www.DukeEmployees.com - Duke Energy Employee Advocate
Pensions - Page 3
- Congressman Bernie Sanders, The Foremost Employee Pension Rights Advocate
The Pension Nuclear OptionEmployee Advocate – www.DukeEmployees.com – August 4, 2005
Where do all the outlandish corporate programs come from? Some do not pass the snicker test. Some do not pass the smell test. Some do not pass legal scrutiny and are quietly dismantled. Apparently the corporate suits are severely deficient in creativeness; they constantly steal programs and slogans from each other. If one corporation comes up with a program, no matter how inane it is, it is guaranteed that others will copy it.
Some executive, high on paint thinner, proclaimed that his company would have 100% customer satisfaction. Other corporations promptly vowed that they would achieve 100% customer satisfaction. None achieved it and none ever will.
One company proclaimed that it would be the “company of choice.” These corporate fads spread like wildfire. Soon more executives were claiming to have the company of choice. Some of these were actually the “company of poor choice.”
The Employee Advocate’s all time favorite corporate program is “zero injuries, sicknesses, and deaths.”
“Respect for the individual” has had its share of play. But everyone over the age of two knows that most executives only respect one thing – wealth. And, most are not too picky about how they acquire it. These days fines have gone from millions of dollars to billions of dollars. In the face of this, executives are pleading for less laws governing business! For every executive nailed, one can only imagine how many get away clean.
The most flagrant method of escaping penalty for wrongdoing is to simply buy new laws. Sometimes it’s the only way out, short of the unthinkable: actually making restitution to those victimized. With enough political contributions and enough money paid to lobbyists, laws can change overnight.
The retirement cash balance plan is an example of a corporate ploy that spread like wildfire. These plans did not spread because they are ethical or even legal. They spread because of the tremendous amounts of pension money that can be taken from employees through a cash balance conversion.
Corporations cried out to G. W. Bush to save them from the consequences of their own greedy actions. Bush eagerly responded by trying to legalize cash balance plans by changing government regulations. These attempts failed. The “pension nuclear option” is now being promoted: lobbying Congress to retroactively legalize cash balance plans. Do not think that it cannot be done. Congress has previously saved the corporations’ bacon by retroactively legalizing the illegal.
What is so bad about this situation is some employees are still completely oblivious to what is happening to them. There have been dozens of opportunities to fight cash balance plans, but many workers have yet to lift a finger in their own behalf. While waiting for someone else to save their pensions, they may find that there are no longer any pensions to be saved.
For employees willing to take action to stop cash balance plans, it’s time to pull out all the stops! Call, fax, or e-mail your senators and congressman and ask them to take no action that will retroactively legalize cash balance plans. If they do not hear from you, they may assume that you do not care one way or the other.
The Price of Pension GreedEmployee Advocate – www.DukeEmployees.com – July 25, 2005
Employees, aged 40 and above, are protected by federal age-discrimination labor laws. Suppose a corporation wanted to take pension benefits from employees by converting to a cash balance plan. It would seem reasonable to grandfather those 40 and over.
But when pension greed hits a corporation, it cannot see the law for the money. Many corporations converting to cash balance plans gave a choice to only those 50 and over. Why would a corporation practice age discrimination on employees aged 40 to 50? That’s easy. For the money! Taking pension benefits from the 40 to 50-year-old group meant more millions of dollars for the executives.
IBM’s cash balance plan originally gave a choice to only employees 50 and over. IBM was dumbfounded by the backlash from employees. The very day before a congressional pension hearing, IBM rolled the choice back to age 40! It is evident that IBM knew it was on shaky legal ground, by denying employees aged 40 a choice of plans.
The employees sued anyway and won. The age discrimination portion of the settlement is being appealed by IBM.
If IBM lost the age discrimination case, after grandfathering employees aged 40, what about all the companies that left the cutoff age at 50? No wonder they are throwing money at lobbyists like crazy. They want Congress to change the law retroactivity to save them from their own greed.
Craig Copeland, Employee Benefits Research Institute associate, told the Associated Press that corporations are now fearful of converting to cash balance plans, with a cutoff age of 50.
Corporations are a bullheaded lot when they smell pension money. But when they start seeing corporate heads on stakes, they tend to be a little more cautious. Now corporations are taking the pensions of those under 40. The corporations that rushed in and took pension benefits from everyone under age 50 are now waiting for the other shoe to drop.
A $32 Million PensionEmployee Advocate – www.DukeEmployees.com – July 19, 2005
Almost daily there are reports of employees losing half or more of their pension benefits. This lost money has to go somewhere. One group is making out okay on pensions – the executives.
Consider Stephen S. Crawford, co-president of Morgan Stanley. He received a retirement package of $32 million, according to The New York Times. $32 million is an obscene amount under any circumstances, but it’s even worse than you think. He was only in the position for around three months!
A week before that, CEO Philip Purcell was forced out of the company and collected $113 million in compensation.
A Pension Break for CorporationsEmployee Advocate – www.DukeEmployees.com – July 13, 2005
Marie Cocco covered the latest pension skullduggery in the article “Pension 'reform' to serve corporations,” published by Newsday.com. Republican Rep. John Boehner has pushed a bill through the House Committee on Education and the Workforce that would change the definition of age discrimination. Not only that, but corporations with illegal pension plans will get a special deal. If they act quickly to conform to the new rules, their liability will be capped!
Ms Cocco wrote: “With friends in Congress, who needs to worry about losing a lawsuit?”
Hey, corporations don’t pass out millions of dollars to lobbyists for nothing!
One only has to read Rep. Boehner’s comments to see who owns him. He said cash balance plans are "the future of the defined-benefit system." He says that pension lawsuits are "jeopardizing generous pension benefits for workers across the country." Here’s another good one "Legal harassment of these retirement plans needs to stop."
Rep. Boehner is a real piece of work. Dozens of corporations must have their brands burned into his buttocks.
Employees only bring pension lawsuits when their pensions have been ripped off by greedy corporations! Some have lost half of their pension value in one whack. Is receiving one-half of the true value of a pension what Rep. Boehner calls "generous pension benefits”?
If an employees loses half of his pension and seeks justice, Rep. Boehner calls it “legal harassment”!
Do not confuse “benefits” with something free. Pension benefits are deferred compensation - not charity. And, don’t get the idea that an early retirement subsidy is something given by corporations. The “subsidy” is also deferred compensation.
Eva Cantarella, pension attorney, said that employers were well aware of the pension laws, but chose to break them anyway. She said "Now they're saying, 'Help, come save our fannies.' " On Boehner’s actions, she said "It indirectly sanctions conduct that was previously considered illegal."
Ms Cocco wrote: “But they worried about how pension reductions would affect upper managers. They plotted more generous 401(k)s and a supplemental pension system for executives. The rich are (still) different from you and me.”
If IBM were to lose its age discrimination appeal, its top liability would be $1.7 billion. That is far less than was taken from the employees. Of course IBM was seeking a way to get out of making even partial restitution.
Ms Cocco wrote: “But there is nothing that focuses the lobbyist mind like a proposed $1.7 billion settlement. It could, after all, signal to all the other judges hearing all the other lawsuits that people have indeed been wronged. Reparations, it would seem, might be in order.
“Desiring to escape such a demand for accountability, business lobbyists turned to those who know best how to avoid being called to account. If the facts and the law aren't on their side, they can always find a lawmaker who is.”
How Bad is the Pension Bill?Employee Advocate – www.DukeEmployees.com – July 6, 2005
The House Education and the Workforce Committee has pushed through a “pension-funding bill.” How bad is the bill? It is so bad that Labor Secretary Elaine Chao wrote Chairman John Boehner a letter protesting the bill, according to The Hill. She stated: “The bill should be improved to better protect the retirement security of American workers, retirees and their families. The legislation does not address fully the problems facing the defined-benefit pension system.”
As a lapdog of G. W. Bush, Elaine Chao is no friend of working Americans. If the bill is so bad that she is protesting it – look out!
The Democrats could not vote on the bill because the Republicans kept the details hidden from them.
It has been speculated for some time that Rep. Boehner would attempt to legalize cash balance plans.
Waivers Can be BeatenEmployee Advocate – www.DukeEmployees.com – May 5, 2005
What if a corporation illegally took pension money from an employee? What if earned medical coverage was also illegally taken from the employee? The corporation could potentially be liable for hundreds of thousands of dollars, and in some cases, over a million dollars. This potential liability could be per employee of an affected class. It is easy to see why executives are happy to give an employee a few thousand dollars to sign away all legal recourse.
But sometimes greed takes control of the corporation and the documents are loaded up with every outlandish stipulation imaginable. These documents may be so fanciful that they are not even legal. Indeed, some are not worth the proverbial paper they are printed on. Some documents state that a former employee may not sue for any reason, including a violation of civil rights!
Often a relatively small amount of money is offered if a laid off employee will sign a covenant not to sue. Corporation bank on workers being willing to sign anything for a few dollars in cash and most are.
It really does not matter if the documents are legal, as long as the employees believe they are binding. In that case, many employees think they have no legal recourse because they “signed some papers.” The employee who challenges the agreement may find it to be illegal and not binding.
Consider the case of Thomforde versus IBM. IBM laid off Dale Thomforde, who signed a document titled “General Release and Covenant Not to Sue (Agreement).”
Mr. Thomforde signed the agreement on August 24, 2001 and simultaneously presented IBM with a letter contesting his reduced retirement benefits. This is exactly what no corporation wants to deal with – an employee who does not buy the hype. Executives prefer employees who will take a “bribe” of a few dollars and slink away forever.
IBM denied Mr. Thomforde’s request for the retirement benefit to be corrected. The only avenue available for redress was the legal system. He started by filing a complaint with the Equal Opportunity Commission (EEOC). Workers do not always understand the value of filing an EEOC charge.
IBM tried to have the charges dismissed, but the EEOC granted Mr. Thomforde a Notice of Right to Sue in October 2002. He immediately filed a lawsuit and was off to the races.
The district court granted the IBM motion for summary judgment and found the waiver to be enforceable. IBM won – that round.
A good rule of thumb is to never start anything that you are not willing to finish, no matter what it may take. Mr. Thomforde appealed the district court decision.
On May 3, 2005, the Eight Circuit Court of Appeals reversed the district court’s summary judgement; the agreement is illegal.
What is the moral of this story? Just because a corporation says it so, does not necessarily make it so!
Best Places to Work?Employee Advocate – www.DukeEmployees.com – April 7, 2005
The South Florida Business Journal published these comments from employees of “Best Places to Work” finalists:
"If an opportunity to work for another company came my way, I would take a pay cut just to get away from here."
One employee expressed his sentiments concisely:
"This place blows chunks!!!!!!!!!!!!"
Keep in mind that these people are employed by the “Best Places to Work.” One shutters to think what would be said by employees of the “Top Benefits Robbing Places to Work.”
Speaking of taking away benefits, check out this last quote:
"This is the first time in my career where I've worked for a company that has gone out of its way to strive for mediocrity."
It brings to mind Duke Energy’s deliberate effort to go from a-cut-above to run-of-the-mill. All of the negative events faced by Duke were brought about by deliberate actions taken to become commonplace. A variety of cover stories were offered for destroying the pension plan. But some managers have offered more candid versions.
One manager told a group of employees that senior management decided that the pension plan was “too lucrative.”
Never mind that it was senior management who devised the plan and forced all employees into it. There was no option to take more pay and no pension. Senior management unilaterally devised the plan, forced employees into it, and failed to honor their own plan decades later.
The manager said that Duke looked around at companies with cheaper pension plans and copied them. So, senior management, with forethought, went “out of its way to strive for mediocrity."
One only needs to read the new for the last several years to see that management succeeded, and then some!
Age Discrimination Lawsuits Green LightEmployee Advocate – www.DukeEmployees.com – March 31, 2005
On Wednesday, the Supreme Court gave the green light to employee age discrimination lawsuits against corporations, according to the New York Times. Heretofore, lower courts maintained that workers must prove that the discrimination was intentional. The lower courts were overruled; “disparate impact” claims by employees may proceed.
In Smith v. City of Jackson, No. 03-1160, the employees did not prevail. But the clarification of the disparate impact point may well help other employees win their age discrimination cases.
On Tuesday, the Court ruled that Title IX, which bars sex discrimination in schools, also protects those who file the charges from retaliation.
On Wednesday, a federal district judge blocked a Bush administration rule legalizing the reduction or elimination of retiree health benefits at age 65. G. W. Bush is in favor of tax cuts for his cronies. He is in favor of workers losing retirement, health, Medicare, and Social Security benefits. What a guy.
Duke Energy did not waste any time in taking away all retiree health coverage. In 1999, under CEO Rick Priory, Duke decreed that future retirees would lose all health benefits at age 65. This deferred compensation was used to lure employees to stay with Duke for 30 years.
This huge reduction in earned benefits came only two years after employees were forced into a chintzy cash balance pension plan. Duke baited employees to stay with the company for decades, then switched them to cheap retirement benefits and no health benefits at age 65. What a company!
During all of this, only on thing was never cut back - executive compensation. It just keeps soaring and soaring.
$10 Million Pension Settlement OfferedEmployee Advocate – www.DukeEmployees.com – March 27, 2005
Conseco has offered a $10 million retirement plan settlement, according to its annual report and the Indianapolis Star. Roderick W. Russell sued Conseco over two years ago for failing to disclose key facts regarding the retirement plan. He further charged that the company and some of its top officers wrongly allowed employees to keep investing in Conseco stock, although the firm was approaching bankruptcy.
Former Conseco officials Stephen Hilbert, Gary Wendt, William Shea, Rollin Dick and Charles Chokel are among those sued.
CEO William S. Kirsch will receive an annual salary going forward of $800,000.
Not too bad. But then there is the $1.7 million signing bonus he received in August.
Of course, there is also the restricted stock award valued at $6.5 million.
In 2004, his salary was a mere $300,000. He did pick up a cash bonus of $1.2 million in 2004.
The new chief administrative officer did alright too. James E. Hohmann received a $600,000 bonus during his first two months on the job.
Employees tend to lose basic benefits because of corporate greed. At the same time, corporations invent new ways to shove more money at the executives.
Cleaning Out the Pension FundEmployee Advocate – www.DukeEmployees.com – March 4, 2005
Day by day it becomes more obvious that the true corporate goal is to clean out every pension fund in America. Many corporations have already hit their pension funds hard, but they keep coming back for more.
Gutting pension funds is easy with so many management consultants eager to sell methods to do it. Each day, as you work, these consultants are plotting for more ways to take your pension and other benefits. If any way is found to take away benefits, it will be marketed to other greedy CEO’s. That is why all the flaky cash balance plans are so similar.
Cash balance plans are like playing cards, all different, but basically the same. The cash balance empire is composed of many different cards. You know what happens to a house of cards with one is knocked down. A federal court has already knocked down the IBM cash balance plan, ruling it to be illegal and inherently age discriminatory. Lawsuits continue to be filed against cash balance plans of other corporations. The Bush administration is trying to prop up the shaky house of cards by issuing regulations.
One consulting firm, with a vested interests in saving the house of cards, is Towers Perrin. It, and other firms, have yet another idea for extracting money from pension funds, according to The New York Times. It wants corporations to have more access to “excess” pension funds.
How does pension fund money get to be excess?
By manipulating the funding rules, anything is possible. If the executives take out too much money and the company goes bankrupt, it’s not their problem. It is a problem for the employees. It becomes another problem for the Pension Benefit Guaranty Corporation (PBGC) to take over. Even then, employees are not guaranteed to recoup every pension dollar lost.
Cash balance plans are another way to create a fictitious surplus of funds. The surplus is fictitious because the true value of the pensions are not paid. If employees received the true value of their pensions, there would be no surplus. If the employees are shortchanged on their pension payouts, there is an illusion of surplus funds.
Steven Kerstein, of Towers Perrin said "We think there needs to be access to the surplus."
Sure he does. All consulting firms feel that executives should be able to plunder all of the employees’ benefits. And all the while, they will be generating fat consulting fees.
Hostile takeover thrived in the 1980’s, when there were fewer laws to curb pension raiding. A hostile takeover would occur. The pension would be raided of “excess funds.” This money would finance the deal and leave a profit for the raiders, after the company was sold. The pension raiders would own the company long enough to drain the pension fund of as much money as they could.
It got so bad that some companies would actually pay the raiders not to be taken over! It was like paying a thug not rob you.
With cash balance plans, no takeover happens. It is the existing executives who drain the pension fund. Cash balance plans are a ploy to evade the 50 percent excise tax on pension raiding gains. In any case, it is always the employees who lose.
Richard A. Ippolito, PBGC chief economist, from 1986 to 1999, told of the problems of cash balance conversions. He wrote in The Journal of Law and Economics that conversions "almost always impose substantial capital losses on workers.”
Yes, the employees lose pension value due to cash balance conversions. The money goes into the pockets of executives, consultants, and “helpful” politicians. The pension plunder can only continue if it is legalized. The Bush administration is working to exempt cash balance plans from age discrimination laws. The corporations have a president in the White House. The employees will not have a president for at least another four years.
David Zion, Credit Suisse First Boston accountant and analyst, said "Currently, the pension fund is a nice profit center."
That’s another problem. Corporations are allowed to earn enormous profits on the pension fund, while denying employees the pensions that they have earned.
The Times stated that since the late 1930’s, federal tax law has held that any excess in a terminated pension fund belongs to the participants – “unless the plan contract specifically states that any excess resulting from ‘erroneous actuarial computation’ belongs to the company.”
Cash balance plans are very useful to corporations looking to take money from the pension fund. Using these plans, money can be effectively removed from the fund, without terminating it! The devastating effects are the same for the workers. But corporations are able to evade the 50% penalty.
IRS Faults Bank of America’s Pension PlanEmployee Advocate – www.DukeEmployees.com – March 3, 2005
The Bank of America pension plan may have violated the IRS anti-cutback rule, according to The Charlotte Observer. The anti-cutback rule guards against the reduction or elimination of accrued pension benefits.
The Security and Exchange Commission (SEC) annual 10-K filing indicate that the IRS has "tentatively concluded" that Bank of America violated pension plan tax regulations. The bank’s 1998 and 1999 retirement plans tax returns are being audited.
The SEC may recommend enforcement action against the bank’s securities unit, due to a trading and research probe. Last March, the SEC fined Bank of America $10 million for failing to provide requested documents. The record fine also covered the matter of the bank lying about the availability of the documents.
Bank of America is also facing a class action lawsuit by employees over pension and 401(k) plans. Bank of America predictably asked that the case be moved from Illinois to the Western District of North Carolina. Corporations always stand a better chance of getting off the hook there. It is immaterial how many laws have been broken when the trial is held in a “corporate friendly” court.
Citigroup Cash Balance LawsuitEmployee Advocate – www.DukeEmployees.com – February 21, 2005
One by one, corporations that converted to cash balance plans are being sued by employees and retirees. It could not happen to a more deserving bunch!
Citigroup is facing a lawsuit charging that its cash balance pension plan violates minimum accrual rules, according to the Wall Street Journal. Class action status is being sought in federal court.
The Citigroup plan allegedly violates "backloading" rules.
Elaine Chao’s Pension SpinEmployee Advocate – www.DukeEmployees.com – February 21, 2005
“Honoring Promises Made to Workers,” by U. S. Labor Secretary Elaine Chao, was published by the Seattle Post-Intelligencer. There is a problem with such a title by Ms. Chao. She is a lapdog of G. W. Bush and he is completely owned by large corporations. Every move by this pair has been to enrich corporate executives by allowing them to pilfer employees’ benefits. You know from the outset that the article will be a spin job.
Ms. Chao's opening comment: “Working hard and ‘playing by the rules’ has for generations of Americans been the guiding ethic for leading an honorable life and attaining financial security. Millions charted their career and finances based on a promise that when they retired they would have a stable income from a defined pension plan to live on the rest of their life. These workers trusted in that promise, planned around that promise and reasonably assumed that it was inviolable.”
She started off with true statements to lure in the gullible and uniformed. Good spin requires a certain amount of truth mixed in with the distortions.
She continued: “The $12 trillion in current pension assets is testament to the American people's hard work and faith in the future. Nearly $2 trillion of these assets reside in traditional defined benefit pension plans covering 20 percent of the nation's work force. The 34 million Americans covered by these traditional plans played by the rules.”
She still applying the soft sale. If you just reached earth from another planet, you would actually think that she was on your side. And do not let her title fool you. Ms. Chao has no interest in protection the rights of the labor force. Her leash is controlled by G. W. Bush. His leash is controlled by corporate executives. A huge number of these executives do not want to make good on the benefits that their employees have earned. They look to G. W. Bush for a get-out-of-jail-free card.
If Ms. Chao were truly interested in “honoring promises made to workers,” now would be the time to bring up the pension losses caused by cash balance conversions. Some have lost 50% of their pension value due to these conversions. But cash balance plans were not even mentioned.
What about the employees who “worked hard and played by the rules” to earn retirement health care benefits? For some, these earned benefits will vanish when they turn 65. The “fully paid” health benefits cost retirees more each year. She also failed to mention this confiscation of earned benefits.
Inadequate federal pension rules and underfunded pension plans were mentioned. She did not mention that just pension rules would outlaw the age discriminatory cash balance plans. She did not mention that corporations should not be allowed to skip payment to employees after 30 years of labor. Pension and retirement health benefits are deferred compensation. Corporation should not be allowed to promise one thing and deliver nothing.
All Ms. Chao mentioned was the underfunded Pension Benefit Guaranty Corp. (PBGC). This is a problem, but not the most significant one. She mentioned “the ‘perfect storm’ of historically low interest rates, equity markets that began sliding in 2000 and the economic downturn that followed.” She neglected to add greedy executives, consultants, and politicians to the list of causes.
Ms. Chao stated: “President Bush firmly believes that promises made to workers and retirees must be kept and that taxpayers must be protected from the failing pension system.”
Barf bag, please. All G. W. Bush is interested in is legalizing the benefits plunder already underway. Under Bush, the EEOC is trying to legalize corporations cutting off health benefits to retirees at age 65. Under Bush, the Treasury has attempted to legalize age discrimination in cash balance plans.
Ms. Chao’s only purpose is to help G. W. Bush sell “comprehensive reform.” Reform means setting up all the rules to favor corporations. You only thought the rules already favored corporations. Just wait until G. W. Bush is through with them! Tax reform, Medicare reform, Social Security reform, tort reform, overtime reform, and pension reform by G. W. Bush will cost Americans dearly. Only one crowd will make out like bandits – the wealthy executives. But that is the only group that G. W. Bush answers to.
Here is the closing sentence of the article: “At the same time, traditional defined pension plans represent promises made to workers that the president is determined will be promises kept now and in the future.”
The article is a sandwich. It starts with a piece of bread and ends with a piece of bread. The middle is loaded with arsenic.
Swallow it at your own risk!
Class Action Certification of Pension CaseEmployee Advocate – www.DukeEmployees.com – February 19, 2005
The law firm Lamothe & Hamilton sent notice that a new class action pension lawsuit against IBM was certified on Tuesday.
“Louisiana's First Circuit Court of Appeal in Baton Rouge, Louisiana upheld, in a brief memorandum opinion issued on Tuesday, the certification of a nationwide class of former IBM employees who left IBM after availing themselves of an early termination package called ITO II, in 1992.”
IBM pulled a good one on these retirees. It allegedly altered the terms of the release agreement after the employees retired by "suspending" the education benefit!
Terminating the TerminatorEmployee Advocate – www.DukeEmployees.com – February 17, 2005
Gov. Arnold Schwarzenegger has plans to privatize California's public pension systems. The Associated Press reported that other states are joining together to terminate the Terminator’s plans. Treasurer Phil Angelides and officials of five states are fighting the move.
Phil Angelides said Schwarzenegger's plan ''is part of a concerted effort to break apart the powerful voices of public pension funds that have stood up for ordinary investors in corporate boardrooms.''
North Carolina Treasurer Richard Moore is joining the fight against Schwarzenegger. New York State Comptroller Alan Hevesi and Nell Minow, editor of the Maine-based Corporate Library, are also joining the fight.
Nell Minow oversees the $121 billion New York State Common Retirement Fund. He said the campaign is about stopping a ''right-wing cabal from protecting the evil people who have done so much to damage the economy.''
Richard Moore oversees a $63 billion North Carolina pension system. He said ''Parts of corporate America were stealing. We helped shine a light on that.''
The Explosive Pension ProblemEmployee Advocate – www.DukeEmployees.com – February 14, 2005
Here is advice on how not to regain your pension from the Associated Press. In Bolivia, an unemployed tin miner was having difficulty collecting his pension. He tried for years to get his pension started, with no success.
Eustaquio Picachuri had been without a steady job for five years. His only means of support was working odd jobs. He was 47-years-old, but had petitioned for early retirement benefits. When one has been out of work for five years, with no prospects insight, he is pretty much retired.
Mr. Picachuri was not alone in his plight. Thousands of miners are unemployed because the government privatized the mines.
The governmen would not grant early retirement for the 15 years that Mr. Picachuri had worked as a miner. It declared that 20 years must have been worked to collect benefits. Never mind that it was the government’s actions that prevented him from completing 20 years of service.
The pension, about US$125 a month, was needed to support Mr. Picachuri, his wife, and his brother. But you know how hard it can be to get the government’s attention.
Mr. Picachuri will never receive his pension, but he did manage to get the government’s attention. Last year, he walked into the halls of Congress strapped with explosives.
He said "If you try to arrest me or move me, you all will die!"
He shouted "I'm not an assassin, I'm not a terrorist, but I am prepared to die."
He was wearing a vest wired with several sticks of dynamite. He had the attention of Congress and no one was crowding him. But his final act ensured that he would never collect his pension – he hit the switch.
The concussion rocked the hallway, killing Mr. Picachuri and two police officers. Ten people were wounded.
His friend, Rene Gutierrez, was not able to talk Mr. Picachuri out of his plan of action. Mr. Picachuri had told him that he was tired of living in hardship.
New Cash Balance Plan LawsuitEmployee Advocate – www.DukeEmployees.com – February 11, 2005
At least one corporation has backed off of its cash balance pension conversion. But most keep clinging to the pension money taken from employees. More and more lawsuits continue to be filed.
PNC Financial Services Group is facing a class-action pension lawsuit, according to a press release by the law firm law firm of Miller Faucher & Cafferty LLP. PNC is charged with seven counts of illegally converting its retirement plan into a cash balance plan.
Why do employees get so ill when this happens? Because many of them lose pension money that they have already qualified for.
It is alleged that “PNC Financial Services' unilateral decision to change its method for calculating pension benefits has dramatically reduced employees' retirement income and violates federal law.”
The decision to convert to a cash balance plan is virtually always unilateral, because only the corporation benefits. No employee in his right mind is going to voluntarily give away up to half of the pension that he has earned.
Sandra Register said "After thirteen years of hard work, carefully putting money aside to build a small pension for my retirement, the company told me they were switching the plan. Instead of receiving the annual pension that I worked to earn, PNC reduced my benefit to a lump-sum just slightly in excess of $12,000. I feel cheated."
Other specific charges:
Attorney Bryan Clobes said "Companies are simply trying to increase profits at the expense of their employees by breaking the retirement promises they made to plan participants. Any change in a company's pension program should safeguard workers' interests and must follow the law."
Some Retirees Still Get PensionsEmployee Advocate – www.DukeEmployees.com – February 1, 2005
The San Diego Committee on Government Efficiency and Openness held it first meeting, according to 10News.com. Retirement board member Diann Shipione let the brand new committee in on a few secrets. The city makes pension payments to hundreds of dead people and has been doing so for at least 10 years!
All over the United States, employees who have earned specific pension benefits do not get to collect them. Their benefits shrank when they were forced into cash balance plans. But in San Diego, even the dead get pensions!
Apparently in San Diego, benefits are not even reduced when a person dies. Even the Employee Advocate would go along with reduced pension benefits at death. After all, the deceased have no living expenses to speak of. The exception of course are those who get buried in rented tuxedos. But that's just a dead expense.
Ms. Shipione reveled that the pension board "laughs" at the City Council and "ridicules" the courts and the press. The board barred her from talking to the media. It eliminated minutes of the meeting and holds secret secessions.
That’s how the Dick Cheney Energy Task Force operated. Cheney’s secret energy meetings were held in 2001, but he is still hiding all details from the public.
Ms. Shipione said "The pension system pays hundreds of checks monthly to people that the Social Security Department claims are deceased."
Ms. Shipione said that she was denied access to the pension payment records. The committee also found a way to stop audit problems. It eliminated audits eight years ago.
Ditching Cash Balance PlansEmployee Advocate – www.DukeEmployees.com – January 26, 2005
It’s finally starting to happen. A corporation realized that cash balance plans are just not worth the bad publicity and employee hatred that they create. SBC Communications is freezing contributions to its cash balance and pension equity plans for managers, according to the Associate Press.
SBC has seen the error of its ways and will direct all new contributions to its traditional pension plan. Employees will be able to choose whichever plan offers the greater pension. No line is expected to form of employees wanting cash balance plans.
Most of the 107,000 nonmanagement employees already have traditional pensions.
More corporations may come to realize that alienating their most senior employees was not a wise move.
Lawsuit Over Retirement AdviceEmployee Advocate – www.DukeEmployees.com – January 24, 2005
Here are some good rules of thumb that will never let you down:
If you put too much credence in either one, it could be costly. A group of BellSouth retirees have learned a lesson about relying on financial advisors, according to The Charlotte Observer.
BellSouth employees, with no plans for imminent retirement, were allegedly convinced by Smith Barney financial consultants that they should retire.
Over 60 former BellSouth employees filed suit against Charlotte-based Salomon Smith Barney in 2003. Consultants Jeffery Sweitzer, Matthew Muller, Samuel Rankin, Randy Matz and Joseph Zentner are also charged with breach of fiduciary duty, negligence and other infractions.
Class-action status is being sought by the plaintiffs, who are largely from the Charlotte area. 300 BellSouth employees may be eligible to join the suit, which goes to mediation next week.
The complaint stated that the employees were told that they could maintain their lifestyles and even take a foreign vacation or buy a new car. They were advised that they could retire and generate more take-home pay than when they were working. Now that’s a seductive close!
Vickie McPhatter was led to believe that she could retire and her retirement package would grow by 12 percent a year. It all sounded good, so she retired and invested about $320,000 with Sweitzer and Muller.
Her investment did not appreciate by 12 percent a year. She lost about $83,000 before pulling out. She had to go back to work, but makes less money.
Mrs. McPhatter said "We had no business retiring. We didn't have enough money."
Alexis Schoenthal retired and invested about $469,000 with Sweitzer and Muller. She lost about $60,000 before dropping the consultants.
Mrs. Schoenthal said "They painted such a rosy picture."
Many of the retirement seminars were held in BellSouth offices. Was BellSouth trying to give the employees a nudge toward retirement?
Duke Energy has allowed financial consultants to hold retirement seminars on company property for years. Duke has also offered incentives to entice employees to retire early. But if consultants can convince employees to retire, there is no need to pay incentives.
The Employee Advocate attended a retirement seminar that was held in a Duke Energy board room. When the consultant said that we should thank Duke Energy for giving us a cash balance plan, he lost all credibility.
What kind of consultant would Duke allow to give a retirement seminar on company property during work hours?
A corporation does not encourage early retirement because of concern for the employees’ well being. Early retirement is encouraged because it saves the company money. Period.
Employees are forced into cash balance plans for the same reason - money.
Remember that when you retire it’s a one-way door. You can go out. But if financial consultants have lied to you and your cash balance pension turns out to be too small to live on, you can never return.
Fed to Pit Bulls for PensionEmployee Advocate – www.DukeEmployees.com – January 19, 2005
Employees who have been forced into cash balance plans know how desperate executives can get to take the pensions of others. They can relate to this Brazilian Reuters report.
Painter Luiz Polidoro, 48, was robbing his mother of her pension on Thursday, so he would have drinking money. An argument ensued at his mother’s house. Mr. Polidoro picked up his mother and threw her over a wall to the pit bulls next door. Police said that the two tied pit bulls mauled the 88-year-old woman to death.
The dogs owner, Helder Bento Rodrigues, told O Estado de Sao Paulo newspaper "He is an alcoholic. He was robbing his mother's pension money so he could drink."
You have probably noticed that when pensions are stolen, the perpetrators' stories are always a little thin. Mr. Polidoro explained to police that his mother decided to jump over the wall.
Next, we may hear that thousands of employees suddenly decided that they wanted the executives to have their pensions.
The Brazilian pension robber is in the Sao Paulo jail, charged with murder. The executives who took employees’ pensions are on beaches somewhere, counting their money.
Dave Finlay: Pension FighterEmployee Advocate – www.DukeEmployees.com – December 29, 2004
Workers across America are fighting the injustice of cash balance pension conversions. One well known IBM pension fighter is Dave Finlay. The article below was written by Roger Fillion and published in the Rocky Mountain News:
December 27, 2004
The IBM pension lawsuit has some roots in Colorado, thanks to Dave Finlay.
In 1999, the former IBM senior engineer painstakingly calculated how much he would lose after IBM switched to a cash-balance pension plan from a traditional pension.
The bottom line: Finlay's future pension benefits would get slashed more than 30 percent from what he would have received under -IBM's traditional pension plan.
"Every day I went to work I got angrier and angrier," said Finlay, who retired in 2001 after 29 years at Big Blue, most of them in Boulder.
Finlay put his anger to work. In the end, his thousands of hours of data crunching helped inspire IBM employees to file a lawsuit in 1999 accusing Big Blue of age discrimination.
IBM denies the charges and is battling the suit.
Finlay didn't know a lawsuit would result when he sat down and began crunching the numbers, doing his computations at home after work and on weekends. He reckons he put in at least 2,000 hours doing the math.
Initially, Finlay plotted his calculations using a hand-drawn graph. It showed what his benefits would look like under the new cash-balance plan and the old traditional plan.
Finlay later switched to a computer spreadsheet to show how his benefits would vary under different pension formulas, salary levels, interest rates, etc.
Next, Finlay refined another Boulder employee's spreadsheet so IBM staffers could chart their future pension benefits using the company's pension formula.
After enlisting colleagues as testers, Finlay posted his spreadsheet on a Web site. IBM workers could use it to calculate the impact of the cash-balance switch.
That spreadsheet produced fallout for IBM.
"Without that, I don't think we would have ended up filing suit," said Janet Krueger, a former IBM computer consultant involved in the suit. "His work allowed us to quantify the impact of the changes."
Finlay also got the attention of the media. NBC News and The Wall Street Journal interviewed him.
After much negative publicity and the scheduling of hearings in the U.S. Senate, IBM changed the pension plan to allow all employees at least 40 years old and with at least 10 years of service to choose between the old plan and the new cash-balance plan.
That didn't pacify IBM employees, who went ahead with their lawsuit. It also didn't pacify Finlay, though he qualified for the old plan.
"The fact that they converted led me to retire," he said.
• Age: 59
• Former job: IBM senior engineer
• Years of service: 29
No Pension Problems for ExecutivesEmployee Advocate – www.DukeEmployees.com – December 27, 2004
Executives do not seem to understand all of the media interest in pensions. Their pensions only get bigger each year; doesn’t everyone’s? No, everyone’s pension does not get bigger each year. In fact, some employees’ pensions shrink by 50% when they are forced into a cash balance plan. Of course the executives are fully aware of the cash balance pension losses. Who do you think railroaded the employees into these disastrous plans? They only pretend to be mystified.
Even when executives are tossed out on their ear, they still get to leave with their big pension. Fannie Mae CEO Franklin Raines was forced out over the restatement of possibly $9 billion of past profits. The Associated Press reported that he had held the job for 5 years.
What could the average employee expect in pension benefits for only 5 years of work? Perhaps a total of a few hundred dollars from a cash balance plan?
The departing CEO will receive a pension of more than $114,000 for life! And that is not $114,000 per year. It is $114,000 per month!
SEC documents revealed a deferred compensation of $8.7 million and more than $5.5 million in Fannie Mae's stock. There are also insurance benefits to sweeten the pot.
Some executives have done everything wrong for a few years and have left the company with huge pensions and other benefits. Some employees have done everything right for thirty years only to retire with half of their earned pension benefits.
The consensus of the executives continues to be that no pension problem exists.