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Senate Committee Investigates IBM, Corporate Pension Tactics
CWA President Morton Bahr told a Senate panel that workers should not be harmed by corporations seeking the financial benefit of converting defined benefit pension plans into cash balance accounts.
"Our union has had a good deal of experience with the issue and we have found that there are potential benefits to cash balance plans, as well as potential pitfalls that can grossly penalize longer-term employees unless the conversion is properly implemented to protect them," Bahr told the Senate Health, Education, Labor and Pensions Committee.
In addition to Bahr, senators heard from IBM workers and executives, benefits experts and members of Congress proposing legislation to prevent companies from raiding workers' pensions.
Bahr cited CWA's experience in bargaining a cash balance account plan with AT&T. While AT&T first proposed such a plan in 1992, that proposal "would have reduced benefits for many thousands of mid-career employees and was rejected by CWA." CWA and AT&T last year worked out an agreement to change the pension plan "in a way that met our bottom line requirements," he said.
"It's clear from CWA's experience that workers must have union representation and collective bargaining rights to ensure that conversion to cash balance accounts is phased in, with appropriate safeguards to protect long- term workers from the personal crisis of learning that their retirement income has been slashed. For those unlucky enough to lack union representation, there are no current legal protections from such injustice," Bahr pointed out.
Members of Congress, including Sen. Tom Harkin (D-Iowa) and Reps. Maurice Hinchey (D-N.Y.) and Bernard Sanders (I-Vt.), are introducing legislation to help safeguard workers' retirement security.
"Our union has had a good deal of experience with the issue and we have found that there are potential benefits to cash balance plans, as well as potential pitfalls that can grossly penalize longer-term employees unless the conversion is properly implemented to protect them," Bahr told the Senate Health, Education, Labor and Pensions Committee.
In addition to Bahr, senators heard from IBM workers and executives, benefits experts and members of Congress proposing legislation to prevent companies from raiding workers' pensions.
Bahr cited CWA's experience in bargaining a cash balance account plan with AT&T. While AT&T first proposed such a plan in 1992, that proposal "would have reduced benefits for many thousands of mid-career employees and was rejected by CWA." CWA and AT&T last year worked out an agreement to change the pension plan "in a way that met our bottom line requirements," he said.
"It's clear from CWA's experience that workers must have union representation and collective bargaining rights to ensure that conversion to cash balance accounts is phased in, with appropriate safeguards to protect long- term workers from the personal crisis of learning that their retirement income has been slashed. For those unlucky enough to lack union representation, there are no current legal protections from such injustice," Bahr pointed out.
Members of Congress, including Sen. Tom Harkin (D-Iowa) and Reps. Maurice Hinchey (D-N.Y.) and Bernard Sanders (I-Vt.), are introducing legislation to help safeguard workers' retirement security.