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Highlights—August 19, 2006
- Wall Street Journal: What
You Need To Know About Pension Changes. New
Law and Court Ruling Mean More Companies May Convert Plans to 'Cash Balance' Mode. By Ellen E. Schultz and Theo Francis.
Excerpts: If you're covered by a traditional pension plan, the odds that your employer will change to a "cash balance" pension
plan have just increased. These new-style pensions, which currently cover roughly a quarter of the 22 million private-sector
workers with pensions, have been controversial because switching to them reduces pensions for older workers -- sometimes
significantly. This has led to lawsuits and proposed legislation to slow their spread, causing some employers to hesitate
But last week, a federal appeals court ruled that International Business Machines Corp.'s cash-balance
pension didn't violate age-discrimination laws. Just days before that, Congress approved a measure that would deem
cash-balance plans legal. While the ruling will be appealed, and the bill has yet to be signed into law by President
Bush, employer groups say the recent actions are a green light for employers to change their pensions.
For employers, switching to a cash-balance pension plan reduces future payouts and boosts earnings.
That, in turn, can result in big gains in executive incentive pay, which is tied to earnings.
Researchers at Cornell University, the University of Colorado at Boulder and the University
of California at Irvine examined hundreds of companies that converted their pensions to a cash-balance formula,
and they found that the average incentive compensation for the chief executive officers jumped to about four times
salary in the year of the pension cut, from about three times salary the year before. Companies that didn't change
their pensions saw little change, says Julia D'Souza, a Cornell associate professor of accounting and lead author
of the study, which is currently under review by an accounting journal. [...]
The bottom line is that companies can boost their profits by converting to cash-balance plans
and now face little legal risk in doing so. Unless you have already retired -- in which case your pension won't
change -- here's what it may mean for you: [...]
Why do employers change to cash-balance plans? Companies can save money and boost
profits. If a company has a pension surplus (most that converted in the 1990s did, and some that are converting
today do), it can use the surplus assets to "fund" the contributions to workers -- offering the company a
cash savings for a 401(k)-like benefit that it wouldn't have if it actually switched to a 401(k). What's more,
changing to a cash-balance plan reduces pensions, and thus a company's pension obligation. Under accounting rules,
companies calculate how much they expect to pay out in pensions over the lives of their employees -- including
amounts workers haven't earned yet -- and then reflect that amount as a liability on their books. When the pensions
are cut, the estimated amounts that will no longer be paid out instead get added to income. [...]
Are cash-balance plans better for younger workers and job-hoppers? Employers
say cash-balance pension plans are better for younger and more mobile workers because these workers can build
up a better benefit than under traditional pensions, and take it with them when they leave. But last year, the
Government Accountability Office concluded that most workers -- regardless of age -- get lower retirement benefits
when employers switch from traditional pension plans to cash-balance plans. [...]
Remember, your employer can still cut a cash-balance pension. In coming years, it can reduce
the annual pay credit, or even freeze the plan. (Sears Holdings Corp. and Verizon Communications Inc. froze their
cash-balance plans this year, and IBM announced it will freeze its plan at the end of 2007.) So you need to save as
much as you can in a 401(k) account or elsewhere. Cash-balance plans could be even riskier going forward, because
the new pension law would allow companies to use an interest crediting rate that could turn negative, potentially
wiping out all the interest credits previously earned.
|News and Opinion Concerning U.S. Court of Appeal's Overturn of Cooper
v. IBM Decision
- National Public Radio: IBM Wins
Case Involving Pension Change. By Wendy Kaufman. Excerpt: A federal appeals
court ruled earlier this week that IBM did not discriminate against older workers when it changed its pension
coverage in the 1990s. The case involved 140,000 older employees who were affected when IBM converted to
a "cash-balance" pension plan.
- Littler Mendelson's Benefits Practice Group: Cash
Balance Comeback - New Opportunities for Employers in Wake of Court Decision and New Legislation. By Steven
J. Friedman. Excerpts: For these reasons, employers have been, in a fairly robust manner, converting their
traditional pension plans to alternative plan designs, such as cash balance plans and pension equity plans.
However, in 2003, a ruling out of the District Court for the Southern District of Illinois put a halt to this
robust migration to cash balance plans. Specifically, the court held in Cooper v. IBM that the benefits provided
under IBM's cash balance plan discriminated against older workers. The holding also implicated pension equity
plans. This caused many employee benefits professionals to question whether cash balance (and pension equity)
plans were legally viable alternatives to traditional plans. Two very recent developments have now bolstered
the legal alternatives to traditional plans. Two very recent developments have now bolstered the legal viability
of these types of plans.
IBM Decision Reversed: Employers feared that Cooper would spell the end of cash balance
and pension equity plans when employers were seeking a means to provide alternatives to traditional pension plans.
On appeal, however, the Court of Appeals for the Seventh Circuit reversed the district court and found that the
structure of IBM's plan was not discriminatory. The court stated that the district court improperly treated the
time value of money as age discrimination. The court held that benefit accruals under IBM's cash balance plan should
be measured by looking at the amount of the employer's contributions (which were clearly age neutral) rather than
the value of such contributions after they have accrued earnings from the date of the contribution through the plan's
retirement date. Accordingly, as long as an employer provides credits which are uniform percentages of pay to all
participants, the Code and ERISA prohibitions against not reducing accruals to a participant on account of his or
her age would not be violated.
Pension Protection Act Also Boosts Cash Balance Plans: The Pension Protection Act, passed
by Congress on August 3 and signed into law on August 17, 2006, provides that "hybrid" plans, which are
account-based defined benefit plans, such as cash balance (and pension equity) plans are not discriminatory so long
as participant's accrued benefit, determined as of any date, is greater than or equal to that accrued by a similarly
situated, younger participant. Accordingly, this new legislation explicitly approves typical cash balance and pension
equity plan designs.
|News and Opinion Concerning the Pension Reform Bill
- Fort Worth Star-Telegram: No pension worries
- at least for execs. By Mitch Schnurman. Excerpts:
Traditional pensions have been fading away for almost 25 years, and last week's pension bill is likely to
speed along their demise.
Except for the executive class.
It seems almost a law of nature that CEOs will get theirs regardless of changes in tax
laws, securities regulations and public disclosure. Executives have been racking up millions in guaranteed
retirement money in the past few years even while a growing number of companies froze or terminated their
Supplemental retirement plans, in particular, allow companies to pay out much higher sums
and shift the tax burden to the corporation, making them even more attractive to executives. The researchers cite
examples including Robert Nardelli, who joined Home Depot in December 2000. Three years into his tenure, Nardelli
was eligible for retirement payments of $3.25 million a year beginning at age 62. If he leaves the company then,
he will get $4 million in retirement money for every year he worked there, the report says -- and that assumes
no increase in salary or bonuses.
It used to be ailing companies that gave up their pensions. But in the past few years,
17 large, financially healthy companies have frozen their plans, including IBM, Verizon, Hewlett-Packard
and Alcoa. They say the programs are too expensive and the costs too uncertain, and like most other companies,
they have shifted their focus to defined-contribution plans like 401(k)s. Those cost about half as much,
and the expense is predictable because the plans are not tied to stock-market performance or changes in
life expectancy. [...]
But traditional pensions pay out much more, especially to those in middle age, and they
provide a stable alternative to market returns. Executives understand their appeal, which is why their supplemental
plans are usually structured as pensions, based on their final salary and years of service. Union leaders have
always valued them highly, too, and many workers realize what they stand to lose when their plan ends.
Pensions, like most employer-benefit programs, used to be guided by a great democratizing
principle: What was good for the boss was good for the little guy, too. That notion flourished in the 1970s, when
a CEO earned 40 times more than the average worker. Today, with the pay multiple closer to 400, the connection
is slipping away.
- U.S. News and World Report: Retirement:
Mixed views on pension legislation. By Emily Brandon.
Excerpt: But Bradley Belt, former executive director of the Pension Benefit Guaranty Corporation, stressed
what the new legislation would not do. "It's not going to save the defined-benefit system," Belt
said at the eighth-annual conference of the Retirement Research Consortium. "It was not an explicit
goal of the administration. It will not insure against future loss of benefits under defined-benefit plans.
It will not in itself ensure financial security." He also said it would not restore the PGBC to financial
solvency but acknowledged that it would be a modest improvement to current law.
- Dallas Morning News: Pension
legislation puts the workers in control. By Pamela Yip. Excerpts: The intention is to improve the health
of corporate pensions, which have suffered low investment returns thanks to the bursting of the stock market
bubble and low interest rates. However, experts say that the bill also will speed the disappearance of traditional
pension plans because companies will find them much more expensive to keep up.
"It's going to probably dampen what remaining employer support there is for defined-benefit
plans," said Norman Stein, a law professor at the University of Alabama and an expert in pension law. Those
that keep defined-benefit plans are expected to move toward cash-balance plans. The pension legislation created
a legal framework to convert traditional pensions into cash-balance plans.
"The floodgates are open," said Janet Krueger, spokeswoman for a group of current
and former employees who challenged IBM's cash-balance plan. "Other people are going to be converting."
Shortly after the pension bill passed Congress, a federal appeals court ruled that IBM didn't
commit age discrimination when it converted to a cash-balance plan. The ruling "definitely will help a lot
of companies which were waiting for clarity from both the courts and Congress," said James A. Klein, president
of the American Benefits Council, which represents employers. "In a matter of a few days, both the courts and
Congress have confirmed that these plans are legitimate, non-age-discriminatory plans, so the efforts to convert
- Kiplinger's Personal Finance Magazine: The
death of the retirement safety net. Americans are quickly losing retirement
security as companies stop offering pension plans. Here's what you can do to patch together a retirement that's just
as safe. Excerpts: Pension checks may one day be relegated to museum exhibits along with buggy whips, telegrams and
other artifacts of days gone by. The number of employers offering so-called defined-benefit plans peaked in the mid
1980s, when pensions covered one out of three private-sector workers in the U.S. By the end of 2003, pension coverage
had slipped to less than one in five. [...]
And within the past year, even well-funded pension plans sponsored by healthy, profitable companies
have taken a T. rex-sized step closer to extinction. Some of the biggest names in corporate America -- many known
for offering the richest benefits ---- have backed away from making any further pension promises to employees.
General Motors, IBM, Lockheed Martin, Motorola, Sprint Nextel and Verizon are among those that have "frozen" their
Most companies that are altering their pension plans are either implementing a "soft freeze" or
a "hard freeze." A soft freeze is what IBM put into place in early 2005 when it closed the plan to all new
hires. Existing employees continued to accrue benefits. In January 2006, IBM turned down the temperature another notch,
moving from a soft freeze to a hard freeze. As of 2008, there will be no further benefit accruals in the pension plan,
but all benefits earned as of that date will be preserved. IBM's 125,000 current retirees, former employees with vested
benefits and employees who retire prior to 2008 will not be affected.
- Detroit News: Execs
wage class war against serfs. By Froma Harrop. Excerpts: "As Workers' Pensions Wither, Those for Executives
Flourish: Companies Run Up Big IOUs, Mostly Obscured, to Grant Bosses a Lucrative Benefit." This headline comes
to us not from the communist Daily Worker but the orderly pages of the Wall Street Journal, the chronicler of capitalism
-- or, as it used to market itself, "The Daily Diary of the American Dream."
It's not news that American executives have put ordinary workers' benefits on a diet while
they go for a fourth helping. What makes this redistribution of corporate wealth special is its brazen and unblushing
quality. We are not talking here about some stock option deal where the top guys are rewarded for increasing shareholder
value. In this case, the money gushing into the executive suite is simply being siphoned through holes drilled in the
workers' paychecks. Here's an example, courtesy of the Wall Street Journal:
General Motors has long complained that its "legacy costs" have made the automaker
dangerously uncompetitive. By "legacy costs" it means the health benefits and pensions that it promised its
workers and retirees. In an effort to ease those "burdens," GM recently announced it would end pensions for
42,000 of its salaried employees.
But guess what the Journal discovered. It found that the fund for those middle-class pensions
was actually bulging with $9 billion more than was needed to honor them. The real problem, it turns out, was GM's executive
pensions, which management had been supersizing even as it demanded cuts from the lower-downs. GM's executive-pension
obligations, we learn, are $1.4 billion.
General Motors is not the only company to have built up extravagant pension deals for the privileged
few. Executive-pension liabilities have hit $3.5 billion at General Electric, $1.8 billion at AT&T and $1.3 billion
at Exxon Mobil and at IBM. "Sometimes a company's obligation for a single executive's pension approaches $100
million," the Journal reports. [...]
It's painful to observe a growing serf mentality among ordinary Americans. Working folk seem
afraid to complain about greedy executives or tax cuts for the rich, lest some big-money politician accuse them of
waging "class warfare." They fall sway to right-wingers on the radio, who tell them to get on their hands
and knees and thank Wilbur Ross for giving them a job. Workers should understand that this doesn't have to be. The
rules of this unfair game are made in Washington. And until they change the rule makers, nothing will get better for
- MSN Money: Money
doesn't buy happiness in retirement. Your health and your savings are important,
but they aren't the defining factors. It's whether retiring was your own decision -- or if you were forced out early.
By Liz Pulliam Weston. Excerpts: "The biggest impact on how satisfied people were with their retirements … was
whether they wanted to retire at the time they did," said Keith Bender, a University of Wisconsin economics professor
and the study's co-author. The "voluntariness" of retirement "plays a big role, even after controlling
for other factors like income."
Being forced out of the workplace before you're ready is, unfortunately, a reality many of
us are likely to face. A full 40% of the retirees polled by the Employee Benefit Research Institute in 2003 had to
retire before they'd anticipated. What usually ushers people out the door prematurely are health problems and layoffs.
A full 41% of those polled by EBRI who said they retired earlier than planned did so because of illness or disability,
said EBRI Chief Executive Dallas Salisbury. Another 34% cited changes at work, including downsizing and closures. Early
retirement, planned or unplanned, is actually the norm. Half of all workers retire by age 62, according to the Social
Security Administration, and fully 72% receive reduced benefits because they retired before age 65.
- Yahoo! message board post
by "ctman1452". Full excerpt: The above statement summarizes the most egregious
and long term damage Lou did to IBM. He changed the culture from a shared one between mgt. and labor in both good and
not so good times to one of WIN/LOSE no matter what the conditions were.
So now you have a culture where you have divided the company and put one group against the
other with execs over incented to "extract" their perks from active and retired employees instead of advancing
the basic business deliverables with the customer understandably getting very mixed results in the interplay. Who is
going to believe in leadership that is asking you to sacrifice so they can benefit at your expense with any enthusiasm?
A formula for mediocrity and incrimination that is reflected in the tone of the majority of the posts in these boards.
Until the "legacy" culture left by Lou is replaced with a more balanced and positive
one IBM will continue to struggle toward mediocrity and one day possible irrelevance in the IT sector.
- Yahoo! message board post
by "chz_whiz". Excerpts: Very well put, Andy. I can't agree with everything
you said, but you have some very valid points. I was a manager as well, to 3rd line. What was different then was that
good times and bad, along with risk and reward, were shared between management and employees.
Assignments called for unplanned overtime -- everyone pitched in. The economy and business
results provided for rewards, as well as cutbacks, for everyone. Everyone shared in the rewards or the pain.
Yep, IBM made tremendous investments during the 70's for M&L and retraining to protect
full employment. Much of the investments paid off; a lot didn't.
You said IBM did what it needed to do to survive. IBM's pension plan was self supporting, and
they didn't make contributions for about a decade, except to fund the court ruling which was just reversed. In
fact, much of the excess fund requirements were funneled back to corporate profits and therefore to executive boni.
The days of sharing risk and reward across the company seem to be over. Sam froze the employee
pension plan, while setting himself up for a $4,000,000 annual pension ($10,000 per day, 7 days a week).
Lou took nearly $0.5 billion in exec compensation during his tenure. He cashed in $424 million
of insider stock (parenthetically, the top 7 Enron execs cashed in $402 million) while kicking 100,000 hardworking
IBM'ers out the door.
- Pension Preservation Network: Congressman George Miller
Offers Support To The Pension Preservation Network. Excerpts: The Pension Preservation Network Founder and Chairman, Jim Hosking, met with Congressman George
Miller, Senior Democrat on the House Education and the Workforce Committee, on August 3, 2006, to discuss the future
of Defined Benefit plans in this country. Congressman Miller and Hosking discussed strategies to right the wrongs that
have and are being committed against the retirees and future retirees of this nation. Hosking felt it was important
to know first hand what Congressman Miller's goals and objectives are for the future of pensions.
- USA Today: Northwest
changes handbook after advice rankles laid off workers. Excerpts: Getting money
advice from a bankrupt airline wasn't the thing that most offended some soon-to-be laid-off Northwest Airlines Corp.
employees. It was the Dumpster diving tips. Northwest is laying off its customer service workers and baggage handlers
at many smaller airports as it reorganizes under bankruptcy protection. Earlier this month, it sent workers in North
Dakota, Montana and Texas a handbook with tips for handling their layoffs. It included 101 money-saving ideas such
as, "Don't be shy about pulling something you like out of the trash."
Other tips included using old newspapers for cat litter, asking friends and family for hand-me-down
clothes and asking a doctor for free prescription drug samples.
- Washington Post: Federal
Pay: Myth and Realities. By Chris Edwards. Excerpts: We've often heard that
civil servants forgo higher private-sector salaries in order to serve the nation selflessly. Many federal bureaucrats
are indeed hardworking, but new statistics show that they are anything but underpaid. The Bureau of Economic Analysis
released data this month showing that the average compensation for the 1.8 million federal civilian workers in 2005
was $106,579 -- exactly twice the average compensation paid in the U.S. private sector: $53,289. If you consider
wages without benefits, the average federal civilian worker earned $71,114, 62 percent more than the average private-sector
worker, who made $43,917. [...]
Federal workers receive generous health benefits during work and retirement, a pension plan
with inflation protection, a retirement savings plan with generous matching contributions, large disability benefits,
and union protections. They often have generous holiday and vacation schedules, flexible hours, training options,
incentive awards, flexible spending accounts, and a more relaxed pace of work than private-sector workers.
Perhaps the most important benefit of federal employment is extreme job security. According
to Bureau of Labor Statistics data, the rate of layoffs and firings in the federal workforce is just one-quarter the
rate in the private sector. All these advantages in worker benefits suggest that, in comparable jobs, federal wages
ought to be lower than private-sector wages.
|News and Opinion Concerning Health Savings Accounts, Medical Costs and
Health Care Reform
- Economic Policy Institute: Employers shift
health insurance costs onto workers. By Lawrence Mishel. Excerpts: Fewer employees receive health insurance
through their employers now than in the past, as coverage has declined from 61.5% in 1989 to 58.9% in 2000 and down
to 55.9% in 2004 (the latest data available). Less well known is the fact that those who still receive employer-provided
coverage are now paying a larger share of those insurance costs.
One dimension of this trend can be seen in Figure A, which shows, for both single and family
coverage, the share of employees who are required to contribute their own money to help cover insurance premiums.
In 1993 about half (54%) of workers in the private sector with individual coverage were required to pay for
some of the insurance costs; by 2005 that share had risen to 76%. Almost all workers with family coverage
(88%) are required to pay some of the insurance premium out of their own pockets. [...]
How much more employees pay now than in the past for health insurance premiums is answered
in Figure B, which details the employee share of health premiums for all (both individual and family) coverage in
1992 and 2005. The employee share rose from 14.0% in 1992 to 22.1% in 2005. We estimate that this shift in cost-sharing
caused employees to pay for half of the growth of employer-provided health insurance premiums over the 1992 to 2005
period. This shift onto employees for basic premium costs does not include any of the higher deductibles or co-pays
paid by employees that also have occurred over this same time period.
- Chicago Tribune: Pricing
health care? It's not that easy. Experts say you should shop for the best
deal, but hospitals give patients scant information. By Judith Graham. Excerpts: When Margaret Zilm needed
cataract surgery, she wanted to know what it would cost. Her medical policy has a $5,000 deductible, and
her money was on the line. "I thought I should figure out the impact on my budget," said Zilm, of Kansas
City, Mo. But one eye doctor's office told Zilm it had no idea what her insurance company would pay. The
insurer wouldn't give out the information. And an official at Missouri's Department of Insurance said such
figures were confidential under medical providers' contracts with insurers. "I felt like a criminal for even
Jodi Bloch is a vice president of the Wisconsin Hospital Association, whose medical plan
now has a much higher deductible. Wanting to see how her new insurance would work, Bloch wondered late in her pregnancy
what she and her husband would pay for their child's birth. "I thought, OK, I'll be an intelligent consumer
and ask the company," said Bloch, who lives in Madison, Wis. To her dismay, Bloch learned that the insurer
wouldn't disclose its negotiated fees in advance. "And I'm like, how are people supposed to make good decisions
if you won't give them information?" she said.
Taking Less (sic) Medicaid Patients. By Kevin Freking. Excerpts: Many people who rely on government health
insurance for the poor have to search harder to find a doctor and increasingly are going to large practices, a
study shows. Officials say Medicaid's reimbursement rate is the biggest reason that it is getting more difficult
to locate doctors who take new patients under the program. On average, reimbursements are 69 percent of what Medicare
pays and even lower compared with what private insurers pay.
- Milwaukee Journal-Sentinel: Doyle
proposes tax break for health care. Under plan, workers who
help pay their premiums would get deduction. By Steven Walters. Excerpts: Democratic Gov. Jim Doyle on Wednesday
proposed a tax deduction for workers who share in the health care premiums with employers - a tax break he
said would cost $50 million a year but help up to 637,700 families or individuals. If the proposal became law, Doyle
estimated it would save an average of $236 a year for a family now paying $300 a month to be in their employer's
health care plan.
- Washington Times: Medical
miasma. By George H. Lesser. Excerpts: The last time I sought medical
help in Italy, I suffered from gastrointestinal distress to such an extent I wasn't eating. If I can't eat
in Italy, that is serious. The night before I was due to fly to Washington, I was in a hotel near the Milan airport.
I wanted to see my doctor in Washington as soon as possible, so I telephoned him to make an appointment. He questioned
me about my symptoms and told me I was too sick to fly. We argued, and then he said I could fly, but only if I got
a doctor to prescribe ciprofloxacin ("Cipro") and metronidazole ("Flagyl") for me to start taking
I asked the hotel for a doctor. They said it would be faster to go to the clinic at the
airport. I followed their advice and found a doctor. He wrote out two prescriptions for me, but said the airport
pharmacy had just closed. He directed me to the nearest town with an open pharmacy.
I couldn't find the drug store. I did find a hospital. I parked in the parking lot, walked
in, and asked if I could get the prescriptions filled. The lady got testy and informed me this was a hospital not
a pharmacy. I asked for her advice. She told me: "This is a hospital. We practice medicine. If you would like
us to treat you, take a seat in the waiting room." Unable to think of a better course, I went out to my car,
grabbed my book, went back into the hospital and settled in for a nice, long read.
After at most five minutes, a male nurse interrupted me. I assumed it was to wrestle with
insurance forms in Italian. Instead, the fellow escorted me into a hospital room, where we were joined immediately
by a doctor. He spoke English about as well as I speak Italian, so we spoke my language until he ran into problems,
then switched to his language until I couldn't find a word. He questioned me closely about my symptoms. He had me
lie down on the bed and started poking and asking me how it felt. He had the male nurse draw some blood, and he
ran some other tests. He took a medical history and inspected parts of my anatomy that seemed to have nothing to
do with the problem.
I was there six hours. The nurse was in the room with me for all but a few minutes. The
doctor was there almost all the time. After a while, he got the test results, which showed I did not have food poisoning,
but he wanted to observe me a while longer. Eventually, he concluded I had contracted some kind of intestinal bug,
and he gave me a couple of days supply of Cipro and Flagyl.
I checked in with the waspish lady at the front desk to ask how much I owed. She asked
me if I had parked in the hospital parking lot. I said yes. She said I owed one euro and 50 pence ($2). I asked
how much for the medical care and the medicine. She said that was free. When I got back to Washington, I saw my
doctor. He had a few tests run in the office, gave me full prescriptions for Cipro and Flagyl, and billed me $1,000.
Most Americans I talk to have a lot of screwy ideas about medical care. They think Americans
have "The Best Health-Care System in the World." They think "socialized medicine" doesn't work,
because people have to wait too long to get care, and the care isn't very good and they don't have any choices.
We have many wonderful doctors, hospitals and pieces of equipment in the U.S. However, statistically,
we don't do so well. Life expectancy, infant mortality, how long people live with a disease after it is diagnosed:
You name the criterion, and we don't compare well with any of the countries that have national health care. And
we spend a whole lot more for a lot less health care.
Here are a few comparisons between the U.S. and France. According to the Organization for
Economic Cooperation and Development: French women live 3-1/2 years longer than American women; French men live
just over three years longer than American men. Our infant mortality rate is 72-1/2 percent higher than theirs.
And 30 percent more Frenchmen smoke than we do, and they consume almost twice as much alcohol. Who knows how much
more butter, cheese and fois gras?
Worried about waiting for a doctor? Or a hospital bed? The French have 37-1/2 percent more
doctors than we, and way over twice as many hospital beds, per capita. Worried about choice? French hospitals are
65 percent government run and 35 percent privately run. Take your pick. The health-care system pays. You also get
to choose your doctor.
The difference in the quality of service is difficult for Americans to comprehend. In France,
doctors routinely make house-calls. Patients aren't thrown out of hospitals because the insurance companies decide
when it is time to go. They stay until doctors decide it is time to go. The French government pays 75 percent of
all health care costs. Most of the rest is paid by private insurance. If somebody can't afford private insurance,
the government makes up the difference. The bottom line: We pay 43 percent more for health care than the French
do, and we get a whole lot less for our money.
| New on the Alliance@IBM
- IBM Pension Lawsuit FAQ about Cooper v IBM (Updated 8/8/06)
- From the Job Cuts Status & Comments
- Comment 8/13/06: Expect a significant "resource action" for field SSR's in the not too distant
future. Those who did not go over to Qualex will see the axe swing -Anonymous-
- Comment 8/14/06: Today's 'State of the Business' meeting w/ Colin Parris stated the facts as
bluntly as possible, "Resource Actions" & "Resource Reductions". To what extent, that
remains to be seen. But the cold hard fact is true...there will be a reorg including some cuts. It seems
reminiscent of the early 90s; another time when the initial action was to 'request' development go to some field
or lab support position shortly before the slashing that we remember none too fondly. -Anonymous-
- Comment 8/14/06: Resource actions in Global Services Integrated Technology Delivery
May 30 and July 6, 2006. 146 employees cut. Jobs going to India -Anonymous-
- Comment 8/16/06: Endicott STG-- a contractor hit of 10 people the last 2 weeks and today
we find out we got 2 new hires. Also, rumor of regular employee's being resourced are coming this week
or next. Just hope were still getting severance and the 1 year bridge. Last year the VM group in Endicott
laid off a bunch and they claimed it was a performance action instead of a Resource action and the people
only got 13 weeks severance. The games IBM plays! -Anonymous-
- Comment 8/17/06: Yes, they want to move all internal jobs overseas and even some external
ones if the external customer agrees to it. The jobs left in the US will indeed be face to face jobs
for those doing actual work for US customers who demand on-site presence....meaning 100% travel jobs,
in most cases. Then, there will still be lots of paper-pushing BSers who sit in meetings on phones all
day and don't produce anything real and don't have skills beyond "schmoozes well with others".
Once again, IBM is losing track of the fact that the innovators are the technical people doing the work,
not the management schmoozers. IBM is preaching innovation but losing jobs that will grow our future
innovators. Innovation will not be sustainable in this business model....at least, not in the USA. This
will not bode well for the USA. But I suppose that in this new global market world, there is no loyalty
toward any country, only to the multi-national corporation. It's not just IBM....it's many of our once
great AMERICAN corporations. It's a scary future for the USA. Vote accordingly in November, Folks. -Anonymous-
- Comment 8/17/06: RTP SWG is playing the numbers game. Downsize 4 high paid long time
employees and hire 2 low paid college graduates to make people think IBM is hiring instead of firing.
Don't be fueled by the deception. RTP SWG will be 30% transferred to India/China/Brazil by end of 2006
and 100% by end of 2007. -Anonymous-
- Comment 8/18/06: These will all be small resource actions. Anything larger and they
will trip the labor laws and incur larger reductions costs.. So it will be a few 100 here.. a few 100
there every few months to get around the laws protecting workers.. Look it up on the dept of labor web
page.. it's all there! -Anonymous-
- Comment 8/18/06: IBM's 5 year strategy is to reduce US labor to no more than 20% being
provided in this country; with the remainder being in India, Brazil and China. Yes folks, meaning the
125K workers presently in the US will go down to 25K. All service deals are having this automatically
imbedded in them today. Global Resources are about 1/5 of US cost. So think about it. In the next 5 years
8 out of 10 people will lose their jobs. That needs to be everyone's mindset now. Join the Union NOW...!!!
It's the only hope for the US IBM'ers today. Young or old. This is it.-Anonymous-
- From the General Visitor's Comment
- Comment 8/13/06: laid off ibm'er - the latest IGS utilization targets for 2007. Not sure if this goes
under ‘general comments’ section or ‘layoffs’.. Just thought you should know
that the new IGS utilization requirements are increasing AGAIN. It looks like for 2007 that the target
for IGS’ers will be 107%. That comes out to about 2220 hours per year to be worked, which if you
have 4 weeks vacation, and take NO sick time and NO education, you still MUST do about 10 hours per day,
every day, all year long. What makes it even more absurd of course, is that even then, there’s
still little to no raises, poorer PBC reviews, zero bonuses, at best you get a ‘Thanks’ award
so you can go buy yourself a blue gorilla stuffed animal, or perhaps one of those insipid “thank
you email” as a reward for weeks, months, or years of worked overtime to achieve ridiculously set
deadlines in grossly understaffed projects, etc, etc, etc... -Anonymous-
- Pension Comments page
- Comments 08/17/06: The judge that ruled in IBM's favor in our pension case is a Reagan appointee. So
all you people who voted for Reagan and thought he was the best thing for this country--guess what--you
cut your own throats. Voting has consequences. -Anonymous-
- Comments 08/18/06: Hey 2nd choicers out there: Now with the legislation and current
appeal ruling, I doubt there is anything to stop IBM from converting all of you from the DB to CB plan.
It could happen real soon, even well before the planned 1/1/2008 pension big freeze. IBM will cheat you
out of your pension benefits once again and you will not have a 3rd choice. If we have collective bargaining
rights we might be able to stop this from ever becoming true by negotiating protections in a union contract.
It is never too late to join the Alliance and to protect your current benefits and employee rights! -Anonymous-
- IBM employees on employee
- Comment 8/13/06: I too have been greatly disappointed by the damn greed of our Management. Was dropped
from a band 6 to a 4 due to reclassification. Was told it would not affect my chance to get a better
position - MY ASS! Last 4 yrs have been trying to get a better position and have all the credentials
and experience and can't even get a friggin hello due to this BS buddy system in IBM. Why post jobs when
they have someone stuck to their ass already sucking away for the position. I have been looking outside
since it appears they don't want the best, but just their friends. Wow! Sam, how can you live on a 29%
salary increase? I mean, that raise alone is probably more than my annual pay. Thanks IBM! -PJ-