DukeEmployees.com - Duke Energy Employee Advocate
Duke - 1999
of conscientious men is a corporation with a conscience." - Henry David Thoreau
The Big LieDuke Energy Employee Advocate - 12/9/1999
Duke would have you believe that they went to the cash balance pension plan due to overwhelming demand by employees! Of course you have heard that one many times before. Duke has been running that scam for at least 25 years. Every time Duke takes something else from the employees, they always proclaim, "But this is what you said you wanted." We have yet to find anyone who will admit to asking for all of the blunders that Duke says we asked for.
Duke said that employees did not value the old plan. Did Duke ask your opinion about whether the cash-balance plan was a good idea or not? We didn't think so. No wonder that in the 1999 employee opinion survey, the question: Sufficient effort made to get employee's opinions? ranked dead last. Only 38 percent said yes.
If they did not ask us, just where are they getting their information? Do they fabricate it to suit their purpose? Did they swallow the propaganda of the "renegade" actuaries selling the plans? Did they assume it? How can Duke always manage to be 180 degrees out of Phase with the real world?
Many employees have worked for Duke for a quarter century BECAUSE of the old retirement plan with the early retirement feature. Does this sound like employees who didn't value the retirement plan? Duke said that the cash balance pension plan would attract and retain younger employees (and Duke wonders why we are filing age discrimination charges). Duke's name is mud with younger people. They see what Duke has done to us and know the same thing can happen to them.
Duke used to want employees to be 20,000 ambassadors of good will. With 20,000 ambassadors of hate and discontent, they need not expect us to recommend Duke as a good place to work! Employees used to say that their children would probably work for Duke. We have not heard that statement in a while. Employees have said that Duke is the last place they would recommend for their children to work! You have heard every shaky reason for the cash-balance plan except the truth: TO MOVE EMPLOYEE PENSION MONEY TO DUKE'S BOTTOM LINE.
Duke would have you believe that there is no money, that it evaporated. And, pigs can fly! Once a company reduces its pension liabilities, there are ways to move the "excess" to the bottom line. And yes, you are regarded as a liability. There are certain things that "excess" pension money can be spent on without incurring the 50 percent tax penalty. The 50 percent penalty was supposed to discourage pension fund raiding.
The "renegade" actuaries came up with a way to circumvent that law. Every dollar spent from the pension fund, is a dollar effectively moved to the bottom line. If the tentative IRS approval holds up, tax credits can be taken for "excess" pension funds! Again the money is transferred straight to Duke's bottom line. You can have input into the decision that the IRS makes about Duke's tax exempt status. The IRS is requesting information from employees. If you have been hurt by the cash-balance plan, let the IRS know about it. If Duke's tax exempt status is denied, you will see some changes made FAST!
Why Duke Energy Loves Us
Duke Energy Employee Advocate - 12/1/1999
Duke loves all the employees who have written and called politicians, federal agencies, and the media about the unjustness of the cash-balance plan. Duke loves all the employees who have attended meetings, sent e-mail, and informed fellow workers in an effort to crush the cash-balance plan. What? You did not realize that Duke loves us? Sure Duke does.
Duke has finally molded us employees into what they have wanted for so very long! As you know, Duke's senior management cannot say two words without "leadership" popping out. Well, have we not been exercising leadership in trying to restore our pension benefits?
Duke has babbled incessantly about "empowerment." Have we not empowered ourselves to take any necessary action to nullify the cash-balance plan?
"Proactive" is another big one with Duke. Have we not proactively sought methods and allies to fight the cash-balance plan injustice?
Duke wants us to be focused. Have we not been keenly focused on our goal of pension justice?
Duke wants us to participate in community affairs. Well, we have participated in community, state, and national affairs regarding pensions.
Duke wants us to be active in politics. We have collectively contacted congress more about pension reform than any other issue ever.
Duke wants us to be involved. Have we not been more involved in pension reform than anyone ever imagined that we would have been?
Duke wants us to communicate with each other. Have we not communicated with each other, on and off the job, about the pension fiasco in every conceivable way?
Duke wants us to be driven. We certainly are that.
Duke wants us to have a "burning desire" for excellence. We do have a burning desire for an excellent pension plan.
Duke wants us to use "team work." We have been using team work to a great advantage over the past weeks, and as more "team mates" get involved, the success will only expand.
Duke does not want us to let others "eat our lunch." We are doing everything possible to keep senior management from eating out lunch, breakfast, dinner, and snack.
Yes, now all of Duke's coaching and counseling, reprimands, "soft" skills training, cajoling, begging, pleading, threatening, patronizing, and fraternizing has finally paid off. Duke has, at last, created perfect employees! Gee, thanks Duke. And remember Duke, THIS IS WHAT YOU ASKED FOR!
Duke Energy Employee Advocate - 11/30/1999
Employees seeking retirement benefit statements, comparing the old plan to the cash-balance plan, had difficulty getting through to HR-24 on Monday, November 29, 1999. Those who were persistent enough to get through, we told that HR-24 could not process all of the requests and to write to the plan administrator.
Companies are required by law to give this information within 30 days, IF REQUESTED. Duke operates on a "Don't Ask; Don't Tell" policy regarding the cash balance pension plan. If you do not ask, they will never tell you how much you lost!
Duke Energy Employee Advocate - 11/29/1999
It seems like every other word that comes out of senior management's mouths is leadership. In truth, the present regime of senior management would not know leadership if it bit them in the buttocks. All they know is copycat, follow, me too, and "someone else did it; let's do it also."
There was a time when Duke was a true leader. There was a time when Duke had the best benefits package around, built their own power plants, and had the respect of their employees. That has all gone by the wayside. Next they will have a Me Too Symposium.
This trend started over 10 years ago with the downsizing fiasco. It would have been one thing to have a lay off out of necessity. Duke has done that many times in the past. When a construction project was completed, often there was just no work available for the construction workers. A lay off was necessary for many workers. The workers understood this; there was no problem with it.
The lay off in 1988 was merely an effort on Duke's part to copy what other companies were doing. "Everyone else is doing it, so it must be OK." And where did the employees learn of the pending lay off? From the "Charlotte Observer," NOT Duke. It was only after the press broke the story that Duke scrambled to make an announcement. It is a sad fact that outsiders know more about what Duke is doing than the employees do. Outsiders have more input than the employees also. Any input is more than zero, which is the amount that the employees have. Some think the lay off would have been more severe if the press had not broken the story and upset Duke's master plan. Some people prefer to call it "dumbsizing." And that is exactly what it was.
When thousands of employees are sent home and many called back to work almost immediately, it proves the plan was half baked from the inception. And it is more expensive to lay off people and call them right back to work, than to have left well enough alone to start with. What did Duke learn from this? Nothing.
Duke still blindly follows what the crowd is doing, without an inkling of the potential consequences. Other companies started looting their employee's pension funds with cash balance plans. And, like a hog to slop, here comes Duke. There must have been some people in senior management that knew the cash balance pension plan was wrong, immoral, and unjust to the employees. They were either silent or beaten into submission. Duke is in quicksand now. The more they protest, the deeper they go. There can be no graceful exit. Maybe Paul Anderson can use some "me too" management members. And then again, he just might pass.
Would You Give Your Home to Duke Energy?
Duke Energy Employee Advocate - 1999
Many financial articles start out by stating "Your home is likely the biggest investment you will ever make." That used to be true. Now the biggest financial transaction that you may ever face, is your pension money transferring from you to Duke-Energy.
Take a simple example: If your retirement benefits were going to be fifteen hundred dollars per month at age 55, but you must now work until age 65 to get the same amount; look what happens. First of all, you just lost 10 years of you life! It could very well be the most important 10 years of your life. It could be the LAST 10 years of your life. You have no assurance that you will even make the extra 10 years. At any rate, instead of doing what you want to do, you will now be bending to Duke's will for another 10 years. That is 10 years that you will not be drawing any pension benefits.
If you were promised fifteen hundred dollars per month in retirement benefits at age 55, that would be eighteen thousand dollars per year. After ten years, you will have lost one hundred and eighty thousand dollars in non collected retirement benefits. Add in the amounts that you will now have to pay for retirement health insurance coverage that Duke took away from you. The amount can easily exceed the value of your home! You could, in effect, very well be giving Duke the equivalent value of your home.
Of course, it is not exactly giving. It is more like Duke taking the value of your home from you. If you retire at 55 anyway. You will not lose 10 years of your life. But you will lose quality of life, because you will not get the pension amount that you have been promised for decades. In view of your potential loses, does a few minutes a day writing a few letters seem like a heavy burden? Read on:
Letter to the Department of LaborDuke Energy Employee Advocate - 1999
On September 9, 1999 Representative Bentsen sent a letter to Ms. Alexis M. Herman, Secretary of the Department of Labor, which was also signed by 20 other representatives. He asked that the actuaries who promoted some of the questionable cash balance plans be investigated.
Ms. Herman replied that she will be pursuing any available remedy under existing federal law to ensure that workers have not been mislead and will receive straightforward information about their pension benefits.
Duke Energy's senior management has worked us over; let's work them over. If you are so inclined, file an EEOC age discrimination charge also. Your representatives in congress also need to know everything that has happened. The IRS needs your comments. The Department of Labor needs your comments. If these people do not hear from you, they will assume that you are happy with your cash balance plan.
Circus Elephants Duke Energy Employee Advocate - 1999
Elephants are very powerful creatures who can carry logs and knock down trees. A charging elephant can obliterate virtually anything in its path. Yet an elephant can be tied to a stake with a rope around its foot and it will stay there! Ever wondered why? The elephant is conditioned from birth to believe that the rope can contain him. And, as long as he is fed and NOT PROVOKED, he has little incentive to break the rope. Of course, he does not know he can break it anyway.
Duke's employees are much like elephants. They are powerful but, few of them realize it. They stay tied with management's rope because, they receive some benefits for doing so and have not been sufficiently provoked into breaking the rope…until now.
If an elephant is sufficiently provoked, he will snap the rope like sewing thread, and heaven help whoever is in his way. The ringmaster's whistle and whip cannot save him; his top hat will not impress the charging elephant.
Devastating loses in pension benefits and retirement health care coverage has provided sufficient provocation, and ropes are starting to snap.
You Can't Cheat an Honest Man
Duke Energy Employee Advocate - 1999
It is difficult to cheat an honest man, because he is not likely to fall for any half-baked flimflam attempts. The bait for the flimflam victim is always EASY MONEY; the victim is always delivered by GREED.
The honest man will not fall for anything that smacks of dishonesty and therefore will not get into any trouble. The same holds true for corporations. There have been various "renegade" actuaries who actively promoted and sold packaged cash balance plans.
Some of the cash balance plan promoters advertised them as a way to "hide" and "mask" benefits taken from the employees. The selling line was that the employees would not know how much they lost until they retired. Many greedy corporations were blinded by dollar signs and bought these plans. Their greed may be their demise. The honest corporations bypassed these shady deals and are not in trouble with the IRS, EEOC, and DOL, and they still have the respect of their employees.
Straight From the IRS
Duke Energy Employee Advocate - 1999
We called the IRS on their "Pension Hotline" number: 877-829-5500. We asked about the tentative letter of approval that used to be issued by the IRS field offices. We were told that it was a form of "cheap insurance," that companies considering cash balance plans could apply for. However they are no longer being offered by the IRS field offices.
They are now only issued by the IRS national office and undergo more scrutiny that they used to. This was brought about by a class action age discrimination lawsuit against Onan Corporation. The IRS revoked Onan's tax exempt status TEN years after the IRS's tentative approval of the plan! We asked if this would likely slow down the approval rates for cash balance plans. We were told "DEFINITELY," if the plan was a conversion from a defined benefit plan.
This is exactly what Duke did. We were told that there would likely be no more cash balance plan approvals, at least until the courts make a ruling on the legality of the plans. We were told what we already knew for a fact; the EEOC is pursuing a vigorous investigation of companies who have perpetrated cash balance plans. Senior management is clutching its "favorable letter of determination" from the IRS like a frighten child clutching a teddy bear. But it just might not save Duke. Don't waste your time with senior management puppets; if you want the facts, call the IRS. The IRS also wants YOUR comments.
The Bait and Switch Routine
Duke Energy Employee Advocate - 1999
In the old bait and switch routine, a store "baits" the customer into the store with a good advertised price. Once the customer is in the store, they are "switched" into buying a higher priced product. The bait gets the customer into the game. The switch transfers the customer's money to the store owner. Does anyone see any correlation with our pension plan?
We were baited into staying with Duke-Energy for 20 years or more with the promise of an good enhanced early retirement at age 55, with retirement health benefits, and a certain income. When we were close to reaping the rewards of our long labor, we were switched into a cash balance plan with no enhanced early retirement, reduced retirement health benefits, and less money than promised. We were baited into spending most of our lives laboring for Duke-Energy. Then during the switch, our promised money transferred to Duke Energy.
"Best of Times; Worst of Times"
Duke Energy Employee Advocate - 1999
The American economy has enjoyed unprecedented growth over the past several years. In the same period of time Duke Energy workers have suffered unprecedented loses of benefits. Duke has been taking nibbles at our benefits for over ten years. Over the last several years they have been taking CHOMPS at our benefits. A retirement pension is a very basic benefit to have severely reduced. The same for retirement health coverage. If Duke Energy will do this to the employees during the best of times, what will happen during the worst of times?
Our losses are not chump change; they can run into hundreds of thousands of dollars per employee! If you can spare a few minutes and a few stamps, a few letters to the right places could help us enormously. There are people and agencies willing to help but, they must know that we need help.
Now is the time to write senators and congressmen, so they will know what needs to be done in next years session. The IRS is investigating the companies who have implemented cash-balance plans, and Duke Energy does not need to be overlooked. They definitely need to be under the microscope. The EEOC wants to know more about Duke Energy's cash balance plan. The Department of Labor is gearing up for their own investigation of cash balance plans and they also need to know what Duke Energy has done.
Silence is consent. If you are not happy with the cash balance plan, now is the time to let the right people know. The people who can help need to know that there is a problem before they can help.
"Duke Energy SEC 10-K filings"
Securities an Exchange Commission - 3/30/98
Here are the 10-K filings with the Securities and Exchange Commission for 1997. This was the year the big pension swindle was implemented. Look for the referenced portions near the bottom of the form. (The "good" stuff is always hidden at the bottom.)
"RETIREMENT PLANS. The Corporation and its subsidiaries have multiple non-contributory defined benefit retirement plans covering most employees with minimum service requirements. Effective January 1, 1997, the Duke Power retirement plan was amended to a plan under which benefits are based upon a cash balance formula. Under a cash balance formula, a plan participant accumulates a benefit based upon a percentage of current salary, which may vary with age and years of service, and interest credits. Prior to January 1, 1997, the Duke Power retirement plan benefits were based on an age-related formula which took into account years of benefit accrual service and the employee's highest average eligible earnings.
"The Corporation's policy is to fund amounts, as necessary, on an actuarial basis to provide assets sufficient to meet benefits to be paid to plan members. On December 30, 1997 assets and related liabilities of $235.6 million and $204 million, respectively, for certain PanEnergy participants were transferred to the Duke Power plan. As a result of this transfer, no contributions to the Duke Power plan were necessary in 1997."
Certainly there were no company contribution for 1997! The plan was designed for the money to flow in the other direction.
"Under the Corporation's 1996 Stock Incentive Plan, stock options and awards for up to two million shares of common stock may be granted to key employees. Under the plan, the exercise price of each option granted equals the market price of the Corporation's common stock on the date of grant. Vesting periods range from one to five years with a maximum exercise term of 10 years."
The employees can no longer have a decent retirement plan, but there is always plenty of money to spread around at the top.