DISINTEGRATING PENSIONS NATIONAL CRISIS:CALL TO ACTION

Alliance@IBM Vice-president Earl Mongeon’s Comments:

Hello. My name is Earl Mongeon. I am 50 years old; I live in Westford, VT and have worked at the local IBM plant for 27 years. I am also Vice President of the Alliance@IBM / CWA Local 1701, an ongoing nationwide union organizing campaign at IBM.  

I am very concerned with the deterioration of the pension system in this country, not only at IBM but at all corporations. At one time IBM set the standards to follow; now they don’t even know what they are!

Over the last 11 years, my pension has been slashed three times.

The first major pension change took place in 1995. At that time, many employees did not understand what was going on. When I asked my manager what affect this would have on me, I was told I would have to work 5 more years to get the same pension I would have gotten for working 30 years under the previous plan. I said to him “that means I will now have to work 35 years”. He said yes. I can’t repeat what I said to him (put it like this, I wasn’t happy).

Next, in 1999 IBM put all employees, except for those within five years of retirement, into a cash balance plan.  This caused such an outcry from employees that there were mass meetings all over the country. In Vermont alone we had a meeting of over thousand employees, hosted by our Congressmen Bernie Sanders. Many employees asked for the government to step in and stop this cash balance conversion. These meetings led to a Senate hearing in September 1999, led by Vt. Senator Jim Jeffords, who was Chair of the Health, Welfare and Pension Committee at that time. Just before that hearing, IBM turned around and gave 35,000 employees age 40 with 10 years of service a choice between the old defined benefits pension and the cash balance plan. I firmly believe that the only reason they did was because age 40 is the age used in the Age Discrimination Employment act (ADEA). Today, there still is a lawsuit pending in the courts against IBM’s cash balance plan conversion (Cooper vs. IBM).  So far, IBM has lost the case on two appeals and they are on their last appeal now.

Earlier this year, IBM has announced that it is freezing the pension plans at the end of 2007 and will put everybody into a 401(k) plan.  Now, after all the changes to my pension, or should I say my promised pension, I will only get about half of what I would have gotten under the original defined benefits plan. This means that I will have to work longer to make up for what has been taken away from me by the IBM executive crooks, and I do mean crooks. These are strong words, but what they have done is steal from the employees.

The executives lost nothing because in 1994 they put in place a supplemental executive retirement plan known as SERP, before starting to implement the 1995 pension changes.  The pension changes allowed them to add millions of dollars to their compensation due to “vapor profit”, or lowering the amount of corporate funds that had to be used to fund the pension plan. (Pension Surplus)

I was brought up to believe that, when you make a promise to somebody you kept your promise. IBM should keep its promise and stop slashing benefits it has promised to employees, including health care benefits. I have seen what has happened to the current retirees and how IBM has shifted the cost of their promised lifetime medical coverage back on to the retirees and how it has eaten their pension to a point that many have had to go back to work.

Although we do not have large amounts of funds or legions of lobbyists at our disposal, we can counteract this insanity with our voices and our votes. The Alliance@IBM is asking people to write a letter to the editor of their local paper, contact their Representatives and Senators in Washington, and deliver a clear message about how angry you we will be if they make it possible for companies like IBM to legally reduce the pension checks of their retirees.

We’re telling them:

·        We are concerned about upcoming pension legislation in both houses of Congress as it could seriously hurt workers. Congress must strengthen ERISA pension protections, not weaken them.

·        Early retirement subsidies, once vested, and especially once being collected, need to be fully protected.
 

·        Plans that are under funded need to be fixed by forcing companies to increase their contributions to those plans, NOT by allowing them to cut benefits to current and future retirees.

·        Do not reduce the size of a lump sum distribution that can be offered in place of a promised annuity. Make sure the promised annuity stays an option.
 

·        Strengthen plan termination rules so that excess funds have to be used for the sole benefit of plan participants and cannot be returned to the company or to the corporate executives.

·        Currently, neither the House nor the Senate bill retroactively legalizes cash balance conversions. We will be outraged if we lose a large share of the Cooper settlement because Congress retroactively legalized what IBM did. If Congress must legalize cash balance conversions, they should include all of the protections for older employees that are in the senate bill.

In closing, I’m very concerned about the future of my children and their children. I’m concerned about whether they will have the opportunity to work at a company for 27 years. The big question is “will they have any benefits at all?” That’s why we have to take a stand today and demand that our elected representatives do the right thing and stop these corporate thieves.

Finally, I wonder if my pension be there for me the rest of my life after I retire?????