Lawmakers and clients say the project has led to lost documents, slow approvals and severed eligibility for Medicaid and food stamps. Texas canceled a similar project in 2007.
According to an IBM UK employee speaking to The Reg, IBM UK has already reduced the final salary percentage the Defined Benefit plan would pay out. "This was supposed to make the scheme 'safe,'" says this employee, who's under the final salary plan, "so they've effectively gone back on their word." "I'm fuming," he adds. "It has totally thrown our futures into doubt."
But IBM sees this as a future upgrade. "I understand that the proposed changes that I am announcing today will be sensitive and difficult for many," Riley writes. "However, I believe that these proposals are both responsible and necessary for IBM UK at this time, in order for us to achieve sustainable progress against our Productivity objective, strengthen our long-term competitiveness and ensure our future industry leadership." Earlier in his email, Riley blames the change on a "recent trends in the economic environment." But Big Blue is one of the few tech giants still churning out profits on par with with pre-Meltdown financials.
Anyone in the DB scheme who is old enough to take their pension next March / April will probably elect to do so, otherwise they will be stuck with being unable to afford to go much before 63. Clearly this was part of the deal - it's a way of offloading a lot of the more highly paid employees, without having to fund any separation packages. It will be interesting to see if the retirement option is an open door (in which case it will be bloody tough being an IBM Customer) or whether some people will not be accepted (in which case they are likely to be people who will readily find alternative employment and will no longer have their pension holding them back, so again it will be bloody tough being an IBM Customer).
Anyone in the DB scheme who will not be old enough to retire next Spring (like me), is faced with all their retirement plans being cast aside. The feeling of utter powerlessness is the most frustrating aspect. The one good thing is that I will no longer have any reason to stay with this dreadful company, so once the recession starts to receded and the job market picks up, I'll be putting a lot more effort into finding another job than I'll be putting into my current one.
This is one utterly amoral company which only operates on the basis of staying within the law (or at least making sure the execs can blame someone else when it crosses the line, even if their bullying management style caused the transgression in the first place), not on the basis of any moral compass. All the public statements about leading the world to a better place should be treated as the utter bullocks which they surely are. It is a company that adopts a single management style: bullying. HR push out shed loads of crap about work / life balance etc, but the reality is people are forced to work longer and longer hours under more and more difficult conditions to try and avoid being placed in the bottom 15% and managed out. It's really bad news being in a good team, you can easily over-achieve all your targets, make loads of money for IBM and still get poked up the rear end.
See if you can guess how motivated I feel?
As well as the recently announced plans, IBM has been progressively diminishing the value of its pensions. For example, any pension earned before 1997 is not subject to any statutory indexation floors (which IBM has adopted as caps). Over the years IBM has become less and less generous with the indexation for pensions in payment of the pre '97 "discretionary" element, eventually settling on a practice of 70% of RPI. More recently this has changed to a committed payment of 60% of RPI, reducing to 50% of RPI with RPI capped at 2.5% - clearly a great deal less useful (especially if inflation is greater than 2.5%) than the discretionary approach it replaced. However, this committed indexation is only committed until 2020, after which I expect IBM will cease to offer any increases.
So, rather than the rather excellent pension scheme which I joined, I now have something which will pay out a great deal less at a much later date and any significant inflation once in payment will rapidly erode the value. In effect IBM has shifted the burden of funding me in old age, assuming I survive more than a few years after retirement, to the state. This is the same state that has enacted post-Maxwell pension reforms and a tax-grab which have encouraged companies to abandon DB pensions and done nothing to stop them. The same state that allowed the banks to muck up the economy and which is now so in debt (in our name) that the economic future does not look all all good. The prospects of making up the pension gap through investments or pay rises look very remote indeed.
But IBM has sought for years to reduce its exposure to pensions risk in the US and abroad. It closed its UK scheme to new employees in 1997. Also, it fought legal battles for years in the US after moves in the 1990s to convert its defined benefit plans to what is known as a cash equity plan, and ultimately to a hybrid form of plan known as a cash balance scheme. The latter is a form of defined contribution plan in which a percentage of each worker’s pay is set aside each year and earns a predetermined rate of interest, providing a minimum underpin against investment losses. ...
However, employees challenged IBM’s process of converting from one form of pension to another, arguing that it constituted a form of age discrimination. In 2003, the Federal District Court in the Southern District of Illinois agreed, and that decision was not overturned until mid-2006. At the end of 2007, IBM ceased most of its US defined benefit schemes as well as closing its schemes in Japan.
Today, hardly anyone is complaining about IBM's 401(k), least of all the participants. The plan is sumptuous compared with offerings from most companies. Across the U.S., 401(k)s have been bludgeoned by the financial crisis. Balances have shrunk to a fraction of their former value, and many companies have slashed matching contributions. Yet IBM is sticking with its plan—one of the largest in the U.S., with $27 billion in assets. "In my job, I often hear horror stories," says J. Randall MacDonald, senior vice-president for human resources, who led the shift from pension to 401(k). "I don't hear horror stories about the 401(k)."
IBM pulled the rug out from their older workers in 1999 by removing the defined benefit plan they promised workers years ago. It didn't work well and many protests followed leading to restoration of the plan. (Where was the visionaries when that plan was installed?) The writer claims hardly anyone is complaining about IBM's 401(k) these days - perhaps because they have laid-off all the older workers that were impacted by the change and/or moved a large portion of their workforce offshore?
Performance-based benefits are a great idea in theory but if you are a company that is predisposed to think of older workers as declining in performance by virtue of their age, then with a performance based total comp package, older workers will fare poorly under such a concept. I've had managers tell me that during their ranking and rating process everyone knows the older workers will gradually move down the ranking ladder because of their age and their productivity - they are just not as knowledgeable or quick or flexible as those younger people. Honest, I've had people in high tech companies like IBM tell me that. Those workers would automatically lose in a performance based benefit system. ...
The IBM 401(k) is certainly not visionary nor have they reinvented the 401(k). There are big name hi-tech companies who have been dumping 12.5% of pay in their employee's 401k accounts for 15 years. We set up a 401(k) plan 20 years ago with a generous match like IBM and a more potent company contribution at the end of each year. We've offered more than 100 investment vehicles for employees to chose from, free investment counseling, our participation rate is higher than IBM as is our average account balance per participant. I don't believe our costs are any higher either. I guess we reinvented the 401(k) 20 years before IBM did but no one realized it.
Not sure what the purpose of this article is frankly - perhaps an attempt to bolster an image of a company that's been taking its lumps in the press of late? On Amy's website she has a quote from Einstein - "Never stop asking questions" - I think she did. This is a fluff piece, not worthy of an Einstein.
Don’t even get me going on the changes in the retirement plan. These current times have taught me “Its no longer the benefits of working at IBM, it whether or not you can endure the pyramid scheme on a corporate playing field. Piracy/Rape with a suit on. It is however our own fault. Our culture has allowed big business to behave this way and now WE as weak pawns let them brainwash us into condoning their actions allowing it because its the nature of the business mind. Oh come on... give me a break. That sounds like something a teenager would say when they don't want to be accountable. However...we let business govern themselves, we didn't watch their every step....and they took full advantage of the ungoverned playing field. But who knew we had to watch them too.... we were all too busy trying to get 'career educated', 'experienced' and work at personal life too. -Anonymous-
Alliance reply: We have been telling IBM workers this and warning them of the consequences of not fighting back; since 1999. Apparently, not enough IBMers have listened. You may be right about 'WE as weak pawns let them brainwash us'; but you can recover from it, if you seek help from your co-workers; to get up off the ground and stand up with your co-workers and organize.
But last week the budget office scored the full proposed legislation from the Senate committee on Health, Education, Labor and Pensions (HELP). And the news — which got far less play in the media than the downbeat earlier analysis — was very, very good. Yes, we can reform health care.
Let me start by pointing out something serious health economists have known all along: on general principles, universal health insurance should be eminently affordable. After all, every other advanced country offers universal coverage, while spending much less on health care than we do. For example, the French health care system covers everyone, offers excellent care and costs barely more than half as much per person as our system. ...
So fundamental health reform — reform that would eliminate the insecurity about health coverage that looms so large for many Americans — is now within reach. The “centrist” senators, most of them Democrats, who have been holding up reform can no longer claim either that universal coverage is unaffordable or that it won’t work. The only question now is whether a combination of persuasion from President Obama, pressure from health reform activists and, one hopes, senators’ own consciences will get the centrists on board — or at least get them to vote for cloture, so that diehard opponents of reform can’t block it with a filibuster.
My litmus test is different. It’s the prostate cancer test.
Fatigue sort of goes with the territory, and like many working moms, you just push past it. You get up, you get the family off in various directions, you go to work, you go to class, you cook dinner, you help with homework, go to games and track meets, do housework, set boundaries for the two kids at home and field frequent counseling-like calls from the two who are not, you try to work through problems with your husband, and you collapse exhausted into bed, get up the next day, and do it all over again – it’s a routine you dare not interrupt with reflections on your fatigue – there is no time. Then one day...
The tactic is so widespread that three of every four major health-care firms have at least one former insider on their lobbying payrolls, according to The Washington Post's analysis.
Nearly half of the insiders previously worked for the key committees and lawmakers, including Sens. Max Baucus (D-Mont.) and Charles E. Grassley (R-Iowa), debating whether to adopt a public insurance option opposed by major industry groups. At least 10 others have been members of Congress, such as former House majority leaders Richard K. Armey (R-Tex.) and Richard A. Gephardt (D-Mo.), both of whom represent a New Jersey pharmaceutical firm.
The hirings are part of a record-breaking influence campaign by the health-care industry, which is spending more than $1.4 million a day on lobbying in the current fight, according to disclosure records. And even in a city where lobbying is a part of life, the scale of the effort has drawn attention. For example, the Pharmaceutical Research and Manufacturers of America (PhRMA) doubled its spending to nearly $7 million in the first quarter of 2009, followed by Pfizer, with more than $6 million. ...
A June 10 meeting between aides to Baucus, chairman of the Senate Finance Committee, and health-care lobbyists included two former Baucus chiefs of staff: David Castagnetti, whose clients include PhRMA and America's Health Insurance Plans, and Jeffrey A. Forbes, who represents PhRMA, Amgen, Genentech, Merck and others. Castagnetti did not return a telephone call; Forbes declined to comment. Also inside the closed committee hearing room that day was Richard Tarplin, a veteran of both the Department of Health and Human Services and the Senate, where he worked for Christopher J. Dodd (D-Conn.), one of the leaders in fashioning reform legislation this year. Tarplin now represents the American Medical Association as head of his own lobbying firm, Tarplin Strategies. ...
Overall, health-care companies and their representatives spent more than $126 million on lobbying in the first quarter, leading all other industries, according to CRP and Senate data. PhRMA led the pack in spending and employs 49 former government staff members among its 136 lobbyists, according to The Post's analysis. Dozens of other former insiders are employed as lobbyists by Pfizer, Eli Lilly, the AMA and the American Hospital Association, each of which spent at least $3.5 million on lobbying from January through March.
The aim of the lobbying blitz is simple: to minimize the damage to insurers, hospitals and other major sectors while maximizing the potential of up to 46 million uninsured Americans as new customers. Although many firms have vowed to help cut costs, major players such as PhRMA, America's Health Insurance Plans and others remain opposed to the public-insurance option, a key proposal that President Obama has endorsed. Several major Democratic bills include such a plan, but Baucus's committee -- which is acting as the central broker in the debate -- has not committed to the idea. Instead, the Finance Committee has focused recently on private-insurance cooperatives and other proposals seen as more palatable to the insurance industry and centrist Democrats. More than 50 former employees of the committee or its members lobby on behalf of the health-care industry, records show.
It is a situation most Europeans, Canadians and others who enjoy national health services would find bewildering if not appalling and is one factor fueling the drive to reform the hugely expensive U.S. healthcare system. "People will even stick with a job they feel boxed in on because of the healthcare benefits, especially if those benefits cannot be matched elsewhere," said Andrew Sum, a labor economics professor at Northeastern University. ...
The need for affordable health insurance has forced some Americans out of retirement, especially if they left the work force before they reached an age where government programs like Medicare are available. Patti Sutton, 58, used to work with the City of Phoenix and came out of retirement to whip up espressos at Starbucks for the same reason as DeWaal -- the health insurance. Her husband Scott, who was laid off by the construction company he worked for, is awaiting a heart transplant.
"But dependency on government has never been bad for the rich. The pretense of the laissez-faire people is that only the poor are dependent on government, while the rich take care of themselves. This argument manages to ignore all of modern history, which shows a consistent record of laissez-faire for the poor, but enormous government intervention for the rich." From Economic Justice: The American Class System, from the book Declarations of Independence by Howard Zinn.
Vault's IBM Business Consulting Services message board is a popular hangout for IBM BCS employees, including many employees acquired from PwC. Sample posts follow:
We all have to play nice-nice with our GR (global resource) peers. and when your GR team lead sends notes to IBM US mgmt that they need MORE WORK from their US counterparts, IBM mgmt. rolls over and gives them more work. Reminds me of an old CCR song: Fortunate Son.
And when you ask them, how much should we give? Ooh, they only answer more! more! more. What a sad, pathetic, f'ng company.
What's more pathetic is how India is not held accountable since they are Sam's chosen ones and how anyone who reports problems with India are considered anti-team, racist and uncooperative.
The sacred cows over in India aren't cattle, they're the "office boys" pretending to be IT professionals working for IBM. What a sad, pathetic f'ng company indeed.
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