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CWA, Pension Rights Center, Press Retirement Security for Workers
Following is a statement by George Kohl, senior executive director for research and development, Communications Workers of America, on retirement security and pension concerns of IBM employees:
At CWA, our union has seen cash balance proposals since the early 1990's.
We rejected those first proposals because like the IBM plan-middle aged workers with 15 to 20 years of service lost benefits. We described the Cash Balance Plan as having a Bermuda Triangle where mid-service employees fell into a black hole of lost benefits. There is no way to maintain benefits for middle aged, mid-service employees under a Cash Balance Plan and without a union negotiating for them, telecommunications workers would have suffered the same fate as IBM employees.
In the last round of telecommunications bargaining, we did negotiate two Cash Balance plans and rejected two other management proposals. The difference lay in the transition protections and members willingness to value the portability feature of cash balance accounts. Some of the key "safety net" features we've negotiated include maintaining the "old" plan for employees with 15 or more years of service and only placing future pension benefit increases into a Cash Balance Account which will lead to a long, gradual transition from the old plan to the new.
When we rejected cash balance plans, we rejected them because the company proposals did not measure up to the expectations of our bargainers and did not meet the retirement needs of our members. In those cases, the company proposals would have stripped benefits from middle service, middle age employees, just as IBM did.
However, unlike IBM employees, we had a chance to discuss, evaluate, debate and vote to accept or reject the Company proposed change in pension plans. Pension plans save Corporate America billions of dollars in taxes. It is our money, set aside for our retirement security. Employers should not be able to take it back by changing plan designs. We welcome legislation to help prevent companies like IBM from stealing pension security.
Employees need to build an organization to improve or retain their pension plans. For without organization, employer greed will run roughshod over the interests of loyal employees who have built the company.
We are pleased to stand with IBM employees today in your fight for jobs with justice.
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At CWA, our union has seen cash balance proposals since the early 1990's.
We rejected those first proposals because like the IBM plan-middle aged workers with 15 to 20 years of service lost benefits. We described the Cash Balance Plan as having a Bermuda Triangle where mid-service employees fell into a black hole of lost benefits. There is no way to maintain benefits for middle aged, mid-service employees under a Cash Balance Plan and without a union negotiating for them, telecommunications workers would have suffered the same fate as IBM employees.
In the last round of telecommunications bargaining, we did negotiate two Cash Balance plans and rejected two other management proposals. The difference lay in the transition protections and members willingness to value the portability feature of cash balance accounts. Some of the key "safety net" features we've negotiated include maintaining the "old" plan for employees with 15 or more years of service and only placing future pension benefit increases into a Cash Balance Account which will lead to a long, gradual transition from the old plan to the new.
When we rejected cash balance plans, we rejected them because the company proposals did not measure up to the expectations of our bargainers and did not meet the retirement needs of our members. In those cases, the company proposals would have stripped benefits from middle service, middle age employees, just as IBM did.
However, unlike IBM employees, we had a chance to discuss, evaluate, debate and vote to accept or reject the Company proposed change in pension plans. Pension plans save Corporate America billions of dollars in taxes. It is our money, set aside for our retirement security. Employers should not be able to take it back by changing plan designs. We welcome legislation to help prevent companies like IBM from stealing pension security.
Employees need to build an organization to improve or retain their pension plans. For without organization, employer greed will run roughshod over the interests of loyal employees who have built the company.
We are pleased to stand with IBM employees today in your fight for jobs with justice.
###