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Highlights—October 19, 2013

  • Bloomberg BusinessWeek: IBM: Singing the Big Blues Again. By Roben Farzad. Excerpts: On Wednesday night, management had to fess up to sales falling for the sixth straight quarter and the company’s hardware business posting a loss. IBM’s much-ballyhooed shift to higher-margin software and services—the core of its turnaround story—is now being eclipsed by a slump in sales of servers and other enterprise hardware. The fast-growing emerging economies that were filling IBM’s business pipeline are now stalling; IBM posted its first revenue decrease in those markets in its history last quarter. The company’s shares, which have the second-biggest impact on the Dow Jones industrial average among the index’s 30 members, plunged 6 percent on Thursday and are down this year, compared with the broader market’s 20 percent runup.

    “We are taking action to improve execution in our growth markets unit and in the elements of our hardware businesses that are under performing,” CEO Ginni Rometty said in the quarterly statement.

    Red ink is splattered on IBM’s income statement. In the first nine months of the year, the multinational lost $713 million in its hardware business, compared with $253 million in profit in the year-earlier period. Chinese sales tumbled more than 20 percent. ...

    But while IBM took in more than $1 billion in revenue from cloud products and services in the latest period, that is a penny-ante contributor to its quarterly top line of almost $24 billion. And this comes as IBM is being investigated by the Securities and Exchange Commission, which is looking into the finances surrounding its cloud business. For all the challenges, IBM on Wednesday did stand by its goal of reaching $20 a share in earnings by 2015, up from $15.25 last year. And the company has $11.2 billion on its current share repurchase program.

  • Washington Post: IBM shares fall after sixth straight quarterly sales drop. Excerpts: IBM has reassigned the head of its growth markets unit, a person with knowledge of the move said, after a surprisingly steep drop in quarterly hardware sales in China prompted a 7 percent slide in share prices Thursday.

    James Bramante’s reassignment was first flagged during the company’s conference call Wednesday, when Chief Financial Officer Mark Loughridge said sales chief Bruno Di Leo would be taking over at the unit, which oversees growth markets for the company. IBM declined to comment, and the person with knowledge of the move did not say where Bramante would be reassigned.

  • Poughkeepsie Journal: IBM profit up, revenue sinks; hardware market goes soft. By Craig Wolf. Excerpts: Revenue was down by about $1 billion, falling 4.1 percent to $23.7 billion for the third quarter. Despite that, profit rose 5.7 percent to $4 billion, using generally accepted accounting principles, and earnings per share rose to $3.68, up 11 percent. ...

    The results show that the hardware segment still matters a lot to Big Blue, even though it’s a far smaller part than in years before services grew to be the biggest chunk. And hardware remains critical to the part of IBM that matters in the mid-Hudson, where thousands still work at its Poughkeepsie and East Fishkill plants.

    In September, 697 employees in those two Dutchess County plants were terminated in the biggest local downsizing in several years.

    It was part of a global reduction that IBM never put a public number on. The Alliance@IBM workers’ group documented 3,390 cuts in the United States.

    IBM took the $1 billion cost of those separations as a charge against earnings in the second quarter. Loughridge said the benefit of the staff reductions, which they call “workforce rebalancing,” will flow through in the coming quarters. Another strategy is new products in hardware, notably a Power 8 upgrade in servers aimed at better penetration into markets favoring Linux software. And the currency problems are likely to reverse, he said. ...

    Robert Djurdjevic, analyst with Annex Research, said in a note to clients, “IBM is continuing to shrink. And the stock market is finally starting to realize that there is no quick fix to its challenges.”

  • Annex Research: IBM Drops Like a Rock. Excerpts: One day after reporting disappointing third quarter results, the IBM stock dropped like a rock. As we write this, it is down nearly 13 points. Which means that more than $11 billion of the company’s value has been wiped out literally overnight. And not just IBM’s. We said that the Big Blue rip tide would likely drag down today some of its other fellow-dinosaurs in the Dow Industrials index. Which is down 55 points right now despite the good news of the day – the reopening of the US government – countering the IBM disappointment.

    In fact, this drop makes IBM Dow’s Worst Stock Year to Date. ...

    So Wall Street has only itself to blame. For, it refused to accept the reality of IBM’s slow-no growth business model (see Big Blue Feet of Clay). Over and over again. Until now. This writer’s empathy only goes to the gullible small investors who followed the bankers’ advice.

  • Seeking Alpha: IBM's Description Of Q3 Supports My Previous Bearish Articles. How Low Can The Stock Go? Excerpts: Here's Toni Sacconaghi on the conference call (Seeking Alpha transcript), as the second questioner:
    I wanted to follow-up on the first question bit more broadly. I understand some of the specific issues this quarter around China, but if we kind of step back and think about what's been happening with IBM. Over a longer period recently you've had six straight quarters were revenue growth has been negative. You've missed consensus revenue expectations for seven straight quarters.

    If it weren't for a huge tax benefit this quarter, it would have been a very significant EPS miss, which has occurred to IBM in the last couple of quarters and hadn't occurred in seven or eight years. So if we step back beyond the current quarter, we see a pattern of financial performance that is way out of whack with your historical model, lower revenue growth and operating profit growth that is dramatically lower but it's been buttress by tax rate and not including workforce rebalancing charge.

    So my simple question is what's changed in the last six or seven quarters? Has there been a - I mean, less of a focus on execution that had to deal with the change in leadership at the top? Are you seeing new secular forces? I think it's very easy to explain away a given quarter, but six, seven, eight quarters in a row begins to make a trend. And so perhaps you can try and address what you think is happening more broadly and whether we should be thinking about a financial model that is more like 0% revenue growth and something less than double digit earnings growth on a sustained basis.

    This is an extraordinary statement and set of questions. He summarizes my company-specific concerns expressed in my two Seeking Alpha articles on IBM. ...

    In any case, only the small retail investor is fooled by IBM trying to avoid highlighting in the press release that its earnings missed expectations except for a large unsustainable tax benefit. A straightforward press release would have had a different tone from the start. ...

    IBM keeps cutting R&D. How can it grow that way? Aren't these R&D cuts being done to enhance short term EPS growth? ...

    How many other great companies try to persuade investors that they will earn a certain amount of money some years hence? What IBM is doing with its 5-year EPS plans raises the question of whether it is overly influenced by publicists and bean counters rather than inspired innovators and builders. ...

    Conclusion: IBM's overarching focus on one metric, earnings per share, may have been a strategic error. IBM may have underinvested in future growth initiatives. Its multi-year policy of returning all its earnings to shareholders via dividends and share buybacks may have been well-intentioned. However, it may also reflect a company with diminished creativity, relying more on financial engineering than innovative hardware and software engineering than was optimal for its long run prospects.

    Selected reader comments follow:

    • All very accurate observations. IBM is now being run by career politicians and bean counters - the innovators and technologically savvy have long ago been fired/offshored with the few remaining being frozen in place by a horrible internal morale. Wall St. is waking up to the 'rest of the story.'
    • As a former employee, I agree with you completely. It takes years for bad morale to affect the quality of your products, and several more years for bad quality to affect sales.
    • Fatbaboon: As a shareholder, what I would find particularly irksome about this marketing spin, is that they are a huge repurchaser or stock. Why spend the year bullying up the price when you're going to repurchase $12bn for cancellation. It's unbelievably stupid. Paint the picture, warts and all, leave the stock do what it will and buy back 10% more shares.
    • Fatbaboon, if you are very concerned with IBM Investor Relations "spin" to the external audience, you can just imagine what IBM employees have been thinking about the "spin" presented to them. Is there any question why employee morale is so low?
    • DoctoRX, yep, you said right, sole focus on goosing EPS via financial gimmicks over many, many years, with total lack of focus on sales and long term strategic sales investment is a disaster in the making. The real question is: How many more companies are or will be in IBM's situation, having sacrificed sales and employee morale for profit?
    • I have no inside information on IBM but I did work there for 12 years in WW Software Sales. I retired in March 2012. IBM was great to me and I enjoyed working there BUT I saw the "bean counters" increase their influence over the years. First it was travel expense control, then increasingly arcane rules over sales commissions, then not paying overall compensation in line with competitors and finally watching competitors beat us because we were too slow to move to the cloud. Much of this was in order to meet the financial EPS engineering program.

      This strategy worked for many years but it now prevents any real growth. IBM must now transition into a growth company again or become another HP. It will be a hard transition but I believe they will make it. Next 1-3 years will be difficult IMHO

  • Seeking Alpha: The Info Tech Services Tipping Point: CIA Chooses Amazon Over IBM For Private Cloud. Excerpts: In this article I will discuss the vast significance of the announcement that the Unites States of America's Central Intelligence Agency, or CIA, chose Amazon over IBM for their private cloud service. ...

    Back when the contract was originally granted by the CIA in mid June 2013, The Register wrote this:

    The CIA picked Amazon over IBM for a lucrative government contract not because of price, but because of the company's "superior technical solution" - a view that contrasts with IBM's vision of itself as the go-to tech organization for governments. ...

    The CIA contract with Amazon will be viewed as a "tipping point." Many of the world's largest organizations with easy access to funds, tend to choose contractors based upon their reputations and proficiencies, rather than going with low-end cheaper vendors. IBM has greatly benefited from this tendency, because of their heritage as the bluest of the blue chips.

    One of the biggest concerns from organizations about cloud services is security and reliability. Large companies and government agencies realize that the price of allowing outsiders access to key intellectual property and state secrets, will greatly overwhelm any savings from moving to the cloud.

    Most people, including myself, thought that while Amazon could grow their cloud service dramatically by attracting smaller companies, large companies, and especially governmental agencies, would stick with their old IT service vendors, when they wanted to transition to cloud services.

    That Amazon won a private cloud contract from the CIA, and at a higher price, is a tipping point moment, in my opinion. Who knows more about security than the CIA? Who has one of the most sophisticated IT operations on this planet, outside of the NSA and the US Armed Services?

    IBM's legal maneuvers are enhancing and leveraging this tipping point event. Tipping points are enhanced as more people are exposed to information regarding the product or service in question. The more often people hear about something new and great, the faster the uptake.

    If IBM had said nothing about their contract loss to Amazon, then numerous articles, including this one, would probably not have been written.

    It appears to me that IBM is caught in Quicksand, in relation to the CIA cloud contract. The more IBM fights and maneuvers around, the faster they will sink. In other words, the more publicity that Amazon gets from the CIA contract win over IBM, the worse it is for IBM's reputation.

  • The Street: IBM's 'New Normal' of Mediocrity. By Richard Saintvilus. Excerpts: "Quicksand" was the best way I could describe IBM's (IBM_) recent revenue performance, which has been in a perpetual decline over the past couple of years. This is even though the company has spent well over $16 billion in acquisitions trying to escape its predicament. It hasn't worked. ...

    First, there's never been any evidence from IBM's management that it can effectively respond to Oracle in the enterprise or Salesforce.com in the cloud.

    Secondly, look at the degree to which rivals like Accenture and Tibco have won significant deals at the expense of IBM. The company is now getting attacked from all sides. Last but not least, there are now reports that the Central Intelligence Agency has bypassed IBM's cloud services in favor of Amazon.

    In response to these threats, IBM's management has maintained the standard "corporate speak," saying (among other things) "we're going after higher margin businesses." While this might be true, this strategy has come at the expense of higher revenue and market share. Not to mention investor confidence. ...

    In an effort to streamline costs and achieve its goal to deliver $20 in earnings per share by 2015, the company has been firing workers, while also shutting down portions of its hardware business that's been underperforming. To that end, management's profitability goals remain on track. For instance, while IBM did post a $350 million decline in gross profit, that the company was able to expand gross margin from 47.4% to 48% is nonetheless impressive.

  • Yahoo! Finance: IBM Selloff Makes It Dow’s Worst Stock Year to Date. By Chris Nichols. Excerpts: A disappointing revenue showing from IBM (IBM) had shares of the tech giant suffering through a dismal trading session Thursday, punishing the stock with an abnormally harsh decline seldom seen in its trading history. It also meant the Armonk, N.Y., hardware and software pioneer is now having the dreariest year of any stock in the 30-member Dow Jones Industrial Average. ...

    Shares of IBM are now down 7.8% for the year to date. That badly trails a 20.1% advance in the S&P 500 and the 17.3% increase in the Dow, of which it's one of the most influential members, owing to its high price level in what is a price-weighted index.

  • All Things D: Oracle Beats IBM to Become No. 2 Software Company by Revenue. By Arik Hesseldahl. Excerpts: Here’s another interesting change coming in the wake of IBM’s disappointing earnings report on Wednesday: The size of its software business has slipped enough that it has ceased to be the second-largest software company in the world by revenue. That honor now apparently goes to software giant Oracle. ...
  • Ich Bin Mehr Wert (Germany): Aktionstag zur Tarifrunde 2013: 1600 IBMerinnen und IBMer protestieren für guten Tarifabschluss! Google machine translation to English, Excerpts: Action for contract talks 2013: 1600 IBMerinnen and IBMers protest for good collective bargaining agreement! Resend the IBMerinnen and IBMers on 8 October 2013 a strong signal in the direction of German management. On the national day of action took part in the Berlin, Böblingen, Chemnitz, Dusseldorf, Erfurt, Frankfurt, Hamburg, Hannover, Mainz and Munich over 1600 Catching up to the protests organized by Verdi.

    Participation, the organizers' expectations exceeded at all locations, is an indicator of the mood of the IBM workforce in Germany. The traditionally high level of identification of employees with their company eroded rapidly. The lack of participation in the company's success has led in recent years to a collapsing acceptance of IBM employees for salaries and personnel policies of the IT giants. The fixation on shareholder value and EPS, which had been laid down in the five-year plans and roadmap Roadmap 2010, 2015, provide the basis for success of the company, the employees, for lack of understanding and frustration.

    Editor's note: The article has several photos showing hundreds of IBM Germany protesters. Over 600 participated in Böblingen alone.

  • Glassdoor IBM reviews. Selected reviews follow:
    • Too much politics & short term focus leads to low morale & a climate of fear” Senior Managing Consultant (Current Employee). I have been working at IBM full-time for more than 5 years. Pros: Great technology and innovative people. Cons: Senior Execs and Partners only care about short term targets and managing upwards. The concept of building and leading teams and motivating people seems to be alien to them. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Good place to start, challenging jobs but bureaucracy, politics and location rule career path” Financial Analyst (Former Employee), Austin, TX. I worked at IBM full-time for more than 3 years. Pros: -Good resume and experience builder. -Stability in career, work from home options.

      Cons: -Little to no annual raises; -Disingenuous regarding advancement through career based on locations; -"Drinking water from a fire hose", poor training and enablement; -Cumbersome and error-prone business intelligence/financial infrastructure; -No discernible company culture (team building events, happy hours, company clubs; -Salary in Westchester, NY (Finance HQ) not commensurate with cost of living; -Expectation to often work from home, often late with little/no bonus compensation; -No defined career path.

      Advice to Senior Management: Bring back company culture of former IBM halcyon days; stop touting EPS growth when talented employees are leaving in droves. Substitute some benefits for higher salaries and events/culture that will make employees excited to work for IBM. Be up front with new hires regarding their location and career path. Gallows humor and unproductive employees will be the result of continued fervent cost-cutting at the expense of company culture. Eliminated unnecessary and cumbersome financial systems and dashboards (i.e. COGNOS Suits, Lotus Suite). No, I would not recommend this company to a friend.

    • On my own free will left IBM after 15 years” Advisory Software Engineer (Former Employee), Research Triangle Park, NC. I worked at IBM full-time for more than 10 years. Pros: If you don't have a job. Cons: Benefits are costly—family $10K/year for health, dental with exposure to $24K/yr out of pocket. Raises are non-existent for most people. (Entire company delay). Bonuses are halved every year from the prior year. Entire 401k match is at risk every year if you don't stay till Dec 15th. 80% of IBMers are new in the past 5 years. IBM won't say how many full time USA workers there are. Advice to Senior Management: I would not recommend the place. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Safety revolves around passing audits.” Safety (Former Employee) New York, NY. I worked at IBM full-time for more than 8 years. Pros: They had some good rewards/incentive programs for employees. Cons: Most of the incentive programs and education budgets have been cut out. Raises and bonuses are postponed and often cancelled to make budgets. Advice to Senior Management: Appropriate raises and an occasional bonus is much more motivating than an occasional lunch. The reward system in place creates a competitive atmosphere that does not promote teamwork and most employees become frustrated when they continually go without the raises or bonuses that they are promised. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Associate Partner” Associate Partner (Current Employee), Denver, CO. I have been working at IBM full-time for more than a year. Pros: IBM has a huge knowledge base. You can virtually learn about anything, and any industry if you take the time to do so. Cons: IBM competes with itself. IBM has multiple products that solve the same problem. Multiple product/business lines compete with each other to get the same business. If you win business, then assume resource shortage. 0% growth opportunity. Advice to Senior Management:: Clean up the company. Internal competition, crappy airlines, cheap hotels, and a prorated $40/- stipend (lower than government) will not get you top talent. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Rewarding and challenging” Staff Software Engineer (Former Employee), Ottawa, ON (Canada). I worked at IBM full-time for more than 5 years. Pros: - Some very intelligent folks that will keep you on your toes. - Challenging work that is engaging - Professional culture, professional people, but still fun to go in to the lab to work. Cons: - Typical corporate red tape will be present. - Rating system encourages you to work with an underperforming team, or compete against your co-workers. - Global Resource business model isn't effective, but constantly pursued. Yes, I would recommend this company to a friend. I'm optimistic about the outlook for this company.
    • Stagnant compensation leads to talent loss” Technical Specialist (Current Employee), San Francisco, CA. I have been working at IBM full-time for more than 10 years. Pros: Lots of opportunities to work on exciting technology, as long as you're associated with a product division or field sales. Collaborative culture, not much backstabbing. A lot of techies willing to share. Have been able to travel worldwide. Cons: Company execs out of touch with field. Lawyers and accountants in driver's seat. No raises at all; a little direction given to 2nd line on down. Mushroom management at its finest. Advice to Senior Management: Be upfront with silly 2015 roadmap. Show linkage between ambiguous "exec speak" to actual actions that field could take. Yes, I would recommend this company to a friend.
    • Okay for a couple of years” IT Analyst (Current Employee), London, England (UK). I have been working at IBM full-time for more than 10 years. Pros: Brand recognition—everyone has heard of IBM. Good for your CV (but for the sake of your sanity don't stay too long). Cons: Minimal (usually zero) pay rises. Employee annual review (PBC) is an administrative nightmare. You're just a resource—only a line of someone's spreadsheet. Penny pinching all over the place. Too many inefficient processes. Advice to Senior Management: Free your employees from all the unnecessary process—especially PBC. Many other corporations have abandoned forced ranking because of its negative affect on employee morale. Why don't you? No, I would not recommend this company to a friend. I'm optimistic about the outlook for this company.
    • Good Experience - Not Worth Staying” Anonymous Employee (Former Employee). I worked at IBM as an intern for more than a year. Pros: Great experience, everyone loves putting IBM on their resume. I really liked everyone I worked with and it was fun while it lasted but I'm glad to be gone. Cons: Lack of pay and I feel IBM is focusing on cost cutting as opposed to revenue generation. Advice to Senior Management: Stop asking everyone to cut costs and focus on revenue. Yes, I would recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • IBM” Sales Specialist (Former Employee). I worked at IBM full-time for more than 8 years. Pros: Diverse opportunity, lots of different jobs. Cons: Little upward opportunity into executive ranks. Advice to Senior Management: Not even close to the IBM of old; all about the $, no sense of value in people; executives keep moving around despite incompetence. No, I would not recommend this company to a friend.
    • Bottom line surpasses care for employee” Anonymous Employee (Former Employee), Research Triangle Park, NC. I worked at IBM full-time for more than 10 years. Pros: Great teams, interesting work, unique opportunities. Cons: The corporation has gone from one of a leading edge technical company with incredible employer-employee relations to being just one of thousands largely interchangeable with each other. Advice to Senior Management: Did this for a long time; too small a cog in a wheel to garner any attention. To get any traction you must be a director or higher level. Much of management is running too scared to take on any autonomy Yes, I would recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Was a great company, not any more” Field Sales Engineer (Former Employee), Washington, DC. I worked at IBM full-time for more than 10 years. Pros:Management used to listen to employees Cons: Management doesn't listen to employees any more; just focused on quarterly targets. Advice to Senior Management: Listen to employees. No, I would not recommend this company to a friend.
    • Great co-workers, but the company is a decline” Anonymous Employee (Current Employee). I have been working at IBM full-time for more than 10 years. Pros: Worklife balance, strong, reliable smart co-workers and based on the group you are in, the ability to determine your work schedule. Cons: Bureaucracy, lack of respect for the individual, outdated technology and inability to make quick decisions. Advice to Senior Management: Listen to your people and really recognize they are the organization's best resource. No, I would not recommend this company to a friend.
    • Depressing place to work” Anonymous Employee (Former Employee). I worked at IBM full-time for more than 10 years. Pros: The people I worked with were great. If you can get into one of the hot projects like Watson is at the time I'm writing this, you might be successful. Hot projects don't stay hot for long though. Cons: The company is focused on the "2015 Roadmap". Nothing matters but getting EPS to $20.00/share. They'll fire as many people as the can and cut budgets to the bone to get there. In 2013 the 401k was changed to a once per year match. If you aren't employed on December 15th of the year you don't get the match. I ended up leaving for a new job in October 2013, so I get nothing. Advice to Senior Management: Forget the 2015 roadmap. Fight to make amazing products that business can't live without. You have amazing employees; instead of making them compete against each other, inspire them to make great products. IBM could be a great company again if upper management would get out of the way. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Bad company to start your career. Best for lazy people.” Technical Lead (Current Employee), Bangalore (India). I have been working at IBM full-time for more than 5 years. Pros: Vast Technology exposure. opportunity to learn new technologies also. Very flexible. Cons: No need to think about hike %, salary correction. Even though they do the market correction, it will be minimal to the market. All money is eating my senior level managers who do nothing. Actual developers, senior developers are struggling to leave. Advice to Senior Management: Remove all these matrix structure of managers who don't do anything and give more money to the people who works in the bottom level. Always think, if developers and senior developers are not there or then managers will not come into picture. No, I would not recommend this company to a friend.
    • Old and still traditional type of giant organisation” Senior Project Manager (Former Employee), Sydney (Australia). I worked at IBM full-time for more than 10 years. Pros: Allow working from home. Most of the external clients are very professional to work with. Cons: Poor leadership and management. Salary is super low. Promotion process is ridiculously hard for majority to go through and succeed. Advice to Senior Management: Don't be selfish. Be a positive leaders to support your workers, not just talk. Do this for the sake of "give back". No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Average Large Corporation” Software Engineer (Former Employee), Research Triangle Park, NC. I worked at IBM full-time for more than 5 years. Pros: It's a job. Not a fun or rewarding job, but it's a job. Cons: It's a job not a career. Little to no infrastructure. Cost sensitive to the point of silliness. It's more about looking busy than doing anything. Advice to Senior Management: Look for a better job. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Great company, lots of capability to help clients and very focused on delivery excellence” Associate Partner (Current Employee), London, England (UK). I have been working at IBM full-time for more than 5 years. Pros: Capabilities and focus on adding real value to our clients and the World CEO good vision and willingness to communicate very exciting research products. Cons: Some of the support services need improvement. Advice to Senior Management: Showcase labour saving process improvement and automation through internal practice Yes, I would recommend this company to a friend. I'm optimistic about the outlook for this company.
    • Very comfortable, good coworkers” Advisory Software Engineer (Current Employee), Austin, TX. I have been working at IBM full-time for more than 10 years. Pros: Coworkers are intelligent, enjoyable to be around. Good work/life balance—work from home as much as you need, just get the job done. Structured, professional management style. Cons: Company future outlook is bleak; constantly finding new ways to pare down our benefits. Does not pay to obtain certifications/education or to go to conferences. Upper management cuts jobs and expects deadlines to remain unchanged. Advice to Senior Management: For the love of God, you need to hire more developers. Surely you see customer sat slipping? What you should also see is a bunch of engineers who feel they have no voice, and stress themselves out trying to meet deadlines even though a chunk of their team just got fired. Similarly, be prepared to offer good talent more money to stick around. I've seen several coworkers who are among the best in their field, leave after IBM refused to make them a counteroffer. Yes, I would recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Not a good employer” Program Manager (Current Employee), Austin, TX. I have been working at IBM full-time for more than 10 years. Pros: Used to be a good company which cared about employees. Cons: Usually no pay raises. The market salary band/ranges used are not correct. Company looks out only for shareholders not employees. Employee morale keeps going down every year and nobody cares. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company.
    • Stuck in outdated practices, hiring too many people outside of US, all about profits, not people” Technical Editor (Former Employee), San Jose, CA. I worked at IBM as a contractor for more than 5 years. Pros: Looks great on your resume, nice coworkers, many people can work from home at least some days. Cons: They modify open source code and sell it for thousands, hire most people in countries other than the US but still claim to be a US company, and try to patch together products they got in acquisitions rather than truly innovate. They're staid, not in step with today's business, and they put profits before people. Also hire contractors for lower-level jobs, with no benefits at all, not even paid holidays, yet the agencies you're forced to work through take 35-40% of every dollar your earn as long as you work there. No, I would not recommend this company to a friend. I'm not optimistic about the outlook for this company
  • Glassdoor IBM Canada reviews
  • Alliance for Retired Americans Friday Alert. This week's headlines:
    • Budget Agreement Averts Immediate Crisis, but Threats to Seniors Still Loom
    • Alliance Chapters Protest Government Shutdown with Die-Ins, Other Tactics
    • Poll Shows Public Once Again Disapproving of Cuts to Social Security, Medicare
    • Medicare Enrollment Season is Here – is Your Current Plan Still the Best for You?
  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: spouse/family member under 65?" by "lefutrels". Full excerpt: I received a packet yesterday containing legal notices, along with a letter signed IBM Benefits Team. The letter contained some information about benefits for non-Medicare dependents.

    The letter started "We have enclosed legal notices for your review, one for you and one for your non-Medicare dependent(s), including the Notice of Creditable Coverage."

    The third paragraph states "The enrollment period for your non-Medicare dependent(s) will begin on Nov. 14 and end Dec. 6. During enrollment, you may review current health benefits for your dependent(s) and make changes for the coming year. You will receive enrollment materials from the IBM Employee Services Center for your dependent(s) in the mail by mid-November."

    I am surprised that no one has posted yet about this letter, as it seemed like many were waiting to hear how non-Medicare dependents would be enrolled.

  • New York Times: Finance Class on the Web, for Students of All Ages. By Tara Siegel Bernard. Excerpts: In an ideal world, a master class available to everyone would reveal all the secrets to retirement planning, telling you how much to save, where to invest and what to do when the stock market crashes.

    After all, there are few entirely conflict-free places where investors can educate themselves on the topic, and there’s little to no money-related guidance offered within the public school system, which is where the financial groundwork should really be laid.

    Joshua Rauh, a finance professor at the Stanford Graduate School of Business, is acutely aware of that. And it’s why he felt compelled to open his graduate-level course on the finance of retirement and pensions to the masses. “My goal is to try to empower people to make better decisions about their finances with an eye toward retirement and for retirees who are thinking about managing their money,” Professor Rauh said, “whether it is buying an annuity or having a spending rule.” ...

    “A person that would really benefit is someone who is 40 and realizing they really need to start putting together a plan for retirement and haven’t thought much about it,” he said, though he says he believes that it will be equally helpful for people of all ages.

  • Forbes: 8 Costly Benefits Mistakes Employees Will Make During Fall Open Enrollment Season. By Ashlea Ebeling. Excerpts: “It seems like there are so many mistakes available, it’s almost more likely that you’ll make a mistake than not,” says Amy Gordon, an employee benefits lawyer at McDermott Will & Emery in Chicago, who helps employers sort out mistakes for employees. Here’s a guide to help you through this fall’s open enrollment season for the 2014 plan year.

    Check out the Obamacare health exchanges. The mistake is thinking, oh, I’m covered by my employer, and not bothering to check out the new healthcare exchanges. “It’s a good idea to go on the exchange and see what you would get if you dropped your employer’s coverage,” says Amy Gordon, an employee benefits lawyer at McDermott Will & Emery in Chicago. ...

    Pay attention to spousal surcharges... Don’t forget the kids!... Flexible spending arrangements—healthcare v. dependent care... Flexible spending accounts–healthcare... Flexible spending accounts—dependent care... Health Savings Accounts... Vacation Buy-Up...

News and Comments Concerning ExtendHealth (New Medical Plan for Medicare-Eligible IBM Retirees)
  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "hra vs hsa" by "mr_quarkwrench". Full excerpt: I thinking that taking a reduced HRA to try to leave something for your spouse is putting an awful lot of faith in IBM. From looking at this it would appear that HRA is just another promise like "life time company paid medical" or "I'm from the government and I'm here to help you." http://www.healthpartners.com/public/plans/group-coverage/plan-details/empower-plans/compare-hras-and-hsas/
  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "re: hra vs hsa" by "espressoperson ". Full excerpt: Just a thought here that IBM would like nothing better than to be finished with us when (and even before) we kick the bucket. So they will be happy if we elect to pass on coverage for our spouses after we go. Not a deciding factor for us, but something to think about. There may not be enough $$ at stake either way, especially for the "life is great" crowd, but we should be considering all our options and not let IBM herd us where they want us to go. If you choose to pass, do it because it is best for you and your situation.
  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "EH and Military Tricare for Life" by "durrellae". Full excerpt: As of this date I've received no mailings from IBM or EH concerning the 2014 plans. I have, however, been able to register with EH. I'm very fortunate to be eligible for Medicare and the military medical and pharmacy plans at no cost. The only plans in the past that I've gotten through IBM are dental and vision. I'm only looking at EH now in order to access the HRA.

    It appears that I can sign my wife and myself up with a Humana Medicare Advantage Plan without pharmacy for $0 per month and then use the HRA for dental and vision expenses as well as any other medical expenses without having to purchase dental and vision insurance. Anyone else with military benefits looking at this?

  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: EH and Military Tricare for Life" by "don_savage". Full excerpt: Yes, I'm in the same situation. Didn't see the 0$ plan...I was just thinking of signing up for the Humana/Walmart drug plan at $24 per month; then that leaves $2,700 in the HRA. Then I was thinking If you can put in for your Medicare Part B expense, that's $2,520 in my case; put that money in an account for future dental and vision expenses...after you file for the balance of $80 in the HRA; then no concern about not using the HRA if you don't have many medical expenses in a given year and you can "roll it over" every year...might build up nicely.
  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: EH and Military Tricare for Life" by "sbbeaudry". Full excerpt: You cannot roll over the IBM HRA money. Anything left over goes back to IBM each year.
  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: EH and Military Tricare for Life" by "don_savage". Full excerpt: Sheila, you missed my point. I was saying if you can "use up" the HRA, i.e. get all the HRA money sent to you as reimbursement of your Medicare Part B payments, and put that in a personal checking account from which you pay dental and vision expenses, you'll probably have something left over (in your personal checking account) at the end of the year. I understand there is no "roll over" of the HRA.
  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: is Medigap not available, if on LTD & under 65?" by "rk4877". Full excerpt: I spoke to EH yesterday. I asked for clarification regarding what needed to be purchased to access the HRA funding. They answered it was a Medigap I challenged this based on information I had from peers; and they put me on hold. Five minutes later the clerk came back with quote "good news". I could access funds with only Part D through EH. She went on to say she had been telling people that all along, yet less than ten minutes before she said something different. Why did she say she had good news if she really had been telling people that?
  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "dental plan" by "penny23w". Full excerpt: Does anyone know a good dental plan for NY? Our existing IBM plan which is pretty good expires at the end of the year along with the medical. The only plan I found is Delta Dental which costs $600 for the year with a maximum benefit of $1000.
  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: dental plan" by "lobosphoto". Full excerpt: The plans offered by the Delta Dental website in California seem to be much different that that offered through EH. I suggest you check with their web site directly.
  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: dental plan" by "mwecker1". Full excerpt: I have the same inquiry about a dental plan in NY. On the face of it, the Delta Dental plan sounds ridiculous. However, it may be that the plan has negotiated rates with their dentists (i.e. a sort of Dental PPO), which could lead to savings beyond the $400 difference between annual cost and maximum annual benefit.
  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "EH showing different Medigap plans from last week" by "vpcavalier". Full excerpt: Last week I looked at EH website for zip code 60181 and blue cross blue shield of Illinois was listed under Medigap along with others. Today it only shows 4 Medigap options none of which are BCBS. Has anyone else had this happen?
  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "Re: EH showing different Medigap plans from last week" by "test2btrue". Full excerpt: I am in New York and I also saw this happen. As of today, EH only lists 4 Humana plans. The one I am interested in is plan F HD. When I used the site below for my area, it showed other plan Fs which were being sold in NY. One of them was for $63 versus Humana for $115. For a husband and wife this means an annual savings of $1,200 or being able apply IBM supplement balance to either the deductible or other medical expenses.

    The site I used is https://www.ehealthmedicare.com. New York heavily regulates insurance companies.

  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "Re: EH showing different Medigap plans from last week" by "lobosphoto". Full excerpt: It's October 15th and the start of Open Enrollment for everyone. I suspect that EH is just updating with new info from the insurers and the government.
  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "Dr. Rhee on Plan D" by "torbilll". Full excerpt: Below is the reply I received from Dr. Rhee. It is clear that the IBM rule is that a Part D drug plan purchased through the Exchange by the employee provides full, joint access to the HRA subsidy on the part of the retiree and spouse.

    This is a highly positive development. It presents new opportunities. For example: Based on 2013 rates, I can purchase two High Deductible Plan F supplements on the open market for about the same amount as our monthly premiums on the Aetna Integration plans that we are currently on. This leaves virtually all of the $3000 subsidy to cover out of pocket expenses.

    I'm not convinced that this is the best choice for my policy, as I have some ongoing medical supply needs, and the Exchange is offering me a Plan N at an exceedingly good rate.

    Before I decide to purchase this Plan N, I will get the Medicare Supplement rates from my state Insurance Department, or SHIP, and make sure that the Plan N offered on the exchange is the best available. Or, I may contacts insurance brokers in my area.

    For people who don't want to go through the work I am putting in, you now have the freedom to contact insurance brokers/agents in your area, have them show you the best offerings for you on the open market, and compare them with options for you on the exchange.

    From Dr. Rhee:

    With respect to your question asking for clarification on accessing your IBM subsidy through the Health Reimbursement Arrangement (HRA), you were advised correctly by Extend Health that you, the retiree, must enroll in a medical plan or prescription drug plan through the Medicare Exchange to receive the HRA. If you are enrolled through Extend Health, it is not necessary that your wife also enroll through Extend Health, and you will be able to use the HRA to reimburse your and your wife's health care premiums and eligible out-of-pocket expenses, including deductibles, copays and coinsurance.

    Please continue to work with the Extend Health benefit advisor to find the plans that best fit your and your wife's needs. You can call Extend Health at 855-359-7380 or visit their website at www.extendhealth.com/IBM.

    Thank you for writing.

    Kyu Rhee, MD, MPP Vice President Integrated Health Services

  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: Dr. Rhee on Plan D" by "lastdino1". Full excerpt: I find it interesting that you find this as a very positive action. I'm assuming you realize there is a significant OOP (HD= $2100 each with Aetna $0) difference between the old Aetna Int. Plan A vs. the Humana HD Plan F. Based on the costs I am seeing for Self+1 it looks like we will be paying 3-4X for our equivalent Plan F (same as Aetna Int Plan A). Based on this we will not have any additional HRA funds available for Rx, dental and vision plans.

    I believe the intentions of IBM was to have EH "sell" the HD and Advantage plans so that all of the HRA funds were not exhausted. So remember anything left over at the end of the year goes back to IBM. The plan for everyone should be to "use up ALL' of the HRA funds in their account. Good luck as the games have begun.

  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: Dr. Rhee on Plan D" by "torbilll". Full excerpt: I stated it as a positive action because it opens up more options to retirees, provides more ways to make good use of the subsidy. I think that most readers understood this. You didn't seem to.
  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: Dr. Rhee on Plan D" by "lobosphoto". Full excerpt: Negatives: The dental plan isn't that good. The drug plans don't seem very good either. The EH web site doesn't have a very good comparison tool but I suspect a significant increase in copays. With what comparison I have done, it appears my wife and I will wind up on different Part D plans.
  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: Dr. Rhee on Plan D" by "lastdino1". Full excerpt: Sorry, Bill, but apparently you haven't been reading too many of the posts. It appears that depending on what state/zip code you are in there are less plans then the previous ESC had and the ones that are being offered are at a higher cost. Couple that with now no longer having the self+1 option; it requires you to get a separate policy for your spouse.

    If this were a positive or improvement to us then it would have had the group plans either similar or exactly as today with maybe a slight price increase. Good luck with your suggestion and hope you don't have to meet your deductible.

    I assume you realize the HD plan for self+1 gives you a $4200 deductible where as the Aetna Int Plan A was 0. I'm happy for your opportunity.

  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: Dr. Rhee on Plan D" by "harris_berman". Full excerpt: I think you could refer to last year's IBM enrollment literature and look at the titles of the offered plans:
    1. IBM Medical Supplement
    2. IBM Medical/Prescription Drug Supplement
    3. IBM Medical/Prescription Drug Supplement Plus
    4. IBM Prescription Supplement.

    IBM clearly differentiated the medical benefit from the drug benefit in each plan. However, since you could enroll in the IBM Prescription Supplement without the Medical Supplement, it's possible that the fact of that plan which also received the subsidy makes it possible to have just the Part D plan enrollment through EH allow for the HRA to be open.

    I would just feel a bit more comfortable in my decisions going forward (this is a yearly exercise) to KNOW what all of the parameters are and will be committed for the future access to the HRA. A simple truth table could suffice for clarity.

    I trust that a written U.S.P.S. delivered communication with be forthcoming yield clarity. Perhaps in the November form in which we all have to declare how to allocate our subsidy for evermore.

    BTW, on one of my early calls to EH, the advisor told me that I could not be reimbursed through the HRA for Medicare Part B premiums. I challenged that assertion and she put me on "hold" for the next 10 minutes to research the answer. I was then informed that my IBM HRA could be used to reimburse the Part B premiums, but that other companies with EH did not do so.


  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "Re: Dr. Rhee on Plan D" by "harris_berman". Full excerpt: I find it very disturbing that IBM is now changing the T's and C's of the announcement letter sent to us in September which clearly limited the HRA access to enrolling through EH in a medical plan in order to establish the account. Now through an e-mail (sent to a individual and posted here) we find out that one can use either a medical plan OR a drug plan to gain access.

    When will we all receive the new determinations in writing from Dr Rhee and IBM? There's still no official letter from IBM changing the rules outlined on Page 7 or the Announcement Newsletter.

    None of the new news would change my choices and enrollment, but the flexibility might do so in the future. There is also an implication that if the Part D or medical plan chosen were not available next year via EH, then one could still be reimbursed from the HRA. I really want to see the legal document that describes all of this. E-mails, verbal statements don't do it for me.

  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "Re: Dr. Rhee on Plan D" by "erniefine". Full excerpt: You don’t think that an e-mail from Dr. Rhee is sufficient?

    Legally, there’s a whole “chain of evidence” that includes e-mail, faxes, pictures, written and signed letters, contracts, notarization, certification, etc. I no longer remember the exact sequence, but I knew this area well about ten years ago, and I think the way I wrote the sentence lists the primary sources, in order of low-to-high. There are probably others. This is court-admissible documentation.

    Now, if Dr. Rhee has truly sent that e-mail, and someone else has a notarized document from Ginny that states that we WON’T get the HRA—well, we won’t get the HRA in that case. It won’t matter what Dr. Rhee wrote. Note also that Dr. Rhee’s letter presumably doesn’t have certification/authentication attached. But I’m not nervous about this; unless something else comes up before the end of the year, I expect to pick a low-cost Part D plan, to obtain access to my HRA funds.

  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "Re: Dr. Rhee on Plan D" by "harris_berman". Full excerpt: > You don't think that an e-mail from Dr. Rhee is sufficient? My short answer is NO. The announcement letters and all communications that "officially" were sent to Medicare eligible IBM retirees were very clear on having to select a "medical" plan to have the HRA access enabled. Premiums for outside drug plans could not be reimbursed from that account.

    Now we hear (and I use the term loosely) that the Part D drug plan premiums can be used to enable the access. Interesting, but the requirement is still there that the medical plan premiums must be from a plan for which the enrollment was accomplished through EH.

    A lot of assumptions are being made about reimbursements from an HRA in general. Just because the IRS has defined allowable medical expenses for reimbursement does not mean that IBM will allow these.

    IBM just sent out an update signed by the IBM Benefits Team, entitled Health benefits legal notices and enrollment update (October 2013).

    I do not see anywhere in the document any reimbursement specifics for the HRA and certainly no amendments to the original September announcement letter. This update would have been the perfect opportunity for IBM to clarify any changes, yet there was nothing. There was the usual "Other Important Legal Information":

    These and all other enrollment materials are intended to provide an overview of certain plans and programs in which you may participate. These materials are not an official Summary Plan Description and do not provide full details.

    The company reserves the right, in its sole discretion, to amend, change, suspend, or terminate any benefit or other plan, program, practice or policy of the company, at any time.

  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "EH Sign-up results" by "tajsbb". Full excerpt: We had our EH sign-up appointment this morning, lasting about 3 hours counting the 45 minute wait for the plan adviser to get to us. Thank goodness for speaker phones. The whole process went smoothly after that. Thanks to all the posting here, and the research we had already done, the adviser recommended the same plans we had already decided were best for us.

    I took the cheapest Part D, and my wife took the higher priced AARP MedicareRX Enhanced due to the mix of drugs she uses. She took the Delta Dental, and I will self pay for mine. We both took the AARP/UHC Plan F ND, which for us is $142.45 here in Arizona for our age (65). The bottom line was that with the HRA of $3000, our cost will be less than $100 more than if we had been able to take the old Aetna Integrated Plan A.

    So, altogether not so bad for us. One thing we did find out regarding the AARP/UHC plan is the required AARP membership is only required for the first year. After that you can drop it and continue to have the medical insurance from UHC.

  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "EH Requirements to get the HRA" by "tombettyhickey". Full excerpt: Since we have now had about 1-2 months of emails / information / mis-information about the Extend Health (EH) medical, dental, and vision options, and the HRA plan for a bucket of money to be used for expenses, I am looking for two suggestions/recommendations:
    1. Where can I find a succinct and accurate summary of what option or options must be selected in EH to receive the HRA $$?
    2. My spouse and I, both on Medicare, have chosen the 'Medical/Prescription Drug Supplement' (or it's equivalent) for the past number of years. This option has a $4K Out of Pocket Maximum, typically referred to as a 'catastrophic policy'. I can not find an option in the EH list that seems to be similar.
  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: Dr. Rhee on Plan D" by "harris_berman". Full excerpt: I sent the following question to Dr Rhee's attention yesterday. There's been no response as of this writing.
    The IBM Pension forum members have been debating the access to the HRA as to what is the sufficiency requirement. The original written communication from your office stated that a retiree had to enroll in a medical plan for HRA access. Subsequently, your office has replied to several e-mails that a Part D Prescription drug plan or a Medical plan would suffice.

    My question is the following: If I enroll in a Medical Plan through Extend Health this year, but next year that insurer/plan is no longer offered by Extend Health, will my HRA access be limited as a result? Will the HRA access be preserved and the reimbursements continued if the original plan in which I am enrolled continues outside of the Extend Health future offering? I would rather not be forced to continually change Medigap plans in order to obtain reimbursement from the HRA. Can you please clarify the IBM position on all of this?

  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: Dr. Rhee on Plan D" by "marlyty7". Full excerpt: Daniel, good luck with that. I've been calling EH and ESC as I'm in same situation as you. No one seems to want to take ownership. I get promises of snail mail and 2 weeks later ,....nothing, not a thing. Start the calls again and go thru the same thing again. Let me know if you have any better luck and how you did it.
  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "IBM (HRA) Health Plan Survivor Benefits" by "larryrgeorge". Full excerpt: I wrote a note to Dr. Kyu Rhee regarding IBM survivor benefits under the HRA. Here is what I wrote and his reply.
    Dr. Rhee,

    I have received multiple letters from you regarding the new healthcare plans for retirees. First, I must say that I am very disappointed in IBM, since I retired in June of 1991 on the Voluntary Transition Payment Plan (VTPP) and was told at that time that I was "grandfathered" into the present medical plan for myself and my spouse. In fact I was the Branch Manager of IBM's Salem, Oregon Branch Office at the time and it was I who ran the information program for all of the potential retirees in our branch.

    All of us who retired under this plan understood that "grandfathered" meant that we would have the same plan that we were under at the time. For several years after retirement, we did not have a monthly cost for our medical plan. We only paid a co-pay on office calls and drugs. Then after a few years, we started paying a monthly cost out of our pension plan for our medical care. And it continued to increase each year. This would not have been so bad, but we were also told that under our (VTPP) retirement plan that we would receive cost of living adjustments to our retirement income like had been the practice up until that time. In fact I spoke to a lady in Corporate at the time, because of a question on this matter from one of the employees attending one of the seminars. She told me that we could expect increases in the future consistent with what Social Security does and I still have the email that she sent me on the matter. None of us have received even one increase in our retirement pension plan since retiring in 1991. But we have received a number of increases in our medical plan.

    Now for my real reason for writing. When I retired from IBM, I chose a 50% joint and survivor for my wife, with the restore option. This means that if I predecease my wife, that she will receive 50% of my pension. But if she predeceases me, then my pension will revert back to the original amount without the survivor option. Now the last letter I got from you said that since I retired before January 1, 1992, I would be eligible for a $3,500 HRA. However, if I choose to go with a survivor option, the HRA drops to $2,600. Then your letter states that if I die before my wife, then she will receive 50% of that, or $1,300. But you said nothing about the issue of what happens if my wife predeceases me. Does the HRA revert back to the original amount of $3,500 like the joint and survivor restore? If not, then why not? Also, how did you come up with dropping the $3,500 HRA amount to $2,600 for a survivor benefit without the assistance of an actuarial table? There are a lot of things in this whole plan that does not add up.

    I spent over an hour on the phone this past Friday with Fidelity, who then sent me to Extend health, who sent me to Budco to try to get and answer on the survivor question. Then Budco sent me back to Fidelity, insisting that they were IBM Personnel, which I knew was not. I know that they were hired as a contractor to take care of our pension and medical plans. I ended up speaking with a Supervisor, by the name of Shawn Martinez who also did not know the answer to my question.

    I would suggest that you need to send out another letter that addresses the answer to this question, since it is very key to those of us who are being forced to make a change in our healthcare without all of the information. Also, for your information, no doctors in Salem, Oregon are taking new Medicare patients. So Extend Health is offering us plans with companies and no doctors will be accepting them. IBM has left us high and dry at a time when those of us are in our advanced years and need to have available healthcare. Do you and the rest of corporate management really care? It appears that you don't, give what is happening to us. I want an answer from you on this question, since it is key in my deciding what to do on the survivor option.

    Respectfully, Larry R. George

    Response from IBM:

    Dear Mr. George,

    I want to respond to your note regarding IBM's announcement that Extend Health will provide you with new health plan options for 2014. We know this is an important change for you, which is why we want to do everything we can to help make this a positive experience.

    With respect to your question regarding the IBM subsidy (HRA) amount, since you retired prior to January 1, 1992, the amount of your HRA will be $3,500. We are offering retirees the option to purchase additional coverage (surviving spouse and eligible dependent coverage in the future in the event of the retiree's death) and if they elect this option, your HRA will be reduced to $2,600. Upon your death, IBM will contribute $1,300 to the HRA for your spouse. More coverage - such as surviving spouse/dependent coverage in the event of the retiree's death - costs more money over a longer period of time for the pool of retirees that elect this option. IBM's 2014 offering maintains IBM's total financial contribution to retiree medical coverage (our contributions were capped in the early 1990's). We are giving retirees the choice of having that coverage for the future, or forgo that coverage for the future and have a higher HRA now. There is no "restore" option for this survivor election; should your spouse predecease you, your HRA will continue in the reduced amount. While the concept of survivor coverage is similar to what you describe in your note, the HRA survivor option is separate and apart from the operation of your pension.

    I note that you are currently enrolled in a Kaiser Permanente plan. You should have received a letter from IBM with information on selecting an individual Kaiser Permanente plan and how to contact them to enroll directly. While the vast majority of Kaiser Permanente members will have access, there are a few members who do not, depending on the city/town where you live. This is because the Centers for Medicare and Medicaid services has not approved the same service areas for the individual market as the group offering you are enrolled in today through IBM. You should contact Kaiser Permanente at 1-866-716-7311 to ask whether your city/town is covered by the individual plan. If it is, and you wish to remain in your Kaiser plan, you can enroll directly with Kaiser, and once you have completed enrollment, call Extend Health and tell them you have enrolled with Kaiser in order to receive the HRA contribution

    If there is no individual Kaiser Permanente plan available in your area, or you do not wish to continue with Kaiser Permanente, you will need to contact Extend Health to select a new plan option for 2014. I encourage you to work with the Extend Health benefit advisor to address your concerns related to the plan options available to you with Medicare participating providers.

    You should continue to use Extend Health (855-359-7380 or at www.extendhealth.com/IBM) as your point of contact for any other questions you may have related to the Medicare Exchange or the HRA. There is no limit to the number of phone calls you can make to Extend Health.

    Thank you for your contributions to IBM, and for writing to express your concerns.

    Kyu Rhee, MD, MPP, Vice President Integrated Health Services

  • Yahoo! IBM Pension, Retirement Issues & Extend Health message board: "RE: IBM (HRA) Health Plan Survivor Benefits" by Kathi Cooper. Full excerpt: There are 150,000 retirees. All of them have questions about the new medical. If 1% write Dr Rhee, he will be responding to about 1500 letters. My point? Don't even think he is responding personally. His staffers and AA's are penning the responses. If you want a legal binding response, you have to write the plan administrator.
  • Yahoo! IBM Retiree - Information Exchange message board: "Escalate at Extend Health if you can't get through to a Benefits Advisor" by "Anon". Full excerpt: I already had my consultation with a Benefits Advisor at Extend Health, and signed up for Medicare Part B while on the call. Later, I had 3 short questions, and called Extend Health. However, I was NOT transferred to a Benefits Advisor, and was told I had to wait another 3 weeks to get my simple questions answered.

    I called IBM Employee Services Center to complain (they could do nothing). After being transferred back to Extend Health, I had a LONG conversation with a representative, but they refused to transfer me to a Benefits Advisor.

    Moral: Get all your questions answered the first time, as you will have to wait a long time to get back to Extend Health.

    If this is the future of health care, we are in trouble.

  • Yahoo! IBM Retiree - Information Exchange message board: "Re: Escalate at Extend Health if you can't get through to a Benefits Advisor" by "alwaysontheroad4bigblue". Full excerpt; > If this is the future of health care, we are in trouble. Welcome to the Free Market! You're getting what most Americans say they want! Thousands of choices, all of which boil down to the fact that health insurance companies are in business to make money, not to provide health care. Our system is far superior to all the "socialist" systems in the rest of the world that somehow manage to spent half or less than we do, while providing better health care.

    You have "choices!" Enjoy them!

  • Yahoo! IBM Retiree - Information Exchange message board: "HRA Rollover?" by "rmyorktx". Full excerpt: IRS publication 969 says any balance in an HRA is rolled into the next year. But, the letters I got from IBM's Chief Health Director say any balance is forfeited. What gives? Neither EH nor IBM ESC could answer this discrepancy.
  • Yahoo! IBM Retiree - Information Exchange message board: "RE: HRA Rollover?" by "hankharty". Full excerpt: "IRS publication 969 says any balance in an HRA is rolled into the next year." That is not exactly what Publication 969 says. It says:
    "Any unused amounts in the HRA can be carried forward for reimbursements in later years."

    IBM chose not to roll them over. Complaints should be sent to Ginni.

  • Yahoo! IBM Retiree - Information Exchange message board: "Extend Health Enrollment Appointment - Fiasco" by Doug Dowden. Full excerpt: Yesterday I assisted my 89 year old father, an IBM retiree, and my 86 year old mother with their 'Appointment' with Extend Health to transition their medical coverage from the IBM plan they have had for over 20 years. The call took over 3 hours and was plagued by mistakes and bad information from the 'licensed benefit counselor', problems with the EH website, and a really tedious process of repeating the same basic information four times and listening to two long audio messages of legal disclaimers.

    Make sure you do your research ahead of time and know what kind of coverage you want prior to calling EH, because their website does not reflect all they can really sell you. The EH website only had 1 Medigap Plan F company listed that we had never heard of with a premium that was $200 per month higher than what we knew we could get through AARP United Healthcare. It took a long discussion with the EH rep and her supervisor, but we eventually were able to sign my parents up for the AARP UHC plan. I'm not sure what else they might have been able to sell us, but you can certainly ask for anything else you may have found available in your area. I believe EH is just operating as an insurance broker here, so they should be able to sell you most anything you find on the medicare.gov website for supplemental insurance plans in your area.

    When it came to the Part D Prescription Drug Plan, the EH rep was literally using the medicare.gov website to enter the prescriptions for my parents and to offer available plans. Unfortunately, she goofed it up and must have checked a box saying my parents were eligible for government assistance for drugs, because what she initially offered had radically lower premiums than what I saw on the same web site. She insisted she was correct, and I told her that the premium for the same plan on the EH website was the number I saw. Her supervisor finally acknowledged that she was incorrect. We went with the AARP UHC Rx Preferred plan which is apparently one of the most popular plans.

    The EH rep also did not understand how the IBM subsidy worked when you wanted the spouse survivorship option. She confused it with the plan for another company and had to ask her supervisor for help. More bad information.

    After we made the choice of plans, then we spent another hour with a 'data admin person' repeating the same basic info (name, DOB, SSN, address, phone, etc.) four times, one for each plan. My parents had to repeat a statement four times, And then they had to listen to long audio disclaimers for each plan.

    To top it all off, the EH website would not allow us to register, so we spent another half hour with a customer support person who tried to figure out why it wouldn't accept my father's, name, SSN and email address to register. She did figure out that one of the earlier people had mistyped the email address. But that didn't fix the problem, so we still can't login to the web site. She said they were having problems with that site - obviously. Also, what are the chances that there are more typos in the info that we repeated four times in the process.

    Hope this note is helpful to all you that have to go through this process in order to get the IBM subsidy. What a fiasco.

    Doug Dowden PS - If it's any consolation, at least IBM has a subsidy for some retirees. My company still has an option of company provided insurance for medicate retirees, but it is not very good coverage and most people just buy a supplemental plan on the open market with no subsidy.

  • Yahoo! IBM Retiree - Information Exchange message board: "Extend Enrollment call info" by "carlmarlowe". Full excerpt: I just finished my enrollment call to Extend. I thought I would pass along what to expect. The call was answered after about 5 minutes but it was a screening person who asked a few questions and then Transferred the call to a "specialist". The wait was then about 30 minutes. I only signed up for a Medigap plan and had a few simple questions. That took about 35 minutes. Here are a few things I found out.
    1. We will have to make ANOTHER call in January to the "finance person" to arrange payments, etc.
    2. I requested the auto reimbursement and he stated there would be a 2 month delay next year in getting the first payment I guess we set up the details in January. If you want automatic bank deductions for paying, you have to set that up with the individual plans.
    3. I bought a private drug plan last year since I got one of the Medigap plans without drugs. Although the plan is the same as one of the offerings this year, I cannot get auto reimbursement. You can only get it for things that you sign up through Extend. To be clear, I will just have to use the manual process for reimbursement.
    4. Here is something he mentioned that I had missed regarding the recent option for spousal HRA. We will be getting a letter from "budco" or "bdudco" ?? or something like that in November. We have to sign and send back to REJECT the spousal option. The default is to accept the lower amount. (My wife has state retirement benefits so I did not read the letter too closely once I saw what it was about. .)
    5. In the past, I had been getting the IBM vision plan every other year. I asked If we would still be able to do that and he said yes, no problem.

    All in all, It was not a bad experience except for the initial wait. I had actually put the plan I wanted into my shopping cart on the Extend website but it disappeared the next day. However, he was already aware of what I wanted. I had already looked at the various "advantage" plans and was sure I did not want those I was expecting some "sales" or "marketing" of the other plans but there was absolutely none. Hope other folks call goes as smoothly as mine. Carl

  • Yahoo! IBM Retiree - Information Exchange message board: "Re: Extend Enrollment call info" by "tajsbb". Full excerpt: That's odd. After the "specialist" handled my selections, he transferred me to the "financial person" who took credit card and bank account information for payments. In the case of the Part D insurers, I choose to be billed rather than have premiums deducted from Social Security since we have not filed for that yet. We were told that we will have the option to have ACH deductions once we get the confirming paper work.
  • Yahoo! IBM Retiree - Information Exchange message board: "RE: Email Contact for EH" by "ajferraro_roadking". Full excerpt: I think we may have been 'thrown to the wolves". I have friends that went thru the Extend Health appointment and it has taken 4 to 6 hours to get thru it. They read all the fine print both to you and your spouse. The AARP plan info is not on their website; you cannot sign up on their site as we could do so on the NetBenefits site in the past. I have personally received multiple answers for the same question etc. You need the patience of Job to get thru the call.
  • Yahoo! IBM Retiree - Information Exchange message board: "RE: Email Contact for EH" by "yamee". Full excerpt: I agree ... I was one of the 'lucky ones' who got through the appointment in 2-3/4 hours ... numbers thrown at me so fast I couldn't even process them much less write them down. My wife and I EACH had to listen to the 2 5-minute fine print recordings (also not processable) separately! There was a stipulation buried in the AARP one about prior conditions not being covered that I did catch; so they had to get a 'specialist' on the line to assure me that that provision did not apply to us because the IBM plan was terminating.

    I think I ended up with a decent deal for my wife and myself given our circumstances: AARP Plan F for Medigap and Cigna for drugs (with a Canadian pharmacy for comparison/backup). Time will tell.

  • Yahoo! IBM Retiree - Information Exchange message board: "RE: Email Contact for EH" by "gfretwell2000". Full excerpt: I think we really need to have the discussion with our doctors before we talk to EH. I know United Health Care has severed relations with all of my doctors and I am not even sure who will accept any plan next year. Aetna was already out of about half of the providers here last year. You might end up with a great sounding policy and no doctors that take it.
  • Yahoo! IBM Retiree - Information Exchange message board: "IBM Retirees" by Thomas H. Henning. Full excerpt: Dear Dr. Rhee, Why does IBM discriminate against the majority of IBM retirees who are not on Kaiser Permanente health insurance by allowing those who have Kaiser Permanente Insurance to continue their policies even if they're not offered by Extend Health and allowing them to recover the HRA benefit also? Why aren't other employees allowed the same privilege with their health insurance?

    I regret IBM's decision to abandon health insurance coverage for those IBM retirees who worked for many decades to build IBM's reputation and business. The Extend Health correspondence sent by IBM falls short of the high quality information I expected. For example it was stated that:

    • More plan choices and value would be offered. In fact, less plan choices are offered. The process now calls for more paperwork on the part of retirees.
    • More flexibility in how you use your IBM subsidy. In fact, access to the HRA tax free account has not been provided in any correspondence. Extend Health seems confused on how IBM retirees can recover their subsidy and no direction has been provided as to how to apply for and obtain the subsidy.
    • Unlimited counseling. IBM Extend Health is so backlogged with calls that they can only accept "appointment calls" once every month as in my case. Much of the consulting has been wrong causing multiple questions and calls.

    Like Obamacare, IBM's transition of retirees to a different health insurance process is very flawed. There was no communication regarding deductions ceasing from IBM employee pensions since payments won't be made to IBM after January 1st. And as I understand the process from discussions with Extend Health and the IBM Employee Services Center, a retiree will have to pay the insurance premiums, once for themselves and once for their spouses. Then they must apply to Extend Health (no directions provided as to how), to access payment from their HRA account. This process must be followed over and over for dental and vision coverage. IBM calls this added value.

    I think it's all a disgrace. IBM explains that this transition is necessary because of health care costs rising in the future. Of course everyone knows that costs will rise in the future. We plan for costs to rise, doesn't IBM?

    IBM's reputation was built by its retirees on customer service, excellence, and respect for the individual. Sadly this has all been apparently forgotten by current senior IBM management.

    Thomas H. Henning, IBM Retiree.

  • Yahoo! IBM Retiree - Information Exchange message board: "Re: IBM Retirees" by Gary Pelphrey. Full excerpt: Very good summary of what IBM has done to improve the bottom line and EPS at the expense of 110,000 retirees. This rollout of EH is not going well and it diminishes the credibility and reputation of a once great company even further.
New on the Alliance@IBM Site

Job Cut Reports

  • Comment 10/17/13: The either retire under old plan or convert to lump sum retirement effective 6/30/2014 is rumored to be announced end of October. Especially Service Reps or CE's because IBM hired 170 replacements and no one is retiring. -Anonymous-
  • Comment 10/17/13: With the 3rd quarter report and stock drops to $175, how long before Ginny fires a bunch more employees. When is the BoD going to wake up and get rid of her and the bunch of cronies running IBM into the ground? -Gone in '98-
  • Comment 10/17/13: "Ours is a pay for performance culture and we must all be committed to taking action to address our performance gaps." Based on that statement Ginny sent in an email reporting 3Q13 results, she and her board should NOT be paid for the horrible performance. Crap floats uphill. -Ginny_Ginny_whocanIturnto-
  • Comment 10/17/13: Despite owning a little of their increasingly worthless paper, there's karmic delight in watching how their inability to recognize enduring talent is coming back to bite them in the ass. I may have been let go in July, but I suffered at least a decade and a half of deterioration of managerial judgment. It's a testament to the gullibility of customers and the market that the seemingly blue sky didn't fall sooner. -unsurprised-
  • Comment 10/18/13: Hey Ginny, how is that off shoring strategy working out? -Big Blew forced retiree-
  • Comment 10/18/13: Does anyone see something inconsistent in the first sentence? "Team: As you saw in IBM?s earnings announcement, in the third quarter, our revenue and profit were down, with growth in operating margin and earnings. Linda Sanford Senior Vice President" -EPS-

IBM Retiree Issues

News and Opinion Concerning Health Savings Accounts, Medical Costs and Health Care Reform
  • Washington Post: One nation, two health-care systems. By Ezra Klein and Evan Soltas. Excerpts: In the last two weeks, Oregon has cut the ranks of its uninsured by 10 percent through Obamacare.

    They're not the only state seeing huge gains. California has signed up 600,000 low-income Golden Staters for the law's expanded Medicaid, and over 100,000 are in some stage of applying for insurance on the marketplaces. In Washington state, over 40,000 people have signed up for Obamacare. In New York, the numbers are even larger. Kentucky's online marketplace has been a model of glitch-free performance, with more than 10,000 signing up on the first day alone.

    It's increasingly possible that Obamacare, at least in its early years, will be a success in blue states (and red states run by Democrats, like Kentucky) even as it flails in red states. ...

    Today, most states with Democratic governors both expanded Medicaid and built their own exchanges while most states with Republican governors rejected the Medicaid expansion and left exchange construction to the federal government.

    It's been clear for months that the Medicaid rejections would be a serious problem for the law. In those states, people who make less than the poverty line get nothing under Obamacare, but people who make between 100 percent and 400 percent of the poverty line gets subsidies for private insurance. The Kaiser Family Foundation estimates that about six million of the people expected to get health insurance through Obamacare fall through this massive crack. ...

    The result may be that Obamacare doesn't do anything as simple as succeed or fail. Instead, it vastly improves the health-care systems of the states that wanted to use it to improve their health-care system while collapsing in the states where the leadership did what they could to undermine the law.

    Over time, that could lead to a country with two health-care systems: One, a near-universal system based around Obamacare and centered in blue states; the other, a policy mess based around the rejection of Obamacare in the red states.

  • AlterNews: Fox News Coverage Of Obamacare Was Extremely Misleading. Fact-finding expedition on Sean Hannity reveals Fox News deceived audience. By Eric Stern. Excerpts: I happened to turn on the Hannity show on Fox News last Friday evening. “Average Americans are feeling the pain of Obamacare and the healthcare overhaul train wreck,” Hannity announced, “and six of them are here tonight to tell us their stories.” Three married couples were neatly arranged in his studio, the wives seated and the men standing behind them, like game show contestants.

    I happened to turn on the Hannity show on Fox News last Friday evening. “Average Americans are feeling the pain of Obamacare and the healthcare overhaul train wreck,” Hannity announced, “and six of them are here tonight to tell us their stories.” Three married couples were neatly arranged in his studio, the wives seated and the men standing behind them, like game show contestants. ...

    I decided to hit the pavement. I tracked down Hannity’s guests, one by one, and did my own telephone interviews with them. ...

    Next I called Allison Denijs. She’d told Hannity that she pays over $13,000 a year in premiums. Like the other guests, she said she had recently gotten a letter from Blue Cross saying that her policy was being terminated and a new, ACA-compliant policy would take its place. She says this shows that Obama lied when he promised Americans that we could keep our existing policies.

    Allison’s husband left his job a few years ago, one with benefits at a big company, to start his own business. Since then they’ve been buying insurance on the open market, and are now paying around $1,100 a month for a policy with a $2,500 deductible per family member, with hefty annual premium hikes. One of their two children is not covered under the policy. She has a preexisting condition that would require purchasing additional coverage for $800 a month, which would bring the family’s grand total to $19,000 a year.

    I asked Allison if she’d shopped on the exchange, to see what a plan might cost under the new law. She said she hadn’t done so because she’d heard the website was not working. Would she try it out when it’s up and running? Perhaps, she said. She told me she has long opposed Obamacare, and that the president should have focused on tort reform as a solution to bringing down the price of healthcare.

    I tried an experiment and shopped on the exchange for Allison and Kurt. Assuming they don’t smoke and have a household income too high to be eligible for subsidies, I found that they would be able to get a plan for around $7,600, which would include coverage for their uninsured daughter. This would be about a 60 percent reduction from what they would have to pay on the pre-Obamacare market.

    Finally, I called Robbie and Tina Robison from Franklin, Tenn. Robbie is self-employed as a Christian youth motivational speaker. (You can see his work here.) On Hannity, the couple said that they, too, were recently notified that their Blue Cross policy would be expiring for lack of ACA compliance. They told Hannity that the replacement plans Blue Cross was offering would come with a rate increase of 50 percent or even 75 percent, and that the new offerings would contain all sorts of benefits they don’t need, like maternity care, pediatric care, prenatal care and so forth. Their kids are grown and moved out, so why should they be forced to pay extra for a health plan with superfluous features?

    When I spoke to Robbie, he said he and Tina have been paying a little over $800 a month for their plan, about $10,000 a year. And the ACA-compliant policy will cost 50-75 percent more? They said this information was related to them by their insurance agent.

    Had they shopped on the exchange yet, I asked? No, Tina said, nor would they. They oppose Obamacare and want nothing to do with it. Fair enough, but they should know that I found a plan for them for, at most, $3,700 a year, a 63 percent less than their current bill. It might cover things that they don’t need, but so does every insurance policy. ...

    I don’t doubt that these six individuals believe that Obamacare is a disaster; but none of them had even visited the insurance exchange. And some of them appear to have taken actions (Paul Cox, for example) based on a general pessimistic belief about Obamacare. He’s certainly entitled to do so, but Hannity is not entitled to point to Paul’s behavior as an “Obamacare train wreck story” and maintain any credibility that he might have as a journalist.

  • Washington Post: The huge health-care subsidy everyone is ignoring. By Edward Kleinbard. Excerpts: The political right has paralyzed government over the implementation of the Affordable Care Act, on the grounds that the ACA represents an unacceptable government intrusion into what today is the province of private markets. But the premise is fundamentally untrue. ...

    But perhaps the most consequential subsidy is rarely mentioned or even noticed: Government for decades has directly subsidized individuals’ costs of employer-based health care, to the tune of roughly $250 billion every year – sums far greater than the annual costs of the subsidized insurance coverage provisions of the Affordable Care Act.

    That fact makes the ongoing debate positively perverse. What we are witnessing today are individuals who already receive government health-care handouts attempting to prevent others from obtaining similar (but smaller in aggregate amount) health-care subsidies, as well. And as a group, today’s recipients of government health-care subsidies are better off to begin with than are those they wish to exclude. ...

    The vast majority of Americans get their health care through employer plans, which of course will continue under the Affordable Care Act. When your employer pays your salary, the employer deducts the cost of your compensation as a business expense in figuring its own tax bill. The same applies to health care that your employer buys for you – the insurance premiums or out-of-pocket expenses the employer pays are deductible expenses, because those costs, in fact, are simply more compensation paid for your services.

    But – and here is the magic – while cash salary or bonuses paid to you are your taxable income, the tax code expressly allows you to ignore the value of the health-care costs that your employer pays on your behalf in calculating your taxable income. If your health-care insurance costs your employer $10,000 each year, you are saving up to $4,000 or so on your income tax bill, plus saving payroll tax costs on that $10,000, as well. Conversely, if your employer paid you the $10,000 in my example in cash, and told you to go buy insurance if you wanted it, you would be hit with both income and payroll tax bills on that amount. ...

    The exclusion of employer-paid health-care costs is a deliberate exception to the general rule that any form of compensation must be included in your income. This is not a new government subsidy program – it has been the law for many decades. But it is in fact a subsidy, not an instance of the government letting you keep what’s yours. As anyone who has compared job offers knows, health care is just another part of your total compensation package. ...

    So today, 140 million Americans (including members of Congress) directly receive government subsidies when they get health-care coverage through their employers. The Affordable Care Act extends government health-care subsidies to millions of other Americans, but for administrative reasons delivers the subsidy through a different mechanism. But so what? Why is the first subsidy somehow lost in a fog of flag waving and free enterprise talk, and the second the sure sign of galloping socialism? ...

    The plain fact is that those who have paralyzed government over the Affordable Care Act today feed at the trough of government health-care subsidies, while seeking to exclude others from sharing the bounty. This is simple selfishness in action. If you claim to stand on principle in your demands to destroy the Affordable Care Act, first give back the $250 billion you’ve been taking every year in government help.

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.

  • Denver Post: Fast-food workers cost taxpayers nearly $7 billion in welfare costs. By David Migoya. Excerpts: Fast-food workers cost taxpayers nearly $7 billion in welfare costs each year, according to a study issued Tuesday by the University of California at Berkeley. That's because the workers at restaurants such as Wendy's and McDonald's are forced onto the public dole from wages that are too low for them to get by, the study found.

    The study found that about 52 percent of fast-food workers receive some form of public assistance, compared with 25 percent of the general workforce. ...

    The study defined public assistance as including food stamps, Medicaid for adults and children, temporary assistance for needy families, or TANF, and the federal earned income tax credit.

If you hire good people and treat them well, they will try to do a good job. They will stimulate one another by their vigor and example. They will set a fast pace for themselves. Then if they are well led and occasionally inspired, if they understand what the company is trying to do and know they will share in its sucess, they will contribute in a major way. The customer will get the superior service he is looking for. The result is profit to customers, employees, and to stcckholders. —Thomas J. Watson, Jr., from A Business and Its Beliefs: The Ideas That Helped Build IBM.

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