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Alliance Members Mobilize for Pension Reform
Alliance@IBM/CWA members, part of a coalition fighting for pension fairness, are mobilizing to block a provision in a pending pension and retirement bill that would legitimize cash balance pension plan conversions and the discriminatory practices that deny long-term workers the full pension benefits they have accrued.
The group has the support of Sen. Tom Harkin (D-Iowa), who has pledged to offer an amendment to the Retirement Security and Savings Act to address “the abuses workers face when their employers switch to cash balance plans.”
As part of the campaign, the coalition is delivering a petition to Senate leaders urging them to support the Harkin amendment and to reject the bill, which would not only legitimize cash balance plans but undermine ongoing lawsuits against such plans.
On Capitol Hill, the coalition held separate briefings for reporters and Senate staff with specific examples of how workers have been injured by their employer’s changeover to a cash balance plan, with older workers generally receiving less than they would have received under their traditional plan.
Lee Conrad, Alliance@IBM/CWA, outlined how he was affected by IBM’s switch- over in 1999 to a cash balance plan. Conrad noted that as a manufacturing worker, he was earning around $30,000, not the high-flying pay levels of some in high-tech industries. That meant the shift to a cash balance plan and corresponding cuts in pension benefits would hit him especially hard, he said.
Janet Kruger, of the IBM Employees Benefits Action Coalition and also a member of Alliance@IBM, joined other presenters, including the Pension Rights Center, American Association of Retired Persons, the Coalition for Retirement Security and the National Committee to Preserve Social Security and Medicare.
Earlier, CWA President Morton Bahr wrote to Senate Finance Committee Chairman William V. Roth (R-Del.) outlining some of the measure’s critical flaws and language that would permit radical cutbacks in workers’ accrued benefits. The bill would allow pension plan amendments that would decrease certain accrued benefits, including early retirement subsidies, Bahr said.
In setting standards for the conversion of traditional defined benefit plans to cash balance plans, the bill should reflect that such conversions would be required to recognize the full value of a participant’s accrued benefits to date, he wrote. But the committee’s version does not, and instead establishes a floor equal to the present value of benefits commencing at normal retirement age. “Excluding early retirement benefits is unacceptable,” Bahr said, reminding the committee that this issue at IBM was the starting point for “the ongoing firestorm on the cash balance issue.”
The group has the support of Sen. Tom Harkin (D-Iowa), who has pledged to offer an amendment to the Retirement Security and Savings Act to address “the abuses workers face when their employers switch to cash balance plans.”
As part of the campaign, the coalition is delivering a petition to Senate leaders urging them to support the Harkin amendment and to reject the bill, which would not only legitimize cash balance plans but undermine ongoing lawsuits against such plans.
On Capitol Hill, the coalition held separate briefings for reporters and Senate staff with specific examples of how workers have been injured by their employer’s changeover to a cash balance plan, with older workers generally receiving less than they would have received under their traditional plan.
Lee Conrad, Alliance@IBM/CWA, outlined how he was affected by IBM’s switch- over in 1999 to a cash balance plan. Conrad noted that as a manufacturing worker, he was earning around $30,000, not the high-flying pay levels of some in high-tech industries. That meant the shift to a cash balance plan and corresponding cuts in pension benefits would hit him especially hard, he said.
Janet Kruger, of the IBM Employees Benefits Action Coalition and also a member of Alliance@IBM, joined other presenters, including the Pension Rights Center, American Association of Retired Persons, the Coalition for Retirement Security and the National Committee to Preserve Social Security and Medicare.
Earlier, CWA President Morton Bahr wrote to Senate Finance Committee Chairman William V. Roth (R-Del.) outlining some of the measure’s critical flaws and language that would permit radical cutbacks in workers’ accrued benefits. The bill would allow pension plan amendments that would decrease certain accrued benefits, including early retirement subsidies, Bahr said.
In setting standards for the conversion of traditional defined benefit plans to cash balance plans, the bill should reflect that such conversions would be required to recognize the full value of a participant’s accrued benefits to date, he wrote. But the committee’s version does not, and instead establishes a floor equal to the present value of benefits commencing at normal retirement age. “Excluding early retirement benefits is unacceptable,” Bahr said, reminding the committee that this issue at IBM was the starting point for “the ongoing firestorm on the cash balance issue.”