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1999
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Duke Energy’s cash balance conversion was mentioned in Congress by Rep. Bernard Sanders. The implication was clear that many other corporations are in the same boat with IBM. The only difference is that IBM is the first one to get nailed for age discrimination in pension plans.

Duke was again lumped in with Enron. Duke tries to keep its cash balance conversion out of the limelight, but it is getting more difficult to hide each day. Duke is great at stonewalling, but stones can crumble!

As IBM was negotiating a partial settlement, the House passed an amendment to help keep IBM from sliding off the hook. The amendment bars the Bush administration from trying to legalize age discrimination in cash balance plans. It stops the administration from overturning a federal court ruling through regulatory shenanigans.

Below is the statement made in Congress on September 21, 2004 by Rep. Sanders on the Cash Balance Amendment:

Mr. Chairman, this tri-partisan amendment is cosponsored by Gil Gutknecht; George Miller, the Ranking Member of the Education and Workforce Committee; Maurice Hinchey; and Rahm Emanuel. This amendment also has the strong support of the AARP, the largest senior citizen group in this country representing over 35 million Americans, the AFL-CIO and the Pension Rights Center.

Mr. Chairman, last year this amendment passed the House by a vote of 258-160. Two years ago, a similar amendment passed by a vote of 308-121. By voting for this amendment, we will be protecting the retirement benefits of some 8 millions of American workers who have seen their pensions slashed by as much as 50% through age discriminatory cash balance pension schemes – and the 14 million more who still have traditional defined benefit plans that could be converted to cash balance schemes. The reason that this amendment is coming up again today is that despite the very strong tri-partisan support that we have seen in the House, this amendment has yet to be implemented into law and it is imperative that we keep fighting and keep standing with American workers.

Mr. Chairman, this amendment is simple and straightforward. In July of 2003, a federal court ruled that IBM’s cash balance pension plan violates federal anti-age discrimination law. The Judge in this case is expected to award damages to IBM employees any day now after which the company will appeal to the 7th Circuit Court of Appeals.

Our amendment would simply prohibit the federal government from assisting in overturning this pro-worker court decision. IBM deserves its day in court like every other litigant. But taxpayer money should not be used to support an age-discriminatory cash balance plan, and this amendment gives Congress the opportunity to make that very clear.

Mr. Speaker: Let’s be very clear. While this particular lawsuit involves IBM’s conversion to a cash balance plan, there are hundreds of other companies that have done exactly the same thing – companies like AT&T, Duke Energy, CBS, Bank of America, Enron, and WorldCom. It is not only IBM employees who are hurting, but millions of workers from one end of this country to the other who have also been affected, people whose retirement dreams were shattered when companies changed the rules of the game and slashed the retirement benefits that were promised to their employees.

This precedent-setting court ruling against cash balance plans confirms what American workers have been saying for years: cash balance pension conversions discriminate against workers based on age, are illegal and, without adequate protections for older workers, must be stopped.

Mr. Chairman, let me just read a brief excerpt from the ruling of Judge Murphy:

``In 1999, IBM opted for a `cash balance formula.' The plan's actuaries projected that this would produce annual savings of almost $500 million by 2009. These savings would result from reductions of up to 47 percent in future benefits that would be earned by older IBM employees. The 1999 cash balance formula violates the literal terms of the Employee Retirement Income Security Act. IBM's own age discrimination analysis illustrates the problem.''

Mr. Chairman, I became involved in this issue several years ago when many hundreds of IBM employees in Vermont contacted my office and told me that the pensions they had been promised by the company had been cut by 20 to 50 percent. Imagine that. Workers staying at a company through good times and bad times, providing loyalty to their employers, and then one day the company sends out a message which says, in so many words, thank you for your years of dedicated service, but forget about the promises that we made to you regarding the retirement that you and your family were anticipating. Thank you very much, but we've changed our minds, we've pulled the rug out from underneath you, we're cutting your pensions by up to 50 percent. And, Mr. Chairman, let me reiterate that while my experience in my state was with IBM workers, the same problem is impacting workers of hundreds of different companies.

Mr. Chairman, for those Members who will tell us that cash balance conversions are good things and should be supported, I would remind them of a report from the Congressional Research Service that I requested. According to the Congressional Research Service, the Speaker of the House and the Majority Leader would see their pensions slashed by as much as 69% under a cash balance plan. In fact, every single Member of Congress that the CRS examined in its report would be worse-off under a cash balance plan than under the traditional defined benefit plan that Members of Congress have now. The older the Member of Congress is, the worse-off they would be under a cash balance plan, according to the CRS report. Frankly, I was not really shocked that when I offered an amendment last year to convert Congressional defined benefit pensions to a cash balance scheme, the Rules Committee refused to place it in order. If converting to a cash balance plan would be disaster for Members of Congress and unfair because the retirement benefits we are expecting, then it is equally unfair for millions of American workers.

Finally, Mr. Chairman let me address some of the claims of opponents of this amendment. They will tell you that we have voluntary pension system. But they forget to tell you that companies that do have defined benefit plans receive some of the most generous tax breaks the federal government gives – amounting to some $89 billion a year. Companies that discriminate on the basis of age don’t deserve these enormous tax breaks.

The opponents will also tell you they have a study that shows that workers are better off. The supporters of cash balance plans cite a study by the Society of Actuaries that they claim says that most employees fare better under a cash balance plan. However, according to the Wall Street Journal, “the Society of Actuaries itself doesn't endorse those conclusions, saying the study was never intended to compare how workers fare in the different plans. ‘The study certainly doesn't say the workers are better off,’ says the Society's senior research actuary, Thomas Edwalds.” (December 16, 1999, Page A1)

According to the same Wall Street Journal article, “Employers . . . . increasingly acknowledge that switching to the new [cash balance] plans does reduce benefits for many veteran employees. And, the article also says that “Many younger workers are no more likely to collect a benefit from these newfangled plans than they are from traditional pensions. And when they do collect, they often fare only a little better under a cash-balance system.”

Mr. Chairman, in case there is any confusion among the Members about what this issue is really about, let me close with some quotes from the very actuaries who have been peddling cash balance plans to corporate America:

In a July 27, 1989 letter from Kwasha Lipton to Onan Corporation about cash balance plans, the consultant notes, “One feature which might come in handy is that it is difficult for employees to compare prior pension benefits formulas to the cash balance approach.”

Similarly, Joseph Edmunds stated at a 1987 Conference of Consulting Actuaries, “[I]t is easy to install a cash balance plan in place of a traditional defined benefit plan and cover up cutbacks in future benefits.”

Likewise, William Torrie of PriceWaterhouseCoopers at the October 18-23, 1998 Society of Actuaries meeting said, “[C]onverting to a cash balance plan does have an advantage of it masks a lot of the changes . . . .”

Finally, Mr. Chairman, the age discriminatory impact of these plans has been clear for years. Kyle N. Brown, a retirement and pension lawyer with Watson Wyatt Worldwide said at a Society of Actuaries Conference in October of 1998:

The economic value that is accrued, is different in hybrid plans than it is for traditional plans. In essence, that is part of the reason why you want to put these plans in. You know you are trying to get a different pattern of accrual. Well, what that means is that for your older, longer service workers, that their rate of accrual is going to go down. There is going to be a reduction in their rate of accrual.

Mr. Chairman, these cash balance plans are age discriminatory and the actuaries who sold them to corporate America have known they were since the beginning. This House should stand with workers and not allow the federal government to intervene in judicial proceeding to rob American workers of their pensions.

Cash Balance Amendment Passes!

Dow Jones and Reuters reported that the House wants to prevent the Bush administration from overturning the court ruling against IBM’s cash balance plan. A federal court ruled the cash balance plan to be illegal and age discriminatory. Since that time, the Bush administration has been seeking to legalize pension age discrimination.

Rep. Bernie Sanders’ cash balance plan amendment was passed Tuesday: 237 to 162. Republicans had to join with the Democrats to pass the amendment.

The Republicans who are working to help corporations take the employees’ pensions emphatically opposed the amendment. The last thing they want is for workers to regain their lost pensions. Texas Republican Rep. Sam Johnson was distraught that the amendment passed and parroted the worn corporate refrains. Those who are owned by corporations tend to always do their master’s bidding.

Republican Rep. Ernest Istook Jr. was also moaning because the amendment passed. Who cares about Istook. The problem is the pensions that the corporations took!

Rep. Sanders said "Our amendment would simply prohibit the federal government from assisting in overturning this pro-worker court decision. By voting for this amendment, we will be protecting the retirement benefits of some 8 millions of American workers who have seen their pensions slashed by as much as 50% through age discriminatory cash balance pension schemes."

The House voted for such an amendment last year by 258 to 160. Rep. Sanders said that Congress should weigh in on the subject again to make clear its opposition to cash balance plans that do not include protections for older workers.

Rep. Sanders said "Taxpayer money should not be used to support an age discriminatory cash balance plan, and this amendment gives Congress the opportunity to make that very clear. It is imperative that we keep fighting."

Cash Balance Pension Amendment

Federal Judge G. Patrick Murphy has agreed to a short delay in the IBM cash balance pension lawsuit, according to the Associated Press. The delay before the judge announces what IBM owes to the plaintiffs will allow settlement talks to continue. IBM has billions of reason to negotiate a settlement. If IBM does not settle the case, it is facing a judgment of at least $6.5 billion.

Bruce Wolk is a law professor at University of California, Davis, School of Law. He said "A large number of cash balance plans now exist, the overwhelming number of them conversions, just like IBM's. The holding in that case would hold every one of these plans in violation of the law. It's put a bit of a scare in the boardrooms."

There is one thing that strikes fear in the hearts of directors: The prospect of returning ill gotten pension money to the rightful owners.

It is nothing new for corporations to take pension money from employees. It has been going on for decades. Only the method of taking the money has changed. Corporations used to just fire workers shortly before they were eligible to retire. It was rather crude, but corporations took the pension money just the same. And, the money is all the corporations care about.

When this practice was outlawed, corporations moved on to hostile takeovers and raiding pension plans. When laws were enacted to discourage this pension scam, corporations moved right into cash balance plans. Cash balance conversions are the most diabolical of all pension scams. Now that the courts have caught on to the injustice of cash balance plans, corporations will move on to the next pension scam.

Stopping pension scammers is like trying to eliminate houseflies. It cannot be done; they breed much too fast!

IBM made the laughable argument that it should not have to make retroactive pension settlements because it did not know the plan would be declared illegal! It was a nice try, but the judge did not buy it.

On February 12, Judge Murphy wrote "The prohibition against age discrimination existed long before the appearance of cash balance plans. All that has changed is IBM's clever, but ineffectual, response to law that it finds too restrictive for its business model."

Corporation have universal contempt for laws. They so tend to restrict their quest for unlimited profits. Corporations care little where the money comes from. They even consider the employees’ retirement funds to be fair game.

The Bush administration is working feverishly to legalize age discrimination in cash balance plans. It has literally taken acts of Congress to restrain its zeal!

IBM Settles Part of Pension Suit

Ellen E. Schultz reported today in The Wall Street Journal that IBM has settled a small portion of its cash balance plan lawsuit. The settlement on Wednesday was for an undisclosed sum.

Kathi Cooper v. IBM was filed in 1999. A federal court ruled that IBM discriminated against older workers when it converted to a cash-balance plan. Judge G. Patrick Murphy could rule at any time on how much money IBM owes employees and former employees.

This settlement does not address age discrimination or other claims. This partial settlement only covers a "termination" claim. Thousands of employees were terminated before they could become vested in the pension plan.

The plaintiffs charged that the cash balance conversion constituted a "partial termination" of the pension. When a plan is terminated, the law requires that all participants immediately become vested.

IBM estimates it would take an additional $6.5 billion to settle all pension claims. It would be the largest pension settlement ever. But the actual cost to IBM would be zero. IBM would only be returning the employees’ money to them, not giving them anything that they had not already earned. The only expense to IBM would be the legal expenses. IBM chose to take this risk in the quest for billions of dollars in the pension fund. Shed no tears for IBM or other pension predators.

IBM maintains that its plan is well funded. If it loses the lawsuit, it will not affect cash flow. This is a typical scenario at many large corporations. They never needed the employees’ pension money. They just took it because they thought that they could get by with it. Hey, the money’s there, why not take it?

Cash balance conversions were designed to take pension money from employees and shield corporations from any legal repercussions. Taking the money was the easy part. Evading age discrimination and other laws was the tricky part. According to the federal court, it was also the illegal part.

In addition to depriving some employees of overtime pay, G. W. Bush has tried to legalize age discrimination in cash balance plans. If he gets four more years in office, expect an even greater loss of benefits.

Cash Balance Pension Amendment

Staff members said that Congressman Bernie Sanders is offering an amendment that would bar the Bush administration from assisting in overturning the Cooper v. IBM court decision. That decision declared the IBM cash balance plan to be illegal and age discriminatory.

The Bush administration has been trying to nullify the court ruling by backdoor methods. It tried to circumvent the decision through Treasury regulations, but that did not work out.

Why did the court rule against IBM? It determined that IBM knew that the cash balance conversion would rob senior employees of up to 47 percent of their earned pensions.

Of course IBM knew it. Taking retirement money from workers is the very reason the pension was converted! Taking earned pension benefits from employees it the true reason cash balance plans were concocted. Cash balance plans are used as a vehicle to skirt age bias laws. Any other reason is a cover story, and there have been some outlandish stories.

No member of Congress has done more to right the injustice of illegal cash balance pension conversions than Bernie Sanders. Cosponsors of the amendment are: Rep. Gil Gutknecht, George Miller, Maurice Hinchey, and Rahm Emanuel. The Pension Rights Center also supports this amendment.

It is very possible that IBM will not be the only corporation with egg on its face, due to cash balance conversions. The other shoe has not dropped yet.

Congress Zeros In On Cash Balance Plans

A coalition is discussing how to expand pension benefits to employees who do not have them, according to Employee Benefit News. That is a very worthy endeavor, but don’t bet the farm on this group accomplishing anything worthwhile. It has the smell of a pension whitewash group, a group that will produce unlimited rhetoric and little substance.

The group is asking the wrong questions and overlooking obvious existing problems. There seems to be zero concern will correcting the existing cash balance pension abuses. What will it accomplish to get more people involved in bait and switch pension programs?

The Pension Rights Center is a very good organization and it is active in the group. But it is dealing with some very unsavory characters.

There was much talk of savings proposals. The mindset seems to be that it is fine for corporations to raid the employees’ pension fund. Just set up some rinky-dink savings plans and everything will be okay. The group wants to make plans that really let corporations off the hook. It is touting plans that cost corporations little, free them from liabilities, and do not hold them responsible. What possible good could such plan be to employees? Corporations already find ways to get out of the pension responsibilities that they have voluntarily assumed. If corporations are freed of any responsibility, lots of luck in collecting any of the promised benefits!

Rep. Robert E. Andrews said "Unless we make some changes, three decades from now we'll have a whole new class of impoverished retirees."

Rep. Andrews is three decades behind the times. Retirees are impoverished now! Many of these retirees worked for decades to obtain certain pension and health benefits. The promised pension benefits evaporated with cash balance conversions. The promised "lifetime" retirement health care ends at age 65. The promised “free” coverage (until age 65) costs more each year.

These retirees are not getting the benefits that they were promised. The meger benefits they do get have to pay for medical coverage that was promised to have no cost. The “lifetime” coverage evaporates completely at age 65. At least those who will retire thirty years in the future will see the disaster coming. The present retirees were hit by a fast moving train. They were promised certain benefits, but the promises did not materialize. They did not have thirty years to prepare. Their benefits vanished overnight!

Deene Goodlaw (yes, the name is real), retired attorney, talked of Plain Old Pension Plans, "designed to provide a modest pension to a lot of workers ... to be somewhat meaningful in alleviating poverty in old age."

This is what many worker had, but did not even collect these meager amounts.

Rep. Rob J. Portman mentioned cash-balance reform. He is a corporate shill. Any “reform” will only further pad the executives’ pockets with the employees’ pension money. We do not need cash balance reform. We need cash balance annihilation. Eliminate these illegal, age discriminatory plans and prosecute the actuaries and executives who promoted them.

Attorney Martha L. Hutzelman said "It is still vitally important for employers to be involved. They are closest to employees."

By all means, corporations like to help write the laws. That is why the laws always favor the corporations. The Employee Advocate agrees that employers are closest to employees. A pickpocket has to get up close to ply his trade!

The House Workforce Committee revealed that it will try to whitewash the deceptive and abusive cash balance pension plans. It tipped its hand in the very first sentence of its June 15 press release:

“House Workforce Committee leaders today announced plans to move forward and look at solutions to ensure cash balance pension plans remain a viable retirement security option for workers and employers.”

Cash balance plans never were “a viable retirement security option for workers.” They are, and always were, a way to forcibly take pension money from employees. They provide corporations with a deceptive method to take back benefits that employees have earned over many years.

By telling such an outrageous lie in the first sentence, it is obvious that an attempt will be made to put perfume on the cash balance pig.

Education & the Workforce Committee Chairman John Boehner (R-OH) told another big pension lie. He said “American workers deserve retirement security, and cash balance pension plans are an important tool in the defined benefit system for ensuring they have this security in a changing economy.”

Cash balance plans are not an important tool in providing retirement security. They are an important tool for corporations to use in robbing employees of their earned pensions!

He followed with yet another big pension lie. He said “Unfortunately, the ongoing uncertainty about cash balance plan conversions is undermining the retirement security of American workers and jeopardizing employers’ willingness to continue offering defined benefit plans to their employees.”

Corporations and their shills have been trying to scare workers with this conard for some time. If corporations terminate retirement plans, the IRS will extract a 50 percent penalty on their ill gotten gains. Do you think corporations want to pay a 50 percent penalty? Corporations do not even want to pay attention!

Penalty evasions is the true purpose of cash balance plans. They allow corporations to raid pension funds, without triggering the 50 percent penalty. Corporations once terminated retirement plans, at the drop of a hat, and pocketed the profits. The IRS penalty put a kink in that scam.

But scammers are eternally scheming. They dreamed up cash balance plans to provide a convenient loophole to evade paying the penalty.

Congress can change the laws to allow corporations to take all of your retirement money and keep it. Congress has the power to make any number of dumb laws. And, they have just the crowd to do it. Of course, the members will be looking for new jobs after the election, if they try anything too stupid.

Corporations and some members of Congress want to legalize age discrimination in cash balance plans. But they want to do it in such a manner that workers will not know that they have been robbed.

It is much too late for that now. Employees already know that cash balance plans belong in a burglar’s tool box. Some burglars are in the boardroom; some are in Congress. They all want to profit at the employees’ expense.

Employer-Employee Relations Subcommittee Chairman Sam Johnson (R-TX) had lies of his own to tell. He said “There are plenty of hybrid plans that currently need the certainty we will provide in our legislation and we will work to ensure that defined benefit pensions remain a vital and thriving employee benefit far into the future.”

Hybrid plans (cash balance plans) are not “a vital and thriving employee benefit.” They are only vital to corporations that want to raid pension plans, without paying the IRS penalty. He has already promised the whitewash age discrimination by establishing the “certainty” of cash balance plans. He effectively told his corporate owners that the fix is in.

With proper public involvement, it can be “unfixed.” If you sleep through this one, corporations will write the pension laws.

The Big Lie

The Wall Street Journal published new information about the doctored Treasury document that was sent to members of Congress last fall. The altered document was a desperate attempt to perpetuate illegal cash balance pension plans.

The IBM cash balance plan has been ruled illegal in federal court. In an attempt to override the courts, the Bush administration proposed Treasury legislation that would have exempted these plans from age discrimination laws. G. W. Bush – what a pal!

Rep. Bernard Sanders introduced an amendment that would counter the Bush administration’s ploy to help corporations keep employees retirement money. The amendment was to bar the Bush administration from any attempt to nullify the federal court ruling through Treasury regulations.

The tampered Treasury document was sent to members of Congress, in an effort to thwart Rep. Sanders’ amendment. The ploy did not work. The amendment passed anyway. And, it passed with wide bipartisan support!

The proposed Treasury regulations were withdrawn on Tuesday.

Bush Backs Off of Cash Balance Plans

The doctored document issue has been kept quite in Washington for some time. Rep. Bernard Sanders asked questions about the document at a Washington hearing, on Wednesday. Dennis Schindel, Treasury acting inspector general, said that IBM altered the document and sent it to lawmakers. He went on to say that criminal prosecution has not been ruled out.

Reporter Ellen E Schultz wrote that this is the first public acknowledgment of the investigation’s status, being conducted by the inspector general.

If you have read any employee comments about IBM’s cash balance pension plan, you know the workers have little respect for IBM management. Who could possibly be more treacherous than a pension-grabbing IBM executive? Why, an IBM lobbyist, of course! It was an IBM lobbyists that spin doctored the document and tried to pass it off to congressmen as having come from the Treasury Department.

Rep. Sanders asked the inspector general if anyone at the Treasury was implicated in altering the document. Mr. Schindel said "There are several aspects of this investigation involving IBM employees, lobbyist employees and Treasury employees." He hopes to issue a report within two months.

The Washington Post published a statement that Congressman Sanders made on Thursday:

"It is bad enough that the Bush administration is publicly siding with major corporations who are trying to cut back on the pensions that their workers were promised. It is an outrage that, from what we understand, a staff member in the Treasury Department illegally colluded with one of these corporations (IBM) to try to defeat a pro-worker amendment that I successfully offered which protects the pensions of millions of employees."

IBM Admits Treasury Document Tampering

The Treasury Department backed out of its plan to whitewash age discrimination in cash balance plans, according to The Wall Street Journal. The Bush administration’s proposed solution to pension losses for older workers was to exclude cash balance plans from age discrimination laws!

Reporter Ellen E. Schultz suggested that the Administration may be unwilling to anger employee voters in an election year. But this is only one of dozens of things the Bush administration has done to harm citizens and enrich corporations!

It is now up to Congress to draft legislation to address the inequities of cash balance pension plans. Congress is almost 20 years late in addressing the issue. Corporation have been taking advantage of the lack of guidance, by doing about anything they wanted to do. Without specific laws, who could prove them wrong?

It is vitally important to elect people who will act in the best interest of the citizens and employees. Corporation have controlled Washington for over three years.

Rep. George Miller said "The Treasury Department's ill-advised plan would have seriously harmed millions of white collar employees nearing retirement, and I'm glad to see that, under pressure from Democrats in Congress and workers across the country, the Administration has decided to discard the plan."

It is unknown why Rep. Miller singled out white collar workers. The pension losses can affect anyone forced into a cash balance plan!

Corporate lobbyists have already descend upon Washington like ants. If the officials are already owned by the corporations, it makes taking pension money just too easy. Corporations want to keep the money taken from employees and be shielded from lawsuits.

Executives who took retirement money from employees have been sweating since the IBM cash balance plan was declared illegal last July. Xerox has lost three appeals over cash balance plan issues.

Prestigious Potomac Pension Plundering Party

Globally, workers are facing problems getting the pensions that they were promised. In Japan a pension brawl even erupted, according to the Associated Press.

What barroom did the brawl take place? The brawl broke out in Japan's legislature!

The upper house chamber debated the pension issue all Friday night. Security guards tried to separate the lawmakers. The politicians were shoving each other up against the corridor walls.

The debated bill will cut pension benefits and raise premiums. 70 percent of the citizens oppose the law because workers will not receive the benefits that they were promised.

For added excitement, the public learned that about 100 lawmakers have not been paying into the pension system! Some have not paid their premiums for years.

Lawmaking works in Japan just like it does in the United States. The ruling party rammed the “pension reform” bill through. Just as in the U. S., “reform” means taking more from the citizens

Pension consultants have had a pretty good game going for years. They taught corporations how to take away benefits that employees had already earned. The consultants were making fat fees and life was good.

Somewhere along the line employees began to question the legality of these schemes to take away earned benefits. Consultants had been getting away with many things because they were never questioned.

It was found that these consultants were actually selling their schemes as ways to take money from employees! Several courts have ruled in favor of the employees. The IBM cash balance plan was found to be illegal. The plan it replaced was also illegal! Consultants are now in the damage control mode.

The Benchmark Companies sent out a May alert: “The Heat is On Pension Consultants.” It mentioned “mounting allegations of wrongdoing, lawsuits and regulatory scrutiny.” Some managers over “pay-to-play schemes” are jumping ship.

Companies are setting up Chinese Walls to give the illusion that there is some degree of separation in their operations.

The alert stated: “Don’t believe a word of it. The only Chinese Walls are in China and separate subsidiaries still share a common economic purpose, if not common employees.”

The matter of fiduciary duty was mentioned. Violations of federal securities laws and bribes were also mentioned.

Those who fell for the shady deals do not have clean hands either.

Don’t Steal Our Pensions

The New York Times reported today that one large employer has rejected cash balance plans, and other such ploys that rob employees of their retirement benefits. The United Methodist Church voted to start a defined benefit pension plan for its 25,000 employees. The plan received 75 percent of the vote!

Defined benefit plans offer real, government guaranteed, pensions that a person cannot outlive. Cash balance plans are designed to take away pension benefits that have already been earned. Many who retired with only a cash balance plan will end up penniless and with zero income, other than Social Security.

Barbara Boigegrain is the secretary general of the United Methodist Church's General Board of Pension and Health Benefits. She said "I guess I'm old-fashioned. But I don't feel that a defined-contribution plan only is necessarily the best way to take care of employees. Especially for a large, stable organization that has a considerable future in front of it."

Church officials said that they are not convinced defined contribution plans are cheaper and simpler to run than pension funds. Their defined contribution plan was described as an administrative nightmare.

Ron Gebhardtsbauer is the senior pension fellow of the American Academy of Actuaries. He is also a United Methodist pension trustee. He said "Every time the money gets transferred, or somebody transfers the wrong amount, or does it late, it's just a mess. It was obvious that a defined-benefit plan would be easier to administer… More of the money can be spent on benefits."

There was a time when Ron Gebhardtsbauer was promoting cash balance plans. It is noteworthy that he appears to have seen the light.

Read about Ron Gebhardtsbauer’s cash balance plan promotion efforts:

A Busy Man

The Iraqis are using democracy for all it is worth, even though they don’t officially have it yet. In Baghdad, around 500 Iraqis demonstrated for an inflation-adjusted increase in their pensions.

Iraqis receive no cost of living adjustments (COLA’s) to their pensions. As wages and new pensions rise, the retired Iraqis are stuck with pitifully small pensions, set years ago. They are demanding that their pensions be fixed to 80 percent of the equivalent present day salaries.

If they pull it off, they will be light years ahead of American workers. Many Americans do not receive any private pensions. Most do not receive any COLA’s. As inflation continues to soar, they are left farther and farther behind.

Many Americans do not even receive the meager pensions that they worked 30 years to qualify for. Corporate scheming and cash balance pension conversions eroded the value of their pensions.

Demonstrator Hassan Ibrahim, former consular services employee, said "Let us see some change between the American occupation and the age of Saddam Hussein. They should not be giving us reasons to be unhappy."

The Humanitarian Association of the Retired in Iraq issued a statement: "The new regime can't claim that it aims at the prosperity of the Iraqis while a large section of the community is being neglected."

The Iraqis have achieved some noteworthy advances in pensions and wages because they are not too timid to let their displeasure be known.

Getting What One Asks For

Iraqi Soldiers to Get Pensions

The danger of using depleted uranium in military projectiles and armor is an issue that has been swept under the rug for years – in England and the United States. The first known award for a depleted uranium poisoning claim went to a Scotts 1991 Gulf war veteran, according to www.theherald.co.uk.

The pension award was made to Kenny Duncan, of Clackmannan, at a Pension Appeal Tribunal Service hearing in Edinburgh. Mr. Duncan, 35, helped remove tanks which had been destroyed by depleted uranium shells.

His three children also have health problems linked to depleted uranium poisoning, including deformities and low immune systems. These symptoms are similar to those suffered by some Iraqi children.

Mr. Duncan retired from the Army in 1993 due to ill health, but was awarded only half the full pension amount.

The National Gulf Veterans and Families Association (NGVFA) has called for a full independent inquiry into Gulf war illnesses.

Mr Duncan said “It is just a huge relief to have someone in authority say that you have been poisoned by this stuff and that you are not telling lies. It is now time for the MoD (Ministry of Defense) to tell us what went wrong.

“For all those veterans who have been going to the doctor with these ailments and are being told there is nothing wrong with them, this is for them, and I hope it will help them.

“I doubt that I will benefit much financially from this, but it wasn't about the money, it was about the principle of the thing.”

Gulf War Veterans are Suing Corporations

This week, the Treasury Department proposed legislation to end age discrimination in cash balance pension conversions. Why would the Bush administration want to end cash balance age discrimination, after it tried to legalize it? It took arm twisting by Congress to bring forth the proposals.

This administration epitomizes the avarice of American corporations. Most will do the right thing, but only if forced to and there is absolutely no way out of it!

As written, the proposal laws would likely be worthless to employees already suffering from staggering pension losses. They would apply to future conversions only.

But this development is still noteworthy. The government was forced to admit that cash balance pension conversions are age discriminatory. If they were not, why would legislation be needed to rectify the situation? Under the proposed law, wear away would be eliminated. Call it wear away or call it rob away; that is the period of time that employees lose earned pension benefits.

Would the new laws have teeth? Yes. “These protections would be enforced through a 100 percent excise tax.”

If a bullheaded corporation converted to an age discriminatory cash balance plan that cost you $200,000, the government would get the $200,000. Not a bad deal – except for you. The company would lose nothing. The government would gain $200,000. You would furnish the $200,000!

This a government proposal, who did you expect it to favor?

Congress Zeros In On Cash Balance Plans

CBS MarketWatch reported that women cannot be discounted in the corporate world. The report was based on a study by Catalyst, a nonprofit research firm. The study concluded that companies with a higher percentage of women in top positions have a 35 percent greater return on equity.

Ilene Lang, president of Catalyst, said “A company that manages diversity well all the way through its top management probably manages many things well. It's a sign of good management of talent and a hallmark of success.”

Duke Energy was one of the companies in the study.

The contributions of women in the fight for pension justice cannot be overlooked either. Their accomplishments have been remarkable – and they are not letting up.

The Financial Accounting Standards Board (FASB) has, once again, started a formal review Of Cash-Balance Pension Rules, according to Dow Jones. The FASB started this earlier, but the ERISA Industry Committee (enemy of employees) howled and begged FASB to reconsider. The ERISA Industry Committee pleaded for more time and FASB backed off.

Now that FASB is back on the job, expect more wailing from the ERISA Industry Committee, actuaries, and corporations. In short, everyone who has profited from employees losing their pension benefits will be moaning. They are petrified that they may have to make restitution to the rightful owners of the pension benefits.

One thing that may work in favor of workers is the FASB is a private rule maker. All federal agencies are now wholly owned subsidiaries of Bush Incorporated.

On Wednesday, the FASB started reviewing just how corporations measure cash balance pension benefits. Do you see why some people are sweating? The FASB is striking at the very heart of the monster.

Gerard O'Callaghan, FASB practice fellow, said “The goal is to put out final accounting guidance by the end of the 2004 addressing the measurement of liabilities for cash-balance pension plans. But before we can get to the issue of measuring benefits, we need to refine the definition of cash-balance plans.”

Corporations started confiscating employees’ earned pension benefits back in 1985. Does it seem a little strange that in 2004 the experts are still not exactly sure what a cash balance pension is?

Therein lies the value of cash balance plans to corporations. If pension experts do not agree on what they are, who could possibly police them? The answer is no one! The actuary has been like a small child in a room with 10,000 building blocks. He has been able to build the cash balance plan any way he wanted. Corporation could give him guidelines such as: take X million dollars out of the pension fund. There has never been anyone to question the actuary. Who could question him if no one knew what he was building?

If cash balance plans were thoroughly defined, and strict laws protected the employees from thievery, there would be zero such plans in existence today. The only value these plans have to unscrupulous companies is they are undefined. Present day laws do not address them because they were designed expressly to evade the pension laws. Cash balance plans are a murky, gray area, custom made to be exploited.

What was the justification for the outcry against cash balance plan rules by Corporations and their toadies? You’ll love this: The complaint was that corporate earnings would be hurt by expanding benefit obligations!

The pension obligations would not really be expanded. Pension obligations had been artificially, and possibly illegally, contracted through cash balance conversions. If pension benefits are restored to their original value, no benefit expansion has taken place.

If the police recover a victim’s stolen money, the victim has not profited. His net worth has not expanded. He has merely broken even.

When corporations boast of saving millions of dollars through cash balance conversions, they are not saving anything. They are taking pension money that employees have earned through years of labor.

When FASB decides what cash balance plans are, they will get into the accounting issues. That’s when the rubber will meet the road.

Dow Jones stated: “Employers have embraced cash-balance plans, but a growing controversy has cast doubt on their future. At issue are concerns that the pensions don't pay older workers their fair share of benefits.”

In 1999, the IRS stopped approving new cash-balance plans, over age discrimination concerns. That alone should have told the greedy corporations something. But greed is a blinding force; companies continued to wade on in.

Last year, a federal court ruled the IBM cash balance plan illegal and age discriminatory.

The Bush administration tried to legalize age discrimination in these phony baloney plans, last year. The attempt fell flat. Congress has now blocked the bush administration from tampering with the pension regulations. Congress further order the Bush administration to propose legislation to address the pension losses through age discrimination by cash balance plans.

There is a blatant conflict of interest if the Bush administration is to propose remedial legislation. Corporations hold title deed to G. W. Bush’s soul. Whose interests will he be looking out for?

Everything this administration fixes, only gets worse. “Fixing the economy” created billions of dollars in debt from a surplus. If you have any pension benefits left, hang onto them for dear life!

Corporate Pension Shills Emerge