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CWA Presses IRS on Pension Fairness
CWA has joined members of Congress and pension rights supporters in calling on the Treasury Department and the Internal Revenue Service to rescind proposed regulations that threaten workers' retirement security.
Testifying before a Treasury Department hearing, Linda Guyer, president of Alliance@IBM, CWA Local 1701, reminded officials that workers rely on the government to set fair ground rules for the terms and conditions of employment, including retirement security. The Treasury Department proposal fails this test, she stressed.
If approved, the Treasury Department regulations would give corporations broad authority to convert traditional defined benefit pension plans to cash balance plans, causing many workers, especially longtime employees, to lose a substantial portion of their retirement assets.
Members of Alliance@IBM mobilized around IBM's 1999 attempt to unilaterally convert to a cash balance plan, a move that would have cost long-term workers as much as 50 percent of their pensions, Guyer said. A national campaign, with congressional and community support, resulted in IBM's backing away from full implementation and enabling employees with 40 years of age plus at least 10 years of service to choose which plan better met their needs. However, this meant some longtime workers who didn't meet both criteria still suffered a substantial loss, she noted.
CWA has indicated strong support for the Pension Benefits Protection Act, introduced by Rep. Bernie Sanders (I-Vt.) and George Miller (D-Calif.), to blunt the harsh impact of the proposed regulations. An identical measure also was introduced in the Senate by Sen. Tom Harkin (D-Iowa).
The bill is needed to restore important safeguards for workers, first, by giving employees who are 40 years old or who have at least 10 years of service the option to choose whether to remain in the traditional plan or move to the cash balance plan.
Second, the bill would prohibit the "wear away" feature in many cash balance plans that requires employees after a plan conversion to work many years before accruing any additional benefits.
Guyer told the committee that CWA has negotiated with employers over cash balance conversions, reaching agreement when plan changes meet the needs of workers. The proposed IRS regulations, however, ignore workers' interests, she said.
Testifying before a Treasury Department hearing, Linda Guyer, president of Alliance@IBM, CWA Local 1701, reminded officials that workers rely on the government to set fair ground rules for the terms and conditions of employment, including retirement security. The Treasury Department proposal fails this test, she stressed.
If approved, the Treasury Department regulations would give corporations broad authority to convert traditional defined benefit pension plans to cash balance plans, causing many workers, especially longtime employees, to lose a substantial portion of their retirement assets.
Members of Alliance@IBM mobilized around IBM's 1999 attempt to unilaterally convert to a cash balance plan, a move that would have cost long-term workers as much as 50 percent of their pensions, Guyer said. A national campaign, with congressional and community support, resulted in IBM's backing away from full implementation and enabling employees with 40 years of age plus at least 10 years of service to choose which plan better met their needs. However, this meant some longtime workers who didn't meet both criteria still suffered a substantial loss, she noted.
CWA has indicated strong support for the Pension Benefits Protection Act, introduced by Rep. Bernie Sanders (I-Vt.) and George Miller (D-Calif.), to blunt the harsh impact of the proposed regulations. An identical measure also was introduced in the Senate by Sen. Tom Harkin (D-Iowa).
The bill is needed to restore important safeguards for workers, first, by giving employees who are 40 years old or who have at least 10 years of service the option to choose whether to remain in the traditional plan or move to the cash balance plan.
Second, the bill would prohibit the "wear away" feature in many cash balance plans that requires employees after a plan conversion to work many years before accruing any additional benefits.
Guyer told the committee that CWA has negotiated with employers over cash balance conversions, reaching agreement when plan changes meet the needs of workers. The proposed IRS regulations, however, ignore workers' interests, she said.