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"The pen is mightier than the sword" - Edward Bulwer Lytton

The Way GTE Used to Be
wheel of time - Trooper Brown - April 11, 2001

Message 486

At a fundraising dinner for a school that serves learning-disabled children, the father of one of the school's students delivered a speech that would never be forgotten by all who attended.

After extolling the school and its dedicated staff, he offered a question. "Everything God does is done with perfection. Yet, my son, Shay, cannot learn things as other children do. He cannot understand things as other children do. Where is God's plan reflected in my son?"

The audience was stilled by the query. The father continued. "I believe," the father answered, "that when God brings a child like Shay into the world, an opportunity to realize the Divine Plan presents itself. And it comes in the way people treat that child."

Then, he told the following story:

Shay and his father had walked past a park where some boys Shay knew were playing baseball. Shay asked, "Do you think they will let me play?" Shay's father knew that most boys would not want him on their team. But the father understood that if his son were allowed to play it would give him a much-needed sense of belonging. Shay's father approached one of the boys on the field and asked if Shay could play. The boy looked around for guidance from his teammates.

Getting none, he took matters into his own hands and said, "We are losing by six runs, and the game is in the eighth inning. I guess he can be on our team and we'll try to put him up to bat in the ninth inning."

In the bottom of the eighth inning, Shay's team scored a few runs but was still behind by three. At the top of the ninth inning, Shay put on a glove and played in the outfield. Although no hits came his way, he was obviously ecstatic just to be on the field, grinning from ear to ear as his father waved to him from the stands. In the bottom of the ninth inning, Shay's team scored again. Now, with two outs and the bases loaded, the potential winning run was on base.

Shay was scheduled to be the next at-bat. Would the team actually let Shay bat at this juncture and give away their chance to win the game?

Surprisingly, Shay was given the bat. Everyone knew that a hit was all but impossible because Shay didn't even know how to hold the bat properly, much less connect with the ball. However, as Shay stepped up to the plate, the pitcher moved a few steps to lob the ball in softly so Shay could at least be able to make contact. The first pitch came and Shay swung clumsily and missed.

The pitcher again took a few steps forward to toss the ball softly toward Shay. As the pitch cam in, Shay swung at the ball and hit a slow ground ball to the pitcher. The pitcher picked up the soft grounder and could easily have thrown the ball to the first baseman. Shay would have been out and that would have ended the game. Instead, the pitcher took the ball and threw it on a high arc to right field, far beyond reach of the first baseman.

Everyone started yelling, "Shay, run to first. Run to first." Never in his life had Shay ever made it to first base. He scampered down the baseline, wide-eyed and startled. Everyone yelled, "Run to second, run to second!"

By the time Shay was rounding first base, the right fielder had the ball.

He could have thrown the ball to the second baseman for a tag. But the right fielder understood what the pitcher's intentions had been, so he threw the ball high and far over the third baseman's head. Shay ran towards second base as the runners ahead of him deliriously circled the bases towards home.

As Shay reached second base, the opposing shortstop ran to him, turned him in the direction of third base, and shouted, "Run to third!" As Shay rounded third, the boys from both teams were screaming, "Shay! Run home!" Shay ran home, stepped on home plate and was cheered as the hero, for hitting a "grand slam" and winning the game for his team.

"That day," said the father softly with tears now rolling down his face," the boys from both teams helped bring a piece of the Divine Plan into this world."

p.s. from wheel - First, I did not author the above nor I am there to live the essence of the above story with you at Verizon but the above reminded me of the company that I used to work for - the kids in the story gave an example of what we were (are) - if you feel you have turned into a professional Shay at Verizon, know that you can make a difference in your and other's everyday lives with a simple decision to do the right thing (the kids lost, but gained so much). The company can take care of itself, if the people take care of each other.

Re: GAO Response to Harkin-Cash Balance Age Discrimination
Puppy_Play - IBM Pension Club - March 23, 2001

Message 40740

From our perspective, the GAO Report issued yesterday is great!

No one (other than possibly Senator Harkin) ever suggested that Shea, any other individual or Treasury or IRS as institutions violated the law.

No employer wants to see his or her pension plan disqualified under the income tax laws, so no employer would want their plan to violate an IRS rule. IRS can (and often does) allow taxpayers, including employers, to "get away with something" by ignoring a statutory rule. This result costs the general public, but does not hurt any one person. Some find this acceptable from a policy stand point. But it is not the issue, because whether a cash balance plan violates any part of the Internal Revenue Code is essentially irrelevant in determining whether an employer has maintained a pension plan which violates any non-tax provision of federal law. Employees can seek greater pension benefits only under the laws administered by DOL and EEOC.

The issue for employees has always been one of whether Treasury was authorized to speak for (and did speak for) the other agencies. The GAO Report found that Treasury was not speaking for the other agencies. Apparently IRS thought they didn't have to show it to those agencies -- a position agreed with by GAO. However, GAO specifically criticized Treasury and IRS for not showing the sentence to DOL or EEOC before it was published.

The GAO investigation found that Treasury did not violate the law requiring agency co-ordination; but only because they put the sentence in a preamble issued under a regulation subject only to IRS jurisdiction. The Courts in both Lyons v Georgia-Pacific and Esden v Bank of Boston both specifically ruled IRS determination letters are of no import in employee litigation. This is not much different. Employees are not injured by anything IRS might do or say so as long as IRS does not curb any substantive right of an employee to receive the pension benefits they are entitled to receive under the terms of their plans, Title I of ERISA (the title administered by DOL and under which employees can sue) or the ADEA (administered by EEOC).

Bottom line: Since Treasury did not co-ordinate with DOL or EEOC, then the preamble cannot be viewed as an agency interpretation issued under the law and therefore, like IRS determination letters, the Treasury preamble sentence is meaningless in the context of ADEA or ERISA Title I litigation.

Re: 3M Offers New Pension Options
andylang_19380 - IBM Pension Club - March 16, 2001

Excerpts From Messages 40649 and 40650

Typically, a pension equity plan converts a final pay pension formula--that is one that keeps pace with inflation during an employee's career-- to a lower final pay pension formula, 'in exchange' for increasing benefits to early leavers. (Wouldn't want employers to absorb cost increases, you know--not in this near recession time--even when they have been getting away with murder for a long time with these partial Tontine DB arrangements.)

The problem is that the latter is far below what should be done to be fair to employees, that is, correcting for ERISA's serious Present Value of Accrued Benefits problem (PVABP); while the former is often done much the same way as cash balance plans are done--with completely inadequate, disingenuous and highly misleading employee communications programs--all complements of a handful of large management consulting firms who have the bulk of the pension actuaries on their staffs, and whose soup-to-nuts consulting includes those outrageous executive compensation packages, from executive pensions to enormous stock options, as well as, of course, major league communication practices, built around employee benefits, naturally.

To know this all one has to do is read transcripts of the huge number of sessions on that subject in the Society of Actuaries programs, the Enrolled Actuaries programs, or in the Consulting actuaries in Public Practice. I defy anyone who isn't an actuary or very skilled with mathematics and finance, especially the mathematics of compound interest, and pension lingo, to figure out the 'before and after' benefits.

Make sure you do that before this stuff became controversial--basically from about 1985 to late 1998. Reading stuff after late 1998 when Ellen Schultz wrote her first piece on this pension tragedy, why it looks like they are all talking about a totally different program.

Watson-Wyatt 'invented' the pension equity plan.

Soon after they invented it, they went out and ballyhooed it in actuarial meetings to attract more actuaries and then did the same in new business promotional flyers to attract more business.

Apparently they have succeeded.

Not to be outdone, other major pension consulting firms soon followed suit. Gotta keep competitive you know. Can't let the competition have a good idea by themselves, you know.

And don't forget about what is happening to private retiree medical programs--as if you all could--and the current baloney with using the assets--that's ASSETS, NOT SURPLUS--of both Social Security and Medicare at exactly the same time---using them to make a major tax cut, almost half of which will go to the top 1% of the nation and to privatize both systems.

Ahhh-the insurance industry and stock brokers are trembling with nervous anticipation--rich, rich beyond our fondest dreams. And everybody thought we were through three decades ago, with our misleading investment products and our overcharging those poor suckers!

Welcome back, individual annuities--of all kinds and stripes, from Universal to Variable to CPI indexed.

Welcome back, Cash value Whole Life insurance policies--and 95% first year commissions too. Don't forget churning those babies---hey, 95% commissions every few years ain't too shabby. God, how we missed you all.

Why those lawsuits a few years back almost shut us all down. Now we have new suckers--errrr blood, I mean.

Welcome back, multiple individual medical policies. Hey you can get one for every disease--cancer, pneumonia, cold sores, Aids (May have to go to Africa for the drugs though),even old standby's like Anthrax, and new standbys like Mad Cow disease even--and maybe one for all livestock too--for that Hoof and Mouth thing that's going around over there in the Old Country.

Little did they know that we would mount such a successful comeback. Hey after losing almost that entire 4 trillion bucks in assets to non-insured, fully trusteed DB pension plans, invested at a mere 1/20th or so, of what we used to charge, our near comeback feels good again.

Convergence is my name. Misleading and then overcharging is my game.

Ain't life just Peachy Grand in "Amerika," at the beginning of the 21st century and the Third Millennium?

3M will offer new pension options

The Other Scandal

andylang_19380 - Andy Lang Club - February 27, 2001

Message 825

The IBM book is important because it is always important to have a complete account of what happened when terrible things happen in the world.

Terrible things usually do not happen because of accidents or some mysterious force of nature, but rather because of people doing terrible things.

It should be kept in mind that IBM dissident employees and some 2-3 million others have been hosed by their employers by CB pension plans--AND it is my contention that some 30-40 million other Americans and perhaps more non-Americans have received less from defined benefit pension plans than they should have, and that this scandal is THE largest financial scandal in history by perhaps a factor of 5. I estimate it to be more than one trillion dollars worth.

And it didn't happen yesterday, or by accident or fate or even ignorance, although the latter has played a role.

It happened because people in Congress, in our regulatory institutions, in corporations, and in my profession helped it every step of the way since 1974--either by ignoring the pleas of people and favoring those of corporations, deliberately remaining silent, by colluding with special interests to make it appear that everything was being fixed when the major problem remained (Red Herring legislation), or worse, by pretending to fix the problem and doing exactly the opposite (Trojan Horse legislation).

The lessons here are the same lesson as the ones we learned from examination of W.W.II and its causes:

  1. Nipping the problem in the bud, even when very painful, is often the right thing to do, as opposed to letting it fester and then get worse and worse, until it threatens to overwhelm us all.

  2. Any great invention, such as the Hollerith machines, or defined benefit pension plans, can be changed to do evil things, if laws are not passed with teeth in them and afterwards closely monitored, to protect the public. (Lang's Law)

  3. The corollary of 2 is that the greater the invention for people, the more likely it is to be subverted for the wrong reasons in the absence of laws.

The good news is that it is not too late to fix it, but the more this stuff is defended and done, the more there will be retribution.

We head much about morality, ethics, responsibility and accountability these days.

This is good. I'm especially interested in that last thing--accountability.

I just wish those who are always proclaiming these things in order to gain the high ground, in the public arena, not the religious, personal and private ones, had just a bit more of it, particularly since they have the responsibility for the public welfare, according to the Constitution.

Time For Lobbying

tally_ho_us - IBM Pension Club - February 17, 2001

Message 40239

I am sorry to say that I was a person during that period that did not pay that close attention to things going on in the government. I, like so many people, thought that the government - that I voted for would take care of the problems facing this country. I guess I believed their hype. I do remember the Saving and Loan problem because it hit Texas big time. I saw CEO's and Presidents of Banks, savings and loans, insurance, etc hauled off to jail. It is because of that situation that I know that heads of companies can be bad and corrupt. I learned my lesson well. Not all CEO's and Presidents are that way however and that was a comment that basically means - it is possible.

Yes, I remember, however, I don't think I was aware. I think that is the difference. Seeing and understanding are two very different things. The last election was a good example of many lessons to learn. That period is another interesting point in history. Basically understanding history so that it is not repeated is important. I think you summed it up beautifully. People do need to be involved and understand what is going on. We need to keep plugging at it.

Medicare - Parts 1 and 2 (Tell It Like It Is, Brother!)

riptoff - IBM Pension Club - February 11, 2001

Messages 40120 and 40121


Remember history tells us the path democracy has previously taken, from it’s institution, is complacency, followed by apathy, followed by dictatorship. Most people see dictatorships as one individual running things which most of America and the press would revolt against. But a socialistic/big government/dictatorship seems the direction we are headed and our already large government is letting corporations drive us in that direction by lobbying to create a bankrupt middle class.

Of course big corporations love the socialistic infusion of cash they get as the favorite government welfare queens. A favorite move of any company planning on leaving New York is to ask for a tax break saying they will leave or else, and leaving anyway soon after the check clears. Even corporations with billion dollar profits easily get hundreds of millions of dollars of ‘tax incentives’ (and most people thought the socialist factory ended when Russia collapsed.)

Now add to the pending pension/1102 legislation new bankruptcy changes to make the indebted middle class unable to escape from a potential economic collapse/stock market collapse. This collapse is being predicted on dozens of sites nowadays and it didn’t surprise me at all when the new president and VP started talking about recession, (what recession... low unemployment, DOW over 10,000, low inflation... just about like it was in the late 20’s actually), With bank and corporations up to their eyeballs in loans (and they’re just too big to fail after all...) you have just created the mechanism for speeding us into the two class society we have been moving slowly towards. The annex research site recently did an article about the return of the robber barrens via mergers and acquisitions, and another post recently detailed the white color sweat shop environment that exists in many corporations today.

College grads have little or no knowledge of the battle labor had to get weekends off, 40 hour weeks , overtime and more, or the blood and effort it took to create unions or how they have protected the basic rights of the working class. The hiring efforts of some companies today make signing up seem like some kind of corporate peace corps effort, on one hand where you get a chance to ‘work with the best,’ (forget about money, benefits, time with your family) or they just tip the other end of the scale and dangle stock option and paper profits. Either way, your working like a surf and get little or nothing in the end unless your one of the lucky few whose options pan out.

We are heading back to the previous century where employees are a necessary evil and treated like cattle. Corporations can clearly see the demographic problem of boomers around the world heading for old age and are taking their profits now and letting the government take the rap on both ends, corporate welfare now, government welfare for their employees later.

We are inundated with information on all sides and most people just keep looking down, pulling the plow and hoping it will all work out in the end. Those in control just keep cracking the whip, reaping the harvest and keeping the number of the glue factory handy should things turn sour. They’ll have theirs now, we get a little now and possibly next to nothing later. When I see tens of thousands IBM’ers getting fleeced of a combined hundreds of millions or even billions of dollars, and heading for a impossible financial future which many if not most seem oblivious about, it does seems a bit crazy!

Does someone have to break down their doors and put them on a train with barred windows before they realize they are being railroaded? Let’s hope not, but with this last election the future looks darker every day. Hope that’s not too much of a downer but that’s how I see it? In the mean time, it’s back to organizing, writing those rep’s that have a clue and working on the others that aren’t completely bought and paid for by corporate US. There’s still a little democracy left, I just hope we can save it before it’s gone for good!

IEEE member protests support for 1102

Puppy_Play - IBM Pension Club - February 11, 2001

Message 40119

Dear C. Brantley,

As an IEEE member, I would like to inform you that I have studied this bill thoroughly and is very bad for mid age employees such as myself. Calculated cash balances would give me equivalent of less than HALF the value of what's coming to me now as annuity. That is what is called wear away. I have worked all my life (22+ years) in a corporation where our retirement was counted as our compensation. To change that at this stage of our lives and reduce it to less than HALF is a travesty. I would very much appreciate if an organization, such as IEEE, NOT support such legislation and in fact should OPPOSE hr 2614 or some version of hr 1102.

By the way who has done the analysis for your organization on wear away and age discriminatory aspects of hr 2614 or 1102? Can we get a copy of such analysis? I urge you NOT to lend support to such a bill which extremely detrimental to your members.

Safe Havens for Employers

ret99_99 - IBM Pension Club - January 30, 2001

It's getting old, reading about (not from you, but everywhere) how companies can do this and that, have a safe haven in this, can excuse this because of this, spin things this way in their favor, and ........meanwhile, the poor employees (people doing all of the work) are ripped off while the execs rake in the money/benefits/golden parachutes/options, etc. The tide must turn in the favor of the workers! I am praying for that time to come!

Huge Pension Argument

albanyblue2000 - IBM Pension Club - January 25, 2001

The liabilities that employers now have, were voluntarily contracted by them over the years, as items of deferred income. Whether or not there is a surplus is beside the point.

These are contractual obligations, just as firm as loans payable and taxes payable. And the political process shouldn't be used to forgive them.

Michael Milken and Pension Scams

andylang_19380 - Andy Lang Club - January 19, 2001

(Excerpts from posts 738, 739, and 740.)

The comments made by the Securities and Exchange Commission regarding Michael Milken were probably the result of my comments to Levitt (as a question from the floor) the other night…

He was not 'just' responsible for a billion dollars in securities violations and then, as part of his parole, again violating one of the conditions for his release in 1998, but he was the very first one to figure out how to seize pension surpluses directly back in the 80s--when no one was guarding them--but also used those potential pension surpluses as collateral to greenmail major companies, without going through the messy and expensive process of actually doing a hostile takeover.

Pension surpluses were often more valuable than the company itself--or if not, were often the most important financial consideration in a major takeover.

This was something that was not well understood by the predator or the prey initially, but actuaries understood as it was typically a major consulting assignment, under great time pressure, sometimes with dueling actuaries representing both sides, debating which surplus (ongoing or termination, or employee downsizing-all different) and almost always including the assumptions as well. Small changes in a number of assumptions has huge effects on the pension liability, whichever measure is used.

Since the surplus is the excess of assets over that liability and the liability is a big number--a slight change in an assumption causing a slight change in the liability, magnifies that difference. This is much like changes in assumptions in forecasts of federal budget surpluses do--but even more so--since the time horizon is much longer in a pension plan.

Then others did the same with Milken's help. The Decade of Greed started with this process and I saw many fine old companies and many fine friends get ruined.

The additional travesty is that when tens of millions of employees got downsized nationally and walked away with vested pensions, they got less than they should have, due to the flaws in ERISA--and the younger you were the less you got.

The present value of an accrued benefit for a young person, can easily be 1/20th or less of another employee earning the identical pay when he is near to retirement--and that present value is peanuts--perhaps 1% or less of his total pay for his years--after the company has told him the company had contributed on his behalf for his dB plan 6,7,or 8%--a true statement--but the flaw in ERISA doesn’t give him that when he terminates.

The young people, therefore, got real angry about defined benefits plans during this period and preferred the new kid on the block, 401(k)s because they could at least 'see' the assets.

This suited some companies fine, because then they could get rid of their defined benefits pensions (or downsize them) and replace them with these--and some with very poor plans--no match, poor choices, no investor information--you name it.

Per dollar of benefit delivered, DC plans cost about 40% more, so long as you take into account both employee money and employer money?

So two plans that deliver the same total benefits, costs society 40% more!

The reason why some companies did this was simple--they could pass the cost onto the employees.

Others didn’t know this 40% cost-more stuff-cause no one told them--especially not actuaries--who at that time (and some today even) did not get the proper investment training and many had zero experience in stock investing--an anomaly that was the result of a major gap in the actuarial exams system ,and the natural conservatism.

Thus, a proper defense of defined benefits plans mounted then to major companies--by actuaries, the key people--never happened.

I believe that defined benefits plans, when done right--fixing these serious problems--for large scale systems, are vastly superior to defined contribution plans, in every way.

That should come as no surprise--they were invented to overcome all of the intrinsic problems that individual accounts have.

In fact, a defined benefits plan-done right--is simply a defined contribution plan, done with all the problems of defined contribution plans from a pension standpoint, eliminated.

Or--if you will, a traditional defined benefits plan, fixed right, is a defined contribution plan, done right, which is a defined contribution plan, with its disadvantages from a pension standpoint, fixed.

I like that last one.

Defined contribution plans are not pension plans you know. They are individual savings plans, They can satisfy certain needs in total retirement planning, but that doesn’t make them pension plans.

Calling a pig a bird, doesn’t make the pig a bird, no matter how many times or how many people call them a bird.

Furthermore; you can make a pig fly like a bird--by liposuctioning all that fat out, drilling holes in his bones to make him lighter and putting huge wings on him--but that sucker will not be a bird.

And as some 401(K)folks have found out recently--that pig might fly for a while, although often not well, but he is prone to crash.

Many Chilean citizens have found that out a couple of years ago when their stock market crashed 50% and so did their dreams of retiring under their SS privatized individual account system. And that doesn’t even take into account the terrible net returns many got--the result of some 18% being sucked out in assorted fees by the investment vendors, which converted good positive gross returns to those negative returns.

Did any of that find its way to American investment firms?

Did any of it find its way to General Pinochet and his advisors?

Did anyone here in the US--in Washington, have anything to do with all of this?

Employee Pension Scam Exposed on the IBM Stock Board

maxbornalive - Yahoo! Message Boards: IBM - January 16, 2001

I had no idea that a regular on this board could have escaped hearing of this.

The scam works as follows:

1. Convince employees that part of their compensation is diverted to their retirement benefit and that comparisons with other companies must take into account the total compensation.

2. Send out projections to the employees every year detailing the expected retirement pay at various retirement ages.

3. Obtain 10-20 years of productive labor from employees under these conditions/expectations.

4. Announce that the pension plan has changed and that previous projections overstated the expected benefit by about 30%.

5. Claim vapor profit (from pension fund growth) on the financial statements.

6. Claim higher earnings per share as a result and increase executive bonuses.

This resulted in senate hearings, multiple front page stories in all national newspapers, and a number of legislative initiatives.

It also resulted (IMHO) in the firing of the senior executive VP of HR at IBM (Bouchard).

Most of us believe that it had an enormous effect on morale of employees as measured in last year's world wide employee satisfaction survey.

Some think the cause of the scam was more criminal and insidious than has come into the open yet.

(There were a lot more posts about the pension scam after this one. Click “View Replies to This Message” from the link below.)

Help retirees save their medical

donshuper - Duke Pension Club - November 29, 2000

Subject: H.R.5405-Emergency Retiree Health Benefit Protection Act

Representative John. F. Tierney of the 6th Mass. 6th District has introduced H.R. 5405, The Emergency Retiree Health Benefits Protection Act. The Bill proposes preventing employers from changing or eliminating health benefits promised to retirees by making necessary changes to ERISA. The purpose of H.R. 5405 is to ensure reasonable health benefit expectations of retirees from ERISA-regulated group health plans are fulfilled, to minimize the incidence of prolonged legal disputes arising from post-retirement cancellations or reductions of retiree health benefits from such plans, and to prevent further adverse effects on retiree health arising from such post-retirement changes. The complete text of the bill can be found at: In the appropriate box enter: H.R.5405.

Please write TODAY to your local U.S. House of Representative and your two senators urging their support of H.R.5405, and urge your friends and family to do the same. This Bill is important not only to IBM retirees, who are now being threatened with paying a greater and greater share of health care costs out of their fixed pensions, but present and future retirees of all corporations. We are all in this together, regardless of our present and past business affiliation. Hopefully, Clubs and groups will get behind supporting H.R.5405. We can not stress too much for you, and your friends critical involvement supporting this very important piece of legislation. We are again, strongly urging ALL to write today! Then follow-up by phone, fax, and lastly by e-mail.

You might want to consider in the same letter asking what other plans your senators and representative have to help protect retirement benefits. This is an especially good time to introduce yourself if you have a newly elected representative or senator that you haven't communicated with before.

Refer them to the legislative section of for more information about bills we care about.

H. R. 1102 and ERIC

duke_did_it_too - Duke Pension Club - November 22, 2000

If this were all one knew about ERIC, one would think that they were our old pals. Do not be deceived. ERIC represents ONLY the employer's interests - NEVER the employee's interests.


ERIC's statements are the sugar coating and the damaging provisions are hidden from view.


The political winds have shifted dramatically in favor of the employees, and ERIC wants to be seen as being on the right side of things.

Think about it. If the tiger that has wiped out half the village, suddenly says "Meow," do not believe that it has turned into a kitty cat!

H. R. 1102

Puppy_Play - IBM Pension Club - November 17, 2000

"What is the latest situation on hr 1102 or any other similar bills?"

The bill to watch is HR2614, Enactment of Certain Small Business, Health, Tax and Minimum Wage Provisions. A conference committee report (Rpt. 106-1004) was issued for this bill on Oct. 26, 2000. It does NOT include the damaging provisions legalizing cash balance conversions and defining wearaway without covering early retirement subsidies that were introduced by the senate finance committee last fall. It DOES include language to reduce the protections on early retirement subsidies that came from 1102, although the term "de minimus" has replaced "material value", which some claim lessens the potential damage.

Nothing further will happen this year unless both the house and senate approve the conference report; if that happens, President Clinton has vowed to veto the bill. So it is not law, and most likely will not make it into law this year. Several key staff people in both the senate and the house have promised to call us with an alert if anything changes.

Most people on Capitol Hill agree it is probably done until next year. Whoever the president elect ends up being will most likely want any sizable tax cut to be done in January or February, when they can claim full credit for it, rather than in a lame duck session in December.

We need to start pulling together a wish list of what we would like to see for pension protection legislation next year. With that, maybe we can spend some time proactively lobbying for good stuff, instead of fighting fires as we've done this year!

IBM Lawsuit Update (House Cleaning Time)

Puppy_Play - IBM Pension Club - November 4, 2000

A law suit titled Cooper vs. IBM Pension Plan was filed in October of 1999 against IBM. Over 50 motions have been filed in the case, and it continues to proceed through the federal district court system. Such suits generally take a minimum of 5 years to be processed, and may take even longer if they are appealed up through the Supreme Court. The class being represented by the lawsuit has not yet been fully defined or certified by the court, so it is not yet possible to state exactly who would be covered, or to what extent. IF all of the allegations made by the plaintiff end up accepted by the court, then anyone who earned IBM benefits between 1995 and 1999 would receive some amount of reimbursement. Exactly how much can also not be predicted; that too would be decided by the court…

Clinton's Veto; Bush's SS Privatization

andylang_19380 - Andy Lang Club - 10/27/2000

A response to 37845 on the IBM Pension Forum... (First of three pages.)

Please do not forget about losing Social Security and Medicare--because both are seriously threatened by 'privatization.'

That one trillion dollars that Bush is giving you back to 'invest privately' is your money all right--its also set aside in the SS trust and needed there to pay future benefits. You contributed it--even the part paid for by your employer--through lower wages.

Both conservative and liberal economists have been saying that for years.

As the American Academy of Actuaries correctly just pointed out, the Trust Fund currently has sufficient assets which together with the future SS taxes, will pay all benefits promised until about 2037. The SSAs long range forecasts suggest that the system at that point has about a 20% shortfall in future taxes to pay benefits after that. Serious, but far from fatal and we have time to fix it.

Gore's proposals, while not enough, extend the system several decades more, by using some of the forecasted surpluses to pay more into it. More needs to be done, however.

Bush's proposal shortens that year 2037 to 2015 and does absolutely nothing to decrease the long range problems, unless those who opt out do extraordinarily well in the stock market.

They will have to because the benefit cuts that will have to be made are huge.

But guess what. Larry Lindsey, his advisor on these matters, originally said that the voluntary amounts would be invested in stocks, and then quickly backed off when Gore criticized that.

So now he and Bush are claiming that the monies will be invested in safe secure investments, instead of stocks--checked by the government the two of them call it--but with neither of them giving the details of whose benefits are going to have to cut and by how much.

Trust them, they all say.

Yeah right. The benefit cutbacks are going to have to be huge--a lot more than 40%, in exchange for that voluntary 20% tax give-back.

True he won't have to cut any retirees benefits--but look out folks for anyone else.

They have absolutely avoided any details of just how they are going to accomplish all this--because it cant be accomplished--they are trying to give huge tax breaks that already use part of the SS forecasted assets buildup. (Confusing isn't it? The outgrowth of an accounting system that is absurdly ill-suited for pensions)

1102 Pension Theft-Center of TAX Cuts?

olderfemale - IBM Pension - 10/20/2000

-heard a reference to the TAX cut, (omnibudget bill) percolating behind the scenes in congress.

-This is what is being brokered by both parties, in hopes of passage, and probably trying to adjourn and get out of town by 10/27/2000.

Not surprising, heard reference to "Higher IRA contributions etc. as being one of the centerpieces.

THE HR1102 DB Pension Theft in-- behind the "smoke and mirrors," of higher IRA/401k contribution limits.

Also a reference TO THE HUGH BUSINESS TAX BREAKS in the "bill".

FOR SURE - HOW ABOUT BILLIONS in Retirement subsidies and early retirement benefits - being allowed by this bill to be scammed (tax breaks have already been taken) by large plan sponsors away from benefit participants!

Call your senators today - ask to speak to staff person for business/budget/pension issues.

Make it clear that hr 1102, stuck in this omnibudget bill Without support for HARKIN amendment, is a direct vote by senators to allow their constituents to be "ripped off."

Do not allow a ira/401k diversion or evasion with the staff person. Make it clear you are well aware of the title 29/ title 26 DB pension loopholes - in this bill....!

End the message, either insist on the HARKIN amendment, OR VOTE AGAINST if hr1102 is included!

This is the biggest attempt since ERISA was enacted--- to "gut it" and strip billions out of D/B pension trusts!

Pension Bill Amendment (Added Back)

cbploser - Duke Pension Club - 10/16/2000

Today's News Dash from Plansponsor

ADDED BACK. Senator Jim Jeffords (R-VT) and Senator Ted Kennedy (D-MA)have filed an amendment that would add certain ERISA pension reform provisions to H.R. 1102, the Retirement Security and Savings Act of 2000. Some provisions are new, but many were in the original version of H.R. 1102 before the Senate Finance Committee removed them.

Anti-cutback - GATT and you

donshuper - Duke Pension Club - 10/12/2000

Just came across an old newspaper article I had saved from 1994. Specifically Dec 5, 1994 WSJ article by Ellen Schultz. Under your money matters - titled "GATT law to squeeze U.S. Pensions." I don't yet have an OCR readable or archived text copy.

Two paragraphs stand out- paraphrased they go like this Employers can reduce the lump sum distributions to retirees by using new mortality and interest rate tables [ resulting from GATT ] Normally, such a move would be illegal under ERISA. But according to a benefits consultant [ Sedgewick Noble Lowndes- N.J. ] " the anticutback rules under ERISA are waived for purposes of Implementing GATT provisions ". [ Continuing to paraphrase ] Since the tables assume you live longer, the lump sum becomes smaller, and since the interest rates under GATT are now pegged to the 30 year T-bill, and are higher than the typical 5 percent used previously, the present value of an annuity are lower.

Of course, the younger the retiree, the more the loss. . . There was supposedly a DOL briefing press release on the same day, Dec 5, 1994


Another article on March 15, 1995 goes into more detail about how the pension rules were quietly tacked on a trade bill. ( 129 pages ) . Article was Front page WSJ, march 15, 1995 Headlined" Stealth Legislation - Pension Rules tacked quietly on Trade bill Portend Vast Changes." again by Ellen Schultz.

In the article- again paraphrased - GATT was in trouble -congress wouldn't approve , and there was a matter of money. . . So the " bride " was the pension bill, which promised to raise nearly a billion $ in new money . . . . also tied in to the game was a problems with underfunding of then current pension plans, but overall the move was made to **RAISE** money to offset the "cost " of GATT.

One of the more interesting tidbits is that at first corporations were against the change until it was pointed out that those who had a surplus [ IBM WAS MENTIONED ] could benefit. . . and even worse in the wheeling -dealing was the ' implied" promise by the companies that an extension of 1990 legislation would ENCOURAGE them to use the surplus for RETIREE MEDICAL BENEFITS.

I suggest those who are truly interested and have a VERY STRONG stomach work the problem on their own to get a copy of the above articles. Don't blame the messenger.

Although I had saved the article [ its now a piece of very yellowed newsprint ] I didn't fully appreciate the impact at the time , as the Boeing plan had no lump sum options, and it came out just about the time Boeing had offered their first and only " golden handshake " which I was in the process of accepting.

Don Shuper

Employees 2, Employers 0 (Onan District Court Ruling)
Puppy_Play - IBM Pension Club - 10/3/2000

As I've said before, the Onan case is different than the IBM case. Even if the final ruling on it is against the employees, our case isn't lost.

Note that this was just a district court ruling. The two most recent appellate court decisions on cash balance cases overruled similar statements from district court judges. You might find it educational to take some time and read both Esden v. Bank of Boston and Lyons v. Georgia Pacific. (If you can't find the links, go to and click on Litigation.)

The judge in the Onan case seems to have decided to ignore the law, and just rule in favor of the employer. District court judges in the other two cases who did the same thing had their decisions reversed...

In the Georgia Pacific case, the judge found an easy way to avoid the real questions in the case by deciding that an IRS regulation was invalid; it didn't take the appellate court very long to overrule him.

The judge in the Bank of Boston case actually tried to understand the law, but finally threw his hands in the air and made some crack about the "actuarial acrobatics" necessary to calculate benefits. Reading the decision you would think Mrs. Esden was to blame for all the actuarial stuff, when all she wanted was for her employer to follow the law. This judge was also overruled by an appeals court which called the bank's legal arguments "frivolous."

It looks like the judge in the Onan case decided to work backwards to try to build an argument for ruling for the employer. He blames the employees for filing the lawsuit, saying "I won't rule for the employees because they did not give me any policy reason why I should enforce the law." Someone needs to remind him that he doesn't need policy reasons for enforcing the law; it's his job. And by the way, his job is a lifetime job, and no one is playing games with his pension! The appellate judge may very well issue this reminder when the time comes; we'll see...

The Onan judge also complains about how the IRS and EEOC did not issue age discrimination regulations. He uses the word "complex" three times in a row to describe the pension regulations which the IRS did issue, as if to justify why he cannot understand this stuff. I certainly sympathize with the judge on this one; I don't think any employees should have to sift through actuarial gobbledy-gook to figure out what they've been promised and whether those promises are being fulfilled! Here again, though, the complexity of the regulations doesn't eliminate the need for the judge to sift through them and figure out if they are, or are not, being followed. Fortunately, the American court system allows appeals; there will be more rulings on Onan!

So far the legal score is employees 2, employers 0. The Onan case is still in district court and doesn't count yet. The age discrimination charges will get a full and complete legal review; count on it! (Unless, of course, the employers succeed in asking congress to intervene. If you haven't called your senators' offices this week to ask about the state of HR1102, please do it today!)


P.S. For any of you interested in pondering media bias, here is a question to THINK about: Why has the Onan case received so much coverage, and why does most of the coverage fail to mention either Georgia Pacific or Bank of Boston?

Bush versus Gore in the workplace
carolina_puerto_rican - IBM Pension Club - 10/1/2000

Interesting article by Tiffini Theisen of Knight Ridder Newspapers in some editions today. It was in the Raleigh, NC N&O and we're checking the Washington Post. The article is titled "Bush, Gore want to be your workplace friend in different ways"

The article compares Bush versus Gore in several areas. In the "retirement" section, there is the following:




"He also proposes a 50 percent tax credit for businesses that contribute to employee's pensions. HE VOWS TO PUNISH COMPANIES THAT MISLEAD EMPLOYEES ABOUT PENSION PLANS OR DISCRIMINATE AGAINST OLDER WORKERS." (our italics)

The politicians are waking up. Bush currently has a commanding lead with males, age 40-65. I wonder how long that lead will last if the word starts getting out that he's representing a point of view that's hurting this constituency big time...maybe the democrats have an "October Surprise" for us, after all!

Pension Watch - Page One