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Highlights—May 5, 2012

  • Business Insider, courtesy of Yahoo! Finance: IBM Tries To Screw Salespeople Out Of Commissions, Says One Who Just Quit. By Julie Bort. Excerpts: IBM has this grand plan to make shareholders happy by bringing earnings per share up to $20 by 2015. Sounds great, but it's really screwing up the company, several IBM employees have told Business Insider.

    The plan, dubbed Road Map 2015, was Sam Palmisano's brainchild. Palmisano was IBM's CEO until this year and he's still the company's chairman.

    Internally, employees are calling the plan "Road Kill 2015." The cost-cutting is getting so out of control that top salespeople are leaving the company en masse, they tell us.

    That's because IBM would rather screw them out of commissions than have them bring in big contracts, said one high-end software salesperson who called us the day he left the company. This employee has worked at IBM for over a decade and was a manager when he quit. He has moved to an up-and-coming cloud competitor.

    "I chose to leave just like there are droves of people leaving," the salesperson told us. "The problem came when Palmisano laid out our 2015 plan and everyone had to figure out how to make it work. People are micromanaged until they can't stand it anymore."

    He continued, "Every given year about two-thirds of the salespeople do not make their quota. But they plan it that way. Two-thirds of the people are OK making $100,0000 a year, and while that's a lot of money, I'm not in this to make 100,000 a year, I'm in it to make $250,000 to $300,000 a year," the ex-employee said.

    After the sale, IBM tries to get out of paying the commission, this person says. "It's in how they manipulate your quota and manipulate your payout rates ... which is sad. You would think IBM would pay them what they owe them, but they don't. After the sale, there's a huge money grab."

  • Business Insider: Laid Off IBM Employee Says The Company Is Blowing It By Cutting The Wrong People. By Julie Bort. Excerpts: Getting a job with IBM used to be the pinnacle of an IT career. Not so much today. IBM is trying to strategically reduce headcount, and has laid off nearly 2,000 people in 2012.

    It also suffers from a corporate culture of cronyism that is costing IBM dearly, a former employee told Business Insider.

    Note that in its last quarter, IBM's big services business, responsible for 57 percent of revenue, reported $15 billion for the quarter and grew a negligible 1 percent. But its profit rose 11 percent.

    These cuts are affecting the company's business:

    Poor project management is a big issue, the source says. IBM is routinely putting unqualified people into project management positions. "It's very hard to get promoted at IBM unless you know the right people," says the source. "People don't get promotions on merits or skills but on connections." For example, at Disney, IBM had "gone through five project managers and enormous staff transition" during its time there.

    IBM has laid off more than 1,800 workers in the U.S. and Canada, according to IBM employee watchdog group, Alliance@IBM. Lee Conrad, national coordinator, says that IBM seems to be specifically targeting older, or more experienced, higher paid workers and shipping jobs to cheaper labor overseas.

  • Business Insider: IBM's Offer To Older Workers: Either Take A Pay Cut, Or Risk Being Canned. By Julie Bort. Excerpts: Older IBM employees got a surprise e-mail today: an early retirement offer which asks them to cut their hours by 40% and their pay by 30% if they announce a retirement date of Dec. 31, 2013 or earlier.

    If it sounds like a bad deal, consider that it's better than the alternative: Just being fired unexpectedly. It's actually a pretty clever way to get older workers to share their knowledge before they go. ...

    Some employees believe that IBM is trying to trim its North American workforce by 75% and shift to cheaper offshore workers, an employee that spent 12 years with IBM and left last month told us. U.S. employees say that IBM is particularly targeting older and higher paid workers in its layoffs. ...

    Selected reader comments follow:

    • older than dirt on May 2, 9:05 PM said: I am an older employee who is looking at this transition to retirement offer. This is to the advantage of IBM and not to the employee. We are better off if IBM gives us the option to take a package. The fine print is that we must deliver satisfactory performance. Be real - has anyone ever work 40 hours as far as they can remember. We have likely been working 100 hours - nights and weekends. I have been working until 2-3am on weekdays and 6-7 hours on weekends.

      Have anyone ever heard the story about frogs that were thrown into a pot of water that was heated up slowly - and they got used to the heat and ended up all dead. So the analogy is that IBM has been piling us down with work over the years that we now accept as normal the crazy workloads, not the less because the culture is highly competitive with your peers, and lots of back-stabbing and grab for glory. So I am looking seriously at this offer, not because this is a good offer, but because it gives me a chance to leave the horrible cut-throat back-stabbing environment that is now IBM, and also the back-breaking work.

      IBM has not grown in terms of revenue for 5 years. And has become a place where there is not much job satisfaction other than the paycheck. And the comment by IM: "They should leave and make room for the rest of us to move up." is very symbolic of the cut-throat nature of the people left at IBM.

    • Time to go on May 2, 9:33 PM said: This transition to retire offer gives me an option to leave a cut-throat environment at IBM. I have been a high performer who have found that I have been discriminated against due to my age in the last 2-3 years. It is no longer about doing your job well, but about managing up, attaching yourself to work of others, and taking credit for other people's work. Real work is for dummies. And no one has time for execution excellence by doing the detailed work. Managers and executives endorse this behavior because they in turn are managing up and in land grabs. This is called LEADERSHIP within IBM. And when the culture is land-grab, no value is placed on collaboration or doing work well (though we use the term collaboration a lot). Maybe there is a generation gap in terms of core values, between those who came of age after the 80's and those who came of age in the 60's and 70's.
  • Delusions of Adequacy: IBM Purging The Old Guard, More Unofficial Layoffs. By John Simonds. Excerpts: Any other company in this age of litigiousness would be suspect, perhaps for alleged age discrimination. Fortunately, IBM has been in enough lawsuits that the wording, terms and coercion are carefully crafted and legally reviewed……Heck, we couldn’t use the word monopoly in any press release decades after the monopoly lawsuit. ...

    This has the outward appearances of a Wall Street promotion. Stocks have a tendency to rise when companies announce anything tantamount to layoffs and as I detail later, IBM seems to be focusing on EPS more than innovation. ...

    Over 40% (48 I think is the number so almost 50%) of Systems and Technology Group (STG or the Mainframe group) are in this retirement category. That means those with all the knowledge of how stuff works is leaving. Sure there will be a lot of youngsters who can tweet, but veteran VLSI chip designers and circuit board layout engineers for the next Cloud server are gone. ...

    What happens when they accept the buyout? Nothing. That’s right, even for the most conscientious of employees, people are going to stop working with them so it is a vacation the rest of the year.

    You see, IBM is a place where you call around to get someone else to handle some or all of your work especially in an emergency (it always is when Ginni says get it done which gets thrown around in vain now). If first choice (the person in charge of the product) is not available, you move on to the next likely source until you get someone to take on the task. When you know a person is only in for 3 days a week, you stop going to them as the pressure is so high that to get your job done you will go elsewhere. This of course puts the burden on everyone else to do more with less knowledge, hence a job done worse or you get time back due to not enough people to hold the meeting. ...

    It all comes down to the 2015 EPS claim. IBM made a prediction that it will pay $20 EPS in 2015. I believe it will with this announcement. Older workers make more, have more costly healthcare and can’t be persuaded to work 100 hours a week as easily as millennial’s. You have to make sales, tough in this economy or cut expenses. Payroll (including benefits) is a big number on any company’s financials, so this is a good place to drop the knife. Nothing stands in the way of this number.

    They are going to buy back $7 billion in shares, get rid of expensive employees and cut to the bone any group that isn’t highly profitable and bingo, $20 it is tattooed on the backs of the employees known as Roadkill 2015. ...

    Who Gets Hurt. The Customer, period. Cut out the product knowledge and you have marketing messaging for your products (Smarter anything is the nom de Jour). You’ll see innovation suffer due to this talent drain. There are really smart people at IBM and I’m sure there will be more, just without the benefit of the person who blazed the trail). When you let the bean counters make the decisions for the future, cutting expenses is the goal. Perhaps, IBM will find the next Mark Zuckerberg to work for Big Data? ...

    Update: It seems that for those who qualify, this is a wildly popular program. It is a once in a lifetime (for most) to get paid to leave and work less in the transition while planning your retirement. There is some high fiving in the hallways knowing that the light at the end of the tunnel just got brighter. They say it’ll be one big long vacation for the old timers to end their career.

  • Computerworld: New IBM retirement program guarantees job through 2013. IBM says program is a 'unique' response to U.S. workers looking for ways to transition into retirement. By Patrick Thibodeau. Excerpts: In the letter to managers, IBM said that "a number of our employees with skills and knowledge critical to our success are at or nearing retirement eligibility." The new program provides managers with the ability to forecast their workforce needs and "to better plan for that transition." ...

    In an email response to questions from Computerworld, IBM spokesman Doug Shelton described the program as "rather unique."

    "It's an innovative program to respond to interest from US IBMers who have asked for ways to ease into transition. But it also helps IBM, as we now can better plan for their eventual retirement by preparing to build the skills that they take with them and/or hire behind them, where needed. And the program is totally voluntary," Shelton added. ...

    Selected reader comments follow:

    • OneLuckyIBMr: If anyone thinks that the "Transition to Retirement" workers will be working 3 day weeks, think again. I am sure that they will not have any control of their schedule so they will be working Mon-Fri every week, travelling and If they refuse, all the better, then they can just be fired outright.
    • nancy: I hope these retirees are able to leave right away. Tomorrow.
    • Richard Hung: Retiree boomer jobs are being backfilled by foreign workers. So much for the "skills gap". Again, there's no motivation for US students to study CS if they will be competing with foreign labor at significantly lower pay rates. IBM should not receive any tax breaks from the US guvmint for exporting jobs overseas, and should be taxed additionally to cover the unemployment benefits of the workers they will be dumping. They can try to make it look like they're doing the US a favor, but they're not, really.
    • hoapres The better deal would be for IBM aka Indian Business Machines to offer a severance package with the Americans working "proudly together" to train their H1B replacements to export the jobs to India. Give a years severance on January 1, 2013 leaving sufficient time to train the H1B replacements and give a full year of salary and benefits which would cover 2013. That is a much better deal of "working 60% of the time" for all of 2013.
    • Patty O'Furniture: In other words, IBM wants you to help them replace you with a visa holder and will even pay you 70% while you train your replacement.
  • WRAL TechWire: IBM early retirement plan protects takers from layoffs. By Rick Smith. Excerpts: Lee Conrad, the national coordinator for Alliance@IBM and a retired IBM employee, said he had received copies of the memo "from IBM employees." In the memo, IBM calls the program "Transition to Retirement." ...

    However, the memo says it’s not guaranteed that all IBMers who apply for the plan will be accepted. “This program is completely voluntary for IBMers, and as a manager, you have a say too,” the memo reads. “You can decline an employee's application based on established criteria driven by business need.” ...

    IBM has made cost-cutting and improvement in profit margins a stated goal under a “Roadmap 2015” plan.

    Roadmap or 'Roadkill'. Conrad, who leads the organization that seeks to represent IBM employees, ridiculed the plan. “It is a way to cut the work force and also give IBM an accurate count of how many will leave,” he said. “It appears the RA's have been too haphazard for them."

  • WRAL TechWire: IBM retirement plan reaction from a 'Dead American IBMer walking'. Excerpts: IBM's "Transition To Retirement" plan, which was disclosed Tuesday, has produced quite a bit of reaction. The comments section of the Alliance@IBM website is filled with anger, sarcasm, questions and more, but little in the way of positive feedback. What follows is a lengthy post from "Joe:"

    I am sending the original Transition to Retirement Email with my own annotated notes, each preceded by "Note:" -Joe-

    Dear IBMer:

    Note: Dear Dead American IBMer walking:

    IBM is pleased to notify you of your eligibility to apply for a one-time, voluntary program for IBMers in the U.S. nearing retirement. Called Transition to Retirement, it offers a gradual way to retire, with advantages for both you and the company.

    Note: IBM is pleased to notify you that it has found a way to quickly jettison even more American employees in a cost efficient way. It’s voluntary in so far as the employee has a month to decide, the decision is irrevocable once made, it’s a one-time deal and the employee has to agree to terminate their employment as of 12/31/2013.

    Note: Of course, we added an implied threat to the employee but we decided to list this as a benefit of the program.”you’ll be exempt from any resource actions that may occur during the Transition to Retirement period”. We borrowed this technique from the FBI practice of granting witnesses immunity from prosecution if they agree to testify.

    If approved to participate in the program, you’ll receive 70 percent of your current pay while working 60 percent of your current schedule. You’ll also receive the same benefits you do today, most at a full-time level, including health insurance and 401(k) Plus Plan automatic company contributions. Due to the experience and skills you possess and the business need to close the gaps your departure would create, you’ll be exempt from any resource actions that may occur during the Transition to Retirement period. You agree to retire on December 31, 2013 - or earlier, if you choose to do so.

    Note: This is actually a cost saving for IBM. Separation packages can cost money. For example, if you have an employee with 26 years employment and give a week’s salary for each year of employment when we fire said employee we are actually paying 50% of their salary for 0 days worth of work for a year. By comparison with this program we have the employee work at least 3 days a week and pay them 70% of their salary. But if you eliminate the separation package it could be as low as 1 day’s pay for 3 days work. Not bad. Huh?

    IBM is offering this program to address issues facing American businesses and employees alike.

    Note: IBM is offering this program to lower cost and reduce its American employees , specifically the older ones with higher salaries. We really do not care about American Business or American employees. The less American employees we have the better.

    In recent years, American workers, including IBMers, have been asking for ways to gradually ease into retirement – maintaining a certain level of pay and benefits while freeing up time to explore what to do in their next phase of life.

    Note: HR liked the above line so we put it in.

    At the same time, businesses, including IBM, want the ability to forecast when employees may retire so they can better plan.

    Note: This will allow IBM to fine tune future resource actions [layoffs].

    The Transition to Retirement program was designed to address these issues. We believe it balances the needs of our U.S. retirement-eligible employees with the needs of our business.

    Note: We believe it will be a cost efficient way to get rid of American employees.

    For you, it provides a way to scale back on IBM commitments so you can explore what to do when you retire, whether that involves a second career, volunteer work or other meaningful ways to fill your time.

    Note: For IBM it provides a way to scale back on it commitments to employees. We thought the “meaningful ways to fill your time” line was over the top but again HR thought it had a nice ring to it.

    For IBM, it provides advance notice of when IBMers will retire, giving managers time to work with their teams to identify key skills and knowledge, while maintaining commitments to our clients and the business.

    Note: For IBM it provides advance notice so it can replace an American employee with cheap labor. It also provides time for the employee to train the Global Resource.

    Financial planning and retirement resources – including MoneySmart seminars, individual coaching sessions and other programs -- are available to help you decide if Transition to Retirement is right for you. Much more information, including eligibility requirements, start dates, resources and application procedures can be found on the w3 Transition to Retirement for Eligible IBMers resource page.

    Whether you ultimately decide to participate, IBM encourages you to use the resources available to help you plan what you’ll do when you are ready for that next phase in life.

    Note: And that next phase in life may happen sooner than you think.


    Note: Again HR suggested it is always good to close with Sincerely.

    Randy MacDonald

    Note: “Cost isn’t everything. It’s the only thing”

    Senior Vice President, Human Resources

  • Yahoo! IBM Pension and Retirement Issues message board: "IBM's transition to retirement program" by "markeby". Full excerpt: IBM sent notes to (I assume) people that may be eligible announcing a 'Transition to Retirement Program'. In a nutshell it is (if you are approved to participate) starting in July you work 60% of the time for 70% of your pay. Most Benefits remain at full level. You are exempt from RA's and you must retire by 12/31/2013. I am looking for opinions, is this a first shot, and if you don't take this you will later get a forced to retire or convert your pension note. Thoughts?
  • Editor's note: The 8-page document explaining IBM's new "Transition to Retirement" program is available in the Files section of the Yahoo! IBM Pension and Retirement Issues message board, or you may download it from www.ibmemployee.com.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM's transition to retirement program" by "bitlerisvj". Full excerpt: Most people I know will probably not take it. Essentially, what you get to do is to work a 5 day job in three days (12 to 16 hour days) and get a 30% pay cut. At least most of the people I know would get that result. Also, there is the occasional off hours and weekend work as well. I suppose there are some folks where this may work out for them and they actually do get to work only 3 eight hour days. Someone almost ready for retirement may want this if they are in that kind of work category. I did not see anything about keeping the 5 week vacation either. Regards, Vic B.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM's transition to retirement program" by "leftymcgee". Full excerpt: Another thing to think about with this offer, many IBMers won't make it to their desired retirement date - we'll be RA'd waaaaaaay before that. I'll be lucky if my job lasts the year. The only problem I personally have is that I'm not eligible for my FHA until 2015 - which is probably a moot point, since I'll be laid off before that. As much as I don't trust anything that comes from HR, this may be a way for folks to reach retirement.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM's transition to retirement program" by Kevin W. Full excerpt: In discussions with others who got the notice today. We felt the following:
    1. It is hard to do our job in 5 days much less 3.
    2. We would have to force ourselves to work 3 days and just stop.
    3. If we don't then we are giving up the 30% for nothing AND.
    4. We are not doing what the program states it is designed for. Which is giving us a way to transition to other work.

    At this particular point, I do not think the program is in my best interests. It guarantees no RA during the period if you are accepted. Says nothing about not being fired for "non performance of duties."

    The suggested transition jobs bother me as they suggest Government jobs and/or nonprofits. Both of which are reducing headcount drastically even though they both need more. Right now unless they told me I'd lose my pension to some conversion scheme I don't see taking it.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: IBM's transition to retirement program" by "markeby". Full excerpt: I am 58 but I still have a daughter in high school (don't ask), my PBC's are very good and I am in the mainframe arena, so I would think my chances of hanging on till she graduates are decent (not great, just decent). I did a quick survey on a call today and about 50% of the mainframe skilled folks are eligible for this offer. I have a hard time accepting that IBM can really afford to let all of those folks go but 'it isn't Watson's IBM anymore' it must make sense to someone.

    All that said and based on the comments here I think I will have to say Thanks but no thanks. As someone said in one the responses it would be same amount of work for 30% less pay, and probably less vacation also. So if possible I will hold out for a package or the choice to leave when I am damn good and ready.

    Thanks for the responses, as usual there are some thoughtful well informed folks here. Mark.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Transition to Retirement" by "Tony". Full excerpt: And its not offered to people rated 3 or 4. So if you are on the ropes, you are on the ropes. If you take it you are 'RA proof ' too. It honestly looks like a good deal to me if I was ready to go in a year...3 day week. Good way to ease into it.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Transition to Retirement" by "ambassadoralvin". Full excerpt: I scanned the details and it appears that in the period 7/1/2012 to 12/31/2013 (1 1/2 years) you earn 105% of your annual salary for working 3 days a week instead of 5. If you don't get RAed by YE2012 then you have at least 6 months of full pay (7/1/2012 - 12/31/2012) plus whatever severance you qualify for...most of those sent the Transition to Retirement mailing qualify for 6 months severance. So that is the equivalent of 100% of annual pay, plus in a RA you get the Transitional Medical Program for up to a year (same plans as current employee medical plan) and perhaps you get unemployment (varies by state). So unless you think you are vulnerable in 2012, or want more time for yourself, then financially you will likely be better off taking a pass. This of course depends on the RA severance remaining as is.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Transition to Retirement" by "older_bassman". Full excerpt: While I'm already retired and have not run the numbers my gut feeling was the similar to what you came up with. I don't see IBM doing anything to help potential, or current for that matter, retirees.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: Transition to Retirement" by "willbefree25". Full excerpt: Their aim is to get rid of the old people by y/e 2013, claim the savings for the shareholders, and benefit from any other 'gotchas' I can't see. Where does it say a severance will be paid? I'll have to reread it. Try working 60% of your usual time if you're in Global Services. Go ahead, and let me know how that works out for you.
  • EE Times: GlobalFoundries, Infineon, IBM, ST linked to Indian fab plan. By Peter Clarke. Excerpts: More companies are being linked to the Indian government's plan to get one or more semiconductor wafer fabs constructed on the sub-continent. At least five chip companies have expressed an interest in supporting the project, according to a Hindu Business Line report.

    The five are: GlobalFoundries, Infineon Technologies, STMicrolectronics, Russia's Sitronics JSC and a consortium comprising Jaypee Associates, IBM and Tower Semiconductor Ltd., the report said without naming sources. Sitronics is the parent of Mikron JSC (Zelenograd, Russia), Russia's leading manufacturer of ICs.

  • Following are links to the articles in Bob Cringely's series on IBM:
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: willbefree25..." by "Kady". Excerpt: ...there has been an exodus of extremely talented sales management (promotions from being highly performing salespeople) and of consistent 110%+ sellers from the groups that I am involved in since the 1st of the year. When working conditions and pay suck, it's the best that go out and find better jobs, not the low-performing ones. The company with low comp and bad working conditions get stuck with the low performers, and THAT's when the bubble becomes at risk of bursting.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: willbefree25..." by "mel_zimowski". Full excerpt: My point is simply that IBM is continuing to reinvent itself in interesting ways. Further, IBM has become very adept at protecting and monetizing its intellectual property.

    Underperforming sales people are expendable, just like underperforming services people, engineers etc. I think all that participate in this forum would agree that IBM will not hesitate to replace these folks until they find replacements that meet the companies needs.

    Can't disagree with the fact that the IBM work environment is crappy. If I was a youngster coming out of Berkeley with all the latest skills and looking for my first high tech job, I'd be looking elsewhere. Having said that, the salaries in the high tech world are still much better than those in many other industries. In the 80s and 90s engineers in the Silicon Valley moved from company to company, working for whatever company would pay them the most. They didn't expect to be treated well, they had no company loyalty, and they didn't expect to stay at any one company too long. Unfortunately, as you note, IBM is just another choice much like Oracle and HP and countless others. Nothing lasts forever.

  • Yahoo! IBM Pension and Retirement Issues message board: "Re: willbefree25..." by "Kevin W". Full excerpt: In the technical ranks they are also enforcing a "skip" system. Doesn't matter how hard you worked, what results you achieved. If you were not tied to an opportunity that closed in this specific quarter you are in danger of being skipped from any sales commissions. Many people are assigned to long term deployments. Accounts that bought software and other technology for big projects in a prior year. Now being "stuck" in that account for the next couple of years, your pay will decrease and dry up. It also puts you on the bottom of the appraisal ladder and in greater risk of an RA. Not a good model, doesn't instill any desire to excel.
  • Yahoo! IBM Pension and Retirement Issues message board: "Re: willbefree25..." by "Kady". Excerpts: On your note, though, the exodus of good sales talent since the 1st of the year in my area has been rather remarkable. I did notice that open job postings on LinkedIn went WAY up after the first of the year.

    The reps I know who have left haven't done so because of overall comp. It's the beatings ("the beatings will continue until morale improves") and the archaic IBM compensation system --- other companies offer the same base salaries (or higher) than IBM, but unlike IBM, they don't cut that salary back because you're "on quota". We're in an inflationary world, and guaranteed comp becomes more important when your expenses rise.

  • Yahoo! IBM Pension and Retirement Issues message board: "Pension legalities" by "fhawontcutit". Excerpts: For those that don't know the history or may have forgotten, Ellen Schultz wrote about "how a single sentence paved the way to cash-balance plans."

    Companies were changing to these plans even though the legality of the conversions was being questioned. The Onan employees received a favorable ruling in a Tax Court case. The Onan employees were seeking elimination of the cash-balance plan's tax-favored status.

    Read the following article (PDF) for some background. As you read it, pay particular attention to the following: Richard Shea, Covington & Burling, and the ERISA Industry Committee.

    The problem for employers was that the plans appeared likely to be in violation of age-discrimination law, which forbids reducing the rate of pension-benefits accrual as a person ages. Cash-balance plans have that effect -- despite a more-or-less level annual rate of company contribution -- because contributions in the later years have so much shorter a time to grow by investment.

    But many professionals working on the plans figured they could convince the IRS that the age-bias-in-pensions law didn't apply to cash-balance plans. Their reasoning: The novel plans were intended to mimic savings plans such as 401(k)s, which aren't subject to rules on pension accrual.

    Others fretted. Hugh Forcier, a lawyer at the firm of Faegre & Benson, warned in an October 1990 memo to practitioners at consulting firms that he didn't think the IRS would agree -- nor that they could achieve "a legislative fix." He feared that cash balance plans would be found to violate the law and that the subsequent costs to employers could be "truly staggering."

    After reading the article take a look at the first quarter 2012 lobbying report: http://soprweb.senate.gov/index.cfm?event=getFilingDetails&filingID=ef25f5c2-199\ f-4b93-b596-58122de58449

    1. Registrant name: Covington & Burling LLP
    4a. Contact name: Richard C. Shea
    15. General issue area code: RET RETIREMENT
    16. Specific lobbying issues: hybrid regulations education
    17. House(s) of Congress and federal agencies: U.S. HOUSE OF REPRESENTATIVES, U.S. SENATE, Treasury - Dept of, Pension Benefit Guaranty Corporation (PBGC)

  • Glassdoor IBM reviews. Selected reviews follow:
    • IBM IT Consultant: (Current Employee) “Frustrating.” Pros: Good place to work if you don't want to have a personal life. Cons: Company no longer cares about it's employees. Advice to Senior Management: Start caring about your employees
    • IBM Member of Technical Staff: (Current Employee) “Do not come here.” Pros: Flexible scheduling, easy entry for entry level of career, awesome people to work with, decent health insurance and dental benefits, work from home during overtime or on-call schedule, IBM brand looks good on resume Cons: work-life balance replaced by work-life integration, you work all the time, poor documentation for servicing client accounts, low salary, management's treatment of employees, forced to work on all weekends, holidays, no life, lack of opportunities for career growth and advancement, insane work schedule - work some consecutive days and nights. Advice to Senior Management: You need to stop counting beans and start to think about welfare of your employees, reward your employees for hard work
    • IBM Software Engineer in Ottawa, ON (Canada): (Current Employee) “Challenging but pointless.” Pros: -Recognized world wide, still a symbol of prestige. -Lots of opportunities to switch within. -Starts off with good pay. -Will put you in challenging positions which is great for learning.

      Cons: -Lengthy, painful and often completely useless processes attached with every single thing. -Thousands of different initiatives. Not enough time to properly commit to any. -Very slow salary growth. Barely keeps up with inflation. -Not concerned with efficiency. -Ridiculous lack of commitment to goals and rapid switching around to new roles.

      Advice to Senior Management: -Stop coming up with a list of new plans every 3 months and actually commit to some solid definable goals. -Stop wasting the time of the average worker with mountains of useless information and processes and meetings and focus on what actually matters. -Give people time to learn and excel at what they do instead of rapidly switching around to increase "coverage". -In fact stop doing anything at all and people might do a better job by themselves.

    • IBM Senior Project Manager in Cambridge, MA: (Past Employee - 2012) “Once great but has changed significantly to attain their road map.” Pros: Bright and intelligent people that do a lot of great things. Resources available to learn about new products and services IBM technologies are used globally and are transferable to any industry if you know your stuff. Flexible Work at Home environment and tools to do the job.

      Cons: 2015 Roadmap will produce only more and more layoffs in US. Business Model is unsustainable for long term US employees. IT support Model is all off shore replacements. Below market/industry pay for more senior level jobs.

      Advice to Senior Management: Constantly looking over your shoulder asking if its my turn is not a model to retain and produce top talent. Its clear where things are headed.

    • IBM Market Manager in Denver, CO: (Past Employee - 2010) “Only went there because of an acquisition.” Pros: Big company, opportunities abound if you're willing to sell out. Cons: Big company, little security, lots of people hanging on - you have to use Lotus and open source products rather than industry leading because they're so focused on cost cutting even though its damaging productivity. Advice to Senior Management: We're people.
    • IBM Anonymous: (Current Employee) “In decline.” Pros: Immediate team/department is great. First line managers care. Many people are dedicated to doing a good job, despite difficult and demanding circumstances. Cons: Upper management is way too top-heavy, can't make decisions. Wasting tons of time "planning." Matrixed to death. Very difficult to move jobs within the company. Advice to Senior Management: 2015 road map is far too short-sighted. Need to look beyond earnings. Employees fear executives will plunder and get rich while driving company into the ground. US morale is low.
    • IBM Advisory Software Engineer in Los Angeles, CA: (Current Employee) “work/life balance.” Pros: Overall IBM is a workplace where life and work are well balanced. The management is professional and friendly. The technology is new if it's not the most cutting-edge. If you're a person who thinks that life is equally or more important than work. IBM is an ideal place to work.

      Cons: Career growth is not obvious to everyone. Unless you're quite aggressive. It takes longer time than other hyper companies for you to advance. Plus it's lagging behind in providing competitive compensation than those new companies. As a software developer, another thing I don't like is that the company's budget control is so tight, I cannot get my laptop, my supposed major workstation upgraded in 5 years. It's already an useless junk. Now I'm using my personal computer for company's work. That's right! I'm subsidizing the company to perform my daily job.

      Advice to Senior Management: 1. Don't let a small thing (like the out-dated workstation) can seriously demotivate a worker. 2. Provide competitive compensation so that the worker won't feel she/he can be valued more somewhere else.

    • IBM Anonymous: (Current Employee) “Not the IBM from 5 or 10 years ago.” Pros: Work with highly talented people, many who are leaders in the industry. Exposure to enterprise projects at a scale rarely found in other companies. Cons: Uncompetitive pay. Significant shift of workforce to India and China. Low morale due to repeated layoffs and poor compensation practices in the US. Advice to Senior Management: Return to the roots of IBM as a great US company. Focus on retaining US talent and providing high levels of service using a different model that does not depend so heavily upon the current labor rates in India and China.
    • IBM Managing Consultant: (Past Employee - 2010) “Waste of time.” Pros: Serious research-based products, opportunity to work with cutting-edge technologies, good fit for passengers looking for a free ride. Cons: Bureaucratic atmosphere, opaque management style. Advice to Senior Management: Try to translate more of your amazing research into real products. Stop shilling WebSphere and Maximo as solutions for every piddling little customer issue.
    • IBM Product Line Management: (Past Employee - 2012) “If you get acquired, be afraid...be very afraid.” Pros: Schedule flexibility. Access to some very smart people at IBM. Easy to find people throughout the world The initial policies weren't totally stupid.


      • Misleading compensation practices. Hides behind "IBM Policies" in very confusing legal documents yet never tells you what you'll be paid until you get your first paycheck.
      • Nothing gets done because there's no leadership backbone and the 'matrix' environment allows anyone who wants to to say "no"
      • The company is run by legal and F&A meaning even if the matrix wasn't there...nothing would get done. Required a person 2 people from the CEO to finally approve $2,110 PO after 3 months to pay on an EXISTING obligation. Experienced this 4 times with similar low amounts and no one could have cared less.
      • No work/life balance, little to no management support and virtually zero recognition.
      • Completely screwed up the integration and caused massive system problems that slowed sales deals down for months and caused us to miss our annual numbers.
      • NO one addresses problems head on. Major initiatives are approved unanimously, including revenue, capital, and operating expense, yet no executive lives up to the commitment and pulls things back without regard to the business impact.
      • Leadership seems to live to put responsibility on someone besides them and readily accepts mediocrity.
      • Had no idea how to do a unique compensation plan which ultimately led to a massive turnover (30%+) of sales virtually gutting the potential of the business.
      • This company and job will go down as the absolute worst employment experience of my career.

      Advice to Senior Management: Either become leaders or leave. You are destroying what was once a good company. Initially, I believed you were people of your words; that your words and integrity meant something. The greatest disappointment was realizing that executive has virtually zero backbone or commitment to the business and questionable judgement. They are so far removed from the business (even though micro management is the order of the day) that, while they all "work" 60+ hours, nothing gets done and they can't push anything over the goal. I joined the company believing in it, I left jaded and disgusted after only 18 months. At the end of the day, I'm just another of the growing numbers of "A" Players walking away. Bye.

    • IBM WW SWG Small Deals Sales Leader in Irvine, CA: (Current Employee) “Great company to work for.” Pros: Career growth opportunities. Opportunity to manage significant business. Cons: Bureaucracy. Matrix and Overlay. Too many cadences, metrics and measurements. Advice to Senior Management: Focus equally on employee satisfaction and compensation as well as performance for the street
  • Alliance for Retired Americans: Friday Alert (PDF). This week's articles include:
    • Alliance Members Prepare for 2012 Elections at Southern Regional Meeting
    • Sign-Up Today for Alliance’s Northeast Regional Meeting
    • Romney Assails Obama Support for Labor
    • Rep. Ryan Says Budget Plan “Saves the American Dream”
    • Affordable Care Act Has Saved Seniors $3.4 Billion on Prescriptions
  • CBS MoneyWatch: Ford's retiree cashout: A trap for the unwary. By Steve Vernon. Excerpts: Ford Motor recently announced that it would offer a lump-sum payment to 90,000 salaried retirees and former employees in exchange for their voluntarily forgoing all rights to future lifetime monthly pension payments. Although other U.S. companies have made similar offers to former workers who had yet to start collecting their pensions, the auto giant's proposal to current retirees is the first of its kind for a major domestic enterprise.

    If enough retirees accept the cashout offer, Ford will reap significant financial benefits. First, it would reduce the volatility on the company's financial statements that results from its pension obligations. Second, Ford wouldn't need to pay premiums to the Pension Benefit Guaranty Corporation, the federally mandated organization that backs certain defined-benefit plans, on behalf of any retirees who accepted the lump-sum deal.

    Ford also would likely be able to extinguish its pension liability at below-market rates for retirees who accept the offer. To understand what I mean, consider a retiree who was receiving a monthly pension of $1,000 per month and took the cashout. If the lump sum were calculated according to the minimum amount required by IRS regulations, and if the retiree took the payment and bought an "immediate annuity" from an insurance company, he or she would receive less than $1,000 per month.

    The reason for the lower monthly payment is that annuity purchase rates that are prevalent at insurance companies today are higher than the amounts allowed by IRS rules for lump-sum cashouts. I demonstrated this in a recent post by showing that a fixed amount of money buys a higher monthly pension amount under federal tax regs compared to annuity amounts from insurance companies. Reverse this transaction and it costs more to buy a fixed amount of a monthly pension from an insurance company compared to the rates allowed by the IRS. I don't have access to the rates Ford will be using to calculate the lump-sum payments, but I'm guessing that they'll use the minimum rates allowed by under IRS rules. Conversely, it's entirely possible the company will use rates that are more favorable than the minimum required.

New on the Alliance@IBM Site
  • Letter to the President of the United States: Re: Reform of L-1B Visa “Specialized Knowledge” Definition (PDF). Excerpts: Dear President Obama: The U.S. Chamber of Commerce and 62 multi-national corporations sent you a letter on March 22, 2012 asking you to make it easier for them to transfer employees with “specialized knowledge” from their overseas offices to the U.S. The undersigned organizations urge you to reject their request to weaken the L-1B visa definition of “specialized knowledge,” because the change is not in the best interest of foreign or domestic workers.

    The L-1B visa gives employers access to a large labor force that has very few rights in the workplace. First, employers are not required to pay L-1B visa beneficiaries a minimum or prevailing wage. Workers are not in a position to negotiate better wages, because they can be easily fired, which renders them out of status and requires that they leave the country immediately. Second, the L-1B visa is not a long-term investment in the U.S. economy since only a small fraction of L-1B visa beneficiaries will be sponsored by their employers to stay in the U.S. permanently. The L-1B visa is really about businesses having ready access to a powerless, low-wage workforce.

    The L-1B visa also has a significant impact on U.S. workers. U.S. workers can be fired and replaced with L-1B visa beneficiaries. A report by the Department of Homeland Security, Office of Inspector General in January 2006 found “[t]hat so many foreign workers seem to qualify as possessing specialized knowledge [that it] appears to have led to the displacement of American workers.” Labor unions support the use of nonimmigrant visas for high-skilled workers, but also strongly support assessing the impact of work visas on the U.S. workforce.

    The L-1B visa is largely a black box. We do not know how many beneficiaries are currently working in the U.S., where they are working, what their qualifications are, and how much they are earning. We should have answers to these very basic questions and a thoughtful debate before the standard for “specialized knowledge” is weakened. ...

    Editor's note: I can attest that IBM abuses the L-1B visa program extensively. Before leaving IBM recently, most of my IGS projects were staffed with over 50% (and sometimes nearly 100%) employees from IBM India here on L-1B visas. The IBM India employees included program managers, developers, database administrators, business analysts, and others...hardly employees with "specialized knowledge." In fact, many of the IBM employees were newly hired into IBM India and their first IBM job was in the United States on an L-1B vista.

    Unlike the H1-B visa, which is more closely monitored, the L-1B visa program has provided IBM with a means to bring unlimited numbers of offshore employees to the U.S. to staff projects, instead of employing North American employees. It is a travesty.

  • Job Cut Reports
    • Comment 04/29/12: In case people haven't figured this out, "workforce rebalancing" (aka firings) are part of the regular business model for IBM now. Indeed, just listen to Mark Loughridge's Q/A with analysts on Q1. IBM plans to use the revenue from the store systems sale to Toshiba to continue to fund "workforce rebalancing" efforts. Which from the call was estimated to be between "$700 million, $750 million of workforce rebalancing charges" on top of the $225 million that was spent this quarter. IBM's sale of the Lenovo equity was used to fund last years layoffs. Just open the IBM transcript below and highlight "workforce" in your browser, you'll quickly understand the picture: international-business-machines-management-discusses-q1-2012-results-earnings-call -Enlightened in RTP-
    • Comment 05/01/12: I got the Transition to Retirement offer today. An interesting way to cut IBM's highest paid employees in the USA before 2015 without calling it an RA. Supposedly we can get 70% of our compensation for 60% work time. I will love to see how the 60% is calculated, since today I work 70-80 hours per week in a sales role. The info I read said that scheduling for exempt employees is to be mutually agreed by the employee and management, but could mean 3 or 4 work days per week. Now, I am pretty good with math so I noticed that 4 days per week is 75%, not 60%. Also, I see that stock options that are not vested at the time of retirement (no later than end of 2013) are lost. So I would lose out there as I do have some options vesting into early 2015. At least people on this plan are not eligible for RAs, and the benefits such as medical and 401K look pretty good. Link to details, for people with access to the IBM intranet: http://w3.ibm.com/news/w3news/top_stories/2012/05/cl_t2r_eligible.html (Editor's note: This link is not available if you are outside the IBM internal network.)
    • Comment 05/01/12: About the newly-announced plan to "allow you to retire" and "allow you to work 2/3 schedule" I was RAd. If you are close to retirement anyway, and if you live in America (born here, etc) you are on the list somewhere ANYWAY and when you are RAd they will bridge you to retirement. Also, do you really trust that your workload will be only 24 hours a week instead of 40? This kind of thing only works when there is a trust relationship between manager and employee. If you think you are safe from RA just because you accept this offer, who will enforce it if they decide to change the rules? Have they ever changed the rules before? JOIN the union. If you like to read this board it is worth the measly 10 bucks a month. -alreadygone-still-a-member-
    • Comment 05/01/12: I received the note about the Transition to Retirement. You work 60% of your hours (sounds like 3 days/week), get 70% of pay, and full benefits. It starts July 2, and you must retire by 12/31/2013. Also you are exempt from any RA during this period. For those who were contemplating leaving in the next couple of years anyway, this sounds like a pretty good deal. I am curious what people see as the downside here. -CJ-Roc-
    • Comment 05/01/12: This is to answer the person who said ...sounds like a pretty good deal. I am curious what people see as the downside here. -CJ-Roc-" You lose 1. Everything that is not part of a contract (since this is a gentleman's agreement and the union is not recognized by IBM). 2. Potential severance pay. 3. Potential opportunity cost of another full-time job that you would be able to find and work at if you had 40 hours to devote. 4. Unemployment insurance protection. 5. Your self-esteem when you find out that you will never be able to complete the scope of work you are responsible for in 60 percent of the time. 6. Potential promotions at IBM due to you being in the program. If your back is against the wall financially and you will be devastated if you were RAd in the next 12 months, AND if you get a written guarantee that under no circumstances would you be RAd, that would be my only reason for consideration). -RA targeted and hit-
    • Comment 05/01/12: It is a way to remove older employees from the payrolls. They cannot do that with an RA where they have to prove fairness. Not sure what this buys people who are retirement eligible which is one of the criteria. No severance and no unemployment. I would spend less time understanding their email/memo and consider what a Union could offer. -No advantages-
    • Comment 05/01/12: How many of you "older workers" are going to fall for this? Some of you work on call shifts supporting clients. Do you really think your hours will end after your 3 days if there is an outage at a client site? -Out in 07-
    • Comment 05/01/12: This has another major disaster all over it. 60% work reduction is subjective. It really means you will do 100% of the work in 60% of the time. Ratings, only one more, will be based on 100% of work, not 60%. Not that it matters much at that point. For me, it just means more work, more hours, less pay, less appreciation. If I could leave now, I would be looking. I am stuck for another 18 months. -ConfusedandConcerned-
    • Comment 05/01/12: putting you out to pasture...keeping you until the end of 2013 is probably cheaper for them at 70% salary than paying severance to all the long time IBMers by RA. They know most people will still put in a full days work, so the 60% hours is no bargain. -nonsense-
    • Comment 05/02/12: This new retirement bridge is apparently for the last of the people eligible for the old plan. For the rest of us, there is nothing at 30 years. Whether we leave at 30 years or 29 years is irrelevant. So, this is only a deal for those eligible for the old plan who have 29 years and who are biting their nails, hoping to stay employed through 2013. If I were in that boat, I would jump on this deal immediately because I bet those who don't will be targeted for RA, and at that point, there will be no bridge. -Anonymous-
    • Comment 05/02/12: The down side? Where to begin.. No severance pay, No unemployment, No vesting of the 7 shares of stock, No "3's" or"4's" can participate, The work load / schedule will not change ( if your doing 60 hr a week, you will continue that for less pay ) and No guarantee that the RA's for others will stop. The RC2015 now has a larger pool to Pee in. -ANON-
    • Comment 05/02/12: Here is my prediction: once USA employee ranks reach less than 80,000 IBM will start to spiral down like a bird that has been shot down. What I'm getting at is IBM will have a BAD quarterly report. Real BAD. Wall St. will be shocked even when they hear earlier before the quarter is up that IBM is taking all necessary actions to still be on their 2015 roadmap target. This critical mass number has not been reached yet. But it will happen. -nostradamus@IBM-
    • Comment 05/02/12: After talking with another ex-IBMer, I realized this Transition to Retirement must be targeting people on the old pension plan, which is based on your last couple years earnings. Thus, a 30% cut in your last couple years will reduce your pension. Even though I left the company, they still have an impact on my community. But I'm afraid the executive ranks won't rest until every last dollar is given to their pay packages. -ex-IBMer in Rochester-
    • Comment 05/02/12: -ex-IBMer in Rochester- Both the cash balance pension and old defined benefit plans have been frozen since 2008. IBM no longer contributes to them. No pension is reduced since it is already frozen at the 2008 amount. The enhanced annuity for retirement eligible also will not go down if someone opts for this plan. UNLESS IBM decides to modify this now. So that being said: The last couple of years, typically the last five to calculate the old pension base have just about all went away in the calculations. IBM want a hands count of who might be retirement eligible to use it for their gain and benefit, certainly not for the retiree eligible employee. IBM has an agenda here and probably a hidden one at that based on their recent Gerstner-Palmisano era. -Pensioned?-
    • Comment 05/02/12: What this does is allow IBM to tell the mainframe folks to train their Beijing replacements since they are retiring. When all is said and done IBM can claim they had no choice but to offshore the work as all of their experienced people opted to retire. -Anonymous-retiree-
    • Comment 05/02/12: Question: How many visitors of this board also go to the front page of the Alliance@IBM web site? How many have Twitter and/or Facebook accts? If you do and you come to this board and not to the front page, then you may be missing articles and updates about IBM and other news. Alliance offers plenty of information from their menu on the left column of the front page as well. Do your self a favor and give it a look. It's worth the effort. -AllianceVisitor-
    • Comment 05/02/12: That is too bad that if someone is told they only have to work 60% of 40 hours which is equivalent to 3 days a week, that they would actually work more than that. Part Time is Part Time, if you are told you are part time and work more, then you deserve to be put out to pasture. Take a stand, join the Union and stand up for your dignity. -Working-With-Blinders-
    • Comment 05/02/12: The T "RIP" plan (Transition Retirement Incentive Plan), notice the "RIP" part, does not appear to do anything for an employee who can last at least 3 more months at IBM. It would reduce the amount contributed to the 401K by IBM, 70% pay says you would only get 1,2% of current vs 2%). It says, "NO RA", but it does not say, "YOU WILL NOT BE FIRED for poor performance; If you cannot do your job, satisfactorily to your manager, in 60% of time, you may be rated a 3 or 3- (i.e. out the door)*** NOTICE THE NO 3's in the ELIGIBILITY requirement. (You could be reset to 70% and then fired and they save money.


      CONS: For IBM it gets rid of: the 26 weeks of severance, the $2500 retraining allowance, the 30 percent of your pay for 19 months = about 6 months, your 5 weeks of vacation pay they may have to pay you (if you hold on to it until December of 2013) and months of Unemployment you would be eligible for if you were fired. THE CONS beat the PROS unless you know how to fake working for a year and a half without being fired. KEEP OUT OF THE T"RIP" and you come out ahead, if you are within a year of retirement, NOW; You are probably ahead staying out, any way, if you are eligible for the plan. -NO_KY-

    • Comment 05/02/12: I am continuously amazed at what I read on here. When 2015 rolls around there will be very few people left in the US to get the stock and most of those will be marketing or minimum wage workers in the GDFs. PBC ratings nor value to IBM have anything to do with who is selected for RAs. I have known several PBC 1 Band 10s selected over the last few years. You should be working under the assumption that you will be RAd and working to organize now! -OpenYourEyes-
    • Comment 05/02/12: A more attractive Retirement Transition Program would be to have the folks work full time for the next 6 months, followed by up to a 12 month Bridge Leave Of Absence and a years severance (whatever gets the employee to retirement eligibility). That way they could still plan for work transition while respecting the long term employees. If they offered that I think they'd have people leaving in droves. Respect? I know...too much to ask these days right? -Glass_Half_Empty-
    • Comment 05/02/12: @-Stock Options- I should know better than you what options I have or do not have. I do have ISOs vesting into January 2015. I confirmed today that I would lose any of those options that are not vested as of Dec. 31, 2013 if I accept the Transitioning to Retirement plan. Another downside to the program--a big one, for me. -GettingTooOldforIBMsTaste-
    • Comment 05/02/12: They really have some set of big blue balls to insult their older, experienced US workers with this "program". Clearly it is saying you've overstayed your welcome, we want you to leave, good night and don't let the door hit you in the ass on the way out. Bunch of shmucks up there in Armonk. Frig you! We know you are reading this board. -sickandtired-
    • Comment 05/02/12: Once this "program" is complete, they will re-visit the number of people on the old pension plan that remain. They will determine if there were enough "volunteers" or not. When they decide it is not enough, they will make a very easy retirement decision: On day xx/xx/xxxx, if you are part of the old retirement plan and have not retired, your retirement accounts will be moved from the old plan to the new plan. It is a voluntary retirement date, but you will lose ~60% of your retirement if you choose to stay an IBM employee. The advantage of that program is that it is not an RA and cannot be considered age discrimination. It is going to be an optional work choice that leaves older workers no choice but to leave or face devastating retirement losses. -Anon-
    • Comment 05/03/12: 'Transition to Retirement', just another way for IBM to eliminate more of its US based employees, using a more PC form that will be accepted easier by the media. After 18 years of service with IBM, with PBCs of 1 or 2+ every year, the last year was rated as a 3 at year end with no prior notification/warning. Challenged it and reached the HR level of the process. Then received my RA notice and HR advised me not to continue with the challenge, that at age 61 it was better to go with the RA since the challenge would be denied because of the RA action. EEOC lawyer told me the same thing. That was a month ago and today I received a call from one of the IBM recognized contracting firms asking if I was ready to consider taking an assignment back at IBM as a contractor. Not ready to consider it yet, but may do just that at some point, after all no over40 hours/week to work, less stress. I also interviewed with one of the IBM customers and am at the 3rd level of interviews, they are looking for RA'd IBMers because they know we have all the inside scoop on how IBM operates and can be an advantage to them when it comes to the contract games played. Ironic but true. All's fair in today's world. -RA'd on 3/28-
    • Comment 05/03/12: For the IBMers on the cash-balance plan, and were close to 40 in 1999, you have a quasi-pension which gives you an annuity. Being retirement eligible when you leave IBM (or within one year of eligibility) does matter because as its written right now, there is a substantial bump in the annuity payments if you eligible (or 1 year from eligible). For a friend it made the difference between 11K a year and 18K a year. It's a small number of people who have this but worth saying as you plan your exodus or wait for your job loss. -Poughkeepsie Engineer-
    • Comment 05/03/12: What a scam this so called Transition to Retirement is. It is just a way for IBM to isolate and put a high percentage of older workers on known exit plan path which helps IBM in the continuing Resource Action process because they can't be held to age discrimination for the transitioning group. IBM can then go about their tried-and-true process of staying under the WARN act radar by homogenizing the remaining population, which would have fewer older workers - all the while, getting the same amount of work for a lesser payroll out of those gullible folks that took the bait. Nice try, IBM. -$20in15 Roadmap Roadkill-
    • Comment 05/03/12: Why is IBM offering this TRIP now? They could have offered this years ago and some employees close or eligible to retirement folks could have avoided an RA that befell them. Something really smells here. There is a hidden agenda that IBM is up to. -anonymous-
    • Comment 05/03/12: "Why retire for 50% pay when you can continue to work 50% of the time for 100% pay?" Not my words, but those of a very wise old fellow. Wise indeed... -gadfly-
    • Comment 05/03/12: Was on a VP level call, and the leadership team are already trying to game the 'transition to retirement' rules. If there is a major deliverable the employee can work extra hours and take the time off later (I.e. take a whole week off later). These friggin managers will work your a$$ off at 70% your current salary and won't bat an eye. There was an HR Partner on the call and he said NOTHING. Expect absolutely no support from the HR community (I think most people know they work for management) -Anon-
    • Comment 05/03/12: The Nautilus Program is now aggressively making the rounds again on GBS internal projects. Several on my team have been forced to take commercial GBS assignments that involve travel. They were told that refusal to accept the assignments is grounds for termination, meaning no severance package. How much worse is this going to get? We have RAs, "Pay cut retirement transition", and now this "Nautilus Project". It's very clear that IBM wants US workers to quit. -Anonymous-
News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • New York Times: In Hopeful Sign, Health Spending Is Flattening Out. By Annie Lowrey. Excerpts: The growth of health spending has slowed substantially in the last few years, surprising experts and offering some fuel for optimism about the federal government’s long-term fiscal performance.

    Much of the slowdown is because of the recession, and thus not unexpected, health experts say. But some of it seems to be attributable to changing behavior by consumers and providers of health care — meaning that the lower rates of growth might persist even as the economy picks up.

    Because Medicare and Medicaid are two of the largest contributors to the country’s long-term debts, slower growth in health costs could reduce the pressure for enormous spending cuts or tax increases.

    In 2009 and 2010, total nationwide health care spending grew less than 4 percent per year, the slowest annual pace in more than five decades, according to the latest numbers from the Centers for Medicaid and Medicare Services. After years of taking up a growing share of economic activity, health spending held steady in 2010, at 17.9 percent of the gross domestic product.

  • National Journal: Usual Suspects Not to Blame for High Health Costs, Report Says. By Margot Sanger-Katz. The staggering $8,000 per person that the United States spends on health care can't be explained by our aging population, our overuse of doctors and hospitals, our wealth, or our rates of smoking, according to a new report. ...

    Like the OECD itself, the Commonwealth Fund concludes that high health care prices are the major culprit. U.S. patients pay more to doctors, drug companies, and hospitals than patients in other countries. Other possible factors are our high rates of obesity and a possible tendency to overuse a few particularly expensive procedures.

    The report finds that the U.S. population is not nearly as old as many of its peers, so aging doesn't explain the costs. A smaller percentage of our population smokes, which should predict better health and less need for care. We actually have fewer doctors and hospital beds per person than the average country in the OECD sample. If national wealth predicted per-capita health care spending, the U.S. price tag would be $4,849.

    And we don't get better health outcomes in return for our extra dollars. The data show that the U.S. has middling results when it comes to many key health outcomes.

  • The Commonwealth Fund: Explaining High Health Care Spending in the United States: An International Comparison of Supply, Utilization, Prices, and Quality. By David A. Squires, M. A. Overview: This analysis uses data from the Organization for Economic Cooperation and Development and other sources to compare health care spending, supply, utilization, prices, and quality in 13 industrialized countries: Australia, Canada, Denmark, France, Germany, Japan, the Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the United States. The U.S. spends far more on health care than any other country. However this high spending cannot be attributed to higher income, an older population, or greater supply or utilization of hospitals and doctors. Instead, the findings suggest the higher spending is more likely due to higher prices and perhaps more readily accessible technology and greater obesity. Health care quality in the U.S. varies and is not notably superior to the far less expensive systems in the other study countries. Of the countries studied, Japan has the lowest health spending, which it achieves primarily through aggressive price regulation.
  • The Huffington Post: U.S. Leads Industrialized Nations In Health Care Costs, Falls Behind In Quality: Study. By Jeffrey Young. Excerpts: Health care in America costs more than in other industrialized nation and we aren't even getting the world's best care for our dollars, according to a new study. The United States spent $7,960 per capita on health care in 2009, the most of 13 industrialized nations in the Organization for Economic Cooperation and Development, reports the Commonwealth Fund, a research institution. That's almost three times the amount spent in Japan, which has the lowest expenses of the countries reviewed.

    Americans pay the highest prices for physician visits, hospital treatments and prescription drugs and get expensive diagnostic tests like MRIs at a higher-than-average rate. More Americans are obese, too, though the nation's population is younger than all the other countries but New Zealand and is the least likely to smoke cigarettes than people anywhere but Sweden, according to the report.

    Escalating prices for health care and high use of potentially wasteful, inefficient and unnecessary medical services are the main reasons for the rapidly escalating cost of health insurance, the growing ranks of the uninsured and the fiscal burdens of Medicare and Medicaid. Big price tags also lead Americans, even those with health insurance, to go without care they need.

News and Opinion Concerning the "War on the Middle Class"
Minimize "It is a restatement of laissez-faire-let things take their natural course without government interference. If people manage to become prosperous, good. If they starve, or have no place to live, or no money to pay medical bills, they have only themselves to blame; it is not the responsibility of society. We mustn't make people dependent on government- it is bad for them, the argument goes. Better hunger than dependency, better sickness than dependency."

"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.

  • NJ.com: N.J. politicians preserve own retirement packages while limiting new workers. By Jarrett Renshaw. Excerpts: If state Sen. Nicholas Sacco stepped down today as the assistant school superintendent in North Bergen, his 445 unused sick days would be worth $331,970. The parting check is so large that each North Bergen property owner would have to come up with $26.68 to cover the bill, among the highest payouts in state history. ...

    Then there are two veteran Jersey City police detectives recently elected to the Assembly who have compiled more than $225,000 worth of unused time in a city where the bill for these sort of paydays — derisively dubbed "boat checks," because the money would be enough to buy a boat — has forced officials to take out millions of dollars in emergency loans. ...

    Sacco and the other lawmakers who enjoy the generous perks that accompany their public jobs are part of fading breed in New Jersey, still being paid under a system that has been replaced by years of taxpayer-friendly reform in Trenton. The next generation of public employees can’t collect more than $15,000 in unused sick time and they are forbidden from cobbling together multiple jobs to boost their pension. ...

    In the past three years, the city has taken out $27 million in short-term loans to help make such payments to retiring city employees. Most of the money went to police officers and firefighters who fled the department as Trenton lawmakers weighed changes to their benefits, financial records show. At the same time, the police department has not hired an officer in more than three years to replace the 103 officers who have retired. And to balance the budget, Police Chief Tom Comey — himself in line for a six-figure payout — has shut the police academy and the community affairs department and trimmed the traffic control unit.

  • CNET News: Apple responds to tax criticism by highlighting job creation. Rebuttal comes in the wake of a report claiming the tech giant goes to great lengths to avoid paying billions of dollars in taxes. By Steven Musil. Excerpts: Apple responded today to criticism that the company goes to great lengths to cut its global tax bill by billions of dollars every year, trumpeting the "incredible number of jobs" it has created.

    The statement was in response to an in-depth report published yesterday by The New York Times that depicted Apple as a pioneer in developing ways to sidestep taxes and that claimed companies seeking to do the same have used its methods as templates. "Apple serves as a window on how technology giants have taken advantage of tax codes written for an industrial age and ill-suited to today's digital economy," the Times reported.

  • New York Times op-ed: Wasting Our Minds. By Paul Krugman. Excerpts: In Spain, the unemployment rate among workers under 25 is more than 50 percent. In Ireland almost a third of the young are unemployed. Here in America, youth unemployment is “only” 16.5 percent, which is still terrible — but things could be worse.

    In Spain, the unemployment rate among workers under 25 is more than 50 percent. In Ireland almost a third of the young are unemployed. Here in America, youth unemployment is “only” 16.5 percent, which is still terrible — but things could be worse.

    Let’s start with some advice Mitt Romney gave to college students during an appearance last week. After denouncing President Obama’s “divisiveness,” the candidate told his audience, “Take a shot, go for it, take a risk, get the education, borrow money if you have to from your parents, start a business.”

    The first thing you notice here is, of course, the Romney touch — the distinctive lack of empathy for those who weren’t born into affluent families, who can’t rely on the Bank of Mom and Dad to finance their ambitions. But the rest of the remark is just as bad in its own way.

    I mean, “get the education”? And pay for it how? Tuition at public colleges and universities has soared, in part thanks to sharp reductions in state aid. Mr. Romney isn’t proposing anything that would fix that; he is, however, a strong supporter of the Ryan budget plan, which would drastically cut federal student aid, causing roughly a million students to lose their Pell grants. ...

    You’ve probably heard lots about how workers with college degrees are faring better in this slump than those with only a high school education, which is true. But the story is far less encouraging if you focus not on middle-aged Americans with degrees but on recent graduates. Unemployment among recent graduates has soared; so has part-time work, presumably reflecting the inability of graduates to find full-time jobs. Perhaps most telling, earnings have plunged even among those graduates working full time — a sign that many have been forced to take jobs that make no use of their education. ...

    What the young need most of all, then, is a better job market. People like Mr. Romney claim that they have the recipe for job creation: slash taxes on corporations and the rich, slash spending on public services and the poor. But we now have plenty of evidence on how these policies actually work in a depressed economy — and they clearly destroy jobs rather than create them. ...

    A mind is a terrible thing to waste; wasting the minds of a whole generation is even more terrible. Let’s stop doing it.

  • The Daily Beast: Stephen King: Tax Me, for F@%&’s Sake! The iconic writer scolds the superrich (including himself—and Mitt Romney) for not giving back, and warns of a Kingsian apocalyptic scenario if inequality is not addressed in America. Excerpts: Chris Christie may be fat, but he ain’t Santa Claus. In fact, he seems unable to decide if he is New Jersey’s governor or its capo regime, and it may be a comment on the coarsening of American discourse that his brash rudeness is often taken for charm. In February, while discussing New Jersey’s newly amended income-tax law, which allows the rich to pay less (proportionally) than the middle class, Christie was asked about Warren Buffett’s observation that he paid less federal income taxes than his personal secretary, and that wasn’t fair. “He should just write a check and shut up,” Christie responded, with his typical verve. “I’m tired of hearing about it. If he wants to give the government more money, he’s got the ability to write a check—go ahead and write it.” ...

    Tough shit for you guys, because I’m not tired of talking about it. I’ve known rich people, and why not, since I’m one of them? The majority would rather douse their dicks with lighter fluid, strike a match, and dance around singing “Disco Inferno” than pay one more cent in taxes to Uncle Sugar. It’s true that some rich folks put at least some of their tax savings into charitable contributions. My wife and I give away roughly $4 million a year to libraries, local fire departments that need updated lifesaving equipment (Jaws of Life tools are always a popular request), schools, and a scattering of organizations that underwrite the arts. Warren Buffett does the same; so does Bill Gates; so does Steven Spielberg; so do the Koch brothers; so did the late Steve Jobs. All fine as far as it goes, but it doesn’t go far enough.

    What charitable 1 percenters can’t do is assume responsibility—America’s national responsibilities: the care of its sick and its poor, the education of its young, the repair of its failing infrastructure, the repayment of its staggering war debts. Charity from the rich can’t fix global warming or lower the price of gasoline by one single red penny. That kind of salvation does not come from Mark Zuckerberg or Steve Ballmer saying, “OK, I’ll write a $2 million bonus check to the IRS.” That annoying responsibility stuff comes from three words that are anathema to the Tea Partiers: United American citizenry.

    And hey, why don’t we get real about this? Most rich folks paying 28 percent taxes do not give out another 28 percent of their income to charity. Most rich folks like to keep their dough. They don’t strip their bank accounts and investment portfolios. They keep them and then pass them on to their children, their children’s children. And what they do give away is—like the monies my wife and I donate—totally at their own discretion. That’s the rich-guy philosophy in a nutshell: don’t tell us how to use our money; we’ll tell you. ...

    At the risk of repeating myself, here’s what rich folks do when they get richer: they invest. A lot of those investments are overseas, thanks to the anti-American business policies of the last four administrations. Don’t think so? Check the tag on that T-shirt or gimme cap you’re wearing. If it says MADE IN AMERICA, I’ll … well, I won’t say I’ll eat your shorts, because some of that stuff is made here, but not much of it. And what does get made here doesn’t get made by America’s small cadre of pluted bloatocrats; it’s made, for the most part, in barely-gittin’-by factories in the Deep South, where the only unions people believe in are those solemnized at the altar of the local church (as long as they’re from different sexes, that is). ...

    The U.S. senators and representatives who refuse even to consider raising taxes on the rich—they squall like scalded babies (usually on Fox News) every time the subject comes up—are not, by and large, superrich themselves, although many are millionaires and all have had the equivalent of Obamacare for years. They simply idolize the rich. Don’t ask me why; I don’t get it either, since most rich people are as boring as old, dead dog shit. The Mitch McConnells and John Boehners and Eric Cantors just can’t seem to help themselves. These guys and their right-wing supporters regard deep pockets like Christy Walton and Sheldon Adelson the way little girls regard Justin Bieber … which is to say, with wide eyes, slack jaws, and the drool of adoration dripping from their chins. I’ve gotten the same reaction myself, even though I’m only “baby rich” compared with some of these guys, who float serenely over the lives of the struggling middle class like blimps made of thousand-dollar bills. ...

    I guess some of this mad right-wing love comes from the idea that in America, anyone can become a Rich Guy if he just works hard and saves his pennies. Mitt Romney has said, in effect, “I’m rich and I don’t apologize for it.” Nobody wants you to, Mitt. What some of us want—those who aren’t blinded by a lot of bullshit persiflage thrown up to mask the idea that rich folks want to keep their damn money—is for you to acknowledge that you couldn’t have made it in America without America. That you were fortunate enough to be born in a country where upward mobility is possible (a subject upon which Barack Obama can speak with the authority of experience), but where the channels making such upward mobility possible are being increasingly clogged. That it’s not fair to ask the middle class to assume a disproportionate amount of the tax burden. Not fair? It’s un-fucking-American is what it is. I don’t want you to apologize for being rich; I want you to acknowledge that in America, we all should have to pay our fair share. That our civics classes never taught us that being American means that—sorry, kiddies—you’re on your own. That those who have received much must be obligated to pay—not to give, not to “cut a check and shut up,” in Governor Christie’s words, but to pay—in the same proportion. That’s called stepping up and not whining about it. That’s called patriotism, a word the Tea Partiers love to throw around as long as it doesn’t cost their beloved rich folks any money.

  • National Organization for Women: Social Security Panic Unwarranted: Report Sets Stage for Improved Benefits. Statement of NOW President Terry O'Neill. Excerpts: Trustees for the Social Security Trust Fund report today that the program can pay full benefits through 2033 -- three years less than projected in 2011, due primarily to the continuing high unemployment rate. As usual, we can count on Wall Street interests and the politicians carrying their water to proclaim that Social Security is going bankrupt. That's plain wrong. Social Security has an accumulated surplus of more than $2.7 trillion and can pay 100 percent of benefits for the next several decades.

    NOW suggests that with a number of modest adjustments to Social Security's financing, we can improve benefits and ensure adequate funds far into the future. Improvements are especially important for older women, who are poorer and face higher expenses in retirement.

    It is especially troubling to hear Wall Street demanding further steps that would dismantle the program. Remember, these are the very folks who drove the U.S. economy off a cliff in 2007, resulting in the main stress on Social Security's finances -- unemployment. The system's revenues have been reduced in recent years due to high unemployment; fewer people working means fewer workers paying into the system. This is nothing new. In fact, this situation has occurred 18 times since 1958 -- whenever a recession has shed thousands of jobs.

    As the economy improves and more people find employment, Social Security revenue will increase, allowing the trust fund balance to continue to grow. Safeguarding Social Security's financing is all the more reason for lawmakers to endorse projects that get people back to work and stimulate what is now a sluggish economic recovery.

    Unfortunately, conservatives in Congress have stood in the way of any major job stimulus effort. These are the same conservative politicians who have tried time and again to cut Social Security benefits or to privatize this highly successful social insurance program, risking nearly everyone's retirement in the hands of Wall Street gamblers.

  • Rolling Stone: Straight Talk on Social Security. By Jared Bernstein. Excerpts: Here’s what Social Security is not:
    • going broke;
    • a Ponzi scheme;
    • expected to stop paying out benefits in your lifetime;
    • bankrupting our nation or future generations.

    Here’s what Social Security is:

    • a critical source of income support for millions of retirees;
    • an elegant and binding intergenerational contract between yesterday's and today’s workforces;
    • a progressive social insurance program that efficiently provides a reliable, affordable, guaranteed pension to those past their working years.
    • a national treasure to be fiscally strengthened and carefully preserved for both today’s elderly and for future generations.

    Some of these facts may surprise you, but I can and will easily defend each one.

  • New York Times op-ed: Tanks, Jets or Scholarships? By Thomas L. Friedman. Excerpts: And so it came to pass that in 2012 — a year after the Arab awakening erupted — the United States made two financial commitments to the Arab world that each began with the numbers 1 and 3.

    It gave Egypt’s military $1.3 billion worth of tanks and fighter jets, and it gave Lebanese public-school students a $13.5 million merit-based college scholarship program that is currently putting 117 Lebanese kids through local American-style colleges that promote tolerance, gender and social equality, and critical thinking. I’ve recently been to Egypt, and I’ve just been to Lebanon, and I can safely report this: The $13.5 million in full scholarships has already bought America so much more friendship and stability than the $1.3 billion in tanks and fighter jets ever will.

    So how about we stop being stupid? How about we stop sending planes and tanks to a country where half the women and a quarter of the men can’t read, and start sending scholarships instead? ...

    I wish my government was giving more scholarships to Americans, but since we budget this money specifically for foreign aid, let’s use it intelligently. We can still give military aid — but in the right proportion.

    While in Amman, I interviewed some public schoolteachers at Jordan’s impressive Queen Rania Teacher Academy, which works with a team from Columbia University to upgrade teaching skills. We talked about the contrast between the $13.5 million in U.S. scholarships and the $1.3 billion in military aid, and Jumana Jabr, an English teacher in an Amman public school, summed it up better than I ever could:

    One is “for making people,” she said, “and the other is for killing people.” If America wants to spend money on training soldiers, she added, well, “teachers are also soldiers, so why don’t you spend the money training us? We’re the ones training the soldiers you’re spending the $1.3 billion on.”
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