December 30, 2002

Dear

The US Treasury recently announced proposed regulations to allow US companies to convert to cash balance pension plans without regard for the harm such a conversion can do to long-term employees.

These conversions have a history of reducing benefits for older workers by 50% or more. Opening the door to corporations to allow this treatment of older workers should not be allowed. Older workers cannot make up the 20, 25 or 30 years of time they have dedicated to their employer, to make up the shortfall that they would suffer in these conversions.

Older workers have already seen their future security reduced by the cancellation of retirement medical plans, and by the erosion of their 401K investments. Our government should not now allow further threats to retirement that could lead to poverty or bankruptcy in old age.

I'm asking that you please co-sign the following letter to President Bush. Reps. Bernie Sanders, George Miller, and Sens. Tom Harkin and Barbara Boxer sent out this dear colleague letter on December 20 (See below).

Sincerely,

December 20, 2002

Urge President Bush to Throw Out Proposed IRS Regulations That Harm Older
Employees' Pensions

Dear Colleague:

Please join us in writing to President Bush to urge him to withdraw
proposed regulations that will devastate the traditional pension benefits
of millions of employees in large companies throughout the United States.

The proposed IRS regulations will make it easier for hundreds of
companies to convert their traditional defined benefit plan pensions, which
were promised to employees at the time they were hired, to types of cash
balance plans that hurt older workers. Even though the GAO found that the
conversion from a defined benefit plan to a cash balance plan can decrease
the pension of an older worker by as much as 50 percent per year, the
proposed regulations would protect companies from age discrimination
lawsuits.

It is easy to understand why companies would want to make this
switch - they can save hundreds of millions of dollars per year. What is
harder to understand is why the Administration would take steps to
jeopardize private pension benefits at a time when Americans' retirement
security has been greatly weakened by huge losses in 401(k) investments,
the weak stock market, and with lingering questions about the long-term
health of Social Security.

Some members of Congress, employees, and advocacy organizations
became concerned about the effect of cash balance conversions during the
1990s when they first came into use. Between 300 and 700 companies
converted their traditional pension plans, affecting some 8 million
workers, before the IRS placed a moratorium on approving such conversions
in 1999 in response to age discrimination complaints. AARP, the Pension
Rights Center, the AFL-CIO, and employees at IBM and elsewhere have been
particularly vocal outside of Congress on this issue and they are again
concerned by these new rules.

Despite the controversial legacy of cash balance conversions and the plain
language of the federal pension anti-age discrimination statutes, the IRS
has proposed regulations that endorse the use of cash balance plans without
even minimum protections for older workers' pensions.

Since the regulations were announced on December 10, we have been
called by employees in the airline industry, the financial sector and other
parts of the economy concerned about losses they have already suffered
through abusive conversions or concerned about losses they might incur if
the new regulations go forward.

We are therefore asking that you join us in sending the following letter to
President Bush urging him to withdraw these proposed regulations on cash
balance plans that, when finalized, could affect millions more employees in
companies eager to make the switch. Our letter asks the IRS to withdraw
its proposed cash balance plan regulations and to issue new pension
regulations that clarify the rights of older workers to a secure pension.

If you would like to sign on to this letter or you have any questions,
please contact Warren Gunnels with Rep. Bernie Sanders at 5-4115, or Dan
Rawlins with Rep. George Miller at 5-1505.

Sincerely,

_______________________________
Bernard Sanders, Member of Congress

_______________________________
George Miller, Member of Congress

_______________________________
Tom Harkin, Member of Congress

_______________________________
Barbara Boxer, United States Senator

January __, 2002

The Honorable George W. Bush
President of the United States
1600 Pennsylvania Avenue, N.W.
Washington, DC 20500

Dear President Bush:

We are writing to strongly urge you to withdraw proposed Treasury
Department regulations regarding cash balance pension plans and to issue
new regulations that will prohibit profitable companies from reducing the
pension benefits of existing employees or retirees by converting to
age-discriminatory cash balance plans. (Federal Register December 11,
2002, Internal Revenue Service, 26 CFR Part 1, REG-209500-86,
REG-164464-02, RIN 1545-BA10,1545-BB79.)

According to the General Accounting Office, annual pension benefits of
older employees can drop by as much as 50 percent after a company converts
from a traditional defined benefit plan to a cash balance plan. Large
companies favor the conversion because they can save hundreds of millions
of dollars a year in pension costs. Delta Airlines, for example, recently
announced it would save $500 million per year by switching to a cash
balance plan. In the late 1990s, IBM initially estimated it would save
$200 million per year by switching to a cash balance plan. IBM, A T&T, and
Verizon are among the 300 to 700 large companies that have already
converted to a cash balance pension plan. An additional 300 companies had
been waiting for IRS approval of their conversion plans even before the
regulatory change was announced. Thousands of companies employing millions
of people would be eligible to convert their pension plans under the
proposed regulations.

Switching to a cash balance plan in mid-stream has the greatest negative
effect on older employees who have worked for many years with one company
and plan to continue to work for additional years for the same employer.

As you know, in September 1999, the IRS issued a moratorium on issuing
letters of approval to companies for pension plan conversions because of
age discrimination concerns. There are over 800 age discrimination
complaints currently pending before the EEOC based on cash balance
conversions. The 1999 moratorium has nearly stopped the flow of companies
converting to cash balance plans.

The recently proposed regulations would create an incentive for thousands
of companies to convert to cash balance plans by providing legal protection
against claims of age bias by older employees. The regulations would
result in millions of older employees losing a significant portion of the
annual pension they had been promised by their employer and had come to
rely upon as part of their retirement planning.

We urge you to direct the Treasury Department to immediately withdraw these
proposed regulations and instead issue regulations that provide for the
protection of older employees' pensions.

At a time when millions of employees are still reeling from significant
losses to their 401(k) retirement plans because of corporate scandals and
the ongoing weakness in the stock market, we believe these regulations
represent another serious blow to the retirement security of hard working
Americans who have played by the rules in their companies only to see the
rules of the game for rank and file employees change midway through their
careers.

Re-opening the floodgates for cash balance conversions will destroy what is
left of our private pension retirement system. This is a devastating step
that your Administration need not and should not allow.

We deeply appreciate your attention to the concerns that we are expressing
on behalf of the millions of employees who will depend on their pensions
for a secure retirement. We look forward to working with you to protect the
pension security of America's workers.

Sincerely,

_______________________________
Bernard Sanders, Member of Congress

_______________________________
George Miller, Member of Congress

_______________________________
John McHugh, United States Senator

_______________________________
Tom Harkin, Member of Congress