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CWA Fights IRS Proposals Affecting Pension Plans
Retirement security - already shaky in today's economy - would be further undermined by regulations the Internal Revenue Service is proposing for the conversion of traditional defined benefit pension plans to often less valuable cash balance plans, CWA told the IRS in a brief filed with the agency.
With the stock market's slide and employers' bottom-line agendas, pension plans designed to ensure a reliable income for retirees are in trouble, and the IRS regulations would make the situation worse. Companies could more easily switch to cash balance plans, with the following consequences:
*** Workers would have no protection from a sudden, often tremendous loss in benefits.
*** No "transition" arrangements to protect senior workers would be required
*** Employers could slash pension benefits and offer no recourse to the vast majority of workers.
Members of CWA Local 1701, Alliance@IBM have been mobilizing around this issue and will join an April 9 news conference with congressional supporters to protest these changes.
"CWA is concerned that the proposed regulations will alter the landscape for retirement security for union and non-represented workers alike," CWA said in its brief. "By codifying practices that cut workers' benefits, these regulations will ensure that represented employees will have greater difficulty maintaining adequate and fair pension benefits."
Non-unionized workers are even more at risk. "Those who lack the power to bargain collectively will fall victim to employers' desire to gain the advantages of a cash balance conversion, without ensuring that employees get a result that is in their best interest," CWA stressed.
Because of strong CWA contracts, the union has been able to negotiate cash balance conversion options for members with proper protections, instead of accepting employer demands to change plans outright. "Our union has the ability...to demand that employers negotiate the terms of benefit plans. This has allowed us to reach agreement on conversions and, in other situations, to determine that such a change will not meet the needs of our members," CWA said.
CWA is urging the Treasury Department to rescind the proposed regulations and develop an alternate plan based on meetings with citizen groups and labor and trade organizations. CWA also says legislation needs to be put forth to address the serious flaws involved in cash balance account plan designs.
With the stock market's slide and employers' bottom-line agendas, pension plans designed to ensure a reliable income for retirees are in trouble, and the IRS regulations would make the situation worse. Companies could more easily switch to cash balance plans, with the following consequences:
*** Workers would have no protection from a sudden, often tremendous loss in benefits.
*** No "transition" arrangements to protect senior workers would be required
*** Employers could slash pension benefits and offer no recourse to the vast majority of workers.
Members of CWA Local 1701, Alliance@IBM have been mobilizing around this issue and will join an April 9 news conference with congressional supporters to protest these changes.
"CWA is concerned that the proposed regulations will alter the landscape for retirement security for union and non-represented workers alike," CWA said in its brief. "By codifying practices that cut workers' benefits, these regulations will ensure that represented employees will have greater difficulty maintaining adequate and fair pension benefits."
Non-unionized workers are even more at risk. "Those who lack the power to bargain collectively will fall victim to employers' desire to gain the advantages of a cash balance conversion, without ensuring that employees get a result that is in their best interest," CWA stressed.
Because of strong CWA contracts, the union has been able to negotiate cash balance conversion options for members with proper protections, instead of accepting employer demands to change plans outright. "Our union has the ability...to demand that employers negotiate the terms of benefit plans. This has allowed us to reach agreement on conversions and, in other situations, to determine that such a change will not meet the needs of our members," CWA said.
CWA is urging the Treasury Department to rescind the proposed regulations and develop an alternate plan based on meetings with citizen groups and labor and trade organizations. CWA also says legislation needs to be put forth to address the serious flaws involved in cash balance account plan designs.