Posted by shar on March 2, 2003, at 12:19:37
I received this in an email from a friend my age. It doesn't apply to me so much because I'm unemployed and had to cash in my retirement to live on. But...for those of you with pensions, I thought you might be interested. Warning: it's definitely biased in a non-rich folks direction.
The "harder" news starts where I put the ###. And the "how to respond" to this starts where I put the ***.
==============================================by Molly Ivins 2/27/03
AUSTIN, Texas -- You ain't no John Snow when it comes to pensions. Snow, our new
treasury secretary, was CEO of the railroad company CSX Corp. and got a platinum
parachute when he bailed. He gets $2.47 million a year for life in retirement
benefits. This package was based on the premise that he'd worked for the company
for 44 years, even though he'd
been there only 25. Now that's creative accounting.Plus, CSX decided to let him factor in the stock benefits he had received as
regular income, instead of just salary, as is normally done. At the same time
CSX was giving Snow this lovely deal, it was cutting the health benefits in its
retirement plan for lesser workers. Since Secretary Snow is now in charge of
pension policy at the Treasury, can we look forward to
similar deals for ourselves? Nope, we're in the class that gets the cuts.### The Bush administration has a plan (those are rapidly becoming the six most
chilling words in the English language) to de-improve your pension. It allows
companies to switch from traditional fixed-benefit retirement plans to what's
called the cash-balance pension plan. You will be unsurprised to learn that
corporations just love it because it saves them millions of
dollars a year, as much as $100 million in the case of huge companies.Under the administration's proposed rules, companies can eat away at the
retirement benefits they owe workers by using "reasonable" interest rates and
mortality rates to calculate the value of a pension as the company converts to
the cash-balance scheme. Presto: Hey, look honey, I shrunk your retirement
package.The cash-balance plan is particularly harmful to older workers, so if you've got
any gray hair, you might want to take a look at what they're about to do to you.
Under fixed-benefit plans, retirement is based on the employee's salary and
years of work at the company. This gives older workers a chance to rack up
benefits. When companies started switching to cash-balance plans, the AARP, the
Pension Rights Center, the AFL-CIO and other groups set up a mighty holler. The
Equal Employment Opportunity Commission received over 800 age-discrimination
complaints. As a result, the IRS stopped approving these conversions in 1999.But the Bush administration, operating on its cardinal principle -- Whatever
Bill Clinton Did Was Wrong -- has naturally decided to reverse course. If
Clinton did it, it can't be good (and what splendid results they've gotten so
far), so the new rules will give companies that convert to cash-balance plans a
tax advantage, as well as giving them protection from
age-discrimination suits. Don't you love it? The perfect Bush plan: They get to
screw workers and get a tax break, and nobody is allowed to sue.More than 200 members of Congress have written Bush asking him not to let the
proposed rules become law. The General Accounting Office did a study showing
that annual pension benefits of older workers can drop by as much as 50 percent
under the new plan.*** There is a 90-day period for "public comments" on the proposed rules, and it
might well behoove you to put pen to paper over this one. The public comment
period ends March 13. You can call the Treasury Department at (202) 622-6090 or
6030 to find how to submit a comment. The Communication Workers of America
website also has some how-to advice:
It's at www.allianceibm.org/pension/treasuryletters.htm.Rep. Bernie Sanders, the Vermont independent, has a bill to require companies
that are going to convert to allow their employees to choose which plan works
best for them. The bill requires companies to provide workers detailed
information that allows them to make an apples-to-apples comparison.If you're wondering why you haven't heard much about this, let me suggest two
reasons. One is that TV news is in its one-story, Dead Diana mode: All they have
time for is Iraq and the occasional nightclub fire. The second is the
consequence of having all the media owned by a few giant corporations. It is not
in the interest of these corporations to have such news
widely reported.Am I suggesting (gasp!) censorship? Nope, just that even though this affects
millions of people, those millions are not a large percentage of the total
television audience, and pension de-form is not as gripping as war or nightclub
fires. That's the way media gigantism affects news. You can't save your pension
with duct tape, so get on this.
poster:shar
thread:205278
URL: http://www.dr-bob.org/babble/social/20030301/msgs/205278.html