Later (not sure of the year) even the FHA was eliminated for newly-hired employees. It will take a few years, but eventually those retirees on the "old" plan will die off; those on the FHA will receive at most around $40,000 of "premium support" for insurance that can only be purchased from IBM; younger employees get nothing.
Excerpt from section 1.6:
Employees who meet the following age and service requirements can purchase post-employment IBM health care coverage through Access.
For this purpose, service counting toward this requirement would include a continuous period of employment with any IBM global subsidiary or affiliate. Rule of 65 examples:
Those who are eligible for Access can continue IBM health care coverage for themselves and eligible dependents by paying full retiree group rates. There is no time limit or maximum coverage period; however, election of coverage is a one-time enrollment opportunity.
If coverage is not elected within the specified enrollment period immediately following separation from IBM; or upon the depletion of our FHA (if applicable); or upon termination of Transitional Medical Program (TMP) benefits - if elected first; you are considered to have declined coverage and you waive the right to any future election of coverage. This applies to your coverage elections by plan type â€" medical, dental, vision. For example, if you elect medical coverage, but not dental or vision, you are considered to have declined the dental and vision coverage, and you will not be allowed to elect dental and vision coverage at a later date.
If you enroll in Access Only coverage, you may cancel your medical, dental or vision coverage at any time during the year, effective the first of the month following your request; however, you will not be allowed to re-enroll in the cancelled coverage (medical, dental or vision) in the future.
Upon the death of an Access Only participant, eligible survivors can purchase continuing coverage for up to 36 months.
==== end excerpt
In order to be "withdrawal eligible" and be able to use the funds in the FHA, you must meet the requirements in section 1.4.4, which are more restrictive than for Access Only:
* You must be at least age 55 with 15 years of service,
* You must have 30 years of service (at any age) AND have been at least 40 years old AND have had at least 1 year of service on as of July 1, 1999.
It should have said:
* You must be at least age 55 with 15 years of service,
* You leave IBM with at least 30 years of service, regardless of age, AND you were at least 40 years old AND had at least 1 year of service on as of July 1, 1999.
Cons: 5 years ago I would have give it 10 stars out of 5. My enthusiasm has been squashed since then by the cohort of so called "freezes": Education freeze, Q4 spending freeze, travel freeze, beginning of Q1 freeze, end of Q2 freeze etc.
Advice to Senior Management: We all know know even the largest businesses are struggling to keep relevant in this very fast moving world but there must be better ways to manage and grow a company than ONLY through cutting costs, and cater to share holders by driving up share value at all cost. I argue that this is a sure way to fail on the long term.
I would quit applying one size fits all business strategy in China and Europe and the same time in Australia and US. One global strategy is probably easier to manage but the company is wasting valuable resources down this road.
Adapt and be flexible and nimble learn from the start-up culture instead of over burdening and eventually choking and demoralizing valuable and highly skilled people with bureaucracy, over-regulation, ITIL, other overkill overboard management shackles etc. in the end rendering them ineffective and unproductive.
Capitalize on own technology instead helping the competition to gain more market share.
Really invest in people and empower them and motivate them and let them bring more legitimate and long term business.
Cons: I was a new hire. In hindsight, IBM is like any large consulting company. There is a high rate of turnover, and very little support/investment is given to their new staff. Managers care about the bottom line and how many hours you're able to log, and not whether or not projects are a good fit for you. The upward mobility requires you to be at over 100% utilization, as well as the ability for you to "sell yourself" within the company. This results in a lot of fancy terminology thrown around by people who may not know anything about the topic - i.e. "process improvement."
There is no work/life balance, but if you're young you can give a couple years here for experience. A band 6 should go to a band 7 in 2 years, but this really depends on whether or not you're able to BS well on your assessments, and whether or not your project manager supports that BS. Going from a band 6 to a 7, in the 2 years it takes you to get there, means a paltry raise and a new title - not much more to it than that. You'll also bill at different rates, so band 7s might have problems getting on a project where all they're looking for is a clerk.
Advice to Senior Management: Show your younger consultants that you care. Logging endless hours to improve your bottom line shouldn't be the only motivator. There is little to no accountability for senior management, other than the hours logged.
So kudos to Hank Kim, executive director and counsel of the National Conference on Public Employee Retirement Systems, for calling out the shoddy reporting on pensions for what it is: misguided and irresponsible. ...
Our country’s retirement crisis is serious stuff. Half of near retirees have no savings whatsoever. And this startling statistic has to do with the absence of pensions, not because of them. The real problem is that fewer and fewer middle class workers have access to defined-benefit pension plans, which are still the best avenue to retirement security.
Older Americans without pensions are nine times more likely to live in poverty. But it’s no secret that pensions are disappearing as corporations (and now increasingly public sector employers) have moved to 401(k)-type accounts. Still, this makes little sense. We have already seen the consequence when retirement risks are shifted to individual workers—and it’s not pretty. Ask anyone who was close to retirement before the last stock market plunge.
As Teresa Ghilarducchi of the New School for Social Research brilliantly pointed out, our approach to retirement—expecting individuals who are not professional investors to manage their own funds and not touch their savings during tough economic times—is ridiculous. This is precisely why it hasn’t worked.
I’m sick of corporate-backed politicians attacking the retirement security of the few workers who have it left. It hurts the middle class and economy at a time when they should be making sure that all Americans can retire with dignity. As Kim points out, addressing our retirement crisis means fewer seniors will have to rely on public assistance. And it also means more jobs will open up for younger workers because people can actually retire. ...
Who else has a role to play in solving America’s retirement crisis? The media. Instead of falling for the talking points of a corporate-backed Governor or right-wing “think tank,” they should better educate themselves on how pensions work. Ask tough questions of those who would move to a system that has failed millions of other Americans. How does forcing more workers into 401(k)’s with higher fees help the 1 percent? How does taking more away from middle-class public sector workers free up more taxpayer dollars for corporations? Ask those questions, and you just might be on to a more interesting story.
So why do we dread it so much?
Overwhelmingly, employees said they found decisions on their health-care benefits to be difficult because the information they are given is confusing and complicated, there is conflicting data and it’s hard to determine which plan is the right for them, according to the Aetna survey.
First — and this may sound obvious — don’t treat your open enrollment package like junk mail. Open it. Or go online and read through the materials provided by your employer. You will likely find tools to help you compare health-care costs, insurance plans or other benefits. Even if you aren’t planning to make any changes to your choices, look at everything that is being offered. The health insurance plan that has worked for you in the past may have undergone some major changes or service deletions. How do you know if you’ve got the best plan for you or your family if you don’t know what else is being offered? ...
Aetna has some additional tips to help during open enrollment. Go to www.planforyourhealth.com and look for “(Benefits) Decisions 2012: Top 10 Tips.” Here are a few of the tips, pulled together by Wendy Shanahan-Richards, co-author of “Navigating Your Health Benefits for Dummies” and national medical director for Aetna.
The two largest wedges of the retiree-related debt are health coverage for 32,000 Medicare-eligible retirees, representing a $440 million liability on its balance sheet, and the Survivor Income Benefit for 7,500 people representing a $510 million liability.
The Survivor Income Benefit, which Kodak quit offering in 1995, guaranteed that 30% of a retiree's pension annuity would get paid to a surviving spouse. It came at no cost to Kodak workers, unlike the related Joint & Survivor pension benefit, through which retirees could elect to receive less money monthly with the guarantee that a surviving spouse would continue to receive payments. ...
Kodak first targeted retiree benefits in March, when it proposed eliminating the Medicare Advantage plant it provides to post-1991 retirees. The company yanked that proposal after objections from retirees and prodding by Gropper, with the end result being formation of a committee to represent retirees' interests in Kodak bankruptcy. That committee negotiated a settlement with Kodak that allows it to end its retiree health spending in exchange for $635 million in claims against the company. When Kodak emerges from bankruptcy, the money paid toward those claims will be put into a fund to help pay for future retiree benefits.
Corporations have been slashing pensions for decades, but such cuts are common now in the public sector, where retirement benefits were traditionally much better. In both cases, employers frequently reach for the same tool — preserve benefits for current employees but make severe cuts for new ones. ...
“We have a looming retirement-income crisis in this country,” said Diane Oakley, executive director of the National Institute on Retirement Security. “The problem is we won’t see the ultimate brunt of it until 30 years down the road when it is too late to do something about it.”
Young workers are having little or no say in any of this, but the changes will affect them most. ...
Blue-chip corporate giants such as IBM and Verizon are among those that have closed their traditional pension plans to new workers in order to limit future liabilities. Meanwhile, public workers in states from Rhode Island to California have seen pension promises scaled back as governments struggle to reduce debt. ...
Young workers “are starting later and more precariously than before,” said John Schmitt, a senior economist at the Center for Economic and Policy Research. “Imagine you are postponing your career three or four or five years, then afterward you spend 10 years drifting in and out of low-paying jobs without benefits. It could be that you are, relative to someone a generation older than you are, 10 or 15 years late pulling yourself together for retirement.” ...
Fewer than one in three workers had defined-benefit coverage in 2010, down from 44 percent in 1995 and 88 percent in 1983, according to the Center for Retirement Research. ...
The changes already are hitting retirees. Just 42 percent of people 60 and older had income from a traditional pension plan in 2010, down from over half in 2003. ...
The percentage of workers under 40 who said their retirement program was an important factor in accepting their jobs more than doubled between 2009 and 2011, going from 28 percent to 63 percent, according to a survey this year by Towers Watson, a human resources consultant.
Among Fortune 1000 companies, only 11 percent still offer a traditional pension plan to newly hired salaried workers, down from 14 percent in 2011 and continuing a long slide from 90 percent in 1985. Conversely, in 1985 only 10 percent of those companies offered only a defined contribution plan to salaried workers -- today that figure stands at 70 percent. ...
"The ongoing shift from [defined benefit] to [defined contribution] plans due to cost and cost volatility is helping to create a next generation of retirement-age workers who may not be able to afford to retire when they would ideally like to," said Towers Watson consultant Kevin Wagner in a statement.
As a result, older workers are delaying retirement, potentially clogging up promotional opportunities for younger workers and helping keep unemployment levels high for the younger generation. And this next generation is beginning to learn from the unfortunate circumstances of the current generation of retirement age workers.
"Interestingly, as this shift in retirement plans continues, other Towers Watson research shows that younger workers are finding DB and hybrid plans more appealing than DC plans," said Alan Glickstein, another retirement consultant at Towers Watson.
"The election removes what was really the last distraction from focusing on the job, which is to get millions of Californians enrolled in health coverage," said Peter Lee, executive director of the California Health Benefit Exchange, which was renamed Covered California last week.
The rule in question forces health insurance companies to become more efficient by requiring them to spend at least 80% of our premiums on medical care, not bureaucracy, salaries and profits. Those health insurance companies that fail and don’t meet the standards have to send rebate checks to consumers to make up the difference. $1.1 billion in rebate checks were sent out by insurers this year alone.
The health insurance lobby isn’t too happy about refunding consumers. They’ve laid on the lobbying in Congress for a bill to weaken the so-called "medical loss ratio" rule and let them spend more money on overhead and less on actual health care.
"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.
While most of Peterson's cronies make no bones about their right-wing politics, Peterson really wants you to think of him as nonpartisan. Peterson is definitely a conservative, but through his billion-dollar-endowed Peter G. Peterson Foundation, he has made a gargantuan effort to present himself as a friend of both sides of the aisle. Peterson has given grants to conservative think tanks such as the Heritage Foundation and the American Enterprise Institute. But he has also given grants to the likes of the liberal Economic Policy Institute, and Peterson's foundation has brought the likes of Bill Clinton to its fiscal summit. ...
By attempting to present himself as nonpartisan, Peterson has been able to set our nation's agenda. Both Democratic and Republican politicians are being told by their sources of information that Social Security needs reform, so Social Security reform has, of course, become a big political issue. Peterson isn't exactly throwing handfuls of money at grantees and yelling, "Tell everyone we have to reform Social Security!" But he is making his priorities our priorities. As Michael Hiltzik puts it in his article "Unmasking the most influential billionaire in U.S. politics," "Peterson's influence in national politics stems largely from his ability to make his interests appear eclectic and nonpartisan." Peterson declined Hiltzik's interview request for the article.
One of Peterson's latest projects, the bipartisan Fix the Debt campaign, is spending millions to convince us all we need to take one for the team if we want to save Social Security. Fix the Debt proposes a gradual COLA decrease, as well as an increase in retirement age to 69 years old. Mitt Romney, by the way, champions this plan.
This sounds like a reasonable sacrifice to save Social Security, right? After all, if we don't do something now, we're going to lose it, right? Wrong. As of 2011, the Social Security Trust Fund had a surplus of $2.7 trillion. The Social Security Board of Trustees states that the fund will not be exhausted until 2033. And at that point, Social Security recipients will still receive 75 percent of expected benefits. But thanks to the efforts of Peter Peterson, we talk about Social Security as if we are going to lose it tomorrow. If you ask Peterson, the sky is indeed falling.
Do our "entitlement" programs need reform? Yes. If we continue our present course, we will run into trouble in a couple of decades. Is Social Security circling the drain as we speak? No. But Peterson wants you to think it is. If we believe this, we are much more likely to accept losing some of the benefits of the system we pay into every working year of our lives.
So it's weird that, when a Republican congressman asked a group of private equity lobbyists and industry executives a very basic question about one of the more problematic political elements of their business — namely, the favorable tax treatment given to private equity and hedge fund managers, who are allowed to treat the bulk of their fees as capital gains rather than ordinary income — the question proved to be a stumper.
According to the WSJ:
The meeting was led by Ken Spain, a vice president at the industry association who once worked for the House Republicans' campaign arm where he helped elect Mr. Gowdy, among others.
Mr. Gowdy focused on the primary political problem facing the industry. "When someone stands up at a town hall and asks why private-equity managers are paying a lower tax than them, what do I say?" he asked.
The private-equity executives didn't have a succinct response.
It could be that private equity professionals have a hard time defending the carried-interest loophole because, as industry heavyweights like CalPERS CIO Joe Dear and venture capitalist Marc Andreessen have said, it's basically indefensible. (Essentially, if you want to avoid admitting that it's a gift given through the tax code to wealthy buy-side managers that politicians are afraid to rescind for fear of losing campaign contributions, you have to mumble some stuff about incentivizing investment and putting personal capital at risk and then change the subject quickly.)
Extending the estate tax cut would benefit the estates of the wealthiest 0.3 percent of Americans who die in 2013 — about 7,000 people. Ending the tax credits would hurt some 13 million working families, including nearly 26 million children, many of whom live at or near the poverty line. ...
The winners would be the few and the wealthy: the Tax Policy Center has estimated that the estate tax breaks save wealthy heirs an average of $1.1 million per estate, compared with the 2009 estate tax law. The losers would be the many and the hard pressed: a married couple with three children and earnings at the estimated poverty line ($27,713) would lose $1,934 in tax credits in 2013, according to a study by the Center on Budget and Policy Priorities. ...
The heirs of the wealthiest people in America do not need continued tax breaks, nor can the nation afford the giveaway. Low- and moderate-income working Americans need all the help they can get. That is not the way Republicans see it, but that is the way it is.
The story, as you may recall, is that the financial industry — having brought both itself and the rest of the world to the edge of disaster — was bailed out by taxpayers. Yet far from being grateful, top financial types were furious at Obama for occasionally hinting that some of them might have misbehaved a bit. And investment bankers — who normally lean Democratic — went overwhelmingly to the other side, pouring cash into Mitt Romney’s coffers in the no doubt correct expectation that a Romney administration would dismantle financial reform and treat their wealth with the adulation they believe to be their birthright.
But Romney lost and Obama won. The limits of their power have been cruelly exposed, and the reelected president now owes them nothing. Did I mention that Elizabeth Warren is going to the Senate — a Senate that will be substantially more progressive and less Wall Street friendly than before?
Bad move, guys.
Romney’s election-night event was in a ballroom at the Boston Exhibition and Convention Center that could accommodate a few hundred. Most men wore jacket and tie; women donned dresses and heels. Secret Service agents blocked reporters from mixing with the Romney supporters as they sipped cocktails and nibbled canapes.
Outside the ballroom, waiters in black tie tended bar, and Jumbotrons showed the election results on Fox News. Downstairs, Romney’s big donors assembled in private rooms for finer fare; guards admitted only those whose credentials said “National Finance Committee.” ...
Romney had spent nearly two years, and hundreds of millions of dollars, trying to convince Americans that he wasn’t an out-of-touch millionaire unconcerned about the little people — that he was more than a caricature who liked to fire people, who didn’t care about the very poor or the 47 percent who pay no income tax, who has friends who own NASCAR teams. ...
On election night in 2000, George W. Bush hosted an outdoor rally for thousands in Austin. In 2008, Barack Obama addressed a mass of humanity in Chicago’s Grant Park.
Then there was Romney’s fete — for which reporters were charged $1,000 a seat. The very location set the candidate and his well-heeled supporters apart from the masses: The gleaming convention center, built with hundreds of millions of taxpayer dollars, is on a peninsula in the Boston harbor that was turned into an election-night fortress, with helicopters overhead, metal barricades and authorities searching vehicles. Only a few gawkers crossed the bridge from downtown to stand outside.
“Obama’s vote percentage declines in straight line fashion as income rises. He got 63 percent of the votes of Americans making less than $30,000 and 57 percent of those making between $30,000 and $50,000. Above $50,000, the Other America kicks in. Romney won 53 percent of the votes of Americans making between $50,000 and $100,000 and 54 percent of the votes of Americans making above $100,000.” ...
What does it mean? For starters, it means that struggling people have seen right through the faux populism of the GOP, and they know that between the two parties, the Democrats are slightly more likely to stand up against the dangerous income inequality, wage depression and shredding of social safety nets the Republican Party has embraced. And it means that the Occupy Wall Street movement has enhanced awareness of a system that redistributes income toward the top -- the 99 percent know it, and so do the rich. ...
The president should heed the message voters sent as negotiations for a so-called “Grand Bargain” (what white-collar criminologist Bill Black has more properly called a “Grand Betrayal”) heat up in the face of another phony crisis meant to give the fatcats a new shot at redistributing income upward. ...
As Nobel Prize-winning economist Joseph Stiglitz argues in his most recent book, The Price of Ineqality, the continued redistribution of income toward the rich is not only immoral and a cause of social unrest, it is economic stupidity. The economy is weakened when people don’t have enough money in their pockets to buy what they need. To use the excuse of the recession and phony crises in order to rob Americans is nothing short of criminal. The working people who elected Obama did not cause the financial crash. They have been squeezed and squeezed in the last four decades to the point of desperation. They deserve a break.
Memo to Obama and the Congress: You have a mandate from the hard-working people of this country not to bargain away their health, their dignity and the retirements they have earned. The social safety net in the United States is already woefully meager compared to other industrialized countries and already makes us look mean-spirited and uncivilized to much of the world. To further reduce it will be another step toward turning a once-great nation into a third-world country of barbed-wire fences and people with nothing left to hope for. The people have elected you. They will not silently stand by in the face of a hold-up.
Keep your eye on the pea. It’s under one of the shells. Watch me shuffle them around. The very next time I talk about it, FEDERAL has disappeared. So has INCOME. All that’s left is TAXES.
Then I will say, “Almost half of all Americans, about 47%, don’t pay TAXES.”
That statement is completely false.
We all pay taxes. If we’re working, we pay in for Social Security and Medicare. Every time we buy something we pay sales tax (except in Montana, New Hampshire, and Oregon), usually between 4% and 7%. Local sales taxes run from 0% to 8%. There’s always a special tax on gasoline, 18.4 cents federal, plus state taxes, coming to an average of 48.9 cents, going as high as 69.4 cents. If you own property, you pay property taxes and school taxes. If you rent, the landlord passes those costs on to you. Forty-three states have income taxes, seven of them have a flat tax, and some of those vary by locality. ...
Laurence J. Kotlikoff and David Rapson, Boston University economists, did a study for the National Bureau of Economic Research.
It said, “A 30-year-old couple earning only $20,000 a year has a marginal tax rate of 42.5%, while a 45-year-old couple earning $500,000 pays at 43.2%. …” There are several odd points which step outside this range, but basically, “the average marginal tax rate on incomes between $20,000 and $500,000 is 40.3%, the median tax rate is 41.8%, and the standard deviation of all of those rates is 5.3 percentage points. Basically, most of us pay about 40%, plus or minus 5.3 percentage points.” ...
Neither study deals with people like Mitt Romney, in the top 1/10th of 1%.
According to his Federal Income Tax returns, he made $21.7 million dollars in 2010, and paid three million in federal income taxes, just short of 14%. If we added in his other taxes, the way we did for everyone else, that would likely add only another one or two percentage points. He stops paying social security after $110,000, a pittance in relation to $21,700,000. He didn’t make Medicare contributions on most of it, because it was unearned income. Yes, he has a California beach house, a New Hampshire lake house, a Michigan lake house, and a Boston house, but how much can their real estate taxes be compared to their income? How much can they spend on food, clothing, Cadillacs, and horses? At a certain point, the income curve leaves the spending curve behind.
That has them paying about half what average Americans pay in taxes. Average working Americans – a couple earning $20,000 a year, for example – pays a rate two and a half times greater than what the Romneys pay. That’s the reality.
This election was a clear and unequivocal victory for the populist positions the president took on the campaign trail. Don't believe the hype: This was a great night for progressives, populists and agents of change. Our political system may be dominated by Big Money, but this was a victory for the 99 Percent. ...
Here are seven lessons from this election that have been under-reported, or overlooked completely, in all the media frenzy. They include Occupy Wall Street's victory, the Harold and Kumar factor, Harry Reid's big mandate and the fact that "socialism" sells.
An energy commodities trader, whose identity is unknown, spent over $60,000 at a private club in west London on Nov. 1, according to the Sun. While the exact reason for the outlandish bill is unknown, onlookers suspected the banker was trying to impress Academy Award Winning actor Benicio del Toro who strolled into the bar moments before the spending frenzy began.
The banker’s tab included two $2,600 bottles of Belvedere vodka, three $12,700 bottles of Dom Perignon champagne and $2,400 worth of Don Julio 1942 tequila. The late night escapade was fueled by caffeine--25 Red Bulls that cost $140, to be precise. The bill also included a tip for $8,000.
Nor was that all: They scored major gains in the states. Most notably, California — long a poster child for the political dysfunction that comes when nothing can get done without a legislative supermajority — not only voted for much-needed tax increases, but elected, you guessed it, a Democratic supermajority.
But one goal eluded the victors. Even though preliminary estimates suggest that Democrats received somewhat more votes than Republicans in Congressional elections, the G.O.P. retains solid control of the House thanks to extreme gerrymandering by courts and Republican-controlled state governments. And Representative John Boehner, the speaker of the House, wasted no time in declaring that his party remains as intransigent as ever, utterly opposed to any rise in tax rates even as it whines about the size of the deficit. ...
Because Republicans are trying, for the third time since he took office, to use economic blackmail to achieve a goal they lack the votes to achieve through the normal legislative process. In particular, they want to extend the Bush tax cuts for the wealthy, even though the nation can’t afford to make those tax cuts permanent and the public believes that taxes on the rich should go up — and they’re threatening to block any deal on anything else unless they get their way. So they are, in effect, threatening to tank the economy unless their demands are met.
Mr. Obama essentially surrendered in the face of similar tactics at the end of 2010, extending low taxes on the rich for two more years. He made significant concessions again in 2011, when Republicans threatened to create financial chaos by refusing to raise the debt ceiling. And the current potential crisis is the legacy of those past concessions.
Well, this has to stop — unless we want hostage-taking, the threat of making the nation ungovernable, to become a standard part of our political process. ...
Meanwhile, the president is in a far stronger position than in previous confrontations. I don’t place much stock in talk of “mandates,” but Mr. Obama did win re-election with a populist campaign, so he can plausibly claim that Republicans are defying the will of the American people. And he just won his big election and is, therefore, far better placed than before to weather any political blowback from economic troubles — especially when it would be so obvious that these troubles were being deliberately inflicted by the G.O.P. in a last-ditch attempt to defend the privileges of the 1 percent.
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