of living adjustment (COLA) which is standard in most companies and averages about 3% per year. Therefore, I figure I am behind the 8 ball about 12% in the last 4 years compared to others at competitive companies. I am looking for another job now because recent college graduates are getting higher starting pay than I am and I have 17 years of experience. My pay at IBM has been going backwards. I make $20K less now than I made in 2000. Good luck to you. -Anonymous-
  • Pension Comments page
    • Comments 02/20/06: After finding a major problem with the "official" retirement estimate payments, late November, I retired at the end of November 2005. I was unable to get "correct" payment numbers for over 30 days. The Netbenefits estimator kept giving me lower numbers for waiting to collect. I was later told that the Netbenefits estimator, does not get updated interest rates for calculations, nor the correct information for your salary until 20 days after you have left. I personally received multiple iterations from the IBM Benefits people (Fidelity) which gave me different payments for the same retirement dates using the same options. I finally got a set of numbers that was satisfactory to me and applied for them. I made IBM put the amount they had agreed on the document as a minimum amount I would receive.
      (You cannot change what you selected after a payment has been made to you.) They tried to have me accept a smaller amount (after making their "official" calculations and I refused. After much conversation and my pointing out their mathematical errors, I again had the amount put into the official contract stating I would receive that amount or more. I have been told that everything I gave them has been accepted and is being "processed", whatever that means. I hope to receive my first payments (effective last year) in March of 2006 (over 3 months after I retired). I had done my due diligence ahead of time and current retirees told me to have at least 3 months living expenses, as it may take that long to get your checks. I thought it was crazy, but had the funds available, just in case. This must be the JUST-IN-TIME processing; Just-In-Time to avoid a lawsuit. -Anonymous-

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