Pensions Across the Board are Under Attack

CWA members' pension plans are protected by union contracts. But when non-represented workers' pensions come under attack at healthy companies like Verizon and IBM, union members have to wonder: "Are they coming after my retirement next?"

Verizon announced in early December it would "freeze" the defined benefit pensions of non-represented workers and managers effective July 1, 2006. That means the company will stop contributing to the pension plan and the pensions of non-represented workers who retire five, 10 or more years from now will be frozen at their values as of that date.

"Our pensions are safe for now only because we have a strong contract," said Jim Osenburg of Local 2101, a Verizon systems technician in Baltimore. "But if they've hit managers with this already, you know we're likely to see it in the next round of bargaining."

At IBM, CWAers do not have collective bargaining yet. Alliance@IBM CWA Local 1701 organized in 1999 specifically to battle company attacks on pensions and retiree health benefits.

When IBM announced early this year that it would freeze its $48 billion pension plan and instead enhance its 401(k) plan at the end of 2007, it claimed that the cut was necessary for the company to be competitive. But as Local 1701 President Linda Guyer pointed out, CEO Sam Palmisano "will retire on about $10,000 a day. What some of our members will lose over their lifetimes would pay for 10 days of his retirement. If it's really needed, why doesn't he make a sacrifice?"

Alliance@IBM has fought for pension fairness through the courts, through legislative activity and through mobilization, but said Guyer, "If a union contract was in place, changes as significant as this to employee retirement would have to be negotiated. It's time for employees to fight back."

CWA and the Pension Rights Center have calculated that the freeze on Verizon's pension plan could mean a loss of 21 percent, or more, of an employee's pension security. A new website — www.verizonretirementwatch.com — gives management and non-represented workers a way to tell the world how the company's action threatens their future by betraying the promises made to thousands of employees.

CWA President Larry Cohen called Verizon's action, like that of IBM and others, "a chilling signal not just for current workers who have lost their retirement security, but to the future generation of workers who will be penalized before they ever start their first job."

Wealth of Info
A slide show available on the website shows just how Verizon pension plans will change and how much workers will lose. The losses are dramatic.

For example, a non-represented worker, age 40, with 10 years of service on June 30, 2006, will lose up to 14 percent of previously expected pension benefits on retirement at age 58. At 15 years of service, the loss increases to 21 percent and it gets worse because non-represented retirees will have to pay as much as 50 percent of their health care premiums. About 56,000 non-represented workers and managers will be affected.

No wonder employees are angry, as can be seen by comments posted on the website. One described the blow as "a punch in the gut."

Another worker who will soon turn 56, with 38 years of service calculates that he will lose over $100,000. "They stole from all of us. How can Ivan (Seidenberg, Verizon's CEO) look in the mirror?" he asks. Verizon has paid nearly $14 million into a supplemental pension plan covering Seidenberg.

Battling Big Blue
Alliance@IBM has fought for pension fairness since 1999, when IBM tried to eliminate its defined-benefit and substitute a cash-balance plan. Members participated in Senate hearings that year and an active mobilization campaign that forced IBM to roll back the changes for more senior employees.

Now IBM has frozen plans covering all 120,000 employees.

Lee Conrad, national coordinator of the Alliance@IBM, described the move as "a further takeaway of the employees' retirement security and part of a national trend to drive workers' standard of living down while enhancing corporate profits and executive bank accounts."

Local 1701 and members are getting involved in the pension fight by:

• Writing their senators and representatives asking for pension fairness.
• Writing letters to the editors of their local newspapers "expressing their outrage at IBM's pension theft."
• Wearing black and blue to work on Wednesdays to signify "the beating our members are taking on their pensions."
• Posting news articles and editorials on www.allianceibm.org and working with the Pension Rights Center, www.pensionrights.org, and other organizations to keep members and the public informed and to build support for the pension fight.