MEMBER'S CORNER

IBM RETIREES GAIN BERNIE SANDERS CO-SPONSORSHIP OF HR1322.


Congressman Bernie Sanders has introduced 1 bill (HR 1677) to protect workers pensions and cosponsored another (HR1322) that would require companies like IBM to honor the commitments made to employees regarding health and retirement benefits.  We encourage you to send this to all the IBMers you know and ask them to contact their Congressional representatives (in NC Dole and Burr) and ask them to support those bills.  This is the only way IBM can be forced to do what they promised.

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RETIREE HEALTH BENEFITS
I was proud to meet with over 200 IBM retirees and employees who expressed their concerns about letters they received from IBM informing them of cutbacks IBM was making to their health benefits. Specifically, one IBM retiree told me that on their monthly health care premiums were going to skyrocket from $116 per month to $410 per month. Others told me that they were facing significant increases in their health care premiums as well.
Under current law, companies that offer health benefits to employees and retirees can cutback or even eliminate these benefits for whatever reason at anytime - a policy which I think is unacceptable.
That is why I am a proud co-sponsor of H.R. 1322 to prohibit companies from reneging on the promises they made regarding earned health care benefits. Specifically, this bill, in most instances would prohibit companies from cutting back or eliminating retiree health benefits and to require companies to restore any health benefits they took away from retirees. This legislation currently has 95 co-sponsors.
IBM is not the only company cutting back on health benefits. Other large companies in this country are also reneging on retiree health benefits as well including: General Electric, General Motors, Sears Roebuck, the old Bell Telephone companies, Walt Disney, Polaroid, and J. P. Morgan & Company.
According to recent estimates, 5 to 10 million retirees throughout the country have either had their health benefits reduced or eliminated over the last 12 years. And, President Bush's disastrous Medicare Reform law is already providing incentives for IBM and other companies to drop the prescription drug coverage of up to 2.7 million retirees making a bad situation much, much worse.
As you know, IBM used to provide free health insurance for their retirees for life. Now, IBM has turned their retiree health benefits program into a "cash balance" health benefits plan in which retirees are responsible for paying more and more of their health care costs.
Many of you know full well what happened when IBM slashed the pension benefits of workers by as much as 50% through an age discriminatory cash balance pension plan.
Vermont IBMers, and IBMers throughout the country fought back, forcing IBM to change its cash balance pension plan and increasing the retirement benefits of some 35,000 employees in the process.
And, IBM employees won a lawsuit against this age discriminatory cash balance pension plan in a federal district court and have won a partial settlement worth $320 million. IBM has said that it will still appeal the issue of age discrimination in this court ruling, but if the IBMers win they will receive up to $1.7 billion.
As a result of IBMers open rebellion against cash balance pension plans, employees at other companies started fighting against their cash balance pension plans as well, leading Verizon to make changes to its cash balance pension plan and saving the retirement benefits of some 20,000 employees.
Now, IBM retirees and employees are in the unfortunate position of waging another battle on health benefits.
I wish you didn't have to do this. But, IBMers have already shown, that working together, you can win concessions from IBM. You can win in the courts. And, you can win in Congress.
Unfortunately, Tom Watson's IBM is not Lou Gerstner's or Sam Palmisano's IBM.
At the same time IBM was reneging on the promises on pension and retiree health benefits, at the same time IBM was laying off thousands of IBMers in Essex Junction and throughout this country, while agreeing to train 100,000 software specialists in China over the next 3 years, it helped one man become one of the richest people in the U.S. worth $600 million, according to Forbes Magazine. And, that person is the former CEO of IBM, Lou Gerstner. Even though, IBM gave Mr. Gerstner over $260 million in stock options, and annual bonuses of$8 million during his final years as IBM's CEO, apparently they were so concerned about his financial well-being during his retirement years, that IBM made sure that Gerstner will be receiving an annual pension benefit worth over $1 million for the rest of his life.
Of course, Mr. Gerstner is not alone when it comes to corporate greed. Today, the average CEO makes more than 500 times the salary of a typical worker. Jack Welch, the former CEO of General Electric, has an estimated fortune of $900 million at the same time that he was responsible for laying-off tens of thousands of employees and exporting their jobs to Mexico and China.
And Sam Palmisano, IBM's current CEO received $25.4 million in compensation including $18.4 million in stock option grants that could rise to over $46 million in future years.
At the very least, these CEOs have a responsibility to keep the retirement promises that were made to employees and retirees when they first started working at the company.
I am currently co-sponsoring the legislation HR 1322 referenced in the letter.
I have also introduced HR 1677, a bill to protect workers pensions and numerous amendments against cash balance plans.
(ORIGINAL SIGNED BY Congressman Bernie Sanders)
Congressman Bernie Sanders
 


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   Copyright 2006 National Retiree Legislative Network
  Last modified: Oct 11, 07