Pension Reform Bill Could Thwart ABC Attack

Corporations that give executives lavish retirement plans would have to provide a guaranteed, defined benefit pension for their other employees under a CWA-supported Senate bill (S.1725) that aims to fix problems created by the federal Pension Protection Act of 2006.

The bill, introduced last week by Sen. Tom Harkin (D-Iowa), could impact ABC's scheme to freeze the pensions of NABET-CWA members. The network sprang the pension demand on NABET several weeks into contract talks in March, prompting members to vote strike authorization.

"'ABC wants to take our healthy, successful, well-funded pension plan and freeze it, and they're using the current Pension Protection Act as an excuse to do it," NABET-CWA President John Clark said.  "This law needs to be changed and we commend Senator Harkin for his efforts in that direction."

Clark and other critics of the 2006 pension legislation say that rather than ensure a secure retirement for workers, the law has led even hugely profitable companies such as ABC-Disney, Lockheed Martin and IBM to freeze their defined benefit plans; Verizon froze its defined beneift plan for non-union employees. The problem is that under the bill's funding requirements, many companies would have to make large contributions to their pension funds in a short period of time. Instead, some are simply dumping their plans.

"This is just plain wrong," Harkin said. "If a company is profitable enough to afford gold-plated pensions for executives, then it can provide a pension for workers who generated the profits by paying for those pensions."

CWA research economist, Bob Patrician, who spoke about the ABC situation at a news conference with Harkin on June 28, said the threatened freeze "would reduce the benefits that our members will receive by 25 percent - a minimum of $18,000 per year at age 65."

ABC-Disney, which earned more than $4.5 billion in profit last year and had more than $35 billion in revenue, sponsors several other defined benefit plans for employee groups as well as pension benefits for its executives in the form of deferred compensation. The network has said nothing about changes to those plans.

"According to the company's 2007 proxy statement, the combination of Disney's qualified plan for salaried employees and the deferred compensation plan for executives will pay Robert Iger, president and CEO of the Disney Company, $972,291 per year beginning at age 65 - after seven years of service," Patrician said.

The Harkin bill would further protect workers by establishing a pension participant advocacy office at the Department of Labor to identify and fix recurrent pension problems. It would also prevent employers from using mergers as an excuse to dump promised early-retirement pensions, among other protections.

"The premise of this bill is that pensions are critical to retirement security and companies should not raid or slash pensions in order to cut costs or boost profits," Harkin said.