They used to be able to retire early, losing 3% of their annual pension for each year before 60, but the new scheme now sees 6% lost each year before 63.
IBM said its changes were legal and it will contest any action.
Under the old scheme if an employee with an annual pension of £40,000 retired at 55 they would sacrifice £6,000 (15%) over the five years before their 60th birthday.
But under the new scheme the same person would sacrifice £19,200 (48%) over eight years, from their annual pension.
The employees are claiming unfair dismissal and age discrimination. Their solicitors, Now Legal based in Fareham, Hampshire, claim they were effectively forced to take early retirement to avoid the new terms which would mean losing "substantial proportion" of their future pensions. The firm added that because the changes impacted on long-serving employees, who are all aged in their 50s, a claim for age discrimination would also be pursued. ...
IBM, which said it will fight any action, added: "Throughout the process of changes to IBM defined benefit pension plans - and the introduction of a new early retirement programme - IBM has consulted with relevant employees and complied with all legal requirements. "Claimants left IBM of their own volition, on favourable early retirement terms. "Thus, we will contest these actions, which are without merit."
Making the decision to accept the job was easy. Jack was really pleased to be working for a company that was the leader in its industry, and was known for taking care of its employees. In fact, on his first day, he learned that, “Respect for the Individual,” was one of the company’s core values.
Jack set out to be the best employee he could be, always striving to do excellent work, and believing that if he did his best, the company would take care of him. He planned to work for thirty or thirty-five years, and then take an early retirement. “Why not?” he thought, the pension plan was designed to allow him a nice bump in those later years of his career.
As the years went on, Jack felt some pressure to put in more hours, and saw some years where he got an evaluation that was less than he expected, and sometimes he even had to go twenty-four months without a raise. But he loved his job, and he believed that his boss would take care of him.
In the early eighties when his employer offered a tax-deferred savings plan he took advantage of it, but only up to the employer match. He didn’t feel the need to put in the full amount allowed by law – after all, his monthly pension checks should replace about 75% of salary when he retires.
Then in the mid-nineties Jack’s company announced a change to the pension plan. Employees who were within five years of eligibility for retirement remained on the old plan, but everyone else saw a significant change to the pension plan. That nice bump Jack was expecting in his later years disappeared. He would only get about 65% of his salary in retirement.
Now in his early forties, Jack increased his 401K contributions to make up for the loss. Despite seeing many friends and colleagues let go in resource actions, Jack still trusted that the company was doing the right thing, and he remained tremendously loyal to the company.
In the late nineties, the company did something Jack thought he’d never see – they announced that anyone who wasn’t already forty years old would be shifted from the existing defined benefit pension plan to a cash balance plan. Jack’s colleague Jill missed the age cut-off by just one month. She would be lucky to get half of what she expected to get when she first joined the company. It was the first time Jack was happy about his age – at least he was still taken care of.
Jack was now maxing out his 401K contributions, and even took advantage of the additional amount he could set aside when he turned fifty, but retiring at age fifty-five now seemed out of the question.
The company announced more changes in the mid-2000’s, this time primarily affecting older workers like Jack. Employees were told that their pensions would be frozen. This meant that Jack’s pension would no longer accrue additional value. The last few years he worked up to that point would be the final years used to decide what his pension payout would be, regardless of how many more years he worked or whether he got another salary increase. Jack’s expected pension value at retirement was now less than half of what he thought he’d get when he first started working for the company thirty years earlier. Even if he worked to age sixty-five, it was impossible to make up what he had lost.
The company tried to lessen the blow by agreeing to put in additional contributions to Jack’s 401K plan for the next few years, but before he could take advantage of that benefit, Jack found himself caught up in a resource action, and forced to take early retirement with less-than-adequate pension and retirement savings. ...
The Boston College Center for Retirement Research estimates that the number of employees covered by a defined benefit retirement plan (the ones we think of as traditional pension plans) declined from 62% in 1983 to 17% in 2007. Especially badly hit are those who started working in the seventies and early eighties (who were in their mid-thirties to late forties when changes to traditional pensions started to occur). Many of these employees started working before tax-deferred savings plans were introduced, and joined Corporate America when the fairy-tale that their employers would take care of them was still real.
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According to my calculations I lost 30% of my pension and, of course, I lost the piddly retirement medical benefit. But 30%, that really hurts, and it really hurts that a company that did use to "respect the individual (employee)" just throws them away now so the CEO and execs can get a great bonus! (Yeah, sounds really great for the company overall, huh?)
(I figure the big push to layoff and offshore is because the company is exceeding their 5 year goal of 10% EPS by this year, which I expect means BIG bonuses for those at the top.)
I think this particular company should be stripped of its name. I imagine that the company's founders would want that. The company they created and worked so hard for is gone now
So okay, I'm employed again now in a completely different field which carries absolutely no pension options. I make just enough to live and enjoy myself on and I'm happy about it because I'm loving my work and travel. No one else around me has a pension either, and they're not worrying about it. Of course, it's also the norm here in Indonesia that extended families take care of their parents/relatives for life. I think if we're going to get rid of pensions as a norm, we'll need to return to that expectation - that we may need to be financially supported by our families in our old age. As usual, those caught in the middle of change miss out on both ends - we have the lower pension but our kids weren't expecting to support us. And we don't want them to - we want our independence.
I agree that company loyalty has gone - I had pretty much lost almost all of mine before I was laid off. But it's the change that's hard; they hired us with promises and they broke those promises. Perhaps they had to, although perhaps not. That's right - it's everyone for him or herself - but I can't blame people for being bitter about the let-down.
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Following their training, the tech workers will be placed with outsourcing vendors in the region that provide offshore IT and business services to American companies looking to take advantage of the Asian subcontinent's low labor costs.
Under director Rajiv Shah, the United States Agency for International Development will partner with private outsourcers in Sri Lanka to teach workers there advanced IT skills like Enterprise Java (Java EE) programming, as well as skills in business process outsourcing and call center support. USAID will also help the trainees brush up on their English language proficiency. ...
But it's the outsourcing program that's sure to draw the most fire from critics. While Obama acknowledged that occupations such as garment making don't add much value to the U.S. economy, he argued relentlessly during his presidential run that lawmakers needed to do more to keep hi-tech jobs in IT, biological sciences, and green energy in the country. He also accused the Bush administration of creating tax loopholes that made it easier for U.S. companies to place work offshore in low-cost countries.
As recently as Monday, Obama, speaking at a Democratic fundraiser in Atlanta, boasted about his efforts to reduce offshoring. The President said he's implemented "a plan that’s focused on making our middle class more secure and our country more competitive in the long run -- so that the jobs and industries of the future aren’t all going to China and India, but are being created right here in the United States of America."
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I spent my entire IBM career in field service. After retiring, I have been working part time for a business partner. I have had customers pay me to come on site and hold the IBM CE's hand. IBM used to be the expert - a sad commentary.
Last week, I met a customer who is spitting mad at IBM. He would dump IBM in a heat beat if he could. He loves the equipment and he loves his service folks. The problem? Administration. Every time he calls for service, he is told no contract. He has contracts on everything. All the administration was moved to Brazil. The customer and the IBM salesman spend days working with administration to correct the records. The next service request is still denied. The problem seems unfixable. Regards, 73, Bob Nelson, K2QPN, IBM 1967-2005 ITS NE Area Technical Support Staff.
Here's a screenshot (with most figures blurred out) http://i36.tinypic.com/34nf692.jpg
I will be contacting benefits to find out what that means, but was wondering if anyone else noticed this too. Did Fidelity jump the gun on some pension plan change? thx!
It took me three months with multiple submittals to UHC and several phone calls to get payment for a flu shot at Costco. According to UHC, IBM required the shot be at clinics or doctors' offices. Not so and after they finally found out they were wrong, they lost paperwork and then wanted doctor's tax number for Costco -- what a waste of time for $20.
I also had problems with my mammogram and yearly physical being paid by UHC. From talking to others, it appears that UHC makes payment difficult hoping we'll give up and they won't have to pay. I just hang in there and finally get what my premiums paid for.
I recently went on Medicare and find their processing of payments and online account updates much quicker than UHC and best of all there is no payment hassle. This is one person who is happily went on Medicare and left the stress of UHC behind. The best part with Medicare is that I talk to a person in the United States and not a person in a foreign country.
All of the biggest Indian tech companies would be affected by the fee increases, Mr. Mittal said, including giants such as Wipro Ltd., Infosys Technologies Ltd. and Tata Consultancy Services Ltd. Big U.S. tech companies such as Microsoft Corp. and Intel Corp. would almost certainly avoid the fees because their foreign workers make up less than 50% of their overall U.S. work force. An Intel spokesman said Friday, "We are aware of the legislation, we did not take a position on it and are not impacted by it." ...
Indian software services and outsourcing companies generate about 60% of their combined $50 billion in annual revenue from the U.S. The Indian industry has enjoyed explosive growth over the past decade, fueled by an army of skilled, low-cost, English-speaking workers in Bangalore and other Indian cities. ...
As the U.S. backlash over outsourcing has intensified in recent years, some critics have zeroed in on the skilled-worker visa programs, arguing that they give foreign companies a beachhead to facilitate deals with U.S. companies that ultimately transfer American jobs abroad. Sen. Charles Schumer, the New York Democrat who co-sponsored the legislation raising visa fees with Claire McCaskill (D.-Missouri), has been a critic of outsourcing. ...
According to a summary of the Senate bill, the new charges would increase visa fees paid by affected companies by roughly $2,000 per visa application. But Mr. Mittal says the increase would actually be about $4,500 more per worker for new visas and $4,000 more for renewals. Currently, most visa applicants also face additional fees; in most cases, the H1-B visa fees amount to about $2,320.
Teaching mainframe skills is out of vogue at many universities with the advent of newer approaches to solving the biggest computing challenges. At the same time, many of the engineers capable of tinkering with the refrigerator-sized machines are nearing retirement. The average age of mainframe workers is 55 to 60, according to Dayton Semerjian, a senior vice-president at CA Technologies (CA), the second-largest maker of software for mainframe computers after IBM. "The big challenge with the mainframe is that the group that has worked on it—the Baby Boomers—is retiring," Semerjian says. "The demographics are inescapable. If this isn't addressed, it will be trouble for the platform."
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This is a good company for any fresh-out-of-school job hunter that wants to gain some standard 21st corporate world experience. The pay is not bad for the fresh-out-of-school job hunter. For more experienced workers however, IBM is very limited. Executive management's not-so-secret agenda is to layoff as many "high priced" USA-based employees (and in other developed countries) and off-shore everything possible to the 3rd world. Any gaps are theoretically back-filled with the "layoffees" as contractors, assuming they can't find work elsewhere.
Cons: IBM is not a place where job hunters should apply if they are seeking long term employment.or stability. One day an IBM employee may come into work as he/she has done for the past 20+ years and be taken into the manager's office to be told their position is being Resource Actioned (IBM does not like to use the words "Laid Off"). The soon to be EX Employee will then be required to stick around for the next 30 days. This 30 day period is so the soon to be EX Employee will have the privilege to train their India Replacement staff member. Once the 30 days is past and the training is complete the EX Employee will no longer be needed and will be thrown out like yesterday's garbage.
You'll have lots of exposure to different technologies at IBM. Unfortunately, a lot of what's forced on you is either proprietary, obscure, or rapidly vanishing outside the world of IBM (think Lotus Word Pro, Lotus Notes, Domino, etc). Many US-based jobs at IBM are "tenuous", so the workplace feels a lot like dining under the Sword of Damocles. Since your co-workers know that the end could come at any moment, and their survival depends upon how well they rank compared to you, the result is reduced information flow/share, cooperation, participation, and general workplace camaraderie among your co-workers.
On the subject of "how you rank", the PBC system (performance reviews) at IBM is a TOTAL FARCE. It's basically a random system of ranking by the managers. Worse yet, you usually already have a performance number assigned before the evaluations ever begin -- based on who the manager's favorite employees are, how many people in the dept the execs said will need to be laid off in the next year, etc.
Advice to Senior Management: If all of the work that IBM does can be done with cheaper labor and cheaper office space in 3rd World countries, does that mean that eventually IBM Headquarters will be moved to India or perhaps Samuel J. Palmisano's job is going to be off-shored to Pakistan ?? Just wondering. "IBM - MADE EVERYWHERE BUT THE U.S."
"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.
Many of those workers were cashiered for no reason other than outright greed by corporate managers. And that cruel, irresponsible, shortsighted policy has resulted in widespread human suffering and is doing great harm to the economy. ...
As Professor Sum studied the data coming in from the recession, he realized that the carnage that occurred in the workplace was out of proportion to the economic hit that corporations were taking. While no one questions the severity of the downturn — the worst of the entire post-World War II period — the economic data show that workers to a great extent were shamefully exploited.
Productivity tells the story. Increases in the productivity of American workers are supposed to go hand in hand with improvements in their standard of living. That’s how capitalism is supposed to work. That’s how the economic pie expands, and we’re all supposed to have a fair share of that expansion. Corporations have now said the hell with that. Economists believe the nation may have emerged, technically, from the recession early in the summer of 2009. As Professor Sum writes in a new study for the labor market center, this period of economic recovery “has seen the most lopsided gains in corporate profits relative to real wages and salaries in our history.” ...
Executives are delighted with this ill-gotten bonanza. Charles D. McLane Jr. is the chief financial officer of Alcoa, which recently experienced a turnaround in profits and a 22 percent increase in revenue. As The Times reported this week, Mr. McLane assured investors that his company was in no hurry to bring back 37,000 workers who were let go since 2008. The plan is to minimize rehires wherever possible, he said, adding, “We’re not only holding head-count levels, but are also driving restructuring this quarter that will result in further reductions.”
There can be no robust recovery as long as corporations are intent on keeping idle workers sidelined and squeezing the pay of those on the job.
It doesn’t have to be this way. Germany and Japan, because of a combination of government and corporate policies, suffered far less worker dislocation in the recession than the U.S. Until we begin to value our workers, and understand the critical importance of employment to a thriving economy, we will continue to see our standards of living decline.
Not long ago, anyone predicting that one in six American workers would soon be unemployed or underemployed, and that the average unemployed worker would have been jobless for 35 weeks, would have been dismissed as outlandishly pessimistic — in part because if anything like that happened, policy makers would surely be pulling out all the stops on behalf of job creation.
But now it has happened, and what do we see?
First, we see Congress sitting on its hands, with Republicans and conservative Democrats refusing to spend anything to create jobs, and unwilling even to mitigate the suffering of the jobless.
We’re told that we can’t afford to help the unemployed — that we must get budget deficits down immediately or the “bond vigilantes” will send U.S. borrowing costs sky-high. Some of us have tried to point out that those bond vigilantes are, as far as anyone can tell, figments of the deficit hawks’ imagination — far from fleeing U.S. debt, investors have been buying it eagerly, driving interest rates to historic lows. But the fearmongers are unmoved: fighting deficits, they insist, must take priority over everything else — everything else, that is, except tax cuts for the rich, which must be extended, no matter how much red ink they create.
The point is that a large part of Congress — large enough to block any action on jobs — cares a lot about taxes on the richest 1 percent of the population, but very little about the plight of Americans who can’t find work. ...
What lies down this path? Here’s what I consider all too likely: Two years from now unemployment will still be extremely high, quite possibly higher than it is now. But instead of taking responsibility for fixing the situation, politicians and Fed officials alike will declare that high unemployment is structural, beyond their control. And as I said, over time these excuses may turn into a self-fulfilling prophecy, as the long-term unemployed lose their skills and their connections with the work force, and become unemployable.
I’d like to imagine that public outrage will prevent this outcome. But while Americans are indeed angry, their anger is unfocused. And so I worry that our governing elite, which just isn’t all that into the unemployed, will allow the jobs slump to go on and on and on.
"They do not," said Greenspan. ...
Speaking with PBS' Judy Woodruff, Greenspan expressed his opposition to passing legislation that would hold tax rates steady (under law the tax cuts Bush passed ten years ago are going to expire, thereby bringing rates back to Clinton-era levels). President Obama has pledged to continue the tax breaks for those individuals making under $200,000 and those families earning less than $250,000.
But Republicans want the entire package kept in place. Even so, they have declined to say how they would pay for it, saying, in part, that keeping the Bush tax cuts in place will pay for itself.
“…Nowadays in America, you have a smaller chance of swapping your lower income bracket for a higher one than in almost any other developed economy – even Britain on some measures. To invert the classic Horatio Alger stories, in today’s America if you are born in rags, you are likelier to stay in rags than in almost any corner of old Europe. Combine those two deep-seated trends with a third – steeply rising inequality – and you get the slow-burning crisis of American capitalism. It is one thing to suffer grinding income stagnation. It is another to realise that you have a diminishing likelihood of escaping it…
This little-remarked giveaway is the write off which the Internal Revenue Service allows every year for stock market losses: when net losses exceed gains, taxable income can be reduced by up to $3,000. This is "I-want-it-now" tax law and it turns a private loss into a hurry-up claim on the public purse. With the deficit soaring, it richly deserves repeal.
The same as now, capital losses could be written off dollar for dollar against capital gains. The same as now, losses could be carried forward indefinitely until they were wiped out. What the repeal would disallow is writing off stock market losses against ordinary income (which, as we shall see, was poor policy in the first place). ...
Roughly half of all Americans own no stocks, so losses in the market offer no tax advantages to them. While it's true that more people than ever do own stocks, most have their holdings in tax-sheltered retirement accounts; the write off doesn't help them, either. It turns out that the benefits flow entirely to a privileged minority: those well-off enough to have nonretirement investment portfolios. There's no defense for a tax break so skewed toward the affluent, especially one as gratuitous as this. And who picks up the tab? Like any other tax deduction, it's paid for by taxpayers in the aggregate; in this case, the many pony up to benefit the few. Far better for the Treasury, and better for tax fairness, if Congress shows some spine and calls a halt.
Both Mr. Geithner and the president hammered on the theme that administration policies point the way forward while Republicans would take the country back to the days of the Bush administration, and not just on tax policy. Mr. Obama told the labor leaders they must remind their members, “this election is a choice,” between “these folks who drove America’s economy into a ditch” and the Democrats who for 20 months have “been shoving that car out of the ditch inch by inch” as Republicans stood by. “And now we’ve finally got that car up on the blacktop there, about to drive, and they say they want the keys back. Well, you can’t have the keys because you don’t know how to drive,” Mr. Obama said, to laughter. ...
Mr. Geithner said even a temporary extension would be a mistake. In international forums, he has cited the tax cuts’ expiration as a major way in which the United States will begin reducing its projected debt. “The world,” he said, “is likely to view any temporary extension of the income tax cuts for the top 2 percent as a prelude to a long-term or permanent extension, and that would hurt economic recovery as well by undermining confidence that we’re prepared to make a commitment today to bring down our future deficits.” As stimulus, Mr. Geithner added, the $30 billion needed for a one-year extension would be better spent for more middle-class tax cuts, business investment incentives or aid to hard-pressed states.
So, what's the punishment these self-serving money manipulators can expect from Washington's arbiter of excessive executive pay? None. In a stunning show of soft-on-crime leniency, Feinberg declared that he will not even attempt to recoup any of the $1.6 billion the money-grubbers grubbed from us. Declaring that he thought shaming these bad boys was enough, Feinberg asked plaintively, "At what point are you piling on and going beyond what's warranted?"
Shaming them? They're Wall Street executives – they were born without the shame gene! Piling on? They imploded their banks, crashed our economy, got Washington politicos of both parties to save their jobs, paid themselves a looter's level of taxpayer booty, and now are getting a free pass to continue their flimflammery. Feinberg even refuses to release their names. Some shame!
If you rob a bank, the law hunts you down and throws your scrawny butt in jail to teach you and other robbers a lesson. But the lesson that Feinberg has given to America is that if you run a bank and rob the people, the law kisses your ample butt, giving you and others permission to find evermore-creative ways to keep stealing from us.
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