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Mr. President: Push Legislation Not Executive Order on Drug Costs

President Trump may issue an Executive Order to address the cost of prescription drugs rather than push Congress to pass legislation fulfilling his promises to allow Medicare to negotiate drug prices and allow the importation of safe, lower cost drugs. Send the NRLN’s sample letter to President Trump to urge him not to issue an Executive Order but work to get legislation passed to reduce the cost of prescription drugs. Click here to email your letter to President Trump.


Senate’s Health Care Bill Should Preserve Medicare Benefits in ACA

Now is an opportune time to email the NRLN’s sample letter to your Senators to advocate preserving in the Senate’s bill to repeal / replace the Affordable Care Act what has been good for Medicare beneficiaries. Also, tell them that Americans age 65 and older deserve catastrophic coverage and protection from being denied health care coverage due to a preexisting health condition.


Serve Americans' Interests, Not Big Pharma

The Senate Health, Education, Labor and Pensions (HELP) Committee on May 11, 2017 voted 13-10 mostly along party lines to kill a proposed amendment to the FDA Reauthorization Act that would have allowed Americans to purchase safe, lower priced prescription drugs imported from Canada. Send the NRLN's sample letter, with your personal comments added, to your Senators and Representative to tell them they need to pass legislation to stop the prescription drug price gouging of Americans by the pharmaceutical industry.


NRLN Action Alert – Stop the Effort to Privatize Medicare

Tell your members of Congress stop the effort to privatize Medicare through a “permium support” plan that seniors would pay to insurance companies. This would certainly lead to seniors paying more for health care. Please email the NRLN’s sample letter to your Representative and Senators to urge them to prevent the privatization of Medicare.


NRLN Action Alert – Mr. President, Reduce Prescription Drug Price Gouging

Thirty-three U.S. Representatives have signed and sent a letter to President Barack Obama urging him to take executive action against pharmaceutical price gouging. Because the requests made by the lawmakers address NRLN lobbying issues, please email the NRLN’s sample letter to President Obama to urge him to take action on the requests made by the U.S. Representatives. Email the NRLN’s sample letters to your Representative and Senators to tell them that you believe the fiduciary rule is in the best interest of retirees and workers and efforts to eliminate it should cease.


NRLN Action Alert – Tell Congress: Don’t Eliminate SHIP Needed for Medicare Advice

The Senate Appropriations Committee made a blunder when it voted to abolish the entire $52.1 million in federal funding for the State Health Insurance Assistance Program (SHIP) in the budget bill. SHIP has been a valuable program for older adults and younger people with disabilities who need advice on complex traditional Medicare, Medicare Supplemental Insurance (Medigap) and Medicare Advantage programs. Click here to send the NRLN’s sample letters to tell your Senators and Representative that funding for SHIP should not be eliminated in the budget bills.


NRLN Action Alert – Pass Bills to Reduce Cost of Prescription Drugs

The NRLN has been advocating legislation to reduce the cost of prescription drugs. In 2015 there were 13 bills introduced in the U.S. House and U.S. Senate that the NRLN supports that, if passed, would result in savings to Americans and in some cases also to Medicare. These bill have automatically carried over into 2016, the second session of the 114th Congress. Click here to send the NRLN’s sample letters to your Representative and Senators to urge them to come together and form a consensus on which bills to pass to best address skyrocketing drug costs.


NRLN Action Alert – Pass Bills to Cut Cost of Prescription Drugs
9/24/15

This Action Alert involves a number of prescription drug importation and Medicare Part D bills. You are encouraged to email the NRLN’s sample letters to your members of Congress. These bills that have been introduced in Congress are so important to retirees that they need to be enacted immediately.


NRLN Action Alert – Pass Bills to Allow Importation of Rx from Canada 8/5/15

Bills in the U.S. Senate and House, S. 122 and H.R. 2228, would allow all Americans to legally import safe prescription drugs from Canada. It would result in major savings for consumers, especially retirees on fixed incomes, and bring greater competition into America’s pharmaceutical market. Please send to your members of Congress the NRLN’s sample letter urging passage of S. 122 and H.R. 2228. Also, if your Representative or Senators will be conducting Town Hall meetings in your area during the August Congressional recess attend the meetings and ask them to support passage of the bills.


Don’t Let Pharma Hijack TPP

The U.S. Senate and House of Representatives have voted to give “Fast-Track” approval to the Trans-Pacific Partnership (TPP) being negotiated by the Obama Administration. Passage of “Fast-Track”, means that when the 12-nation trade pact is submitted to the U.S. Senate for review Senators can only have an up or down vote and not filibuster. Please email the NRLN’s sample letter to President Obama to urge him to not allow the pharmaceutical industry (pharma) to hijack TPP through provisions that only help the prescription drug makers and increase cost to Americans, especially retirees who need affordable medicine.


NRLN Action Alert - Don’t Hurt Medicare with Trans-Pacific Partnership

The NRLN urges you to send to your members of Congress the NRLN’s sample letter to oppose enactment of the Trans-Pacific Partnership (TPP) if it contains a provision that would constrain competitive bidding by Medicare for prescription drugs or if the TPP bill would affect Medicare in any way, shape or form.


NRLN Useful Links Expanded

In response to a request from the NRLN, a number of members provided ideas for savings. Click here to review the expanded Useful Links webpage.


Pass Medicare Access to Rehabilitation Services Act of 2015

Prior to a March 31 deadline Congress needs to pass the Medicare Access to Rehabilitation Services Act of 2015 (H.R. 775 and S. 539) which would repeal the cap on Medicare outpatient rehabilitation therapy services and speech-language pathology services. Click here to send the NRLN’s sample letter to your Representative and Senators to communicate the urgency for passing the Medicare Access to Rehabilitation Services Act of 2015.


Prevent Trans-Pacific Partnership from Raising Cost of Medicines

Negotiations by the Obama Administration on the Trans-Pacific Partnership treaty to boost imports and exports have been taking place in secrecy. Information has leaked out that indicates big pharmaceutical companies have had sway in the dealings that would increase the cost of medicines at the expense of patients’ health and the budgets of consumers and governments. Click here to send the NRLN’s sample letter to your Representative and Senators urging them to prevent the TPP from raising cost of medicines.


Congress’ Vote to Cut Pensions Is Outrageous

Congress has passed a trillion dollar omnibus spending bill that includes giving trustees of multi-employer pension plans the ability to cut pensions earned by 1.5 million workers and retirees. Many pensions will be cut by up to 50 percent to retirees who are in no position to make up for the monthly short-falls they will be sorely missing in order to be financial secure.

Congress did not stipulate that this change applied to multi-employer plans only. It enacted the law in a way that it changed ERISA to permit the change to some underfunded multi-employer plans but did not add “only”. Therefore, Congress did not preclude that underfunded single-employer pension plans couldn’t be de-risked by allowing plan sponsors to cut pension benefits in the future! Most NRLN grassroots advocates are in single-employer pension plans!


NRLN Action Alert: Pass Medicare Prescription Drug Price Negotiation Act

The NRLN is asking you to email the NRLN’s sample letters to your U.S. Representative and Senators to urge him or her to work to pass the Medicare Prescription Drug Price Negotiation Act (H.R. 1102) and (S. 117). If passed, the Act would direct the Secretary of Health and Human Services (HHS) to negotiate with pharmaceutical manufacturers the prices that may be charged to Medicare Part D prescription drug plan sponsors and Medicare Advantage organizations for covered Part D drugs. This would mean more affordable prescription drugs for seniors and would save Medicare up to $156 billion over the next 10 years. Click here to access the sample letters.


URGENT NRLN Action Alert: Don’t Put Pensions At Risk for Highway Funding

The House Ways & Means Committee and the Senate Finance Committee passed, by a voice vote, bills approaching $11 billion intended to keep the federal highway program funded through May 2015. Unfortunately, much of the new revenue would come from "pension smoothing," an accounting move that allows companies to delay contributions to employee pension plans.

Click here to read the Action Alert Message from NRLN President Bill Kadereit.

Click here to send the NRLN’s sample letters to your U.S. Representative and Senators to urge them not to use “pension smoothing” to gain revenues to shore up the Highway Trust Fund.


NRLN Action Alert: Legislation Needed to Protect Medicare Beneficiaries

The NRLN is asking you to email the NRLN’s sample letter to your U.S. Representative to urge him or her to work to get the Creating Access to Rehabilitation for Every Senior (CARES) Act (H.R. 3531) out of the House Ways and Means Committee and passed by the House. Also, email the NRLN’s other sample letter to your U.S. Senators requesting that he or she introduce a companion bill to H.R. 3531 in the Senate and work to get it through committee and passed by the Senate. This bill, which has received bipartisan support in the House, will reduce barriers to health care services for America’s seniors by eliminating the three-day inpatient hospital stay requirement for Medicare beneficiaries who are in need of skilled nursing facility (SNF) services. Click here to access the Action Alert letters.


ACTION ALERT - SUCCESSFUL CONGRESSIONAL CANDIDATES SHOULD SUPPORT RETIREES

Now that the 2012 election is over and Congressional races have been decided, the NRLN asks that you to send an email to your successful candidate(s) to congratulat


e them and request they support retiree issues whether re-elected or newly elected to Congress. On the next screen, type in your zip code and click "GO". The Capwiz system should be able to identify most, if not all, of the candidates who have won election.

Congress Needs to Support Retirement Security

As a follow-up to the NRLN's Washington, DC Fly-In, NRLN Grassroots Network Members are asked to email the NRLN's sample letter to their U.S. Representatives and Senators to encourage them to support the NRLN issues that Fly-In participants were advocating in their meetings on Capitol Hill. Those issues included preventing cuts in Social Security and Medicare; protecting pension plan assets; safeguarding retirees' pensions and benefits in corporate mergers, acquisitions and spinoffs, and lowering the cost of prescription drugs.

Click here to read the message from NRLN President Bill Kadereit.


Cut Medicare Drug Costs to Reduce the Federal Deficit

If Medicare used competitive bidding for prescription drugs, the federal government would save billions of dollars annually. Retirees on Medicare would also save because deductibles and co-pays on cheaper drugs would lower their costs. Please send the NRLN's sample letter to your Representative, Senators and President Obama to urge them to support Senate Bill S. 44, the Medicare Prescription Drug Price Negotiation Act of 2011. This bill would direct the Secretary of Health and Human Services to negotiate prices for all parts of Medicare Part D with pharmaceutical manufacturers.

The Congressional Budget Office projects that premiums for traditional Medicare under the voucher plan would be 50% higher than current projections by 2020. Ryan contends that the voucher plan will save Medicare for future retirees because the program faces long-term financial instability. The NRLN believes Congress should instead be looking for ways to eliminate the subsidies to insurance companies and attack the real problems of high cost, overhead and health care industry inefficiencies. If necessary, increase the payroll tax rate until baby boomers move through.

RLN President Bill Kadereit.


PRESERVE HEALTH CARE TAX CREDIT(HCTC) FOR RETIREES

The House, Senate and the Administration are about to make a stealth move to take away Health Care Tax Credits (HCTC) provided to retirees whose companies have either survived or failed as a result of bankruptcy. Tens of thousands of current and prospective retirees will lose their HCTC eligibility on January 1, 2014 if Congress and the President sign a bill that contains this provision. Please send the NRLN's sample letter to your Representative, Senators and President Obama.


HOW TO PREVENT CUTTING SOCIAL SECURITY BENEFITS

Some members of Congress want to cut Social Security benefits in order to reduce the national budget deficit. Please send the NRLN's sample letter to your U.S. Representative and Senators. Ask them not to cut Social Security benefits and support the National Retiree Legislative Network's proposal to address Social Security's long-term funding gap by focusing on modest increases in the payroll tax rate and increasing the cap on maximum wages subject to the tax.


ASK YOUR U.S. REPRESENTATIVE TO JOIN THE U.S. HOUSE CONGRESSIONAL AFFORDABLE MEDICINES CAUCUS

The NRLN is asking Grassroots Network members to send the NRLN's sample letter to your U.S.Representative to urge him or her to join the Congressional Affordable Medicines Caucus if he or she has not already done so. The Caucus is being formed as a bipartisan group with the intent of producing legislation that leads to the wider use of less expensive generic drugs and reduce the growth of health care spending.

Click here to read the message from NRLN President Bill Kadereit.


TIME TO PASS PRESCRIPTION DRUG BILLS

The NRLN has been advocating the need for legislation to address the high and ever-increasing cost of prescription drugs. Please email the NRLN's sample letter to your U.S. Senators to urge their support for passage of three prescription drug bills pending in the Senate. Also, email a letter your U.S. Representative to request that he or she introduce companion bills in the U.S. House. Passage of the three bills by Congress and signed by the President would address practically all of what the NRLN has been advocating in the prescription drug portion of its legislative agenda. Click here to read the message from NRLN President Bill Kadereit.


Tell Congress to Protect Retirement Security

The 2010 Congressional election sent new members to the U.S. House of Representatives and Senate. This gives NRLN Grassroots Network members a fresh opportunity to communicate with the newly elected and re-elected House and Senate members. Tell your members of Congress it is time for them to take action to protect the pensions and benefits retirees have earned and to find ways to solve deficit problems without permanently maiming Social Security and Medicare plans.

Legislation Needed to Protect Pension Plan Assets

How confident are you that your pension plan is secure? Plans aren’t funded much better now than they were before the last stock market tumble, so don’t get lulled to sleep. The NRLN urges you to email the NRLN's sample letter to your members of Congress to ask them to pass legislation to protect pension plan assets.
To read the Action Alert message from NRLN President Bill Kadereit, click here.


Senators Should Support Extending HCTC

December 31, 2010, the date that American Recovery and Reinvestment Act (ARRA) improvements to the Health Coverage Tax Credit (HCTC) will expire, is rapidly approaching. The NRLN is asking Grassroots Network members to write to their Senators to urge them to support the extension of the ARRA improvements to the HCTC program, a tax benefit established in 2002 to help protect workers and retirees who lost their health care coverage when their companies either entered into bankruptcy or moved operations overseas. Read more...


Extend Retirees' Health Coverage Tax Credit (HCTC)

Unless Congress acts very quickly, Delta Air Lines, Delphi salaried retirees and other retirees with Voluntary Employee Benefit Associations (VEBA) will not know if they will qualify for the Health Coverage Tax Credit (HCTC) until it is too late to modify their annual health care insurance selections. The NRLN is asking you to go to bat for all pre-Medicare-eligible retirees who are in the similar predicament to Delta and Delphi retirees by sending the NRLN's sample letter to members of Congress. Read more...


HARM DONE TO RETIREE-ONLY HEALTH CARE PLANS

Through researching statues and regulations along with going to Capitol Hill to meet with staff members from the House and Senate, the NRLN has learned there are seven provisions of the health care reform law that will not apply to retirees in company-sponsored, retiree-only health care insurance plans unless the company voluntarily provides them.

Email the NRLN's sample letter to your Representative, Senators, President Obama and the heads of the Administration's agencies that were involved in the rulemaking process on the Patient Protection and Affordable Care Act. Tell them that the carve out of retirees in retiree-only health care plans must be rectified immediately. Read sample letter...


Corporate Bankruptcy Reform Needed To Protect Retirees

NRLN Grassroots Network members are asked to send the NRLN's sample letter to their U.S. Representatives and Senators to request support for hearings and legislation to provide fairer treatment for retirees in corporate bankruptcy courts. Read more...


Retirees Carved Out by Health Care Rulemaking

Retirees have been excluded from the new health care coverage benefit for young adults until age 26. This was a benefit retirees thought they would have under the provision that took effect on September 23, 2010 as part of the Affordable Care Act. NRLN Grassroots Network members—whether or not you have young adult dependents—are encouraged to send an email to your Representative and Senators to tell them that the exclusion of retirees from the benefits of the Affordable Care Act is not right and must be immediately rectified...Read more...


THREAT TO RETIREES PRESCRIPTION DRUG BENEFITS
When Congress created the Medicare Part D prescription drug plan in 2003, it encouraged companies to provide Medicare-eligible retirees prescription drug benefits by providing a tax-free 28% subsidy. This has been a tremendous savings to the federal government on Medicare and a benefit highly valued by retirees. It makes no sense to eliminate the tax break in the name of health care reform. Please email the NRLN's sample letter to members of Congress. Ask them to repeal the provision eliminating the corporate tax break and enact the NRLN's Maintenance of Cost Proposal (MCP). Read more...


PROTECT PENSION ASSETS FOR RETIREES

Companies and labor unions are lobbying Congress for temporary relief from Pension Protection Act of 2006 (PPA) pension plan funding requirements. It is critical that NRLN Grassroots Network members immediately send the NRLN's sample letters to their Representative and Senators to tell them they need to include the protection of pension assets in any bill that is passed on pension plan funding relief. Read more...


Social Security and Medicare Must Be Protected

The U.S. Senate may soon vote on S. 2853, the Bipartisan Task Force for Responsible Fiscal Action Act. The bill would create a bipartisan task force to address the nation's long-term budget crisis, including Social Security and Medicare. The NRLN believes it is critical to demand that any deliberations on changes to Social Security and Medicare through this task force or any other body be conducted in the open so that America's Social Security and Medicare recipients will know whether their benefits are being protected. You are encouraged to immediately email the NRLN's sample letter to your Senators. Read more...


CONGRESS MUST ADDRESS RETIREES' NEEDS IN 2010
NRLN Grassroots Network members are asked to be a part of the lobbying effort that will include NRLN and Retiree Association leaders being on Capitol Hill on January 13th by emailing the NRLN's sample letter to members of Congress.
The sample letter features the NRLN's 2010 legislative initiatives we want enacted during the second session of the 111th Congress. Click on the "Take Action Now" headline at the top of this webpage to access the NRLN's Action Alert. Read more....


NRLN Letter Endorses Pension Bill
NRLN President Bill Kadereit has written a letter to Texas Representative Lloyd Dog gett endorsing his proposed "Retirement Fairness Act of 2009." If passed, the bill would be a positive step toward accomplishing one of the NRLN's Legislative Agenda objectives for pension plan protections. Read more...


TELL CONGRESS: DON'T CAUSE COMPANIES TO ELIMINATE RETIREES' PRESCRIPTION DRUG PLANS
U.S. House and Senate health care bills contain provisions the NRLN believes are terribly misguided. Each bill contains a provision to begin taxing employers for the federal subsidies they receive in return for maintaining retiree prescription drug plans rather than dumping their Medicare-eligible retirees into the government’s Part D drug plan. Click the "Take Action Now" headline at the top of this webpage to access the NRLN's Action Alert and Sample Letter to email to your members of Congress. Urge them to exercise their influence during the health care reform Conference Committee process to prevent the harm retirees would most certainly suffer as the consequence of the elimination of the tax deduction for federal subsidies for prescription drug plans. Read more...


NRLN Thanks Senator Byron Dorgan For Drug Importation Amendment
NRLN President Bill Kadereit has sent a letter to North Dakota Senator Byron Dorgan to thank him for his valiant efforts to gain passage of an amendment to the Senate health care bill to allow American consumers to safely import lower-priced, Food and Drug Administration-approved drugs from other countries.

It was disappointing to the NRLN that the vote on the bipartisan was 51 for and 48 against, nine votes short of the 60 votes needed to be adopted by the Senate. A thank you letter was also sent to Senator John McCain who was a co-sponsor of the amendment. Click here to learn how the U.S. Senators from your state voted on the drug importation amendment. Read more...


Tell Senators Don't Cut Medicare To Pay For Health Care Reform

The $848 billion health care reform bill being debated by Senators would cover much of the cost, according to the CBO reports, through a net reduction of $404 billion in benefits, affecting literally millions of retirees who are covered by Medicare and Medicaid. Please click on the "Take Action Now" heading above and email the NRLN's letter to inform your Senators that it is unacceptable to fund health care reform on the backs of older Americans. Read more...

Ask Senators To Support Medicare Buy-In For Ages 55-64

The U.S. Senate, now in deliberations on health care reform legislation, is considering allowing Americans ages 55-64 to buy into the Medicare plan starting as soon as 2011. Please send the NRLN's sample letter to your Senators asking them to support the Medicare buy-in for those in the 55-64 age bracket. Read more...

SENATE HEALTH CARE BILL NEEDS TO HELP RETIREES

The health care reform bill passed by the U.S. House of Representatives (Affordable Health Care for America Act – H.R. 3962) has a number of provisions of critical importance to retirees and older Americans in general. Email the NRLN's sample letter to your U.S. Senators to urge them to include certain provisions of the House bill in the Senate health care reform bill -- but with some modification in order to provide truly effective health care cosverage for retirees. Read more...


NRLN Action Alert: Tell Senators to Stand Up for Retirees on Prescription Drugs

Recently, during the Senate Finance Committee's mark up of its Health Care Reform bill committee members rejected, by the narrow vote of 10-13, an amendment that would have filled the "doughnut hole" in the Medicare Part D prescription drug program.

This was a terrible blow to retirees who desperately need to have lower prescription drug prices. The NRLN is asking NRLN Grassroots Network members to immediately send the NRLN's sample letter to their senators to urge them to support the NRLN's proposals for prescription drug legislation. This includes asking Senators to introduce an amendment to fill the Medicare Part D "doughnut hole" when the health care reform bill comes to the Senate floor for debate. Read more...

NRLN ACTION ALERT - Make Protection of Retirees a Priority in Health Care Reform
Representative Nancy Pelosi, Speaker of the U.S. House of Representatives, will have tremendous influence over what is in any health care bill that may be brought to the House floor debate and a vote. Since she is the Speaker of the House, the NRLN believes she should hear from all NRLN Grassroots Network members, not just her California constituents, on the importance of making retirees a priority in health care reform.
Click on the "Take Action Now" headline at the top of this web page to read the NRLN's Action Alert and access the NRLN's sample letter to email to Speaker Pelosi. Read more...


NRLN Action Alert - Congress Must Hear The Health Care Needs Of 50 Million American Retirees

Your help continues to be needed to press forth with the NRLN's health care agenda as we endeavor to influence members of Congress during these critical days of lawmaking. Please read the NRLN's Action Alert and email the NRLN's sample letter to your Senators and Representatives to tell them to oppose proposals harmful to retirees and state what retirees want included in health care reform legislation. Click here to read the Action Alert


NRLN Action Alert - Emphasis on Retirees' Health Care Needs

The NRLN originally envisioned a Public Plan Option that would include reforms such as adding catastrophic coverage to Medicare; allowing retirees between ages 50 to 64 who lose corporate coverage to buy in to Medicare at cost; and eliminating the Medicare Part D prescription drug doughnut hole.
However, the term Public Plan has shifted to a battle for public funds and for reshaping markets and has turned health care reform into a series of political and ideological debates.
The NRLN has concluded that the NRLN should shift its position from supporting a Public Plan Option, as redefined, to directing its efforts strictly to what is needed by retirees in health care reform legislation regardless of the delivery systems.
Click here to read the NRLN's Action Alert and Health Care Agenda Talking Points.

Retiree Association Leaders Asked to Urge Members to Lobby Senators and Representatives

NRLN President Bill Kadereit has called on NRLN Board Members and Retiree Association Presidents to encourage their organization's members to lobby U.S. Senators and Representatives on health care reform legislation when the lawmakers are "back home" during the Congressional holiday weeks of May 25 - 29 and June 29 - July 5.
  Click here to read the proposed sample letter for Retiree Association leaders to send to their members. Accompanying Kadereit's email message was a copy of the NRLN's latest "Talking Points" on the NRLN's agenda on health care reform legislation. Click here to read the "Talking Points."

Tell Your Elected Representatives It's Wrong To Tax Health Care Benefits
NRLN Grassroots Network members are asked to immediately email letters to Washington, DC to oppose the talk about taxing recipients of employer-sponsored health care benefits. The NRLN has provided a sample letter for you to email to your members of Congress and President Obama. Click here to read NRLN President's request to send your emails. To access the sample letter, either click on the link in the message or on the "Take Action Now!" headline at the top of this Home Page. Read more...


NRLN Calls For Protecting Retirees In Bankruptcy Courts
A New York bankruptcy court judge approved on Feb. 24 Delphi Corporation's plan to eliminate health care and life insurance for 15,000 Delphi salaried retirees plus their spouses.
The NRLN has issued nationally the news release calling for President Obama to put pressure on Congress to pass legislation on bankruptcy reform that would better protect workers and retirees. The news release also points out the harm being inflicted on retirees by corporations who have evaded their moral obligations to retirees by eliminating the benefits they earned through many years of their labor... Read more...


NRLN Action Alert – Protect Retirees' Pensions & Benefits

With the inauguration of President Barack Obama and the convening of the first session of the 111th Congress earlier this month, our nation's top political leaders are in place to decide the future course for America.

This is an opportune time for you as a member of the NRLN Grassroots Network to send an email and/or call your elected representatives to urge them to focus on the need for legislation to better protect retirement pensions and benefits.


KADEREIT REPLIES TO MISSTATEMENTS BY ABTR-Verizon RETIREE OFFICERS

A recent communication from the officers of the ABTR-Verizon retirees organization misrepresents NRLN intentions and testimony in Washington (see story below) and mischaracterizes the NRLN’s Maintenance of Cost Payment (MCP) proposal.

Read President Bill Kadereit's letter to members here.


Tell Congress That GM Retirees Are Victims Of EEOC Rule
The NRLN is asking its Grassroots Network Members and any other visitors to this website to write to their members of Congress to point out that GM salaried retirees are the latest victims of the EEOC Rule and request legislation to overturn the Rule and protect retirement healthcare benefits. The Rule allows employers to reduce or eliminate healthcare benefits when a retiree turns 65 and becomes Medicare-eligible. GM has announced that on Jan. 1, 2008 it will end healthcare benefits for retirees age 65 and older, surviving spouses and dependents. Click on the "Take Action Now" link above to send letters to your U.S. Senators and Representatives. Read more...


NRLN Action Alert: Congress Must Protect Retirement Benefits
Chrysler has notified its management retirees that effective June 1, 2008 it will no longer extend company-sponsored group life insurance to its management retirees. Chrysler’s action will be noticed—and likely emulated—by a number of other corporations. NRLN Grassroots Advocates should to write to their U.S. Senators and Representative to point out Chrysler’s decision and call for legislation to protect retirement benefits.


NRLN Action Alert: Ask Senators To Vote For “Baucus-Grassley Stimulus Bill” issued 2/2/08
A battle is expected to take place in the U.S. Senate early next week between the Senators who want to rubber stamp the House-passed economic stimulus bill supported by President Bush and the Senators who believe that 20 million lower-income retirees on Social Security should not be excluded from tax rebates....


NRLN Calls On President And Congress To Include Low-Income Retirees For Share Of Economic Stimulus Rebates
issued 1/28/08


Tell Washington Leaders To Include Low-Income Retirees In Economic Stimulus Rebates issued 1/27/08


Urge U.S. Representatives To Support H.R. 3162, the Children's Health And Medicare Protection Act issued 7/26/07


Ask Your Representative To Support Imports Of Safe Prescription Drugs issued 7/12/07


Urge U.S. Senators Now To Vote Against Cochran Amendment issued 5/5/07


Urge U.S. Senators To Pass Medicare Prescription Drug Price Negotiation Act issued 4/9/07


Urge U.S. Representatives To Support H.R. 3162, the Children's Health And Medicare Protection Act issued 7/26/07


Ask Your Representative To Support Imports Of Safe Prescription Drugs issued 7/12/07


Urge U.S. Senators Now To Vote Against Cochran Amendment issued 5/5/07


Urge U.S. Senators To Pass Medicare Prescription Drug Price Negotiation Act issued 4/9/07


Write To Congress On Cash Balance Plan Issue issued 7/19/06
The language in the House bill on Cash Balance does not protect older workers. Its language is too broad, open-ended and the vagueness leaves open the potential for age discrimination and abuse by employers. Because of these and other weakness in the House bill, I'm calling once again on NRLN Grassroots Members to write to conferees and other members of Congress...


It's Time For Pension Reform Legislation To Provide Real Protections

issued 5/30/06
With the continued delay in action by the U.S. House and Senate Pension Reform Conference Committee, the NRLN believes it is time to remind the conferees and other members of Congress about our positions on cash balance conversions and Section 420 transfers. It appears that some conferees' predictions that the joint committee would produce a bill by Memorial Day were overly optimistic. Therefore, the Memorial Day Congressional Recess, which runs until June 5, presents an excellent opportunity for you to contact your Senators and Representative with a personal meeting, phone call or letter from the NRLN website...


Important to Meet with Members of Congress April 10 - 23  issued 3/7/06     
Yesterday (April 6), the U.S. House of Representatives passed on a vote of 248 to 178 a motion introduced by Congressman George Miller (D-CA) to instruct the House conferees on the Pension Reform Conference Committee to adopt the cash balance provisions of the Senate bill that protects older workers in cash balance conversions. This is evidence that the letters NRLN Grassroots Members and others have been sending to Representatives are being heeded. Although the House vote is a major step forward, the motion only addresses protecting older workers for future cash balance conversions but does not prevent the retroactive legalization of past cash balance conversions. We must continue to press the conferees and all members of Congress with our message for all of the improvements we want to see made in the pending pension reform legislation. 


Tell Senator DeWine That Pension Reform Must Help Retirees, Not Corporations  issued 3/29/06 

To: Ohio Residents
From: Bill Kadereit, NRLN Vice President, Legislative Affairs



In a little over two weeks nearly 11,000 letters have been sent to members of Congress by individuals through the National Retiree Legislative Network’s website.  The NRLN’s Washington, DC staff members who have been meeting with the staffs of Pension Reform Conferees are reporting that your letters are having a beneficial impact on the improvements we want to see made in the pension reform legislation.  U.S. Senators and Representatives from 46 states have received letters through the NRLN’s Capwiz system.
If you were among those who sent letters, thank you for your support.  Now it is time to zero in on specific members of the Conference Committee who can do a great deal to either help or hurt workers and retirees through the pension reform legislation.  One of your Ohio Senators, Mike DeWine, is one of those key individuals who needs to hear from his constituents about the improvements that must be made to provide for greater pension security.  

Important Messages For New Jersey Senator and Representatives 3/21/06

From: Bill Kadereit, NRLN Vice President – Legislative Affairs

A March 19, 2006 New York Times article on pension reform legislation pending in Congress has reported that a lobbyist for Prudential was able to persuade several senators, including Senator Frank Lautenberg, a Democrat from New Jersey (where Prudential has its headquarters), that the companies which are more than 15 percent overfunded should be allowed to remove some of the surplus and use the money to buy health insurance for its retirees. Currently, only companies which are 25 percent overfunded are allowed to do so.

Pension Security Depends On Your Communicating With Members Of Congress issued 3/19/06


Capwiz Action Alert to All NRLN Members
From: Bill Kadereit, NRLN Vice President, Legislative Affairs

This is a follow-up to the Action Alert sent to you by NRLN President Jim Norby on March 11, 2006.  I want to say thank you to those who have sent some 6,000 letters to your U.S. Senators and Representatives.  At the same time, I want to urge those of you who have not sent your letters to do so immediately


Write To Members of Congress To Tell Them To Make Improvements To Pension Reform Legislation issued March 11, 2006

From: Jim Norby, NRLN President

This may well be the most important letter that I ever ask you to write to members of Congress. As you know, on November 16, 2005, the U.S. Senate passed by a vote of 97-2 The Pension Security and Transparency Act of 2005 (S.1783) and on December 15, 2005, the U.S. House of Representatives passed by a vote of 294-132 The Pension Preservation Act of 2005 (H.R. 2830). Conferees have recently been named for the joint House and Senate conference committee on pension reform legislation. It is the job of these conferees to work out the differences in the two bills and make any other changes they deem appropriate before sending a revised bill back to the House and Senate for final votes.

WSJ Article: Health Overhaul Overlooks Retirees

When the NRLN learned that some companies and public entities with retiree-only health care plans would not include retirees' dependents until age 26, a provision in the health care reform law, the NRLN notified a reporter at the Wall Street Journal. A story on this issue is in the Journal's Saturday, Oct. 9, 2010, edition. Click here to read the article on the WSJ website.

The NRLN's research has uncovered the fact there is a total of seven benefits that were excluded from company-sponsored, retiree-only group plans during the rulemaking process for the Patient Protection and Affordable Care Act (PPACA). They include:
  • Prohibition of preexisting condition exclusion or other discrimination based on health status.
  • Prohibition on excessive waiting periods.
  • No lifetime or annual limits.
  • Prohibition on rescissions - can't drop coverage for high claims or health conditions.
  • Extension of dependent coverage until age 26.
  • Development and utilization of uniform explanation of coverage documents and standardized definitions.
  • Bringing down cost of health care coverage (for insured coverage).

The NRLN has issued an Action Alert to the members of its Grassroots Network requesting that they write to their members of Congress, President Obama and heads of three Administration agencies to express their outrage that retirees in company-sponsored, retiree-only health care plans have been carved out of the health care law protections. Click here to access the NRLN's Action Alert.


PBGC Announces Maximum Insurance Benefit for 2009
PBGC News Release - Nov. 3, 2008
The Pension Benefit Guaranty Corporation (PBGC) today announced that the maximum insurance benefit for participants in underfunded pension plans terminating in 2009 is $54,000 per year for those who retire at age 65, up from $51,750 for 2008. The amount is higher for those who retire later and lower for those who retire earlier or elect survivor benefits. Read more... Read more...


Fact Sheet: Your Employer's Bankruptcy - How Will It Affect Your Employee Benefits?
From Employee Benefits Security Administration - December 2008
When your employer files for bankruptcy you should contact the administrator of pension and benefit plans or your union representative (if you are represented by a union) to request an explanation of the status of your pension or benefits. The summary plan description will tell how to get in touch with the plan administrator.


America’s Number One Protection Program
By Polly Winn; The Mexia Daily News ~ Aug 19, 2008
As of August 19, 2008, more than 164 million workers are protected by Social Security. And more than 50 million people receive retirement, survivors or disability benefits. Over the next two decades, nearly 80 million Americans will become eligible for Social Security retirement benefits. That means about 10,000 are becoming eligible to apply for benefits every day.


Retiree Benefits Take Another Hit
By Vanessa Fuhrmans and Theo Francis, The Wall Street Journal - July 16, 2008
GM's announcement Tuesday that it would cease medical coverage for its salaried retirees age 65 and above signals that a new era of ever-shrinking benefits has arrived. Beginning in January, even former employees who are already in retirement will lose their benefits, which most of the company's retirees use to supplement gaps in their traditional Medicare coverage... Read more...


High Court Declines AARP Appeal
The Associated Press - Mar. 24, 2008
The Supreme Court on Monday let stand an EEOC Rule that allows employers to reduce their health insurance expenses for retired workers once they turn 65 and qualify for Medicare. The justices turned down an appeal by AARP to undo a rule that allows employers to treat retirees differently depending on their age. The NRLN will now launch its lobbying effort to gain legislation to overturn the EEOC Rule.


Guess Who Foots America's Health Care Bill?
By Niko Karvounis; Alternet.com ~ Mar 12, 2008
The common claim that employers, government, and households all pay for health care is false. Employers do not share fiscal responsibility and employers do not pay for health care. In fact, the money for health care comes from our own pockets...


Retiree couple needs $225K for medical
By Eileen Alt Powell, AP; The Oklahoman ~ Mar 05, 2008
NEW YORK (AP) -- A couple retiring this year will need about $225,000 in savings to cover medical costs in retirement, according to a study released Wednesday by Fidelity Investments...


Beyond Those Health Care Numbers
By N. Gregory Mankiw; The New York Times ~ Nov 04, 2007

With the health care system at the center of the political debate, a lot of scary claims are being thrown around. The dangerous ones are not those that are false; watchdogs in the news media are quick to debunk them. Rather, the dangerous ones are those that are true but don't mean what people think they mean. Here are three of the true but misleading statements about health care that politicians and pundits love to use to frighten the public...


PBGC Announces Maximum Insurance Benefit for 2008
PBGC News Release - Oct. 30, 2007
The Pension Benefit Guaranty Corporation (PBGC) today announced that the maximum insurance benefit for participants in underfunded pension plans terminating in 2008...


Social Security hits first wave of boomers
By Richard Wolf; USA TODAY ~ Oct 09, 2007
When Kathleen Casey-Kirschling signs up for Social Security benefits Monday, it will represent one small step for her, one giant leap for her baby boom generation - and a symbolic jump toward the retirement system's looming bankruptcy...

 


Financial Powerhouses Are Angling to Buy Retirement Plans as Employers Look for an Exit
By Tomoeh Murakami Tse, Washington Post - Oct. 14, 2007
Some financial services firms are trying to clear a regulatory path that would let them buy out pension plans, freeing employers from pension obligations while potentially giving profit-driven financiers direct control over the retirement savings of millions of Americans...


Health care plans of presidential candidates
Reuters ~ Oct 12, 2007
Several candidates for president have suggested how they would provide coverage for the 47 million people in the United States without health insurance. Following are some health care proposals from the leading candidates...


Medicare adviser urges more than 'lip service' on future of program
By Jeffrey Young; The Hill ~ Sep 21, 2007
As chairman of the influential Medicare Payment Advisory Commission (MedPAC), a federal panel tasked with recommending what the program should pay doctors, hospitals and other providers, Glenn Hackbarth is on the front lines of the complex policy issues facing the giant healthcare program. In the same capacity, he frequently is called to testify before Congress, which has provided him with a political perspective on Medicare...


50 Ways to cut your health-care costs
By Cybele Weisser 7 Amanda Gengler, with Asa Fitch & Daphne Mosher; CNNMoney.com ~ Sep 11, 2007
Cut hospital bills by 25% and drug costs by 35%...there are more ways to save than you ever realized...


Don't give up on defined-benefit system
By Sara Hansard; Investment News ~ Jun 21, 2007
The U.S. should be encouraging both defined-benefit and defined-contribution plans, the head of a group that represents major employers said today at a retirement conference...


Analysis: Are insured the real victims?
By Rosalie Westenskow ; United Press International ~ May 31, 2007
In the ongoing healthcare debate, politicians' emphasis on the uninsured is misplaced, scholars say, and ignores the real underdogs of the system. The current healthcare program exploits low- and middle-income Americans who pay exorbitant premiums for care many never receive, according to two Duke University professors...


Shrinking Social Security
By Jeanne Sahadi; CNNMoney.com ~ May 15 2007
A new report says Social Security will replace less of your income than it did before, thanks to taxes, Medicare and the reality of hitting your 60's...


Vanishing retiree health care benefits
By Carole Moore, Bankrate.com - May 1, 2007
As the first wave of baby boomers makes the transition from career track to riding the retirement rails, here's a warning from those who've already pushed off from corporate life: Don't believe everything you're told, even if you have it in writing, especially where post-retirement health insurance is concerned.


Fight for your health care rights
By Carole Moore, Bankrate.com - May 1, 2007
No, you don't have to sit back and watch while your health care benefits go up in smoke. Then get active. Jim Norby, 79, is president of the National Retiree Legislative Network, an organization working to change health care for retirees


Retiring couples need $215K for health costs
By Jeanne Sahadi; CNNMoney.com ~ Mar 27 2007
Since 2002, Fidelity Investments has estimated what the average person starting retirement will need to pay for healthcare costs. This year, the average amount for a couple, both age 65, is $215,000, up 7.5 percent from $200,000 last year. That assumes they will not have health coverage provided by a former employer...


Aged, Frail and Denied Care by Their Insurers
By Charles Duhigg; The New York Times ~ Mar 26, 2007
Some long-term-care insurers have developed procedures that make it difficult - if not impossible - for policyholders to get paid. A review of more than 400 of the thousands of grievances and lawsuits filed in recent years shows elderly policyholders confronting unnecessary delays and overwhelming bureaucracies...


U.S. Health-Care Costs to Top $4 Trillion By 2016
From HealthDay News; Forbes ~ Feb 21, 2007
Federal forecasters predict that U.S. health-care spending will double by 2016, to $4.1 trillion per year. That's one-fifth of the nation's gross domestic product (GDP)...


Dismantling Retirement
By Richard Craver, Winston-Salem Journal, Feb. 11, 2007
When it comes to preparing for retirement, there are few guarantees anymore. Just ask recent retirees of Hanesbrands Inc. under the age of 65. On Feb. 1, Hanesbrands cut its contribution to retirees' health-insurance premiums from an average of 62 percent to no more than 35 percent. It will end its contributions entirely Dec. 1 but will continue to provide access to the group rate for retirees who can pay the full cost of the premium...


Court upholds pension ruling against AT&T
St. Louis Post Dispatch - Jan. 10, 2007

AT&T Inc. lost a bid to overturn a $31 million judgment in a lawsuit challenging its policy of paying early retirees less if they elect a lump sum instead of regular pension payments. The U.S. Court of Appeals in Chicago Tuesday upheld a 2004 lower court ruling that Ameritech Corp., acquired by AT&T in 1999, underpaid employees when they sought to take a lump sum...

House OKs letting Medicare negotiate lower drug prices
Bill faces rough road in Senate and threat of presidential veto
By Edward Epstein, San Francisco Chronicle - Jan. 13, 2007
The Democratic-led House, acting in the face of a presidential veto threat and opposition from the powerful pharmaceuticals industry, backed legislation Friday that advocates said would lower prescription drug prices for 43 million Medicare recipients and disabled Americans...


Health care cap creating 'bleak' view, advocate says
By Jeff Smith, Rocky Mountain News - December 16, 2006
Mary, or Mimi, Hull lives comfortably in a condominium near downtown Denver. Cuts in her retiree benefits aren't likely to change her lifestyle in the immediate future. But they do have an effect. As it is, her pension is $21,180 a year and, like other retirees, she hasn't seen an increase for 10 years. Her life insurance is being slashed from $84,000 to $10,000...


Growth in U.S. Health Care Spending Slows
By Amanda Gardner, HealthDay; The Washington Post ~ Jan 09, 2007
The growth in U.S. health-care spending has declined to its slowest rate since 1999, largely because of a dramatic dip in the growth of prescription drug spending, government economists reported Tuesday. At the same time, however, households are seeing health-care costs consume more of their personal income, according to the government's annual report on health-care spending...


More Americans facing high healthcare costs
Reuters ~ Dec 12, 2006
A growing number of Americans are devoting a large share of their paychecks to healthcare, and some are skipping medical care because of it...


Retirees Plan to Fight Qwest’s Announced Additional Pension Benefit Cuts
Association of US West Retirees News Release - Oct. 24, 2006
The Association of U S West Retirees (AUSWR) today announced plans to rally retirees against the latest round of proposed pension benefit cuts by Denver-based Qwest Communications, International...


After Years of Growth, What About Workers’ Share?
By Eduardo Porter; The New York Times ~ Oct 15, 2006
Job growth is starting to slow, and wages are barely keeping up with inflation. Five years into a relatively robust economic expansion, it’s understandable that many American workers feel that they are not getting their fair share of the pie. In fact, the share of the economy devoted to workers’ wages and benefits has eroded in the United States over the last five years. But if it’s any consolation, the trend for workers in other rich industrial nations isn’t much better...


Number of uninsured escalates
By Larry Lipman & Christine Grimaldi; The Atlanta Journal-Constitution ~ Sep 28, 2006
Americans with health insurance are receiving better care than ever, but a record number of Americans have no coverage, according to two reports released Wednesday...


Employers Chip Away at Retiree Health Benefits
By Jonathan Peterson; The Los Angeles Times ~ Sep 26, 2006
Geraldine Picha knew that her pension would be modest, given her tenure of just 15 years at the phone company. What she did not expect was that her retiree health premium would eat up every penny of that pension — and more. "It's frightening," said Picha, 63, whose former employer has raised her medical insurance bill steadily since she retired in 1998. At $560 a month, it now eclipses the $514 pension check Picha earned from her years at what was then AT&T Corp. and a spinoff, Lucent Technologies Inc...

Must You Work Until You Drop?
By Janet Novack, Forbes.com - Aug. 30, 2006
Will you have enough pension income to stop laboring some day? It's a timely question, and not just because of the upcoming Labor Day holiday. It's clear workers are going to have to save more, stay on the job longer and pay more attention to the investment of their own pension funds if they want a comfortable retirement...


President Bush Signs New Pension Bill
By The Associated Press; The New York Times ~ Aug 17, 2006
WASHINGTON (AP) -- President Bush on Thursday signed new rules to prod companies into shoring up their pension plans and offered strong words for corporate America: ''Set aside enough money now.'' Before an enthusiastic audience in an office building on the White House grounds, Bush called the legislation ''the most sweeping reform of America's pension laws in over 30 years.''...


What You Need To Know About Pension Changes

By Ellen E. Schultz and Theo Francis, The Wall Street Journal - Aug. 15, 2006
If you're covered by a traditional pension plan, the odds that your employer will change to a "cash balance" pension plan have just increased. Last week, a federal appeals court ruled that IBM Corp.'s cash-balance pension didn't violate age-discrimination laws. Just days before that, Congress approved a measure that would deem cash-balance plans legal...

Many in U.S. forced into retirement
BylineBy Jonathan Peterson, LA Times; The Baltimore Sun~ Jul 9, 2006
American workers, who face growing financial pressure to stay in the work force, are far more likely to be forced into an early retirement than many expect, according to a recent study...


Another perk joins the endangered species list

By Geoffrey Colvin, FORTUNE - June 14, 2006
Retiree medical costs are galloping at double-digit rates, and in an increasingly competitive global economy, the few remaining firms that offer those benefits find them harder to afford. So some companies are eliminating such benefits, including Lucent and Alcatel...

Addressing the Insolvency of the Pension Benefit Guaranty Corporation
By Alex J. Pollock; American Enterprise Institute ~ Jun 14, 2006
The inherent structural risks of having the government insure--through the Pension Benefit Guaranty Corporation (PBGC)--the future commitments of defined benefit pension plans has resulted in a reported deficit of $23 billion. The present value of the long-term cash deficit has been estimated at $92 billion. Pending legislation would improve the financial exposure of the PBGC, but would still leave a large projected deficit and fundamental structural problems...


A View From Washington
By A. J. "Jim" Norby, The Guardian - June 2006


Study: 43% won't have enough in retirement
By Jeanne Sahadi; CNNMoney.com ~ Jun 6, 2006


Lawmakers Never Faced With Losing Benefits
By Jim Abrams;  The Associated Press ~ Apr 19, 2006


The Next Big Bailout?
Addressing the Insolvency of the Government's Pension Benefit Guaranty Corporation
By Alex J. Pollock; The Washington Post ~  Apr 20, 2006


A Benefit for Insurers -  Mar 31, 2006


The Big Freeze: As companies end their traditional pensions, workers are left out in the cold. March 2006


Bush Says Companies Must Keep Pension Promises

Health Care Spending for U.S. May Double to $4 Trillion by 2015


Bill Jones' Work With BellTel Retirees Profiled


Health Care Spending for U.S. May Double to $4 Trillion by 2015   Feb 22, 2006


Congress' pension: Nice and secure   Jan 20, 2006


U.S. pension agency says bill would gut oversight Jan 10, 2006


Retirees: Lookout Below


John Kotson has article published suggesting new approaches to reducing healthcare costs


IBM Retirees gain Bernie Sanders co-sponsorship of HR1322 as well as his introduction of HR1677 a bill to protect retiree pensions.


Center for American Progress reports on who pushed new Medicare law and how much money they contributed to Politicians who backed the new law.


US REP Benjamin Cardin of Maryland calls for a FIX of new Medicare law to stop currently covered retirees from loosing their coverage.


IBM Loses Age Descrimination Law Suit Over Cash Balance Conversions


LEGISLATIVE BILLS

H.R. 676 – United States National Insurance Act of 2005

Purpose: To provide for comprehensive health insurance coverage for all United States residents. Representative John Conyers, Jr introduced the bill.
Status: Referred Committees on Energy and Commerce, Ways and Means, Veterans Affairs and Resources.
NRLN Position: The NRLN has not taken a position on this bill.


Other Health Care Issues

Health Care that Works for All Americans Act

On December 8, 2004, President Bush signed into law the Health Care that Works for All Americans Act, authored by U.S. Senators Ron Wyden (D-Ore.) and Orrin Hatch (R-Utah). Town hall meetings and online surveys are being conducted for citizens to share their views on whether and how the nation’s health care system should be reformed.  By participating with the Citizens' Health Care Working Group you can have an inside track to influence the deliberations of Congress and the President. Don't miss your chance.  Click here to access the website for the Citizens' Health Care Working Group.

Political Spin and False Facts

The U.S. Senate continues to struggle to gain enough votes to pass H.R. 1628, Better Care Reconciliation Act of 2017 (BCRA) for the repeal and replacement of the Affordable Care Act (ACA). The House passed in May the American Health Care Act (AHCA), its version of a bill to repeal and replace the ACA.

On a recent network political question and answer program Tom Price, Secretary of Health and Human Services, promised that the Senate health care bill will “in its entirety” bring premiums down. He and politicians use the word premiums but it is misleading to use the words premiums without adding deductible, copay and coinsurance costs A low monthly premium of $500 means little if one must meet a $6,000 annual deductible. Combined, the insured pays $12,000 before a person sees a dollar of benefit payment.

It is the total cost of premiums, deductibles, copayments and coinsurance that makes health care insurance unaffordable for many Americans. Often without insurance, or in many cases with insurance, individuals and families declare bankruptcy due to high health care costs. Nearly a million file for bankruptcy every year due to medical bills. Roughly three-quarters of those filing for bankruptcy have insurance, but unfortunately their health care insurance plans are so poorly designed that they lead to bankruptcies.

Consider the “National Health Expenditure for 2017 ($3.539 trillion from CMS) and divide that by our current population (325,355,000 from the Census Bureau). The result is a whopping $10,877 per capita spending – just on health care – this year…” This a huge 21% increase in three years!

What bureaucrats and politicians know and are not saying is that the inability to combat rising health care costs and an unwillingness of insurers to accept pre-existing conditions are what has caused insurers to abandon ACA markets. Without phony government subsidies, insurers cannot compete with Medicare Part A and Part B benefits without losing money. Unless Congress pays them subsidies they won’t cover people with pre-existing conditions either. No amount of false privatization will overcome these facts. There should be no more subsidies for health care insurance providers. Congress must level the playing field for insurers and Medicare and make them prove their ability to lower the true, total cost of health care.

What we are hearing from Secretary Price, Speaker Paul Ryan and those who want to privatize Medicare (and then Social Security) is a string of “false” facts and manipulation. This scam is not just about replacing the ACA, it is about the consequences of stripping purchasing power and bankrupting consumers. It’s about taking accountability off the backs of members of Congress. It’s all about the fear of not getting reelected and about preserving the power of political parties. It’s anything but being responsible or doing the best for the long run of our economy, American retirees and all consumers. Today there are 49 million people over age 65 in the U.S. but by 2050 that number grows to over 90 million.

Those pushing to privatize Medicare often say open market competition for health care plans will result in lower premiums (fake news), but they never respond when we ask why this didn’t happen before 2010, before the ACA. We have been heading for a cliff because health care costs are undeniably out of control, led by the shameful price increases being charged for brand-name drugs. Even more critical is the slow process for bringing lower-priced generic prescription drugs to the market.

Brand-name drugs account for 72% of drug spending, but generics constituted 89% of all dispensed medications in the U.S. in 2016. Since 2013, brand-name drug prices have risen, on average, about 10% each year, significantly higher than the rate of inflation in the U.S. However, the bigger problem emerging is that generic prices are rising at 7% or more annually (100% over 10 years) and we expect even higher pricing as brand companies buy generic companies and generic companies merge.

All too often, lower-cost generic drugs are blocked by branded pharmaceutical companies. They use regulatory hurdles and anticompetitive actions to protect their bottom line. An example of this was cited in a July 2 Wall Street Journal editorial: “A generic competitor has to prove equivalence to the branded product to win FDA approval, and that requires extensive testing with anywhere from 1,500 to 5,000 tablets of the original treatment. But brand-name drug companies are invoking FDA safe-use and distribution restrictions to avoid handing over the capsules.”

Newly installed FDA Commissioner Scott Gottlieb told a Congressional panel in May that the agency is crafting a “drug competition action plan” aimed at expediting approval of generic versions of brand-name medications that lack competition.

An important way for Congress to become ethical on health care costs is to allow Medicare to negotiate for drug prices and foster true competition in the brand-name and generic drug market by allowing importation of save, lower priced drugs from countries that meet the FDA’s quality standards.

Members of Congress need to demonstrate they are not fearful over their next election and tackle health care premium, deductible, copay and coinsurance costs combined rather than dodge the real facts by talking about premiums only. We and our children are facing absurd uncontrolled healthcare cost increases and our grandchildren will be among the 90 million over age 65 who will be buried in healthcare debt unless short-sighted thinking is eliminated.


Dialogue with Detroit Edison Retirees

I receive emails and phone calls every week from NRLN members who provide me with feedback about the NRLN’s position on issues and what we should and should not be doing on retirement issues. There are only a few times each year when I have an opportunity to meet face-to-face with a larger number of our members.

Detroit Edison Alliance of Retirees (DEAR) provided me that face-to-face opportunity on May 10 at its annual luncheon to shake hands with many of the 300 attendees, dialogue with them, make a slide presentation about what is happening in Washington, DC, and engage in a Question and Answer session.

The PowerPoint slides that I used in my presentation may be viewed on the NRLN website at: www.nrln.org/documents/DEAR 0510171.pdf . If you have an interest in downloading the slides go to: www.nrln.org/documents/DEAR 0510171 Final-2.pptx .

I opened my presentation with a slide on what the NRLN expects from the new President and the new 115th Congress. President Trump has been working on executive branch regulatory changes; federal agency staffing and executing on a number of his campaign promises promise. The NRLN is attempting to hold President Trump to his campaign promises not to touch Social Security and Medicare plus reduce the cost of prescription drugs by allowing Medicare to negotiate prices and importing safe, lower priced medicines.

The Legislative branch has had conflict and confusion with the bill passed in the House to repeal / replace the Affordable Care Act (ACA). And now the House has passed the American Health Care Act (AHCA) and this “hot potato” is now in the laps of Senators. The next challenge for Congress is tax reform legislation.

If you view my slides you will see that the second and third slides identify the NRLN’s efforts to preserve from the ACA in the new AHCA the features that have been beneficial to Medicare participants, including the annual wellness examinations, closing the Medicare Part D donut hole, and support for Health and Human Service Innovation Centers.

In the fourth slide. I focused on Speaker of the House Paul Ryan’s continuing push for his plan to privatize Medicare through “premium support” payments to insurance companies. (It is interesting that the insurance industry according to OpenSecrets.Com contributed over $860,000 in campaign and leadership PAC contributions to Representative Ryan in 2015 - 2016.) The NRLN will continue to oppose privatizing Medicare through vouchers that will increase the out-of-pocket cost to not only to future retirees, but eventually to those of us currently on Medicare. Frankly, these premium support payment are subsidies paid to insurers that make it appear they are competitive with Medicare and they would be paid from the Medicare Trust, money we have paid in to Medicare.

Over the past weekend, Speaker Ryan, on a local Wisconsin radio program, stood against the President by again saying he wanted to privatize Medicare just as soon as he can. His narrow-minded approach ignores economic consequences and his child-like five-years insistence on ruining Medicare flies in the face of CBO (Congressional Budget Office) reports that have said his plan costs more than Medicare.

The big question is should “premium support” for Medicare get passed in the House and Senate, will President Trump veto such a bill?

“Medicare at Risk” is addressed in my fifth slide with dollar figures on payments by Medicare, the growth rate (there is no doubt that costs are out of control) and Medicare’s funding sources: General Revenue 42%, Payroll Tax 27%, Premiums 13%.

Slides six and seven deal with “Social Security at Risk”. The main “takeaways” from these slides are:

  • --Cost of Living Adjustment (COLA) for 2017 was only 0.3%
  • --Taxable earnings increase from $118,000 to $127,000 (not enough)
  • --The age for full Social Security benefit continues to creep upward
  • --Social Security cash available end of 2015 = $2.8 trillion but….
  • --Funding shortfall by 2035 = $10.7 - $11.0 Trillion – requires 20% Benefit Cut
  • --Why? Congress failed to raise payroll taxes and owes over $2 trillion to Trust Fund that has been spent on other federal government programs; rather than attack cost, Congress propose to shift it.

Slides eight and nine depict in line and bar charts the impact of Baby Boomers on Social Security and Medicare. While the number of those over age 65 grows from 48 million today to 90 million by 2055. The rising tide of Baby Boomers begins to subside, the birthrate drops from about 4% to 3% and population growth drops from 4.9% to 4.3% by 2035 and then lower after that.

A number of the DEAR members told me they understand that Social Security and Medicare being at risk isn’t just about them. They believe it is important to preserve the programs for their children and grandchildren.

My last slide is devoted to the NRLN’s continuing lobbying efforts against prescription drugs price gouging by the pharmaceutical industry in the USA. We continue to press our point that The Secretary of HHS has the authority under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 to issue an order to begin legal importation from Canada .

I listed five bills that the NRLN currently supports that would again provide legislation for the importation of safe and lower priced drugs from Canada; for the first time allow Medicare to negotiate drug prices for Medicare Part D, and expand consumers’ access to cost-saving generic drugs and increase competition to end “pay for delay” deals—brand-name drug manufacturers using pay-off agreements to keep generic equivalents off the market.

Deb Morrissett, a member of the NRLN’s Legislative Affairs Committee (LAC) and a leader of the National Chrysler Retirement Organization (NCRO), is currently doing an in depth review of all bills in Congress related to prescription drugs. Based on the information that the LAC provides, the NRLN’s Legislative Action Planning Committee (LAPC) will decide on a strategy to try to get the best of the bills passed. Certainly, our grassroots members will be an important part of implementing our strategy.

I want to thank DEAR President Bob Tompkins, who is also the NRLN / AREF treasurer, and his leadership team for inviting me to be part of their annual luncheon. They deserve credit for representing their retired and soon to retire members, with their former employer and for DEAR being a strong partner with the NRLN.


Dialogue with Detroit Edison Retirees

I receive emails and phone calls every week from NRLN members who provide me with feedback about the NRLN’s position on issues and what we should and should not be doing on retirement issues. There are only a few times each year when I have an opportunity to meet face-to-face with a larger number of our members.

Detroit Edison Alliance of Retirees (DEAR) provided me that face-to-face opportunity on May 10 at its annual luncheon to shake hands with many of the 300 attendees, dialogue with them, make a slide presentation about what is happening in Washington, DC, and engage in a Question and Answer session.

The PowerPoint slides that I used in my presentation may be viewed on the NRLN website at: www.nrln.org/documents/DEAR 0510171.pdf . If you have an interest in downloading the slides go to: www.nrln.org/documents/DEAR 0510171 Final-2.pptx .

I opened my presentation with a slide on what the NRLN expects from the new President and the new 115th Congress. President Trump has been working on executive branch regulatory changes; federal agency staffing and executing on a number of his campaign promises promise. The NRLN is attempting to hold President Trump to his campaign promises not to touch Social Security and Medicare plus reduce the cost of prescription drugs by allowing Medicare to negotiate prices and importing safe, lower priced medicines.

The Legislative branch has had conflict and confusion with the bill passed in the House to repeal / replace the Affordable Care Act (ACA). And now the House has passed the American Health Care Act (AHCA) and this “hot potato” is now in the laps of Senators. The next challenge for Congress is tax reform legislation.

If you view my slides you will see that the second and third slides identify the NRLN’s efforts to preserve from the ACA in the new AHCA the features that have been beneficial to Medicare participants, including the annual wellness examinations, closing the Medicare Part D donut hole, and support for Health and Human Service Innovation Centers.

In the fourth slide. I focused on Speaker of the House Paul Ryan’s continuing push for his plan to privatize Medicare through “premium support” payments to insurance companies. (It is interesting that the insurance industry according to OpenSecrets.Com contributed over $860,000 in campaign and leadership PAC contributions to Representative Ryan in 2015 - 2016.) The NRLN will continue to oppose privatizing Medicare through vouchers that will increase the out-of-pocket cost to not only to future retirees, but eventually to those of us currently on Medicare. Frankly, these premium support payment are subsidies paid to insurers that make it appear they are competitive with Medicare and they would be paid from the Medicare Trust, money we have paid in to Medicare.

Over the past weekend, Speaker Ryan, on a local Wisconsin radio program, stood against the President by again saying he wanted to privatize Medicare just as soon as he can. His narrow-minded approach ignores economic consequences and his child-like five-years insistence on ruining Medicare flies in the face of CBO (Congressional Budget Office) reports that have said his plan costs more than Medicare.

The big question is should “premium support” for Medicare get passed in the House and Senate, will President Trump veto such a bill?

“Medicare at Risk” is addressed in my fifth slide with dollar figures on payments by Medicare, the growth rate (there is no doubt that costs are out of control) and Medicare’s funding sources: General Revenue 42%, Payroll Tax 27%, Premiums 13%.

Slides six and seven deal with “Social Security at Risk”. The main “takeaways” from these slides are:

  • --Cost of Living Adjustment (COLA) for 2017 was only 0.3%
  • --Taxable earnings increase from $118,000 to $127,000 (not enough)
  • --The age for full Social Security benefit continues to creep upward
  • --Social Security cash available end of 2015 = $2.8 trillion but….
  • --Funding shortfall by 2035 = $10.7 - $11.0 Trillion – requires 20% Benefit Cut
  • --Why? Congress failed to raise payroll taxes and owes over $2 trillion to Trust Fund that has been spent on other federal government programs; rather than attack cost, Congress propose to shift it.

Slides eight and nine depict in line and bar charts the impact of Baby Boomers on Social Security and Medicare. While the number of those over age 65 grows from 48 million today to 90 million by 2055. The rising tide of Baby Boomers begins to subside, the birthrate drops from about 4% to 3% and population growth drops from 4.9% to 4.3% by 2035 and then lower after that.

A number of the DEAR members told me they understand that Social Security and Medicare being at risk isn’t just about them. They believe it is important to preserve the programs for their children and grandchildren.

My last slide is devoted to the NRLN’s continuing lobbying efforts against prescription drugs price gouging by the pharmaceutical industry in the USA. We continue to press our point that The Secretary of HHS has the authority under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 to issue an order to begin legal importation from Canada .

I listed five bills that the NRLN currently supports that would again provide legislation for the importation of safe and lower priced drugs from Canada; for the first time allow Medicare to negotiate drug prices for Medicare Part D, and expand consumers’ access to cost-saving generic drugs and increase competition to end “pay for delay” deals—brand-name drug manufacturers using pay-off agreements to keep generic equivalents off the market.

Deb Morrissett, a member of the NRLN’s Legislative Affairs Committee (LAC) and a leader of the National Chrysler Retirement Organization (NCRO), is currently doing an in depth review of all bills in Congress related to prescription drugs. Based on the information that the LAC provides, the NRLN’s Legislative Action Planning Committee (LAPC) will decide on a strategy to try to get the best of the bills passed. Certainly, our grassroots members will be an important part of implementing our strategy.

I want to thank DEAR President Bob Tompkins, who is also the NRLN / AREF treasurer, and his leadership team for inviting me to be part of their annual luncheon. They deserve credit for representing their retired and soon to retire members, with their former employer and for DEAR being a strong partner with the NRLN.


Lobbying on Capitol Hill

In recent years, the NRLN had held its Annual Leadership Conference in Washington, DC in mid-February. When plans were made for 2017 the conference was scheduled for March 13 – 15 with the hope of avoiding winter weather. But snowstorm “Stella” moved into the nation’s capital on Monday night, March 13, ahead of Tuesday and Wednesday appointments scheduled by conference attendees on Capitol Hill.

Despite the snow, wind, awful traffic conditions and some appointment cancelations, 27 attendees were able to represent you at more than 70 different meetings in Senate and House offices. NRLN retire association and chapter leaders lobbied Senators, Representatives, chiefs of staff, legislative directors, and other staff members. The NRLN legislative issues they advocated in the meetings were:

  • Request for passage of bills in the House and Senate to reduce the cost of prescription drugs by allowing the importation of safe and lower priced drugs from Canada and other countries that meet the Federal Drug Administration’s quality standards and allowing Medicare to negotiate the price of prescription drugs.
  • Retain in the repeal / replacement of the Affordable Care Act the features that were beneficial to Medicare participants, including:
    • annual wellness examinations;
    • closing the Medicare Part D “donut hole” which is the difference between what a beneficiary has to pay for after reaching the initial coverage limit and the amount the government pays for the catastrophic drug coverage
    • rewarding health plans, doctors and other medical care providers if they improve health outcomes and quality.
  • Changes to the federal bankruptcy code to better protect retirees’ pensions and health care benefits when their former employer declares bankruptcy. On Wednesday NRLN leaders representing the Avaya Retirees Chapter (Avaya is in bankruptcy court), DuPont Retirees Chapter, National Chrysler Retirees Organization, Lucent Retirees Organization, NRLN President Bill Kadereit and Alyson Parker, NRLN Executive Director, met with two staff members of the Senate Judiciary Committee. The Committee has jurisdiction over bankruptcy law legislation.
  • Request for legislation to require pension plan sponsors to obtain approval from the Pension Benefits Guaranty Corporation (PBGC) and the Internal Revenue Service (IRS) before combining one or more poorly funded pension plans with one or more well-funded pension plans.
  • Request for legislation to give the PBGC more authority to better protect the interests of retirees when there are mergers, acquisitions and spin-offs – particularly in the case of foreign ownership.

We have worked hard to get prescription drug legislation introduced and we are hopeful these meetings will result in more Representatives and Senators becoming supporters of other NRLN legislative proposals. We have added statute language ready for use by Congressional legal staffs to each of our major proposals. That said, it takes a strong mental commitment and repeated advocate visits to gain acceptance for our proposals by members of congress. Association and Chapter leaders who show this commitment deserve a big thanks from us all. Click here to view photos.

Having appointments on Capitol Hill were leaders from seven retiree associations: Telco/AT&T, Engineering Retirees Society (Boeing), Detroit Edison Alliance of Retirees, EKRA-Kodak Retirees, National Chrysler Retirement Organization, Lucent Retirees Organization and NWB/Qwest/CenturyLink; and five NRLN Chapters: Arizona Chapter, Avaya Retirees Chapter, DuPont Retirees Chapter, Villages (Florida) Chapter and Washington State Chapter.

Additional details about the NRLN’s Annual Leadership Conference will be reported in the upcoming spring issue of the NRLN FOCUS newsletter.


Letter to HHS Secretary Tom Price

Earlier this month, Georgia’s 6th U.S. Representative Tom Price was confirmed as the Secretary of the U.S. Department of Health and Human Services, one of President Trump’s Cabinet members. On February 15, I sent an NRLN letter to Secretary Price pointing out that in 2003, the 108th Congress passed and the President signed Public Law 108-173 in December 2003. This law gave the Secretary of Health and Human Services the authority to set regulations for the importation prescription drugs from Canada. I urged him to exercise his authority to import safe, lower price drugs from Canada to help reduce the ever-increasing prices Americans are paying for medicines.

Last August in an NRLN arranged meeting in Conroe, TX (Houston area) with Kevin Brady, Chairman of the House Ways and Means Committee, Chairman Brady commented that the HHS Secretary could “wave a wand” and import prescription drugs from Canada. The NRLN investigated the Chairman’s statement with his staff and learned about the legislation passed in 2003. In early September, I sent a letter to then HHS Secretary Sylvia Mathews Burwell urging her to exercise her authority to create regulations to import prescription drugs from Canada. However, no action was taken during the closing months of the previous administration.

Wide Support for Importing Rx from Canada

In my letter to Secretary Price, I appealed to him that as a former orthopedic surgeon he could certainly understand the hardships being caused to millions of Americans by unaffordable prescription drugs. I pointed out that opinion polls have shown that a majority of Americans support the importation of safe and less expensive drugs from Canada. Also, I cited an article published in July 2015 in the journal Mayo Clinic Proceedings, where more than 100 prominent oncologists called for support of a grassroots movement to stem the rapid increases of prices of cancer drugs, including by letting patients import less expensive medicines from Canada and allowing Medicare to negotiate prices with pharmaceutical companies.

Canada’s Lower Drug Prices

The letter included a table showing the USA prices on 12 widely used prescription drugs compared to the price of the same prescription drug in Canada. The Canadian prices ranged from 42 percent to 61 percent lower than the prices in the USA.

American Are Subsidizing Foreign Countries

I explained the NRLN’s position that the need for importation arises in large part because U.S. drug companies sell into Canadian, European and other foreign markets where arbitrarily low pricing is set (price setting) by socialized health care systems. American drug makers should either eat all their losses or not sell at a loss in these markets. They should not, however, cross-subsidize by overpricing in America. If they can’t compete, then they should exit these markets or seek trade assistance. Overcharged Americans are subsidizing prescription drugs in socialized medicine countries. This is supporting socialized medicine in foreign countries and is feigning free market beliefs while effectively shipping purchasing power and federal tax revenue to socialized countries.

The four-page letter included information about the spending on prescription drugs in America; how much is spent by Medicare Part B and D; price increases in the U.S. on name brand drugs since 2011, and a paragraph urging Secretary Price to exert his authority to have the National Institute of Health to take action to lower prices on drugs that it had a role in developing before being turned over to a pharmaceutical company to manufacture. All of this was too detailed to include in this message

HHH Secretary Must Be Medicare’s Guardian

Toward the end of my letter, I noted that I would be remiss to the NRLN’s membership if I did not acknowledge that when Secretary Price was a Congressman, he was an advocate for Speaker Paul Ryan’s “premium support” plan which would lead to the privatization of Medicare. The NRLN believes, as the Congressional Budget Office (CBO) reported, when the “voucher” plan was first introduced in the House in 2011, turning Medicare over to private insurance plans would result in seniors paying twice as much for their care, would raise administrative costs and would not keep medical inflation as low as traditional Medicare has done.

I urged Secretary Price to be a guardian for President Trump’s pledge to protect Medicare by opposing any efforts in the House and/or Senate to change Medicare.

Three Senators Send Letter to Secretary Price

The day after my letter was sent to Secretary Price, Alyson Parker, NRLN Executive Director in Washington, DC, called to my attention that Senators Amy Klobuchar (MN), Chuck Grassley, and John McCain had sent a letter to Secretary Price on February 14 also urging him to use his statutory authority to fast track the importation of prescription drugs from Canada to help lower the cost of safe medicines for Americans.

I have sent a letter to the three Senators thanking them for sending their letter to Secretary Price. I also commended the Senators for their bills on prescription drugs that have been introduced in the Senate already this year, including, S. 92, Safe and Affordable Drugs from Canada Act of 2017; S. 41, Medicare Prescription Drug Price Negotiation Act of 2017, and S. 124, Preserve Access to Affordable Generics Act of 2017.

Opportunities to Reduce Drug Costs

We certainly have some opportunities to move forward this year to gain action to help reduce the cost of prescription drugs. When the NRLN calls on you through an Action Alert to email letters to your member of Congress and to sign a petition on the issue of prescription drugs, your support will be important.

Bill Kadereit, President
National Retirees Legislative Network


Thank You to the 5,824 Signers of Petition to President-Elect Donald Trump

If you were one of the 5,824 NRLN grassroots advocates who signed the petition to President-Elect Donald Trump, I want to thank you. The names, cities and states of the signers were printed out on Monday, January 16, and reached the President-Elect’s headquarters in New York on Tuesday, January 17, three days before Mr. Trump’s inauguration as President on Friday, January 20.

Signing the petition were individuals in every state and Puerto Rico, a Caribbean island that is a U.S. territory represented by a non-voting Resident Commissioner in the U.S. House of Representatives.

The NRLN is hopeful that the 60 pages of signatures (printed back-to-back) with the text of the petition below will reach Mr. Trump’s desk either at his Trump Tower or in the White House. Or, it will be beneficial if a White House staff member and/or the nominee for Secretary of Health and Human Services sees the petition.

For the NRLN grassroots advocates who are reading this message, but did not sign the NRLN’s first petition, I hope the 5,824 individuals who took the time to sign and found the process easy will motivate you to sign the next NRLN petition on an issue important to current and future retirees.


University’s Survey on Social Security

I though you would be interested in the results of a new survey on Social Security issues conducted by the Program for Public Consultation at the University of Maryland. The 8,697 participants were selected from a probability-based national panel which also included statewide samples in California, Florida, Maryland, New York, Ohio, Oklahoma, Texas and Virginia.

The content of the survey was vetted for accuracy and balance by Republican and Democratic Congressional staffers, as well as experts from the National Academy of Social Insurance and the American Enterprise Institute. The participants went through a “policymaking simulation” in which they were briefed on the Social Security program and told about the looming shortfall and its causes — the declining number of workers per retiree and the fact that Americans are living longer.

At the core of the survey was the projection that in 2033 the Social Security Trust Fund will not have enough funds to pay the level of benefits that are schedule to be paid by present law. Benefits would then be financed from current payroll taxes only and would drop by 23 percent. Survey participants were asked to consider approaches for dealing with this shortfall and provide their responses to options on both reducing benefits and increasing revenues.

The conclusions from the survey suggests was there are four steps that would resolve at least two-thirds of Social Security’s project shortfall.

Raising the cap on income subject to the payroll from the current $118,000 to $215,000 was the most popular option with 88 percent of respondents supporting this nationally, including 84 percent of Republicans and 92 percent of Democrats. In addition, 59 percent went further, saying they would support eliminating the cap on taxable earnings entirely.

Seventy-six percent also approved of raising the payroll tax from 6.2 to 6.6 percent (72 percent of Republicans, 80 percent of Democrats).

Reducing benefits for the top 25 percent of lifetime earners received 76 percent support, including 72 percent of Republicans and 81 percent of Democrats. (The 25 percent was not identified in annual income dollars.)

Gradually raising the retirement age to 68 years old. This step elicited 79 percent approval (81 percent of Republicans, 78 percent of Democrats).

I would be interested in hearing from you (at president@nrln.org) on whether you agree or disagree with the survey’s results. The full report on the survey can be accessed here.

The Program for Public Consultation has the survey online if you would like to experience the “policymaking simulation” process. Your answers would not be recorded as part of the survey but the process does provide a way for your answers to be sent to your members of Congress. A word of caution, the survey is very detailed and long (approximately 50 separate pages). The questionnaire can be accessed at: http://research.cfrinc.net/vop16159pub/.

 

Dear President-Elect Donald Trump:

During your campaign for President, you said when elected you would: (1) allow Medicare to negotiate prices with drug companies, and (2) allow safe, cheaper pharmaceutical drugs manufactured abroad to be sold in the U.S.

I urge you to add these two promises to your First 100-Days Action Plan as President. I agree with the National Retirees Legislative Network (NRLN), who has advocated these actions for several years, they will do a great deal to reduce the cost of prescription drugs for Americans, especially important to seniors living on a fixed income.

The Medicare Prescription Drug Price Negotiation Act (H.R. 242 and S. 41) has been introduced in the House and Senate in the new 115th Congress. Your support of this legislation could very well result in passage to allow Medicare to negotiate the price of prescription drugs.

The 108th Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 and it became Public Law 108-173 in December 2003. Under TITLE XI - Subtitle C - Importation of Prescription Drugs, Sec. 1121 it gave the authority to the Secretary of Health and Human Services to import prescription drugs from Canada into the United States. Having your HHS Secretary exercise this authority, would be a good start for the importation of prescription drugs manufactured abroad.

You are to be commended for including in your First 100-days Action Plan, FDA reforms to cut the red tape to speed the approval of 4,000 drugs awaiting approval. The NRLN has advocated support for the FDA to bring medicines, particularly lower cost generics, to the market in a shorter time.

With your leadership from the White House, we believe you can convince Congress to join you in taking actions that are long overdue to reduce the cost of prescription drugs. We are relying on you to make prescription drugs affordable for seniors.

Signed by the Following 5,824 Members of the National Retirees Legislative Network


New Approach Applied to Fly-In Lobbying

The National Retiree Legislative Network and attendees at the Fall 2016 Fly-In applied a new approach in the way members of Congress and their staffs were lobbied on key retirement issues. Not only were they presented with the traditional executive summaries of the whitepapers that advocated the NRLN’s position on pension protection, but they were handed proposed amendments to existing laws that would accomplish the NRLN’s objectives.

Lawmakers and their staffs were receptive the addition of proposed “legislative language” to the NRLN’s advocacy for:

-- Proposed changes to the Annual Funding Notice (AFN) to make the document received by single-employer pension beneficiaries more easily understood and with information that showed the real status of the funding of their pension plan.

-- Proposed changes to the Employee Retirement Income Security Act (ERISA) that would require advance approval by the Pension Benefits Guaranty Corporation and Department of Labor before two or more pension plans could be merged. The PBGC and/or D.O.L could stop the merger if the security of beneficiaries would the harmed. Currently, a sponsor of pension plans can combine a higher funded plan(s) with a lower funded plan(s) to avoid making a contribution to a lower funded plan(s). The plan sponsor is only required to report the merger of plans after the fact. Without regulatory oversight, a plan sponsor can use pension plans as a form of “financial engineering” for the company.

-- Proposed changes to ERISA were made that would better protect pension plan beneficiaries when corporate Mergers, Acquisitions and Spin-offs of a piece of a company takes place. In the case of M&A, Spin-offs with a foreign corporation, the NRLN proposed that the fiduciary be an American citizen. It was also proposed that the PBGC have more power to capture foreign-owned assets to apply to benefits in the event of termination of a pension plan.

-- Once again, the Fly-In attendees lobbied for Congress to take action against what the NRLN calls “Pension Drug Price Gouging”. We urged members of Congress to pass S. 31 and companion bill H.R. 3061, the Medicare Prescription Drug Price Negotiation Act of 2015 that has been in the Senate Finance committee since Jan. 2015 and in the House Committees on Energy and Commerce and Ways and Means since July 2015.

-- Again, we urged Representatives and Senators to pass S. 122 and companion bill H.R. 2228, the Safe and Affordable Drugs of Canada Act of 2015 that has languished in the Senate’s Health, Education, Labor, and Pensions Committee since Jan. 2015 and the House’s Energy and Commerce Committee since May 2015.

-- On Aug. 26 when I joined 30 NRLN grassroots advocates in Conroe, TX for a town hall meeting with Rep. Kevin Brady, Chairman of the House Ways and Means committee, we learned that in 2003 Congress passed the Medicare Prescription Drug Improvement, and Modernization Act that gave the Secretary of Health and Human Services the authority to authorize the importation of safe, less costly prescription drugs for personal use from our northern neighbor.

-- During each appointment on Capitol Hill a letter, similar to the one that I’ve sent to the HHS Secretary, was presented with the request that the Representative or Senator sign the letter, and get signatures from additional lawmakers, and send the letter to Secretary Sylvia Mathews Burwell to urge her to exercise her authority to allow importation of prescriptions drugs from Canada.

At our Monday afternoon, Sept. 26, meeting the Fly-In attendees were briefed on all of the above issues so they would be well prepared to advocate the NRLN’s proposals. Also, on Monday afternoon, four PBGC officials accepted the NRLN’s invitation to make presentations. Each addressed their area of expertise which included projections on the PBGC’s financial capabilities to serve as a safety net for terminated pensions; the PBGC’s 2016 annual guarantee limit for payments to individuals; the PBGC Risk Management and Recovery Maximization activities; Early Warning Program for at-risk pension plans, and information available at www.PBGC.gov.

I want to thank the 29 members from six Retiree Associations and six NRLN Chapters who handled more than 60 appointments on Capitol Hill. More details about the Fly-In will be in my Clarion Call Column in the upcoming fall issue of the NRLN FOCUS newsletter. Click here to view a few photos from the Fly-In


Meeting with Chairman of the House Ways and Means Committee

Six months of persistence by NRLN Congressional District Leader Don Begley resulted in an August 26 meeting in with the Chairman of the House Ways and Means Committee, Kevin Brady.

I drove from my home in Heath, Texas (Dallas area) to Conroe, Texas (Houston area) to join Don and 31 other constituents in Texas’ 8th Congressional District for the meeting with Chairman Brady.

Don was invited to participate in the NRLN’s meeting on Capitol Hill during the NRLN Annual Leadership Conference in February. At that time Don met with one of Chairman Brady’s Washington, D.C. staff members to discuss the protection of pensions and the need to reduce the cost of prescription drugs. After returning home to Conroe, Don began a series of regular telephone calls to Chairman Brady’s offices in Conroe and Washington, requesting a meeting with his Representative when he was back in his home district.

With Congress on its annual August recess, Don was finally able to gain a commitment for a meeting with his Congressman who heads one of the most powerful committees in our federal government. Don then recruited 32 individuals (including myself) to attend the meeting. Half of the group was NRLN grassroots advocates and the other have included Don’s wife, Kimberly, and friends and neighbors.

brady

Chairman Brady opened the one-hour meeting at the Conroe Central Library talking about his blueprint for reforming the U.S. Tax Code. Don commented that he had talked with seven retirees about the proposed tax changes and they said their taxes would increase anywhere from 16 percent to five times the current rate.

In my initial review of the Chairman’s tax reform proposal it looks like married couples would gain $11,400 in the standard deduction, but so much would depend upon the schedule of new tax rates (brackets). A definite downside is that while the proposal retains the mortgage interest deduction, it would eliminate real estate tax deductions. The NRLN will do an in depth review of the tax reform proposal to determine how it might further impact retirees and determine a position.

George Engelhart, a member of the Lucent Retirees Organization, held up a receipt from his pharmacy and told Chairman Brady that it showed his wife’s cancer medicine cost $300 per pill. This opened a give and take with the Chairman on prescription drug price gouging.

I said in some detail that the Republican proposals to lower health care costs were inconsistent with their unwillingness to act on drug importation and Medicare competitive bidding on prescription drugs. I indicated that as Ways and Means Chairman, Congressman Brady needed to consider the impact that high drug costs have on Americans’ disposable income, sales of goods and services and thus creation of jobs and federal tax revenue.

Another point I made is that Congress is ignoring the fact that lower prices exacted from U.S. drug makers by countries practicing socialized medicine is transferring our economic growth and GDP to these countries. When France can exact a price of $7 for a pill, the UK $10 and Canada $20, drug companies are cross subsidizing on the backs of Americans, particularly retirees, and our economy when they ask us to pay $30 for the identical drug in order to offset foreign sales losses.

I said that Congress must take action to start as soon as possible importation from Canada and Medicare competitive bidding on prescription drugs. If U.S. drug companies can’t compete on price they must exit these foreign markets. What conservatives don’t realize is that not recognizing this and not taking action directly supports socialized medicine. Americans are effectively being asked to subsidize socialized programs in Europe and elsewhere.

Our position on Medicare competitive bidding is that we don’t support price setting unless necessary to correct greed associated with very expensive drugs used to treat chronic and life threatening diseases. Otherwise, whenever two or more prescription drugs can treat the same health problem Health and Human Service should be mandated to require competitive bidding. We will be carrying this message to Capitol Hill during the NRLN’s annual fall Fly-In. (Click here for NRLN position.)

During the dialogue on the cost of prescription drugs, Chairman Brady said that the HHS Secretary could “wave a wand” and allow the importation of prescription drugs. In a meeting that Alyson Parker, NRLN Executive Director, and I had with the HHS Deputy Director for Medicare C and D (prescription drugs) and her staff on August 30, we briefly discussed the HHS Secretary’s approving individuals importing Canadian drugs legally. We intend to continue to support legislation for the importation of safe, lower cost prescription drugs and alternatively will be asking other advocate organizations to join us in asking the HHS Secretary to approve importation.

I was pleased to witness the way the retirees engaged Chairman Brady on issues important to retirees. My thanks goes to Don for his persistence to get the meeting schedule. His efforts show how a single individual who is determined can gain a meeting with a member of Congress and help constituents bring retirement issues to their attention. I hope other grassroots advocates will follow Don’s example.

NRLN Letter to Speaker of the House Paul Ryan

Speaker Paul Ryan (WI-01), as the leader of the U.S. House of Representatives, is in a position to be a proponent for reducing the cost of prescription drugs the perseveration of traditional Medicare. However, the positions he has taken on prescription drug and Medicare issues are of concern to the National Retiree Legislative Network.

Click here to read a four-page letter that I have sent to Speaker Ryan. I urge you to take the time to read the entire letter. But if you do not have the time to read the entire letter, here is a summary.

I am writing to you (Speaker Ryan) to express our extreme disappointment with the position you have taken as the leader of the U.S. House of Representatives on three Medicare issues. (1) We are disappointed that you have not supported legislation to allow Medicare to negotiate lower prescription drug prices. (2) You have not convinced the Republicans on the House Energy and Commerce committee to pass H.R. 2228, the Safe and Affordable Drugs from Canada Act of 2015. (3) You have supported the House Republicans’ health care reform plan proposal to gradually transform Medicare to a system of premium support or subsidies that in reality support insurance company costs and profits.

Allow Medicare to Negotiate Lower Drug Prices

You and most of your colleagues are ignoring the desire of the vast majority of Americans who believe that Medicare should be allowed to negotiate lower prices for prescription drugs. Retirees wonder whether Chairman Brady (Ways and Means Committee) and other Representatives in leadership positions have had their judgement clouded on prescription drug price gouging due to the huge contributions received in 2016 campaign and PAC leadership contributions from the Pharmaceuticals/Health Products industry.

More than 75% of Americans now say their top health concern is the rising price of prescription drugs, according to the Kaiser Family Foundation.

You should use your House leadership position to gain passage of H.R. 3061, the Medicare Prescription Drug Price Negotiation Act that the Republican Chairmen have bottled up in the House Committees on Energy and Commerce and Ways and Means since July 2015.

In an article published in July 2015 in the journal Mayo Clinic Proceedings, more than 100 prominent oncologists called for support of a grassroots to stem the rapid increases in the prices of cancer drugs, including by letting Medicare negotiate prices with pharmaceutical companies and letting patients import less expensive medicines from Canada.

Safe, Affordable Rx from Canada

The need for importation arises in large part because U.S. drug companies sell into Canadian, European and other foreign markets where arbitrarily low pricing is set (price setting) by socialized health care systems. American drugmakers should either eat all their losses or not sell at a loss in these markets and then cross-subsidize by overpricing in America. If they can’t compete then they should exit these markets or seek trade assistance. Overcharged Americans are paying for prescription drugs in socialized medicine countries.

Stop protecting the pharma! Pass H.R. 2228, the Safe and Affordable Drugs from Canada Act.

“Premium Support” Plan for Medicare

Speaker Ryan, you have been a proponent for a number of years of efforts to abolish traditional Medicare for future retirees. The short coming of the “premium support” plan that you have championed is that the individual would have to cover any difference between the subsidy and actual cost. The “voucher” plan would be the biggest corporate welfare program ever for health insurance and pharmaceutical companies.

A key question is how the premium support voucher's value would be adjusted over time. Republicans claim their plan would give seniors the choice of remaining in regular Medicare. What Republicans don’t say is that their plan would make Medicare so expensive that millions of seniors would likely be forced to switch into the private Medicare plans. Americans’ tax dollars will morph from support for Medicare to insurance and drug company giveaways.

Mr. Speaker you are in the position to make a positive difference in the lives of retirees by providing leadership to pass legislation allowing Medicare to negotiate for lower drug prices, make it possible to import safe and more affordable drugs from Canada and protect traditional Medicare for decades to come. Please support America’s seniors.


Pain Around The Corner – Social Security

Pain Around The Corner – Social Security. This is a continuation of my four-part series. The first installment was on Pensions in an email to you and a posting on www.nrln.org on May 5. I wrote about the coming pain on Medicare in my column in the summer NRLN FOCUS newsletter that you were sent a notice to read on June 22 on the NRLN website.

Before I begin writing about the pain that is ahead for Social Security if action is not taken soon, I want to first cite a few facts on the program that began in 1935:

  • Social Security paid benefits to 49.2 million retired workers and survivors and to 10.8 million working-age people with disabilities.
  • 65% of the 49.2 million rely on Social Security for more than half of their retirement income.
  • 36% rely on Social Security for 90% of more of their income.
  • The average Social Security retirement benefit is $1,335 per month.

The Pain of Lost Buying Power

The news media reported last month that Social Security beneficiaries would get less than a $2.50 increase in monthly payments in 2017 and this will be more than taken away from some Medicare beneficiaries who will face sharply higher "Part B" monthly premiums next year. This projected 0.2 percent increase in Social Security payments would come after beneficiaries received no increase this year. By law, increases are based on a government measure of inflation, which has been low. The official 2017 cost-of-living adjustment (COLA) won't be determined until this fall, but the speculation is it will be in the range of $2.50.

Congress decided in 1975 that automatic COLA calculations for Social Security should be done each year so in theory beneficiaries' buying power could keep pace with inflation. But since 2000, Social Security beneficiaries have lost 23 percent of their buying power according to a 2016 senior cost survey by The Senior Citizens League. This is based on the cost of key items in a typical retiree's budget, particularly influenced heavily by higher medical and prescription drug costs.

The NRLN has been advocating legislation to reduce the cost of health care and prescription drugs. There are now bills in the House and Senate that would do this and the NRLN is lobbying for the passage of the bills. If you haven’t sent the NRLN’s sample letters to your members of Congress to urge them to pass these bills, go to http://nrln.org/congress.html#/38 to send your letters.

The Pain of Social Security Going Broke

“Social Security is going broke,” says U.S. House of Representatives Speaker Paul D. Ryan. And there are facts to back up his statement.

Social Security is a pay-as-you-go system in which current workers pay payroll taxes that fund payments to current Social Security recipients. The amount that is collected in payroll taxes has fallen short of Social Security's annual costs since 2010, and as a result the program is making up the difference between taxes and spending by tapping its trust funds.

The trust fund represents the surplus tax revenues that Social Security collected from 1984 to 2009. While the government spent those funds, it recorded a debt payable to Social Security plus interest. Thus, the trust fund provides authority for Social Security to spend more than it takes in, as it’s been doing since 2010.

Social Security Paying Out More Than Taking In

In 2016, Social Security will pay out about $70 billion more in benefits than it will generate in tax revenue. As the population ages, that gap will only widen. By 2026, an extra 18 million people will collect benefits. In that year alone, Social Security will run a $395 billion deficit, according to the Congressional Budget Office (CBO). The government must increase its public borrowing by an amount equal to the cost overruns. When the trust fund runs out, so does the authority to run Social Security deficits.

Last month the Social Security Board of Trustees released its annual report stating that trust funds will fall short of supporting Social Security payments to recipients beginning in 2034, resulting in an across-the-board cut of about 25 percent in Social Security benefits. But the CBO sees the Social Security trust fund collapsing to zero by 2029, necessitating an immediate 29 percent cut in benefits.

Although 2029 or 2034 seems to be far away, many of today’s newest retirees would likely still be in the program. This has led some in Washington, DC to claim Social Security reform can be put off well into the future. They are wrong.

Pain Gets Worst While Washington Waits

The annual report from the Social Security trustees warned that politically gridlocked Washington needs to act sooner, rather than later, to shore up finances and avoid negatively impacting the lives of millions of retirees and their families. If Washington fails to take action to close the gap between tax revenue and Social Security spending, then a big cut in benefits will push millions of seniors into poverty.

The cost of waiting to avoid this cut in benefits is high. The longer lawmakers wait to enact Social Security reform, the more abrupt and less targeted changes will have to be. In addition, the less time workers will have to plan and adjust, and policymakers will have fewer options. Perhaps more importantly, the size of the gets problem bigger and bigger over time.

Stop the Pain for Retirees – Fix Social Security

U.S. Representative Kevin Brady (TX-08), Chairman, House Ways and Means Committee, spoke on February 25, 2016 at an Urban-Brookings Institution Tax Policy Center event in Washington, DC about his plans to address the impending Social Security crisis. Rep. Brady described his plans as (1) gradually raise the retirement age to 70 over the next three and a half decades; (2) do means testing of wealthy Americans on their need to receive Social Security and (3) “creating a true cost of living for seniors.” He said doing these three things would “solidify Social Security for 75 years or more”.

To restore the program’s solvency, some want to raise or remove the ceiling on earnings subject to the Social Security payroll tax. Currently, Social Security’s 12.4 percent payroll tax applies to a worker’s first $118,500 of wage income, and benefits are calculated based on that income. Though this “taxable maximum” is indexed to wage growth, it currently only covers about 83 percent of all wages. This means 17 percent remains tax free.

However, taxing all earnings would fill only 41% of Social Security’s long-term deficit. Fixing the rest would require either cutting benefits or raising taxes on lower-earning households.

According to the Chief Actuary of the Social Security Administration, eliminating the taxable maximum would extend the life of the trust to 2048 instead of 2034.

Studies Are Presenting Proposals

For the past two years, a commission made up of 19 high-profile people from the academic, political, business, and investment worlds has been busy devising a bipartisan plan to strengthen the retirement security and personal savings of Americans. The result, a comprehensive 146-page report packed with ideas from the Bipartisan Policy Center, came out on June 9, 2016. One of the report's many proposals would raise the taxable level of Social Security earnings to $195,000 from the current $118,500 by 2020.

According to a report by the National Academy of Social Insurance (NASI), none of the following would fix 100% of the problem. In decreasing order of potential impact, the study found:

  • 77% of the shortfall could be eliminated by increasing the Social Security tax rate for employers and employees to 7.2% in 2022 and 8.2% in 2052.
  • 71% could be eliminated by eliminating the earnings cap over a 10-year period.
  • 53% could be eliminated by gradually increasing the Social Security tax rate by 0.05% per year for 20 years.
  • 30% could be eliminated by increasing (not eliminating) the earnings cap to 90% of all earnings over five years.
  • 25% could be eliminated by gradually increasing the full retirement age to 70.
  • 20% could be eliminated by lowering the cost-of-living adjustment.
  • 20% could be eliminated by means-testing SS benefits.
  • 15% could be eliminated by gradually increasing the retirement age to 68.

Presidential Candidates Views on Social Security

President Obama, Hillary Clinton, the presumptive Democrat nominee for President, and other Democrats are rallying around proposals to expand Social Security and increase benefits. This is certainly a major change after three decades dominated by concern over the program’s rising costs.

Donald Trump, the presumptive Republican nominee for President, has promised not to cut Social Security. His campaign has suggested he'd revisit government benefit programs - known as entitlements - after his tax-cut plan boosts economic growth.

NRLN’s Proposals to Fix Social Security

The NRLN’s position is that there is a straight-forward solution to ensuring Social Security for current and future retirees, but from the outset elected officials must be clear that, first and foremost, Social Security is not a welfare program paid for by the U.S. Government.

When some members of Congress, such as Chairman Brady, talk about “creating a true cost of living for seniors” they are referring to changing the current way of calculating COLA for Social Security to the “Chained Consumer Price Index”. The NRLN opposes any changes in the way the annual COLA is calculated. Changing from the current Consumer Price Index for Urban Wage Earners and Clerical Workers to the chained CPI would be less accurate and less-generous to Social Security beneficiaries. Seniors spend far more on health care than younger people. Health care inflation has been outpacing general inflation by a wide margin. Health care, particularly the cost of prescription drugs, is eating away a growing portion of seniors' COLAs—when one is given. Over the next 10 years alone, the Chained CPI would take approximately $112 billion directly out of the pockets of Social Security beneficiaries.

Don’t Raise Eligibility Age for Social Security

The NRLN opposes the recommendations by some members of Congress to raise Social Security's full and early retirement ages. This comes on the heels of the increases already made in 1983 by the Greenspan Commission which moved full retirement age to 67 by 2022, in essence spreading out benefits.

The 1983 change in retirement age cut benefits an average of 13%. A further extension to possibly age 69 or 70 would cut benefits another 20% or more. Moreover, longevity gains that proponents cite for increasing the eligibility age have been concentrated among more affluent Americans. A higher retirement age will require Americans to attempt to remain employed when hiring trends in the private sector favor younger rather than older workers. A recent report by the Center for Economic and Policy Research shows that 10.2 million workers ages 58 and older (43.8 percent of workers in that age range) are employed in either physically demanding jobs or jobs with difficult working conditions. Future retirees cannot physically or financially afford for Social Security’s retirement age to be raised once again. Indeed, a projected longer life span does not translate to a longer employment career or a sustained guarantee for the same quality of life.

Unless Congress intends to compel companies to retain older workers until they reach the age of Social Security eligibility, the proposal to increase the retirement age will fail, harming retirees as well as the U.S. economy at the same time.

The number of Social Security beneficiaries will increase by 18 million in the next 10 years. Current and past Administrations and Congresses have known these facts and have done nothing to effectively prepare for them since the last round of changes in 1983.

Adjust the Social Security Payroll Tax

The NRLN believes a small increase in the combination of tax rate (possibly between 0.5% and 1.5%) and the maximum earnings subject to the payroll tax would go a long way to toward Social Security's solvency. This should be done until such time as the Social Security Trust is again adequately funded actuarially. This commitment should also require that once the Trust is adequately funded, tax rates and maximum wages taxed should be lowered to maintain actuarial funding only. The NRLN maintains that this is the only practical and ethical solution, and one that keeps faith with the American public.

Social Security Can’t Be Congress’ Piggybank

One last point that the NRLN believe is very important. The Social Security Trust in the future should be insulated from access by Congress and its funds should never again be a piggybank to cover other government spending.

Retirees Join Rally at U.S. Capitol to Stop Pension Cuts

As I looked out over the West Lawn of the U.S. Capitol on April 14 while awaiting my turn to speak, I could read placards “Why Won’t Congress Defend Retirees??”, “We Earned Our Pension – Stop The Cuts”, “Stop Pension Theft – Join the Fight Yours May Be Next”, “Steal Pensions Today, Social Security Tomorrow”, and dozens more. (photos at right.)

The placards were at a Washington, DC rally of some 4,000 Teamsters Union participants in the Central States Pension Fund who are facing severe July 1 pension benefit cuts under the Multiemployer Pension Reform Act (MPRA) passed by Congress in late December 2014 as part of the Fiscal Year 2015 spending bill. The outrage at the rally, amid chants of “No Cuts”, focused on the seeming lack of political will from Congress to rescue a pension plan or assist the retirees in other ways.

Beneficiaries in the Central States Pension Fund, which is projected to be insolvent within a decade, are some 400,000 retirees who worked in trucking, parcel delivery and grocery supply industries. The Central States Pension Fund is administered on behalf of employers and unions in industries where workers often move between companies in the same field. The Central States Pension Fund has $18 billion in assets and $35 billion in liabilities, with yearly payouts that exceed contributions.

I was invited to speak at the rally because the NRLN had opposed the passage of MPRA because it gave trustees of severely underfunded multiemployer pension plans the authority to propose to the Treasury Department reductions in pension payments of as much as 60 percent. The NRLN has also lobbied for legislation to rectify MPRA not only because it is unfair to retirees in multiemployer pension plans, but because it nullifies the benefit anti-cutback provision of the Employee Retirement Income Security Act of 1974 (ERISA) for multi-employer plans and sets a bad precedent that could someday negatively impact single employer pension plans and even Social Security and Medicare.

In my brief remarks, some of what I said was: “MPRA is not only setting a bad precedent for you it is setting it for the rest of the country. The suffering on your part is heard across the country in my organization. Our concern in the NRLN is this MPRA precedent will bleed into the single payer plans and disrespect every damn worker [and retiree] in this country.

“Congress ought to be sitting down and doing something for you. This so called solution is going to lead to even greater hardships than American seniors have experienced up to now. Have you heard of de-risking of pension plans? That says that companies are trying to do everything they can to get rid of pension plans in this country.

“We very much oppose MPRA. We will be with you and we will be on the Hill again lobbying our proposal to eliminate MPRA all together. Best to you and we will be supporting you.”

Until I heard the full story, I was not aware that pension benefits earned by these retirees was typically less than $3,000 a month for someone with over 25 years of service and that over 100,000 were at risk of losing up to 60% of that amount. Members of Congress talked about how named Wall Street firms that managed the Central States Fund lost far more assets than other plans did and created the failure of this very large plan.

There were at least a dozen members of Congress who spoke at the rally.

Ohio Representatives Marcy Kaptor and Tim Ryan talked about the bill they have introduced called the Keep Our Pension Promises Act (H.R. 2844) that would repeal MPRA, and would create a “legacy fund” with the Pension Benefits Guaranty Corporation (PBGC) to prop up plans such as Central States that are at risk of failing. (Vermont Senator Bernie Sanders, a Democratic presidential candidate, has introduced similar legislation—S.1631—in the Senate) Unfortunately, there does not seem to be sufficient support in the Republican-controlled Congress for either of these bills to move forward.

Ohio Senator Rob Portman spoke about the Pension Accountability Act (S. 2147), the legislation he has introduced that would change the voting process on any required cuts. His bill would keep the Treasury Department from overruling any vote retirees could take against potential pension cuts and require that only filled-out ballots be counted. That would keep pension trustees from sending out ballots that are never returned and counting them among the votes in favor. But Senator Portman has stopped short of calling for legislation that would immediately inject cash into the Central States Pension Fund.

Other members of Congress that I recall who spoke in support of the retirees included, Senators Tammy Baldwin (WI), Sherrod Brown (OH), Al Franken (MN), Chuck Grassley (IA), Heidi Heitkamp (ND) Debbie Stabenow (MI) and Elizabeth Warren (MA). Congresswoman Debbie Dingle (MI) also spoke in support.

Among other speakers were Teamsters General President Jim Hoffa, and Mike Walden and Bob Amsden, leaders of the pension committees throughout the country who organized the rally and arranged for bus transportation to Washington, DC. Karen Friedman, the Executive Vice President and Policy Director of the Pension Rights Center, called for repealing MPRA and finding a bipartisan solution that fixes the problem of underfunded multiemployer plans and the PBGC – and protects the pension promises of retirees.

The Treasury Department is set to make the final decision to move forward or not with the cuts and plan participants then would face a vote to accept them or risk losing the plan should it be unable to pay benefits. Let’s all hope the enthusiasm exhibited by retirees and the words of support from the politicians will result in the protection of these pension benefits.

It is significant to note that only PRC and NRLN advocate representatives were singled out to speak as defenders of ERISA protection for retirees. Your company Association and Chapter presidents, NRLN board members, Regional Grassroots Vice Presidents and our Executive Director in Washington D.C. work hard to earn and maintain the respect needed to be in a national leadership position on pension issues.


Pension and Rx Cost Issues Advocated on Capitol Hill

I want to provide you a brief summary of the NRLN 2016 Annual Leadership Conference, Feb. 8 – 10, in Washington, DC. Additional details will be supplied in the next issue of our FOCUS newsletter. The conference was attended by 24 representatives from six retiree associations, three NRLN chapters, three invited State/Congressional District Leaders and the NRLN staff. They participated in more than three dozen meetings with members of Congress or their staffs.

The issues we advocated on Capitol Hill were:

  • Pass Safe and Affordable Drugs from Canada Act (S.122 and H.R. 2228).
  • Medicare Prescription Drug Price Negotiations Act (S. 31 and H.R. 3061).
  • Pension Plan Protection:
    --Need for legislation and/or regulatory rules for pension plan mergers.
    --Need for legislation and/or regulatory rules for more disclosures in pension plan Annual Funding Notices (AFNs).

The NRLN position papers on these issues can be read on the NRLN website at http://www.nrln.org/_pvtflyin.html. Executive summaries and talking points on these issues can be read on the NRLN website at http://www.nrln.org/talking.exec.sums.html. Or, click on the “Legislative Agenda” tab above and select either the “NRLN White Papers” link or “Talking Points & Executive Summaries” link. The executive summaries were in folders presented to Representatives and Senators and/or members of their staffs. The talking points were used by attendees to speak about these NRLN initiatives.

The conference began at 2:00 p.m. Feb. 8, at the Liaison Capitol Hill Hotel. I opened the agenda with comments on the NRLN’s financial status and its future direction. Marta Bascom, NRLN and AREF Executive Director, and Michael Calabrese, NRLN and AREF Legal Counsel, provided an update on the status of the American Retirees Education Foundation (AREF), a nonprofit, tax-exempt organization, created to extend the research and education reach of the NRLN and to enable NRLN to sharpen its focus on lobbying for the passage of federal legislation and regulations that benefit retirees.

Calabrese reported that he has written a 22-page document describing the type of research the AREF plans to undertake to educate policy makers and the public about retiree pension and health care benefits earned through decades of hard work and which are being steadily cut back and put at risk due to a variety of corporate financial maneuvers, as well as by outdated or shortsighted federal government policies. He has also written a prototype for an inquiry letter that is being used to seek out foundations that may be interested in providing grants to financially support research on retirement income security and retiree health care, particularly the need to reduce the cost of prescription drugs.

The AREF update was followed by Bascom providing an outlook on retirement-related issues in Congress. She said much will depend on what bills the Republican-led House and Senate will attempt to get passed that will help the party retain its majority in both chambers during this election year and will possibly assist a Republican in winning the Presidential election.

Bascom noted there are 13 bills in Congress that would help reduce the cost of prescription drugs and in some cases also save billions for Medicare. She explained to attendees the importance of advocating in their Capitol Hill meetings the need for legislation that would require a pension plan sponsor to submit its proposal to merge two or more pension plans to the Pension Benefits Guaranty Corporation, Department of Labor and the Internal Revenue Service for possible approval before taking action. Currently, pension plan sponsors only notify the federal government after plans are merged.

Bascom also explained the need for legislation to provide more transparency on the status of pension plan funding in the Annual Funding Notice (AFN) sent to pension plan participants. Currently, AFNs provided by many companies give retirees a false sense of income security in the information provided.

Our guest speaker was Nicholas Uehlecke, Professional Staff Member of the House majority Ways & Means Committee. He acknowledged that the price of prescription drugs is rapidly escalating. He said the belief of many Republicans on the Ways & Means Committee is that they do not want to tell pharmaceutical companies what can be charged for prescription drugs. He said the preference is to make more drugs available and the prices would start to fall.

Judy Stenberg, NRLN Vice President – Pacific Region, Chair of LAC and LAPC member; Deb Morrissett, Director, National Chrysler Retirement Organization and LAC member made a presentation on the roles of Legislative Affairs Committee (LAC) and Legislative Action Priorities Committee (LAPC) related to analysis of retirement-related bills in the House and Senate. The LAC has checked 8,367 bills and reviewed in-depth 118 bills introduced in the 114th session of Congress (2015 and 2016). The LAPC has elected to actively support 65 of those bills (see bills at http://www.congressweb.com/nrln/bills). An additional 23 bills are considered low priority for the NRLN, or have been superseded by another bill of higher relationship to the NRLN legislative agenda. They presented handouts on the 31 prescription drug bills that the NRLN is supporting.

Ed Beltram, NRLN Vice President – Communications, presented important NRLN Grassroots issues on behalf of Bob Martina, NRLN Vice President – Grassroots. Seventy-seven percent of the 435 Congressional Districts have one or more CD leaders. There are 558 state and CD leaders. Beltram asked the leaders of the retiree associations and chapters to follow up NRLN Action Alerts with personal messages to their grassroots advocates to urge them to email the NRLN’s sample letters to their members of Congress.

The efforts of conference attendees from 13 states from coast to coast and border to border and 17 Congressional Districts was a good example of the national scope of the NRLN. It demonstrated the commitment of individuals and the financial support their organizations provide to make it possible to exhibit to our nation’s lawmakers the grassroots strength of the NRLN and advocate legislation beneficial to retirees.

Bill Kadereit, President
National Retiree Legislative Network


Protecting Retirees in Pension Plan Mergers

The NRLN took another important step on December 16 in its efforts to protect retirees in defined benefit pension plan mergers through a meeting with officials of the Department of Treasury and the Pension Benefits Guaranty Corporation (PBGC).

Jay Kuhnie, President, National Chrysler Retirement Organization, and Chris Dyrda, NCRO Director, joined me, Marta Bascom, NRLN Executive Director and Michael Calabrese, NRLN Legislative Adviser, in the Washington, DC meetings. We met with PBGC officials on this issue in July 2015 and renewed our concerns this past week with newly-appointed PBGC Director Tom Reeder and his staff as well. We also advocated for legislation to protect retirees in pension plan mergers with members of Congress and their staff during the NRLN Fly-In to Washington, DC in October 2015.

The NRLN considers pension plan mergers as a new form of corporate financial reengineering. The merging of pension plans is a strategy that can be used to benefit the plan sponsor by combining plans with very different levels of plan assets and liabilities but all at the risk of plan participants. Depending on the circumstances, merging pension plans can be beneficial to plan sponsors and harmless to participants, such as when companies merge two or more well-funded plans to reduce administrative and other costs. However, defined benefit pension plan mergers can also be very damaging to the vested rights of plan participants when one or more well-funded plans are merged with one or more weaker plans.

For example, the NCRO leaders explained to the Treasury and PBGC officials that Fiat Chrysler combined U.S. management pension plans and the successor combined plan was underfunded whereas participants in the better funded plan lost 6% of its funding level because of the merger.

Another example is when CenturyLink, a communications company, merged three dissimilar pension plans (CenturyLink Legacy, Embarq and Qwest plans). This merger combined 81,000 Qwest plan participants from a very well-funded plan at 91% with two plans funded in the 73-74% range. Qwest plan members lost hundreds of millions of dollars in asset protection.

Nokia is currently in the process of acquiring Alcatel-Lucent. Participants in the Alcatel-Lucent pension plan are rightly concerned about what might happen to their pension plan security should Nokia USA and Alcatel-Lucent USA plans and possibly plans from other Nokia corporate future acquisitions be merged.

The Treasury and PBGC officials now understand the potential negative consequences for retirees of granting plan administrators’ unilateral authority to merge plans but believe Congress would need to pass legislation to place protections in the Employee Retirement Income Security Act (ERISA). Our proposals included:

Pre-Approval Process: Plan sponsors should be required to submit the proposed merger (combination) of two or more qualified plans to the PBGC, DOL and IRS for review and approval. Avoidance of funding of underfunded plans, as well as any substantial reduction in the funding level of a merged plan, shall be a reason for denial.

Distress Termination: For a period of at least five years after a qualified plan merger, the PBGC should be required to oppose any proposed distress termination of the merged plan unless the plan sponsor can establish, to the satisfaction of the agency or a court in bankruptcy, that a distress termination would have been justified at the pre-merger funding level.

Hold Harmless Provision: For a period of at least five years following a qualified plan merger, the PBGC should ensure that, in applying its Priority Category allocation of benefits, retirees and other plan participants do not lose any vested benefit that would have been funded based upon the pre-merger asset and funding level of their plan, or the current termination funding level of their plan, whichever is higher. PBGC insurance should guarantee the priority claims of participants who would lose vested benefits due to the merger’s reduction of plan funding levels, if necessary.

The NRLN understands that it will take a tremendous effort to get Congress to pass legislation that includes our proposals. This is because Congress has repeatedly passed legislation that included pension plan funding “holidays” to achieve tax revenue objectives. (Corporate profits contributed to pension plans are tax deductible, which lowers corporate taxable income that in turn lowers Federal tax revenues.) This has given many companies an additional reason to forego contributions to pension plans and only achieve minimum funding requirements required by ERISA. These actions slowly but surely have weakened many defined benefit pension plans.

Again during the NRLN’s Annual Leadership Conference in Washington, DC, February 8 – 10, 2016 we will lobby Representatives, Senators and their staff members for the introduction and passage of a bill to protect retirees in pension plan mergers. Watch for an NRLN Action Alert early next year asking you to help us with this effort.


Polls Validate NRLN’s Efforts on Health Care Costs

Since 2009 the NRLN has aggressively advocated federal legislation to curtail rising health care cost through more competition in America’s pharmaceutical market, competitive bidding by Medicare for prescription drugs, medical devices and equipment and cutting Medicare fraud.

A November 14 article in HealthDay News reported on a new HealthDay/Harris Poll that found most Americans now support aggressive regulation to keep health care costs in check, including price caps on drugs, medical devices and payments to doctors and hospitals. (The poll was conducted online between Oct. 14-16 among 2,072 adults. Figures for age, gender, race/ethnicity, education, region and household income were weighted where necessary to bring them into line with their actual proportions in the population.)

Up front, I want to be clear that the NRLN has never advocated price caps. Our Legislative Agendas over the years has advocated free market competition in the health care industry.

The current mood of Americans validates what the NRLN has been saying for the past seven years that escalating health care cost must be curtailed. The poll found that:

  • 73 percent support price controls on drug and device manufacturers.
  • 70 percent would like price controls placed on hospitals.
  • 66 percent want to authorize Medicare to negotiate drug prices.
  • 63 percent support price controls on payments to doctors.
  • 56 percent want to be able to import less expensive drugs from other countries.

The Modern Healthcare survey released Nov. 16 found almost all of the 80 leaders of hospital systems, insurance companies, large physician practices, industry trade groups and nonprofits want the government to set prices for breakthrough drugs.

Eighty-six percent of them want the government to "negotiate" prices for drugs sold through Medicare. More than half think the drug industry is lying when it says the $2.6 billion in R&D costs for each new drug that gets approved justify high prices, or when it says the prices reflect the value these breakthrough drugs bring to patients.

I believe the NRLN’s lobbying efforts, thousands of letters to members of Congress by our grassroots advocates, visits to local Congressional offices and appointments with legislators and staffs by leaders of our retiree associations and chapters during our meetings in Washington, D.C. have contributed to a number of bills to reduce health care costs. The bills are:

  • Safe and Affordable Drugs from Canada Act (S. 122 and H.R. 2228) - would allow importation of safe prescription drugs from our northern neighbors at greatly reduced prices.
  • Personal Drug Importation Fairness Act of 2015 (H.R. 2623) – provide access to safe, reasonably priced prescription drugs by allowing personal importation and reimportation of prescription drugs from countries with safety standards at least as strong as those in the U.S.
  • Medicare Prescription Drug Price Negotiation Act (S. 31 and H.R. 3061) - would empower Medicare to negotiate for the best possible prescription drug prices.
  • Medicare Prescription Drug Savings and Choice Act (H.R. 3261 and S. 1884) - would create Medicare-administered prescription drug plans to compete with the expensive, privately administered Medicare Part D. The bill would also require the Department of Health and Human Services to negotiate for lower drug prices.

If you did not respond to the NRLN’s Action Alert on Sept. 10 to ask Representatives and Senators to support these bills the NRLN’s sample letters are still available at http://www.congressweb.com/NRLN/36 to email to your members of Congress.

Humphrey Taylor, chairman emeritus of The Harris Poll, stated in the article: "Most people want to see a lot of different actions taken to contain health care costs, including government price controls of providers, drugs and devices, and two controversial actions which are currently prohibited -- allowing the importation of drugs from other countries and allowing Medicare to negotiate drug prices."

Taylor went on to say: "Every new headline about big drug prices increases the likelihood that Washington will revisit the issues of drug importation and Medicare negotiating drug prices -- policies fiercely opposed by the industry but strongly favored by the public."

We hope Mr. Taylor is right. The NRLN will continue its efforts to gain passage of bills for the importation of safe, lower cost prescription drugs and for Medicare to negotiate for lower drug prices, medical devices and equipment and cutting Medicare fraud.


NRLN Advocates Key Retiree Issues during DC Fly-In

I want to provide you a brief summary of the NRLN’s Washington, DC Fall Fly-In Oct. 19 – 21. Additional details will be supplied in the next issue of our FOCUS newsletter. The Fly-In was attended by 31 representatives from eight retiree associations, four NRLN chapters, three invited Congressional District Leaders and the NRLN staff. They participated in more than 70 meetings with members of Congress or their staffs. The retiree issues we advocated at the Fly-In were:
  • Pass Safe and Affordable Drugs from Canada Act (S.122 and H.R. 2228),
  • Pension Plan Protection:
    • Need for legislation and/or regulatory rules for pension plan mergers,
    • Need for legislation and/or regulatory rules for more disclosures in pension plan Annual Funding Notices (AFN),
    • Pass the Keep Our Pension Promises Act (S. 1631 and H.R. 2844) to restore ERISA’s original commitment that changed with the passage of the Multiemployer Pension Reform Act of 2014.

Click here to read the executive summaries and talking points on these issues. The executive summaries were in folders presented to Representatives and Senators and/or members of their staffs. The talking points were used by attendees to speak about these NRLN initiatives.

The Fly-In, opened at 2:00 p.m. Oct. 19. The first presentations were by officials from the Federal Drug Administration (FDA) by Domenic J. Veneziano, Director Import Operations and Policy, and Karen C. Corallo, Esq., Director Center for Drug Evaluation and Research. They were invited because we wanted to learn the FDA’s position on the importation of prescription drugs. Their presentations and responses to attendees’ questions ran more than an hour.

The only objective of the FDA is that prescription drugs sold in the USA are safe and has no responsibility for the cost of medicines. While the NRLN wants safe prescription drugs, we believe that safe Rx can be imported from Canada at a price considerably less than the same drugs now can be purchased in America.

In September, the NRLN surveyed our grassroots advocates in 16 states that either border Canada or the great lakes that touch Canada. Of the responders who purchase prescription drugs from Canada, 64% who purchased brand label drugs claimed savings of 41% or more with 44% claiming over 50% savings, and 66% who bought generic drugs claimed savings of 41% or more with 54% claiming over 50% savings.

Michael Calabrese, NRLN Legislative Adviser, explained to attendees why they would be advocating in their Capitol Hill meetings the need for legislation that would require a pension plan sponsor to submit its proposal to merge two or more pension plans to the Pension Benefits Guaranty Corporation, Department of Labor and the Internal Revenue Service for possible approval before taking action. Currently, pension plan sponsors only notify the federal government after plans are merged.

The NRLN has evidence from two of its retiree groups that plans merged by their pension plan sponsors caused retirees in one plan to lose pension fund value when their plan was merged with two other less well funded plans.

Marta Bascom, NRLN Executive Director, briefed the group on two issues. The first was how the passage of the Multiemployer Pension Reform Act of 2014 last December changed the Employee Retirement Income Security Act of 1974 (ERISA) to give trustees of severely underfunded multiemployer pension plans the authority to cuts pension benefits of retirees by as much as 60 percent. She noted that the change to ERISA could set a precedent for other troubled retirement programs, including single-employer pension plans. She explained that the NRLN advocates passage of the Keep Our Pension Promises Act prevent the cuts in pension benefits to retirees in multiemployer pension plans.

Her other presentation was on the need for legislation to provide more transparency on the status of pension plan funding in the Annual Funding Notice (AFN) sent to pension plan participants. Currently, AFNs provided my many companies give retirees a false sense of income security by the information provided.

The efforts of Fly-In attendees from 14 states from coast to coast and border to border and 23 Congressional Districts was a good example of the national scope of the NRLN. It demonstrated the commitment of individuals and the financial support their organizations provide to make it possible to exhibit to our nation’s lawmakers the grassroots strength of the NRLN and advocate legislation beneficial to retirees.

Click here to see a few photos taken during Capitol Hill appointments.


Supporting Bills to Help Seniors

Two bills the NRLN has supported to help seniors have passed in the U.S. Senate and referred to the House. The Older Americans Act Reauthorization Act of 2015 (S. 192) was passed on July 16. The Program of All-Inclusive Care for Elderly (PACE) Innovation Act of 2015 (S. 1362) was passed on August 5.

Another bill to help seniors that we are also supporting is the COMMUNITY BASED INDEPENDENCE FOR SENIORS ACT OF 2015 (H.R. 2704 and S. 704).

S. 192 had been introduced by Senators Lamar Alexander (R-TN), Patty Murray (D-WA.), Richard Burr (R-NC) and Bernie Sanders (I-VT). If the bill is also passed in the House and signed by President Obama, it will direct the Secretary of Health and Human Services to establish a Community-Based Institutional Special Needs Plan demonstration program to target home and community-based care to eligible Medicare beneficiaries age 65 or older.

This demonstration would be for low-income, Medicare-only beneficiaries who need help with two or more activities of daily living, the usual criteria for nursing home eligibility. The plans would tailor services to beneficiaries, depending on individual needs. For instance, they might provide assistance with bathing or dressing, housekeeping or transportation, or even respite care for their primary caregiver.

The goal is to prevent these Americans from having to enter an institution and spend down their remaining assets, thereby becoming eligible for Medicaid. It would help our seniors remain in their own homes, where studies show they wish to remain, a more dignified approach and at lower cost than nursing home care.

S. 1362 had been introduced Senators Thomas Carper (D-DE) and Pat Toomey (R-PA). If the bill is also passed in the House and signed by President Obama, it will allow the Department of Health and Human Services to conduct pilot programs to enable more seniors with chronic conditions to participate.

The pilot programs would coordinated health and long-term services and supports for individuals 55 or older who qualify for nursing home care. These individuals have been diagnosed with a complex mix of chronic illnesses and functional or cognitive impairments, such as dementia, that inhibit their ability to live independently. For most participants, the comprehensive service package would enable them to remain in the community rather than receive care in a nursing home. Financing for the program is capped, which allows providers to deliver all services participants need rather than only those reimbursable under Medicare and Medicaid fee-for-service plans. This bill conserves individual resources and lowers overall cost and reduces debates over nursing home care coverage for the critical cases where independent living is all but impossible.

S. 704 was introduced by Senators Chuck Grassley (R-IA) and Ben Cardin (D-MD). It is pending in the Senate Finance Committee. The companion bill, H.R. 2704, was introduced by Linda Sanchez (D-CA-28) and Patrick Meehan (R-PA-27) and is pending in the House’s Ways and Means Committee and Energy and Commerce Committee. I have sent letters to the Chair and Ranking Member of all three committees urging them to bring this bipartisan bill to a vote.

Enacting H.R. 2704 and S. 704 would direct the Secretary of Health and Human Services to establish a Community-Based Institutional Special Needs Plan demonstration program to target home and community-based care to eligible Medicare beneficiaries age 65 or older.

This demonstration would be for low-income, Medicare-only beneficiaries who need help with two or more activities of daily living, the usual criteria for nursing home eligibility. The plans would tailor services to beneficiaries, depending on individual needs. For instance, they might provide assistance with bathing or dressing, housekeeping or transportation, or even respite care for their primary caregiver.

The goal is to prevent these Americans from having to enter an institution and spend down their remaining assets, thereby becoming eligible for Medicaid. It would help our seniors remain in their own homes, where studies show they wish to remain. Similar to S.192 above, these companion bills offer a more dignified home care approach and at lower cost than nursing home care.

These bills and the 56 other bills in the 114th Congress that the NRLN supports are posted on the NRLN website at http://www.congressweb.com/nrln/bills. The bills were recommended for the NRLN’s support by our Legislative Affairs Committee (LAC). The LAC conducts twice-a-month conference calls to review bills introduced in Congress. A member of the committee has reviewed 5,000 bills thus far in 2015 and has identified 276 that are retiree related. Another member of the committee researches the bills and the LAC decides during its conference calls which bills to refer to the Legislative Action Planning Committee (LAPC).

I serve as chairman of the LAPC and the committee members are the NRLN’s Executive Director, Vice President – Legislative Affairs, Vice President – Grassroots and Vice President Communications. The LAPC holds regular conference calls to determine what action the NRLN will take in support of or opposition to the bills. The actions range from visits to Representatives’ and Senators’ offices, to Action Alerts with emails and/or phone calls to Representatives, Senators and/or the President; letters to editors, or letters to Congressional Committee chair and ranking member urging passage of the bill out of committee, and/or a thank you letter to the Representative(s) and/or Senator(s) who introduced the bill(s). Some bills are tracked for possible future NRLN action and some bills are removed from further consideration by the NRLN.

You may recall that the NRLN has created a Congressional Report Card to show whether U.S. Representatives and Senators are supporting / co-sponsoring bills advocated by the NRLN. The Report Card is available to any Grassroots Advocates. Instructions on how to access the Report Card for your state are at http://www.nrln.org/reportcard.html.


Treasury/IRS Bans Lump Sum Buyout Offers

You have consistently told the NRLN in our surveys that threats to your income security are your number one fear. This is why the NRLN has advocated for the protection of pension plan participants when pension plan sponsors take a de-risking action through a lump sum pension buyout offer and/or the purchase of a third-party annuity to replace pension plan payments.

With regard to voluntary lump sum pension buyout offers, the NRLN has advocated making complete and plain English disclosures concerning the financial trade-offs, including tax consequences and the higher cost of purchasing an individual annuity contract. We have presented our proposals in meetings with officials at the U.S. Department of Treasury, at the Employee Benefits Security Administration in the Department of Labor and at the Pension Benefit Guaranty Corporation. I’ve made the case for the NRLN’s proposals to the ERISA Advisory Council in my testimony in August 2013 and again in May 2015. In addition, the NRLN has led the way protecting retirees’ pensions from de-risking within a coalition of advocates that includes the Pension Rights Center, AARP and the AFL-CIO.

On July 9, the Treasury Department and the Internal Revenue Service announced that it will amend its ERISA regulations to no longer allow sponsors of defined benefit pension plans to offer lump sum payments to replace pension annuity payments to pension plan participants who are in “pay status” (already receiving a monthly pension check). This policy, effective July 9, 2015, will not be to everyone’s liking; however, it is evidence that federal government officials understand what we have been saying, for instance,

”…the NRLN urges you to consider our proposals in order to provide pension plan participants the security of knowing that the framework within which they made their retirement financial plans and lifestyle elections will not be unfairly altered without reasonable protections.”

This IRS Notice does not apply to retirees or former employees not yet collecting a pension. It has been permissible for companies to offer lump sums to active employees and those who have retired but are not yet eligible for vested benefit payments.

The amendment to Section 401(a)(9) of the Internal Revenue Code does not prevent pension plan sponsors from taking de-risking action through the purchase of a third party annuity (i.e. an insurance company) to replace a defined benefit pension plan. Nor does the amended regulation prevent a pension plan sponsor from doing a voluntary pension plan termination through a voluntary lump sum offer and/or annuity purchase.

Pension plan sponsors that have already received Treasury/IRS approval to offer a voluntary lump sum pension buyout—such as Alcatel-Lucent’s recent announcement—are allowed to go forward.

While some individuals may have desired a lump sum offer to replace their monthly pension check, the federal agency’s action is to protect the interests of the vast majority of retirees in “pay status.” In addition, pension plans will be stronger because lump sum payments come from the pension trust fund and may dilute the status of the fund.

We will continue to pursue legislative changes that would minimize de-risking and protect your income security.


More Disclosures Needed with Lump Sum Offers

Over the last several years, the NRLN has met with federal agencies (Department of Labor (DOL), Employee Benefit Services Administration and Treasury) on several occasions to request detailed disclosures from plan sponsors offering lump sums as part of a larger effort to bring about policy changes on the de-risking of pension plans. I testified on behalf of the NRLN before the ERISA Advisory Council at the Department of Labor in 2013 and just last month as they move closer to making recommendations on this issue.

Our concern has always been that retiree need more, not less, information about the value of the lump sum (and the impact that it has on those who remain in the plan as well as the risks of accepting a one-time, life-lasting sum of cash from a plan sponsor. The basic question most retirees should start with is…why should I be interested in taking on the personal risk of a lump sum that needs to last me for a lifetime?

Over a year ago, Congress commissioned the General Accounting Office (GAO) to study the information needed by pension plan participants in order to make informed decisions about choosing whether or not to accept lump sum buyout offers from U.S. company plan sponsors. 

The GAO study was released earlier this year and I testified on May 28, 2015 before the ERISA Advisory Council where I reinforced the need for DOL to adopt the recommendations GAO made as part of it its analysis of 22 different companies’ pension plan lump sum offers and the sample feedback from 248,000 affected retirees who received offers.

Click here to read my May 28, 2015 testimony to the ERISA Advisory Council.

Click here to access a copy of the GAO report

Bill Kadereit, President
National Retiree Legislative Network


NRLN Supported Medicare Fraud Provision Becomes Law

An element of the NRLN’s Legislative Agenda to protect Medicare is to attack Medicare fraud. U.S. Representatives Peter Roskam (IL-06) and John Carney (DE-01) reintroduced on Feb. 13, 2015 the Preventing and Reducing Improper Medicare and Medicaid Expenditures (PRIME) Act of 2015 (H.R. 818). At the request of the NRLN Legislative Action Planning Committee, I sent letters to the two Congressmen thanking them for introducing the bill to combat waste, fraud and abuse in Medicare and Medicaid.

The PRIME Act was incorporated into H.R. 2, the Medicare Access and CHIP Reauthorization Act of 2015, which was passed by the House and Senate and signed into law by President Obama on April 16, 2015.

As a result of sending the “thank you” letter to Rep. Roskam, his staff member for Medicare issues invited me to provide a statement about the PRIME Act that was included in an April 16 press release with statements by the two Congressmen pointing out that the enactment of their bill “will strengthen these programs [Medicare and Medicaid] by eliminating vulnerabilities that expose them to fraud and improper payments.”

My quote included in the press release stated:

“The National Retiree Legislative Network (NRLN) applauds the enactment of H.R. 818 to bring about a disciplined and fair approach toward reducing fraud and other Medicare program abuses,” said Bill Kadereit, NRLN President. “Congressman Roskam’s bill serves as an example of how to control and lower the cost of Medicare without cutting benefits to seniors.”

Click here to read the entire press release.

The inclusion of my statement shows that Rep. Roskam appreciated the fact that the NRLN and its members believe as he does that eliminating fraud and waste in Medicare is important to helping secure the financial viability of the program.

Reducing the cost of health care has been a major part of our NRLN campaign to protect Medicare benefits. When the NRLN issues an Action Alert asking you to write to your members of Congress your letters may not always be acted on by them, but we must continue to send them because we are gaining traction and are beginning to see our issues addressed. This is one of those times.

Bill Kadereit, President
National Retiree Legislative Network


Report Calls for More Disclosures in Lump Sum Offers

Gaining more disclosure for retirees by pension plan sponsors who offer a lump sum buyout to replace lifetime pension benefits has been an objective of the NRLN. U.S. Representative Sander Levin (MI-09), the Ranking Member on the House Ways and Means Committee, has announced that at his request the Government Accountability Office (GAO) has issued a report that lays out recommendations to ensure that pension plan participants have better information when offered lump sums. The report presents recommendations for the Departments of Labor (DoL) and Treasury, the Pension Benefit Guaranty Corporation (PBGC) and pension plans.

On behalf of the more than 2 million retirees represented by the NRLN and our 10,525 grassroots advocates in Michigan, I have sent a letter to Congressman Levin thanking him for his efforts and that of retired California Congressman George Miller that resulted in the GAO’s report.

Congressman Levin recognizes that pension plan de-risking through lump-sum buyout offers and the conversion of pensions to annuities purchased from insurance companies is of great concern to workers and retirees. His statement in his office’s news release was right on target that, “Plan participants must have all the information they need to make an informed decision about the long-term impact of a lump sum payment instead of a defined benefit on their retirement.”

In my letter to Congressman Levin, I cited this example. On Wednesday, Feb 3, I was with leaders of the Chrysler, General Motors and Lucent retiree organizations who met with 11 staff members of the Department of Labor’s Employee Benefits Security Administration (EBSA). The purpose of the meeting was to discuss pension plan de-risking and, in particular, Alcatel-Lucent’s announced intension to offer lump sum pension buyouts in 2015. The Lucent retirees expressed their concerns regarding the lack of specific disclosure requirements to fully explain the considerations for accepting or rejecting a lump sum offer and the resulting consequences that need to be considered. Other NRLN leaders from the Detroit Edison Alliance of Retirees (DEAR) attended and expressed the need for greater disclosure by plan sponsors as well. Our members are hopeful that EBSA, DoL, Treasury and the PBGC will act quickly as companies continue their de-risking efforts at a fast pace.

Congressman Levin’s news release noted that additional information from the GAO regarding de-risking strategies is anticipated in the coming months as it pursues its investigation into the trend of companies to de-risk their pension plan liabilities by either offering lump sum payments to plan participants or by transferring those liabilities to private companies who would in turn provide a replacement retirement annuity.

The GAO report, “Private Pensions: Participants Need Better Information When Offered Lump Sums that Replace Their Lifetime Benefits,” is available on GAO’s website http://www.gao.gov/products/GAO-15-74 . It is estimated that nearly 200 pension plan sponsors implemented lump sum offers during 2012, and tens and maybe hundreds more plans were looking to de-risk through lump sum offers in the coming years.

The NRLN will continue to track actions taken by the federal agencies and pension plan sponsors to provide a greater degree of disclosure and protection for retirees. I want to thank those of you who have advocated the NRLN’s position on the need for more disclosures and especially thank the leaders of our organizations in Michigan who have met with Congressman Levin’s staff members the past several years.


Retirement Issues Advocated on Capitol Hill

Retiree association and chapter leaders demonstrated their determination to advocate retirement issues during the NRLN’s Annual Leadership Conference in Washington, DC, Feb. 2 – 4, 2015.

Snowstorms in Michigan, Ohio, Nebraska and New York and heavy fog in Arizona caused long delays in flights. Nine National Retiree Legislative Network Associations and General Motors Retirees Chapter members arrived hours late on Monday night, Feb. 2. Flights were cancelled for the NWB director in Nebraska and the EKRA-Kodak Retirees President in New York. We were pleased we did not have snow in our nation’s capital, but it was cold and windy.

Following the NRLN annual Leadership Conference business session on Monday afternoon, attendees met on Tuesday and Wednesday, Feb. 3 and 4, with members of the U.S. Senate and House of Representatives to lobby for passage of bills that would protect retiree income and health care security.
Our advocacy with Representatives, Senators and members of their staffs were focused on these issues:

  • Protecting retirees in pension plan de-disking,
  • Importation of safe, less costly prescription drugs from Canada,
  • Medicare negotiating for lower priced prescription drugs,
  • Elimination of pre-existing medical conditions preventing switching of Medicare Medigap and Medicare Advantage insurance plan,
  • Elimination of the Medicare’s 3-day inpatient rule to be eligible for skilled nursing facility services.

Click here to read the NRLN Talking Points on these issues used by conference attendees in their Capitol Hill meetings. Folders containing executive summaries of NRLN position papers and testimonials by NRLN grassroots advocates on these issues were given at each meeting to Representatives, Senators and members of their staffs.

Each time we meet in Washington, DC we try to meet with federal agencies and to invite experts and leaders from other organizations to meet with us on topics akin to our legislative agenda and specific reasons for our trip there. On Monday, Feb. 2, George Washington University Professor Brian Briley reviewed findings of a study on the cost of Medicare Advantage plans compared with traditional Medicare costs across the U.S. and provided us with the data package he prepared for the Commonwealth Fund that commissioned the study.
Also, the Chairman of RxRights, Lee Graczyk, shared his views on prescription drug importation from Canada and the need for legislation that would authorize Medicare competitive bidding on prescription drugs. Lee joined NRLN participants in meetings with Senators John McCain (AZ) and Amy Klobuchar (MN) who recently introduced S.122 calling for importation from Canada. NRLN supported that introduction and is actively encouraging introduction of a House companion bill and bills calling for competitive bidding.
On Wednesday, Feb. 3, we met with the Department of Labor’s Employee Benefits Security Administration (EBSA) to discuss pension plan derisking, in particular lump-sum pension buyouts.
The Lucent Retiree Organization (LRO) led a discussion regarding the lack of specific disclosure requirements to fully explain the considerations for accepting or rejecting a lump sum offer and the consequences that need to be considered. Leaders from the National Chrysler Retirement Organization (NCRO) and the General Motors Retirees Chapter (GMRC) were active in sharing experiences and supported the need for objective disclosure so plan participants can make the right decision for themselves.

EBSA had no specific disclosure guidelines to offer and were not anxious to take action but made suggestions about what we might do to inform LRO and other members of NRLN associations, chapters and at-large members. We mentioned we had produced a two-page summary of information provided to General Motors retirees. EBSA officials asked us for a copy of that document, which we sent to them following our meeting.

We should be grateful to those who endured snowstorms and transportation delays to make it to Washington, DC. Moreover, those who prepare well and spend valuable time for us every week deserve our support and need us to respond to NRLN requests to email letters to members of Congress.

A more in depth report on our conference will be covered in the upcoming NRLN FOCUS newsletter. Click here to view a few photos from the conference.


Gains with Our Game Plan

This time of year I know many NRLN grassroots advocates are watching the National Football League playoffs leading up to the Super Bowl. You regularly hear football coaches and players say, “We are going to stay with our game plan.” I often watch a team keep using a running play that is stopped for no yards. Or the quarterback keeps throwing passes that are incomplete.  I wonder, “Why do they keep running that play?” But eventually a running play results in a large gain, or a pass is completed for a touchdown.

The NRLN’s efforts to get bills introduced in Congress and passed is a lot like running an offense in a football game. The NRLN’s Legislative Affairs Committee develops our agenda and researches bills that are introduced. The Legislative Action Planning Committee determines the bills we will support and actions necessary to advocate them (i.e. our game plan). The Grassroots Committee is our offense, engaging the NRLN team to lobby members of Congress.

We have had some big gains already during this new 114th Congress season on the playing field known as Capitol Hill.
The Medicare Prescription Drug Price Negotiation Act (S. 31) has been reintroduced from the 113th Congress by Minnesota Senator Amy Klobuchar. The bill would empower Medicare to negotiate for the best possible price of prescription medication for America’s seniors who are enrolled in Medicare Part D. Current law only allows for bargaining by pharmaceutical companies and bans Medicare from doing so.
The bill would help cut costs for more than 37 million seniors and boost Medicare savings. S. 31 would allow the Secretary of Health and Human Services (HHS) to directly negotiate with drug companies for price discounts for the Medicare Prescription Drug Program, eliminating the “non-interference” clause that expressly bans Medicare from negotiating for the best possible prices even though the government can often negotiate bigger discounts than insurance companies.
Senator Klobuchar has joined with Arizona Senator John McCain to reintroduce the Safe and Affordable Drugs from Canada Act (S. 122). The bill would allow individuals to import safe prescription drugs from Canada. This bill would create major savings for consumers, especially retirees on fixed incomes, and bring greater competition into America’s pharmaceutical market.

In 2013, average prescription drug prices were twice as expensive in the United States as they were in Canada. The high costs in the USA causes some Americans to have to choose between paying for food or housing,  skipping doses of medicines, or forgoing filling important prescriptions.

Although the NRLN would prefer to have importation of prescription drugs open to all countries that meet the FDA’s safety standards, passage of S. 122 would be a positive step forward. 
We are now directing our efforts to getting companion bills to S. 31 and S. 122 introduced in the U.S. House.  This will be a key objectives of the NRLN, retiree associations and chapter leaders who will have appointments on Capitol Hill during the NRLN’s Annual Leadership Conference Feb. 2 – 4.
Another issue we have been advocating is legislation to prevent the practice by brand name drug companies of providing payments to generic drug makers to keep generic drugs off the market for a period of time.  This despicable practice is known as pay-for-delay.
Louisiana Senator David Vitter has introduced the FAIR Generics Act (S. 131). The bill would curb the growing prices consumers are paying for prescriptions by removing incentives to enter into pay-for-delay patent settlements between brand and generic pharmaceutical manufacturers.  Pay-for-delay settlements cost American consumers and taxpayers billions of dollars.
During the past 113th Congress, Senator Klobuchar had introduced the Preserve Access to Affordable Generics Act (S.214) that would put an end to brand-name drug firms using pay-for-delay agreements to keep generic equivalents off the market. We are attempting to learn whether Senator Klobuchar will reintroduce her bill in the 114th Congress. If so, we will compare Senator Vitter’s and Senator Klobuchar’s bills and determine whether we will support one or both bills.
Our game plan to continue to advocate the need for legislation to reduce the cost of prescription drugs has covered a lot of ground, but we need “touchdowns” with the enactment of these bills.
The NRLN’s 2015 Legislative Agenda (i.e. our playbook) is now posted on the NRLN website. You can read it by going to www.nrln.org and clicking on the “Legislative Agenda” link at the top of the home page.


NRLN Launches American Retirees Education Foundation

I want you to be aware that the National Retiree Legislative Network (NRLN) has filed Articles of Incorporation for the formation of the American Retirees Education Foundation (AREF), a 501(c)(3) tax-exempt organization, in case you did not read the AREF article in the fall NRLN FOCUS newsletter.

We created the AREF so it could solicit tax-deductible funds from concerned individuals, national foundations and other advocacy organizations to do the important work of developing, publishing, and distributing policy research and training materials. Although AREF cannot lobby Congress on particular bills, it can play a critical role in developing policy changes and educating members of Congress by, for example, publishing whitepapers and convening policy briefings and public events. . It can also teach retirees how to advocate for specific issues and can train retirees who attend fly-ins.

Authorized by the NRLN Board, the AREF’s mission is to research, educate and inform retirees, future retirees and the general public on how best to protect and promote retirement income security and retiree health care. The Foundation will develop and advocate policy recommendations based on its research findings to relevant constituency groups, the media, the general public, and federal and state policymakers. As an educational non-profit, the AREF is not allowed to lobby members of Congress, their staffs or Congressional Committees.

In addition to individual contributions, the AREF will use a subscription to a database service to search thousands of foundations to determine which ones have the greatest potential of accepting a grant proposal. Michael Calabrese, NRLN Legislative Adviser, who wrote the AREF Articles of Incorporation, will partner with Marta Bascom, NRLN Executive Director, to research and write grant proposals.

I will serve as Chairman and President of the AREF. Board of Directors for the AREF include: Bob Tompkins, NRLN Vice President / Secretary-Treasurer, will serve in the same capacity for the AREF; Ed Beltram, NRLN Vice President – Communications, will have a similar role for the AREF, as will Bob Martina, NRLN Vice President – Grassroots.

The NRLN will be able to intensify lobbying for our retiree protection agenda in all 50 states and in Washington, D.C., if we have the extra support of the AREF for research, publication and distribution to all retirees. A number of active bills now support some of our proposals but we need more bills introduced and we need to expand our lobbying presence. We will be better prepared to move fast when Congress becomes more active.

In early December, the AREF will make an appeal to NRLN grassroots advocates for tax-deductible contributions that can apply to 2014 tax returns. This appeal is very much needed to support the AREF startup or plug the gap until our search for third party foundation and trust income pays off.

Your NRLN Board of Directors is thankful for your financial support and we hope you will consider an appeal to help get AREF off and running not as an imposition but as a tax-deductible opportunity that will add strength needed to boost overall progress and that will benefit all NRLN associations, chapters and individual members. Visit the initial version of the AREF website at www.SeniorsAREF.org.


A New Opportunity to Work with Congress

As you know, on Election Day, Republicans won control of the U.S. Senate, winning a net gain of at least 10 seats for a majority of 52 with races in Alaska and Louisiana races still to be determined. Republicans also increased their majority in the U.S. House and, when all votes are counted, will have close to 245 of the 345 seats, the largest Republican majority in the House since the Truman administration in the late 1940s and early 1950s.

For the sake of our nation, the NRLN hopes that the change in Congress will result in the two parties working together for the benefit of all Americans.

We are fortunate to have been lobbying our whitepaper proposals to Democrats and Republican alike and in several cases both Democrats and Republicans have cosponsored bills that support our positions. Of course, there are no guarantees that Congress will be in a cooperative mood to support retiree legislation but we are ready to move forward on policies which support retirees and hope they are as well.

The NRLN will be working to get bills its supports out of committees and passed prior to the conclusion of the 113th Congress at the end of this year. Among the bills the NRLN has been advocating that have been bottled up in committees are:

  • H.R. 1102 and S. 117, The Medicare Prescription Drug Price Negotiation Act would direct the Secretary of Health and Human Services (HHS) to negotiate with pharmaceutical manufacturers the prices that may be charged to Medicare Part D prescription drug plan sponsors and Medicare Advantage organizations for covered Part D drugs. This would mean more affordable prescription drugs for seniors and would save Medicare up to $156 billion over the next 10 years.
  • S.214, Preserve Access to Affordable Generics Preserve would put an end to the practice of brand-name drug manufacturers using “pay-for-delay” to postpone less expensive medicines coming to the market.
  • H.R. 3715, The Personal Drug Importation Fairness Act of 2013 would give Americans access to imported, safe, lower priced prescription drugs.
  • S. 2087, The “Medicare Protection Act would amend the Congressional Budget Act (Rep. Paul Ryan Act) and would express the sense of the Senate that, (1) the Medicare eligibility age should not be increased and (2) the Medicare program should not be privatized and insurers should not be subsidized with “premium support” (vouchers) pass-through payments.
  • H.R. 3531, The Creating Access to Rehabilitation for Every Senior (CARES) Act. This bipartisan bill would eliminate the three-day "inpatient" hospital stay requirement for Medicare beneficiaries who are in need of skilled nursing facility (SNF) services, thus not requiring a patient to be hospitalized prior to receiving SNF services. This would save Medicare the hospital costs.
  • There are two other bills on this issue that would be acceptable to the NRLN if passed. H.R.1179 and S. 569, The Improving Access to Medicare Coverage Act would count being in a hospital for "observation" toward satisfying the "inpatient" requirement for Medicare to cover SNF services. However, it does not eliminate the hospitalization requirement as H.R. 3531 does.

With the party leadership changes, these bills are very unlikely to be passed during the “lame duck” session this year. We will work to get the bills reintroduced in the new 114th Congress and continue to advocate for their passage. Also, we lobby daily for the introduction of new bills that would support our bankruptcy reform, de-risking, back door reversions, Social Security and other income security proposals.

With the Republicans in the majority in the House and Senate when the 114th Congress convenes, the NRLN will be vigilant in case some Republicans again introduce legislation to privatize Social Security and convert Medicare to a voucher plan.

There have been reports in the news media quoting Republicans, Democrats and President Obama about working better together. The NRLN intends to be there to present them with proposals to give them the opportunity to work together to protect retirement income security and reduce the cost of health care—particularly the cost of prescription drugs.

The NRLN will be asking you to respond to our Action Alerts and communicate with your members of Congress in other ways on these issues in order to demonstrate to them you expect them to work on your behalf.


NRLN Scores Major Pension Plan De-risking Gain

The Pension Benefit Guarantee Corporation (PBGC), insurers of retiree defined benefit pension plans, has announced that it intends to hold plan sponsors, such as AT&T and Verizon, responsible for “certain undertakings” to cash-out or annuitize benefits for specific groups of employees under defined benefit pension plans.

The NRLN has been meeting with members of Congress and the PBGC seeking legislation but also PBGC policy changes and regulation changes (through our VP Regulatory Affairs) that would protect retirees in de-risking and bankruptcy situations.

Earlier this week, your NRLN Association and Chapter leaders plus grassroots members from key U.S. Congressional Districts came together at the NRLN’s annual Fly-In in Washington D.C. We reviewed PBGC’s practices with the agency’s Participants and Plan Sponsor Advocate who reports to the PBGC’s governing board and Congress. We had a dialogue with the Pension Rights Center’s Executive Vice President and Policy Director. Then a day and a half was spent in 36 separate meeting with staffs of members of Congress.

When the General Motors de-risking was announced, the NRLN objected to lump sum offers that always leave pension plans weaker for those who do not accept lump sums. After the Verizon de-risking announcement we added our objection and called for policy change to stop selective inclusion rights for annuities that would deny all plan participants the same choices.

The PBGC has now stated in a filing published in the Federal Register it would require reporting “certain undertakings” regarding lump-sum distributions or annuitized benefits for specific groups of employees. This reporting will be a part of the PBGC 2015 premium filing procedures. The PBGC referred to the inequities these changes can create and that “Some pension rights advocates raised concerns…” Click here to read an Oct. 2 article. The NRLN has been a leader of this effort to urge the PBGC to step in to help AT&T, Alcatel-Lucent and Verizon and all other U.S. retirees over the past two years.

While it is unclear what PBGC’s enforcement authority will be, we are very pleased with this progress and will be using this proposed policy change as leverage on Capitol Hill to persuade members of Congress to enact even better protection for retirees’ pension plans.

We are continuing to work on a comprehensive proposal that includes all of our de-risking and bankruptcy reforms.

Bill Kadereit, President
National Retiree Legislative Network


NRLN’s Advocacy and Curtis Kennedy’s Litigation

Corporations use acquisitions, mergers, spinoffs of corporate divisions and subsidiaries sometimes acquired by foreign companies in order to restructure businesses. Loss of retiree benefits can occur as a result of restructuring and usually is severe if the successor organization goes bankrupt. The NRLN is advocating to Congress and federal agencies the need for legislation and regulatory action to protect retirees in these cases.

Curtis Kennedy, a Denver attorney who has represented US West/Qwest/CenturyLink retirees in litigations, has pursued a legal remedy at the Fifth District U.S. Court of Appeals in New Orleans for 2,750 Verizon retirees who were involuntarily transferred to a spin-off company that has since gone through two bankruptcies.

We in the NRLN have been party to the formation and ongoing efforts of retiree associations and individual members faced with mergers, acquisitions, spinoffs, divestitures and bankruptcy court decisions. Starting in 2009, retirees from Delta Air Lines, Kodak, Chrysler, General Motors, Delphi, American Airlines and others have suffered through bankruptcies.

The NRLN has met with members of Congress, the Department of Labor’ (DOL) and its Employee Benefit Services Administration (EBSA) staff and Pension Benefit Guaranty Corporation (PBGC) officials on several occasions to persuade them to take legislative and regulatory action that would protect retirees. We have recommended changes for legislation, regulatory reform and stepped-up enforcement:

  1. Congress needs to clarify that the PBGC has the authority to enforce a lien against all U.S.-based assets of the parent company of a foreign-owned plan sponsor.
  2. The Department of Labor should revise its regulations related to breaches of fiduciary duty to clarify that fiduciaries under ERISA – contributing sponsors and “named fiduciaries” – must be subject to the jurisdiction of federal district courts and fiduciaries for Americans’ pension plans should be American citizens.
  3. Congress should expand the events that trigger immediate liability for pension underfunding, calculated on a termination basis, to include spin-offs, control group break-ups and takeovers by foreign firms that transfer more than 20% of a firm’s under-funded plan liabilities, or which transfer more than 20% of the plan sponsor’s assets or revenues without obligation for funding plan liabilities.
  4. The PBGC should add foreign ownership, and proposed sales or spin-offs to foreign owners, along with such transactions among U.S. corporations, to the list of transactions triggering special scrutiny.
  5. The NRLN is advocating eight bankruptcy reform proposals to protect retirees. The bottom line of the proposals is that legislation is needed so retirees’ pensions and benefits are obligations that corporations can’t eliminate in the bankruptcy process.

Please read the report below by Curtis Kennedy to U S WEST/Qwest/CenturyLink retirees. Verizon retiree plaintiffs are well represented and their attorneys in this case are moving forward with enthusiasm.

While the NRLN is not certain if legal action against Verizon will result in a favorable outcome for retirees, we are certain that if the courts do not favor retirees then laws must change or corporate decision makers never will protect pension plan participants. More information on the advocacy issues above can be accessed at www.nrln.org in the Legislative Action link.

Your NRLN association and chapter leaders will be meeting in Washington, D.C. on September 29 – October 1 with members of Congress, federal agencies, and members of a coalition we have formed on the subjects of pension plan security and the reduction of health care costs.

Bill Kadereit, President
National Retiree Legislative Network


Curtis Kennedy’s Report

The US WEST/Qwest/CenturyLink group of retirees (with the exception of the especially protected Pre-1991 Retirees and the 1992 ERO Retirees) has become accustomed to corporations legally getting away with abandoning prior promises to pay retirees lifetime health care and expected life insurance benefits. Now, the battleground is to fight against pension plan fiduciaries within a corporation who choose to serve the interests of the corporation and not look out for the best interests of retirees.

One such situation occurred when Verizon decided to spin-off a group of retirees, simply in order to enhance shareholder value. This case concerns Murphy v. Verizon, a class action fighting for the rights of 2,750 retirees who were surreptitiously and involuntarily transferred against their best interests into a spin-off company which, since the spin-off occurred, has gone through two bankruptcies. In general, the Murphy defendants' position is that all of the challenged misconduct involving the erstwhile spinoff is immune from legal attack under ERISA, i.e., the defendants contend that all of the activity concerns 'settlor conduct', none of which is either governed by or prohibited by ERISA law.

There are many novel legal issues and claims raised by the Murphy class of retirees. As noted, by Verizon's team of legal counsel at the beginning of their appellate brief, success on the part of the retirees will have far reaching implications throughout corporate America.

After countless hours of preparation, and receiving invaluable very productive guidance from my co-counsel for the retirees in the Murphy case, Attorney Bob Goodman of Dallas, Texas, I conducted the oral argument/presentation last Thursday, September 4, at the Fifth Circuit Court of Appeals in New Orleans before Judge King, Judge Higginson and Judge Graves. Judge Graves called the case, and you will hear his voice at the beginning of the tape recording.

Please click here to hear the recording.

After my initial 15 minute argument, counsel for Verizon argued for 13 minutes. Then, counsel for Idearc/SuperMedia/Dex One argued for a total of 7 minutes. Then, I was allowed to make rebuttal argument for 5 minutes.

As I expected, Judge King, the one judge on the panel having the most ERISA law experience, asked some probing questions. And, surprisingly, Judge Graves, the newest judge appointed to the court, asked a few questions.

Overall, I believe I gained solid ground at oral argument. There should be a comprehensive written decision issued by the three judge appellate panel within 3 to 4 months.

Curtis
CurtisLKennedy@aol.com
303-770-0440


We’ve Made Significant Progress with Congress

With Congress on its annual August Recess, I thought this would be a good time for me to evaluate where the National Retiree Legislative Network stands with its efforts to gain legislation on retirement income security and reduce the cost of health care. This has been a concerted effort by the NRLN Board, the Legislative Affairs Committee, Grassroots Committee, Washington D.C. staff, Region, State and Congressional District Leaders and you, our grassroots advocates who send letters and make calls to members of Congress in support of bills in accord with the top priorities in our Legislative Agenda.

Nothing comes easy when dealing with Congress. However, our persistence in communicating the needs of retirees and future retirees has influenced Representatives and Senators to introduce a number of bills in line with what we have been advocating. Your letters, phone calls, visits to local offices, face-to-face meetings on Capitol Hill during NRLN Fly-Ins, and the day-by-day lobbying by our Executive Director and Legislative Adviser has resulted in significant progress.

Here is my perspective on bills in Congressional committees that are aligned with what we have been advocating.

Prescription Drugs

In the House, H.R. 3715,”The Personal Drug Importation Fairness Act of 2013”, would give Americans access to safe, reasonably-priced prescription drugs by allowing for the personal importation and re-importation of prescription drugs from countries with safety standards that are at least as strong as those of the United States. We are working to get key Senators to introduce a companion bill to H.R. 3715 in the Senate.

Bills in the Senate, S.117, and in the House, H.R.1102, - both entitled “The Medicare Prescription Drug Price Negotiation Act” - would direct the Secretary of Health and Human Services (HHS) to negotiate with pharmaceutical manufacturers the prices that may be charged to Medicare Part D prescription drug plan sponsors and Medicare Advantage companies for covered Part D drugs.

S.214, “The Preserve Access to Affordable Generics Act”, would help put an end to the practice of brand-name drug manufacturers using pay-for-delay agreements to keep more affordable generic equivalents out of the market and help make sure consumers have access to the cost-saving generic drugs they need. Work continues to get a companion bill introduced in the House.

H.R. 2845, “The Diabetic Testing Supply Access Act”, would deny the Secretary of Health and Human Services (HHS) authority to restrict or eliminate a Medicare beneficiary's option of electing to have diabetic testing supplies delivered to him or her by retail community pharmacies regardless of delivery method (except by mail). This includes pharmacies that contract with a long-term care facility, assisted living facility, group home, or other type of residential setting recognized by the state.

Protecting Medicare

S. 2087, the “Medicare Protection Act”, would amend the Congressional Budget Act to define any provision included in reconciliation legislation that makes changes to Medicare to reduce or eliminate guaranteed benefits or restrict eligibility criteria as extraneous and an inappropriate use of the reconciliation process. The bill would also express the sense of the Senate that,

  • (1) the Medicare eligibility age should not be increased and
  • (2) the Medicare program should not be privatized or turned into a voucher system. The NRLN has opposed Rep. Paul Ryan's proposal to eliminate the traditional Medicare program for Americans now under age 54 and younger and replace traditional Medicare with a “premium support” payment (voucher) to purchase private insurance. This would push more costs onto seniors and increase the risk that Medicare becomes unaffordable over time.

H.R. 2504 and S.1332 - both entitled “The Home Health Care Planning Improvement Act” - would allow payment for home health services to Medicare beneficiaries by:

  • 1) a nurse practitioner,
  • (2) a clinical nurse specialist working in collaboration with a physician in accordance with state law,
  • (3) a certified nurse-midwife, or
  • (4) a physician assistant under a physician's supervision.

These are common-sense bills which would reduce unnecessary burdens on health care providers and patients in need of home health services.

Medicare’s 3-Day Inpatient Rule

There are three bills with bipartisan support in Congressional committees that we have advocated to address the 3-day hospital stay requirement as an “inpatient” for Medicare beneficiaries to be eligible to receive skilled nursing facility (SNF) services.

The NRLN prefers the passage of H.R. 3531, “The Creating Access to Rehabilitation for Every Senior (CARES) Act.” This bipartisan bill would eliminate the 3-day "inpatient" hospital stay requirement for Medicare beneficiaries who are in need of SNF services, thus not requiring a patient to be hospitalized prior to receiving SNF services. This would save Medicare the hospital costs.

H.R. 1179 and S. 569 - both entitled “The Improving Access to Medicare Coverage Act” - would count being in a hospital for "observation" toward satisfying the "inpatient" requirement for Medicare to cover SNF services. However, unlike H.R. 3531, it does not eliminate the hospitalization requirement.

Retirement Income Security

The NRLN’s opposition to changing the formula for the Social Security Cost of Living Allowance (COLA) to the proposed Chained CPI (would have lowered COLAs) influenced Congress and President Obama to drop this CPI proposal.

Congress needs to address the Social Security funding gap through modest increases in the payroll tax and temporarily suspending the ceiling on earnings that can be taxed until the trust funds are actuarially funded. Trust funds should be held in a “lock box” that Congress can’t access to spend elsewhere.

S. 2418, “The Bankruptcy Fairness and Employee Benefits Protection Act”, includes several provisions advocated in the NRLN’s white paper on Bankruptcy Reform. For example, the bill would establish Health Coverage Tax Credit (HCTC) payments as a permanent benefit for those who lose health care due a corporate bankruptcy. In late 2010 and during the summer of 2011, NRLN Action Alerts resulted in more than 17,500 emails being sent to members of Congress supporting the extension of HCTC to help offset the cost of monthly health care premiums to retirees ages 55 to 64 (pre-Medicare eligibility) whose health care benefits were reduced or eliminated in bankruptcy proceedings.

This consistent pressure on legislators resulted in a compromise whereby the HCTC tax credit for all eligible recipients was increased from 65% to 72.5%, with the increase being retroactive to February 13, 2011. The higher tax credit continued until the end of 2013 and then reverted back to the 65%.

We have more work to do on S. 2418 for more comprehensive reforms through additional joint meetings with the House and Senate Judiciary staffs. We believe the bill addresses some issues but falls short of protections needed as we saw from the experiences of our Kodak, Delphi, GM and Chrysler retiree members during those companies’ bankruptcies. Without full judiciary committee support on both sides of the aisle, bills protecting retiree benefits in corporate bankruptcies do not stand much of a chance for passage by Congress.

More Work Ahead

We still have more work ahead to convince members of Congress to introduce – and to pass! – bills which would address the protection of pension assets. Our July 27th Action Alert and our Congressional August Recess Initiative are directed toward urging Representatives and Senators to produce bills in four areas:

The NRLN has been successful so far but needs your continued support to persuade Congress to:

  • (1) Stop the use of pension assets for non-pension expense,
  • (2) Require the PBGC to ensure equitable calculations of benefit payments earned by retirees, as required by ERISA,
  • (3) Protect retirees when a pension plan sponsor does de-risking, converting pensions to annuities, and
  • (4) Require more disclosures to retirees in their pension plan Annual Funding Notice. In addition to lobbying members of Congress, we are also meeting with the Departments of Labor, Treasury and other federal agencies through our Regulatory Affairs Vice President, in pursuit of relief.

With respect to retiree health care, Medicare participants may be denied coverage or held hostage to higher premiums for their Medicare supplement (Medigap) plans or their Medicare Advantage plans due to a pre-existing medical condition. The Affordable Care Act (ACA) prevents insurers from denying coverage to all Americans under age 65 due to a pre-existing medical condition – but this protection does not apply to folks age 65 and older. The NRLN is advocating the same for those over age 65.

Keep in mind that the ACA also imposes out-of-pocket cost limits for retirees under 65 but not for those over 65. The NRLN is advocating for out-of-pocket limits for those on Medicare. Insurers are required to spend 85% of Medicare Advantage (MA) premiums on the cost of health care but Medigap (Medicare supplement) plans spend only 65-70%. MA plans set lower “community-rated” premiums but most Medigap plans are “age-rated” (rate change due to age and cost change). The NRLN is advocating that Medigap plans pay-out 85% and insurers set “community-rated” Medigap premiums.

Your Continued Support Is Essential

With your continued support and the dedicated work of our volunteers and the NRLN staff, we continue to do our best to get the pending bills out of committee, passed by the House and Senate and the signed into law by the President.

It’s all important to you as retirees, it’s important to me and our volunteers as retirees, and to our children and grandchildren as future retirees. We’re all the NRLN.

Many thanks to you for your work and support.


Concerns Raised with Treasury on Pension De-risking

Over the last two years, the NRLN has been working in Washington, D.C. on getting the federal government to establish rules to protect pension plan participants in the efforts by plan sponsors to eliminate their obligations to retirees without having to formally terminate the pension plan as prescribed by ERISA. In de-risking, as it is called, plan sponsors have been offering lump-sum payments to plan participants before purchasing an annuity (as in the case of General Motors), or even more troubling, taking select groups from the plan and forcing them to accept an annuity from an insurance company and losing PBGC protection (Verizon). In these cases, retirees have already been in pension pay status, having made their financial plans years before now.

Our staff and several members of the NRLN Board, myself included, have been meeting with the agencies in Washington charged with implementing ERISA and part of the governance of the PBGC. Our latest meeting took place on July 9th at the Department of the Treasury. We met with Mark Iwry, Senior Advisor to the Secretary of the Treasury and Deputy Assistant Secretary (Tax Policy) for Retirement and Health Policy, and with Treasury’s Benefits Tax Counsel, George Bostick.

The NRLN raised the concern that de-risking is happening without any rules or regulations to protect plan participants, especially in cases where they have no choice but to be ejected from the pension plan and its ERISA protections.

The response from Mr. Iwry and Mr. Bostick was consistent with what we’ve heard from the Department of Labor, which is that, while Treasury is very concerned about the effects of de-risking on plan participants, they do not have the legal ability to prevent them. They noted that these types of transfers have been done in the past, but the new phenomenon is that it is occurring to participants who are already in pension pay status.

As to the issue of the Private Letter Rulings that companies ask for prior to de-risking, the Treasury officials noted that the companies are not required to get them in order to proceed, and that the letters are very limited in scope in that they only address the specific questions asked by the plan sponsors. They are not intended by the government to be construed as giving plan sponsors permission to proceed, though companies may make statements with the intent of implying government endorsement.

Both the NRLN and the officials at Treasury committed to working together to find the right approach by which the government can move to protect retirees in these cases before more and more plan sponsors continue to de-risk and jeopardize retirees’ financial security.

In parallel with our Treasury discussions, we have met with the Department of Labor’s Employee Benefit Services Administration (EBSA) and have requested that both the Senate (Health Education, Labor and Pensions (H.E.L.P.) and House Education and Workforce committees commission a thorough investigation into the need for changes to ERISA that would force equitable protection for retirees in pension pay status and all future retiree affected by de-risking.

Bill Kadereit, President
National Retiree Legislative Network


Aging of Americans Increases Retirement Security Crisis

If you have ever doubted the need for the National Retiree Legislative Network (NRLN) to place so much emphasis on the protection of Income Security (including Social Security) and Health Care Security (including Medicare) along with the need to reduce health care costs overall, I urge you to read this message.

First, I want to share with you some data a New York Times article cited that is in a recent report published by the U.S. Census Bureau:

  1. The number of Americans age 65 and older is expected to nearly double by the middle of this century, making up more than 20 percent of our nation’s population.
  2. By 2050, 83.7 million Americans will be 65 or older, compared with 43.1 million in 2012. Fewer than 10 percent were older than 65 in 1970.

Economists worry about something called the economic dependency ratio - the number of people over age 65 to 100 working-age people. The U.S. Census Bureau projects that the ratio will jump sharply: - It projects that this ratio will grow from 22 in 2010 to 35 by 2030, a 59 percent increase over 20 years.

Americans who were 65 in 1972 could expect to live 15.2 more years; in 2010, they were expected to live 19.1 more years, according to the Census Bureau. The unisex mortality table used by Social Security and company pension plan actuaries is revised every 10 years - the next revision will be effective in 2016.

The article noted one sign that big changes are already underway. The Villages, a city in Central Florida with a large retirement community, was the nation’s fastest-growing metropolitan area from 2012 to 2013, according to the Census Bureau. At the NRLN’s Board of Director’s meeting next month in Washington, D.C. we will discuss the restructuring of our grassroots organization in Florida and the NRLN Florida Villages Chapter.

On June 24, 2014, MarketWatch reported that the PricewaterhouseCoopers’ (PWC) Health Research Institute published that medical costs will rise by 6.6 percent this year, 6.8 percent in 2015 and may be headed toward double digit increases again. These increases are the first since the downturn hit all sectors of the economy in 2009.

The PWC study shows that 26 percent of employer-sponsored plans would be high deductible plans this year, up from 8 percent in 2009 and that 44 percent of all employers are considering making high-deductible plans the only option for employees. Specialty drug spending which more than doubles every four years is expected to reach $192 billion in 2016, up from $87 billion in 2012 and climbing to over $401 billion by 2020.

With the demise of many employer-sponsored pension plans many more retirees are depending on Social Security, even though the program was not intended to be the major or only source of retirement income. Responses from NRLN grassroots advocates in our May 2014 survey stated that 24 percent receive half or more of their retirement income from Social Security. Forty-three percent receive 25 to 49 percent of their income from Social Security. Twenty percent stated they could not make it financially if their Social Security payment was reduced. Remember, most of them are retirees who are also receiving a company pension.

America does face a pending retirement security crisis prompted by low saving rates, the decline of traditional pensions and the high cost of health care. Who gets hurt the most if action to preserve income and reduce the cost of health care is not taken; us, our kids, our grandkids etc.? This is why the NRLN constantly lobbies Congress to protect Social Security and Medicare and to reduce the cost of health care, starting with prescription drugs. Also, these are the reasons why we regularly request that you write to your U.S. Representative and Senators about these important issues. Please help us help you!


NRLN Proposals Included in ERISA Advisory Council Report

The ERISA Advisory Council has made its annual report to Secretary of Labor Thomas E. Perez. Some of the NRLN proposals that I presented during my August 29, 2013 testimony to the Council are included as recommendations in their report to the Department of Labor.

The 15-member council advises the Secretary of Labor and submits recommendations regarding the Secretary’s functions under the Employee Retirement Income Security Act (ERISA). The present report examines Private Sector Pension De-risking and Participant Protections. The Council sought to identify particular concerns relating to current de-risking strategies that might warrant further guidance, clarification, or education, with particular emphasis on the impact that these strategies might have on pension plan participants and their retirement security.

The NRLN was an early advocate for regulations or legislation to protect retirees when a single-employer defined benefit pension plan sponsor does what is called de-risking, which is the purchase of an annuity from an insurance company, or pension plan participants accept a lump sum buyout offer.

De-risking really means that the “risk” is placed on the retirees because they lose the protection of ERISA and the Pension Benefit Guaranty Corporation (PBGC). In the case of a lump sum payment, responsibilities and risks associated with investing and managing the lump sum for retirement income fall to the individual. Lump sum payments save corporations millions of dollars. De-risking can happen to anyone currently getting a pension check. It recently happened to General Motors and Verizon retirees. On May 9, Alcatel-Lucent announced that in 2015 it would offer a lump sum pension buyout to 45,000 out of its 100,000 retirees, former employees and related beneficiaries.

Pensions Important to a Secure Retirement

Witnesses representing participants, including myself, said defined benefit plans play a meaningful role in enabling employees to realize a secure retirement. In combination with Social Security, defined benefit plans, as deferred compensation, have assisted retirees in maintaining a steady income level throughout their retirement without fear of outliving their assets.

The Council report noted from my testimony that a 2013 survey of National Retiree Legislative Network members indicated that 96% of those responding were extremely concerned about their financial security, especially in light of the increasing trend toward pension de-risking by plan sponsors. They are concerned that this trend will continue and accelerate the termination of defined benefit plans.

I and other retiree advocates stressed that where a pension plan participant is offered a choice between an annuity and a lump sum, it is of extreme importance that full and complete disclosure is provided to plan participants on the pros and cons of the choices they are being offered and adequate time to make this vitally important decision.

Thorough Disclosures Important in De-risking

The report cited the NRLN’s suggestion that the Department of Labor (DOL) clarify fiduciary responsibilities to include providing thorough plain English disclosures concerning the financial trade-offs, including tax consequences and the higher cost of purchasing an individual annuity contract

Among the recommendations made to the Council that were included in its report were these NRLN recommendations:

  • Require participant consent to an annuity distribution;
  • Require reinsurance for purchased annuity obligations, potentially from the PBGC;
  • Prohibit the offering of lump sum buy-outs to retired participant;
  • Issue guidance to clarify that any worsening of plan funding by virtue of de-risking is a fiduciary violation;
  • Disclosure of pros and cons of lump sum offerings including an explanation of interest, investment and longevity risks;
  • Disclose the fact that the PBGC is no longer insuring the pension.

There has been an increased level of activity by pension plan sponsors to terminate the plans in their entirety, or partially, in favor of the purchase of annuities and/or offer lump sum distributions to some or all of their plan participants. These participants can include both former employees with vested deferred benefits and retirees currently receiving pension distributions from the plan in the form of an annuity.

Plan Funding Following De-risking

A Treasury/IRS issue upon which the Council spent a considerable amount of time was the effect of the 80% funding rule on de-risking transactions. In particular, some Council members were concerned that the plan would end up funded below the 80% requirement after de-risking transactions. Some Council members pointed out that a pension plan sponsor usually makes additional contributions before a de-risking transaction to ensure that the plan remains above the 80% funding mark.

Josh Gotbaum, Director (CEO) of the PBGC, provided an important perspective on a number of the concerns noted by other witnesses. He observed that current rules appear to incent plans to de-risk and to do so disproportionately with lump sums because of a combination of regulatory hurdles and cost advantages. He suggested that lump sums are inappropriate for many participants, and likened pension plan lump-sum cash-outs to cigarettes: legal, liked, and bad for you. He also said that he would like to see fewer incentives for participants to choose lump sum distributions. One suggestion was less criticism of annuities, which might be (unintentionally) causing more individuals to elect a lump sum.

NRLN Won’t Rest on Council’s Recommendations

Although the witnesses’ input was heard by the Council and a number of their proposals included in its report, it does not mean our proposals will be accepted by the DOL. Giving testimony and having NRLN proposals included in the Council’s report is a positive step forward, but the NRLN will continue to lobby DOL and Congress to get de-risking protections written into regulations and/or statutes.

On May 13 and 14 a small group of NRLN and retiree association leaders met with the DOL Employee Benefit Service Administration (EBSA) and key members of congressional committees of jurisdiction in Washington, D.C. to advocate the NRLN’s proposals on de-risking and the need for more transparency in disclosures in pension plan Annual Funding Notices. A separate NRLN report on these meetings will be released to you after we complete follow up work that resulted from these discussions.

Health Care Costs Jump in 2013

A recent Reuter’s news article reported on a study by IMS Health Holdings, Inc. (IMS), a provider of data on prescription drug use and trends. IMS reported that in 2013 Americans spent more on health services on prescription drugs, reversing a recent downward trend. Adding to that study, a USA Today article cited data from the Bureau of Economic Analysis showing health care spending rose at a 5.6% annual rate in the last three months of 2013, the fastest pace in 10 years. This 5.6% health care spending rate accounted for nearly 25% of our economy’s 2.6% annual growth in the same period.

Increase in Spending on Prescription Drugs

The 5.6% change was a marked change from health care prices and spending in recent years. Spending on prescription drugs rose 3.2 percent to $329.2 billion. Although this was far less than the double-digit increases seen in previous decades, it was an increase from a 1 percent decline in 2012.

According to the IMS Health Holdings study, Americans who needed specialty drugs paid disproportionately more. Only 2.3 percent of prescriptions accounted for a whopping 30 percent of all out-of-pocket costs.

The increased spending on medicines in 2013 would have been higher except for Americans using cheaper generic drugs which edged up by 2 percent to 86 percent of all prescriptions filled in the USA. This was despite fewer major new generic drugs coming to the American market compared with 2012. With fewer patents expiring the next two years, the fall in drug inflation will be reversed.

Medicare Part D Has Reduced Hospital Admissions

A study at the University of Illinois and Johns Hopkins University showed that after Medicare Part D was implemented in 2006 for prescription drug coverage more seniors have been kept out of hospitals. The researchers found that drug coverage was associated with an 8 percent drop in hospital admissions and nearly as much in hospital-cost savings — an amount they calculate to be $1.5 billion a year.

Using More Health Care Services

Americans increased their use of health care services across the board in 2013, rises in doctor office visits, hospitalizations and the volume of prescriptions filled. Patients had more visits to medical specialists than primary care doctors for the first time.

Another factor helping to drive the increase in health care spending in the fourth quarter of 2013 was an $8 billion rise in hospital revenue. This is more than the previous four quarters combined.

NRLN Lobbying to Reduce Rx Costs

The NRLN’s legislative proposals to reduce prescription drug costs are: (1) Enable importation of safe prescription drugs; (2) Enable Medicare competitive bidding; (3) Fund the FDA to reduce generic drug approval backlogs; (4) Eliminate pay-for-delay payments from brand to generic drug makers.

Tell Your Lawmakers to Pass Rx Bills

The NRLN always needs the help of voters like you to deliver messages to members of Congress to offset the pressure they receive from over 1,000 industry lobbyists. I encourage you to go to the NRLN’s Action Alert at http://www.congressweb.com/NRLN and click on the “Write your Legislators” link to send the NRLN's sample letters to your members of Congress. Urge them to support getting prescription drug bills out of the U.S. Senate and House committees and passed in both chambers.

Bill Kadereit, President
National Retiree Legislative Network


Effort to Privatize Medicare a Disaster

On nearly a party line vote of 219-205 on April 10, the Republican majority in the U.S. House passed the fiscal year 2015 federal budget proposed by House Budget Committee Chairman Representative Paul Ryan (WI-01). All Democrats and 6 Republicans voted no. The bill outlines how to balance the budget in 10 years.

It also is the last straw, the one that would obliterate Medicare forever; a tragic deception that began during the 1990’s. The NRLN will soon publish a series of 2-3 informative messages on this subject.

Starting in 2024, under Congressman Ryan’s voucher subsidy plan, everyone turning 65 would choose between private insurance plans and traditional Medicare. Once there, they would receive a voucher from the federal government to purchase medical coverage from a private insurer in a public exchange, or to pay for traditional fee-for-service Medicare. Under the premium support, seniors would be given a fixed amount to buy insurance, but the individual would have to cover any difference between the subsidy and actual cost. That voucher would be the final giveaway to health care and pharmaceutical companies. The last straw of the biggest welfare scam, ever!

Privatization of Medicare Would Be a Disaster

A key question is how the voucher's value would be adjusted over time. Congressman Ryan says that his proposal still gives seniors the choice of remaining in regular Medicare. What he doesn’t say is that his plan would make Medicare so expensive that millions of seniors would likely be forced to switch into private plans. Our tax dollars will morph from support for Medicare to insurance and drug company giveaways.

NRLN Will Fight to Preserve Traditional Medicare

The NRLN will urge Senators not to pass the 2015 budget bill with the Medicare voucher plan included. It is always risky when a disastrous piece of legislation gets through one chamber of Congress. Even though conventional wisdom says this will never pass in the Senate, seniors can’t sit idly by and not pay attention to actions by their government. If the voucher plan somehow got passed by the Senate and the President signed the bill, Medicare as we know and value it today would be dead. When insurance companies get full control, the combined cost of premiums, deductibles, copays, and coinsurance is bound to increase, without any protections or recourse.

The NRLN supports a balanced budget but we believe it is imperative that Medicare be preserved for future generations and reject the assumption that “privatization” with government subsidies for insurance carriers will lower Medicare’s cost of health care. Medicare is the cornerstone for health care for Americans age 65 and older and we need to do everything we can to preserve the system in its traditional form.


America’s Middle Class Is Shrinking

Tens of millions of Americans took pride in being part our nation’s middle class and prepared to be self-sufficient in their retirement years. However, the middle class is shrinking and many retirees are struggling.

Mixed reports reflect bad news for American economy – the middle class has shrunk 4-8% since 2007. The most recent National Opinion Research Center’s General Social Survey found that the vast proportion of Americans who call themselves middle or working class is the lowest in the survey’s 40-year history. Although the middle class is still high at 88 percent, it has fallen 4 percentage points since the recession began in 2007.

A Pew Research Center study showed a little different data. Since 2008, the number of people who call themselves middle class has fallen by nearly a fifth, from 53 percent to 44 percent. Forty percent now identify as either lower-middle or lower-class compared with just 25 percent in February 2008.

According to a recent Gallup poll, the percentage of Americans who say they’re middle or upper-middle class fell 8 points between 2008 and 2012, to 55 percent.

Census Bureau data points to the recession and higher paying jobs that have been lost to outsourcing. Whichever middle class shrinkage study data that is applied, a key reason why more Americans no longer regard themselves as middle class is that the recession eliminated 8.7 million jobs. A disproportionate number were middle-income positions; some were outsourced. The percentage of households with income within 50 percent of the median – one way to define a broad middle class – fell from 50 percent in 1970 to 42 percent in 2010. Median household income, adjusted for inflation, hasn't budged since 1996, according to the Census Bureau.

Defined pension Cost Of Living Adjustments (COLAs) are a thing of the past and savings are down. Most retirees who are still fortunate enough to have a pension from their former employer have not had a cost of living adjustment (COLA) in decades. The COLAs for Social Security have been small. The NRLN opposed the proposal by some members of Congress and President Obama to change the Social Security formula for COLAs to the Chained CPI which would have lowered the size of future Social Security COLAs. Members of Congress and the President have, at least for now, dropped their Chained CPI proposals. Defined pensions are absolutely fixed and unless individuals have saved enough in IRA’s, 401ks, etc. total income is fixed for the majority.

Inflation has been reasonable BUT NOW reports reveal rapid increases in health care spending and costs. On April 1st USA TODAY reported that, while unemployment has come down to 6.7% from 8.5%, health care spending rose by 5.6% in the 4th quarter of 2013 according to the Bureau of Economic Analysis. Health care spending rose at the highest pace in 10 years! The USA TODAY article also reported that the Center for Medicare Services (CMS) expects health care spending to rise by 6.1% in 2014 compared with 4% in 2013.

What consumers pay for health care is on the rise. Expired drug patents have resulted in lower cost generic drugs and lower health care inflation. According to Capital Economics that trend will reverse over the next 2-years and that alone could push health care cost inflation back to 2.5% or.5% higher than forecast by the Federal Reserve.

The NRLN’s Income Security and Health Care Protection agenda that is relevant to these issues are:

  • Protect Social Security and Medicare benefits through modest increases in the payroll tax and temporarily suspending the ceiling on earnings that can be taxed until such time the trust funds are actuarially funded.
  • Protection of Pension Assets by stopping corporations from using pension assets for non-pension expenses and Protection of Retirees in Pension Plan De-risking when a plan sponsor converts its pension plan to an annuity from an insurance company.
  • Reduce the Cost of Prescription Drugs through legislation that (1) Enables importation of safe prescription drugs; (2) Enables Medicare to take competitive bids for prescription drugs; (3) Funds the FDA to reduce generic drug approval backlogs; (4) Prevents drug companies from colluding to control pricing.

For America to be strong we must have a large and stable middle class. With your support, the NRLN will continue to work to preserve retirement income and benefits.


NRLN Cites Important Medicare Changes

There are important changes to Medicare that most Medicare participants are probably not aware of and they may benefit from the actions by the Centers for Medicare and Medicaid Services (CMS) and Congress.

First, as the result of the settlement agreement of the Jimmo v. Sebelius (Secretary of Health and Human Services) lawsuit, the Medicare Benefits Policy Manual has been revised to no longer require “improvement is necessary” for Medicare to pay for skilled care. This means that Medicare now will pay for physical therapy, nursing care and other services for beneficiaries with chronic diseases like Multiple Sclerosis, Parkinson’s or Alzheimer’s disease and rehab therapy after joint replacements and other in-hospital corrective treatments. Prior to this change, these rehab benefits would be stopped once your physician could not prove the rehab services were resulting in continued improvement.

The settlement agreement applies to care from skilled professionals for physical, occupational or speech therapy, and home health and nursing care, for patients in both traditional Medicare and private Medicare Advantage plans.

NRLN Research Finds Medicare Changes

Medicare officials were required to communicate the change to health care providers, bill processors, auditors, Medicare Advantage plans, the 1-800-Medicare information line and appeals judges, but not Medicare beneficiaries. The NRLN endeavors to do its research on Medicare issues and learned about the change from a blog article in the New York Times.

It is unfortunate that CMS has not made an effort to do more to inform its Medicare participants about this significant change in policy that will benefit tens of thousands of older Americans.

The settlement establishes a special “re-review” procedure for claims that were denied in the past three years solely because patients were not improving or because their care was intended to maintain their condition.

Medicare has posted a form beneficiaries can use to request reimbursement if they paid for care themselves. The link to the form is https://www.q2a.com/Portals/0/JIMMO_REREVIEWFORM-508.pdf . The form must be submitted by July 23, 2014, for claims with a final denial dating from Jan. 18, 2011, through Jan. 24, 2013. Requests for review of denials received Jan. 25, 2013, through Jan. 23, 2014, are due Jan. 23, 2015. If the claim is denied again, a Medicare spokesman said, beneficiaries may appeal through the regular Medicare appeals process.

Congress Acts on Medicare Payments to Doctors

The other action regarding Medicare is that the U.S. House and Senate have passed legislation that prevents for another year a 24 percent cut in reimbursements to physicians under Medicare. The House passed the bill on a voice vote on Thursday night, March 27. The Senate took action on Monday night, March 31.

The temporary "doc fix" bill was the latest incarnation of a bill passed frequently by the House and Senate -- sometimes multiple times per year -- that avoids a sharp drop-off in Medicare payments to physicians who treat Medicare patients. Congress was up against a midnight March 31 deadline to either pass another “doc fix” bill to overhaul Medicare payments or see skyrocketing costs of doctors who treat Medicare patients.

This measure would stave off a $21 billion (24 percent) cut in Medicare reimbursements to doctors for a year and extend dozens of other expiring health care provisions such as higher payment rates for rural hospitals. The legislation is paid for by cuts to health care providers, but fully half of the cuts won't kick in for 10 years.

In 1997, Congress created the Sustainable Growth Rate, a system that pegged the amount of money budgeted for Medicare payments to projected growth of the economy. However, within a few years health-care costs far outpaced economic growth, creating a multibillion dollar shortfall in funding for Medicare payments. Since 2003, Congress has approved "doc fix" bills 17 times that appropriate more money to Medicare funding in order to avoid cuts in Medicare reimbursement rates for doctors.

President Obama is expected to sign the bill.

There's widespread agreement on bipartisan legislation to redesign the payment formula that would provide doctors 0.5 percent annual fee increases and implement reforms aimed at giving doctors incentives to provide less costly care. But there's no agreement on how to pay the approximately $140 billion cost of scrapping the old formula.

NRLN Has Lobbied for an Equitable Solution

The NRLN has consistently lobbied for an equitable solution to solve the problem rather than “doc fix” it every year. Each time the problem is “fixed” and not solved, the difference between the fix and the current year reduction is carried forward as a cumulative amount. For example, the 2014 $24 billion dollar fix was added to past fixes so that now the cumulative amount dodged by Congress is $140 billion.

We have taken the position that if Congress would stop subsidizing insurance companies and pass legislation mandating prescription drug competitive bidding and importation that these savings alone would more than pay for a permanent “doc fix”. Once again, party politics and cash campaign contributions are preventing solutions that would help retirees and all Americans and the balancing of the federal budget.


NRLN Pleased President Obama Drops Chained CPI Proposal

The NRLN was pleased to see news reports on that President Obama is dropping from his forthcoming 2015 federal budget proposals changing the Social Security cost of living formula to the Chained CPI. This is a victory for Social Security participants who would have suffered lower increases in their future COLAs.

The NRLN has lobbied consistently against switching to the Chained CPI. Over the next 10 years alone, the Chained CPI would take $112 billion directly out of the pockets of Social Security beneficiaries. Cuts would grow larger each year and push many of the oldest Americans into poverty. The COLA cut would reduce benefits by 3.7% after 10 years, 6.5% after 20 years and 9.2% after 30 years.

For typical seniors who retire at age 65, their Social Security benefits would be $1,000 less by the time they are 85, based on a benefit of just $16,000 a year. That would constitute an enormous loss of income for most retirees and become a further drain on the federal budget as this population becomes increasingly more reliant on public assistance.

On the tax side, the Chained CPI would likely draw more revenue. Tax brackets would rise more slowly than incomes, so seniors would fall into higher brackets more quickly with more income subject to taxation.

The Chained CPI proposal in President Obama’s 2014 budget but not acted on by Congress was a deceptive way to cut benefits for Social Security beneficiaries, many of whom are already living on the poverty line. Adopting the Chained CPI would have gone in the wrong direction. Most people who depend on Social Security devote a much larger share of their income to health care, and these costs are increasing at a much higher rate than other living costs.

The current CPI already understates the cost-of-living increases facing seniors because they spend more on medical care than the average American. In fact, the rate of inflation of health care has been more than double the total rate of inflation for several years and is projected to become much higher in coming years. The Chained CPI would present Social Security beneficiaries with a double hit—higher health care costs and deeper benefit cuts.

A White House spokesman said that the President is still open to the idea of including the Chained CPI if talks with Republicans resume on a long-term deficit-reduction plan.

The NRLN will continue to be vigilant and oppose any proposals by politicians that would reduce Social Security benefits or any other threat to retirement income security.

Bill Kadereit, President
National Retiree Legislative Network

Seniors Should Not Be Denied Medigap Insurance Policies

A reporter f


or The Morning Sun, a Michigan newspaper, recently interviewed Chuck Austin, the past president of the National Chrysler Retirement Organization and me for an article. The article focused on our concerns that Medigap health insurance policies that supplement Medicare do not have the same protection regarding pre-existing conditions that apply to other health insurance policies under the Affordable Care Act (referred to as Obamacare by the news media).

As you may know Medigap policies, depending on the type of plan, pay some or all of the costs not covered by Medicare. Many Medicare participants purchase Medigap policies to limit their out-of-pocket health costs.

Senior citizens can get Medigap insurance without respect to pre-existing conditions only in their first year of eligibility for Medicare. After that, if they choose to switch Medigap carriers, they can be rejected on the basis of pre-existing conditions. Also, if they elect coverage from a Medicare Advantage plan and later switch to Medicare, they can be denied the purchase of a Medigap plan due to a pre-existing condition.

Here are a few excerpts from the article:

Bill Kadereit, president of the National Retiree Legislative Network, said the implementation of the ACA [Affordable Care Act] has “amplified” the Medigap issue. The ACA was designed to exclude senior retirees, Kadereit said.

People are discovering this as they hear of non-seniors obtaining health insurance through the ACA without regard to pre-existing conditions. “Why not me if them?” they are asking, according to Kadereit. They wonder why they shouldn’t have the same protection.

“People who can least afford it can’t shop” for better Medigap rates, Kadereit said.

“I worked at Chrysler Corp. as a non-executive for nearly 40 years and retired in 2004,” Austin explains.

“When Chrysler canceled my healthcare and life insurance benefits, I, along with other retirees, founded the National Chrysler Retirement Organization. When Chrysler declared bankruptcy, I contacted GM, Ford, and Delphi retiree leaders, and organized meetings with the Federal Automotive Task Force to protect salaried retiree benefits.”

Austin’s favorite senior retiree group is NRLN. “The National Retirees Legislative Network, in my opinion is one of the very best for the following reasons:

  • “NRLN’s agenda includes healthcare, pension, Social Security, and Medicare issues. Most other organizations only follow some of these issues.
  • “NRLN is non-partisan, with members from both political parties.
  • “NRLN is actively seeking to form coalitions with other larger national organizations.

“I believe that all Americans need to rise above the partisan politics that currently exists in our country, and support policies that foster family and American values,” Austin says. “Today’s seniors have dedicated their lives to their jobs, family and country. Seniors supported their parents with Social Security and Medicare payments as well. Seniors earned their retirement income and benefits over their lifetime of work. Once retired seniors live on a fixed income, and cannot easily recover from cuts in benefits."

“It is immoral, in my opinion for former employers and the government to cut our benefits, except in cases of bankruptcy. Even then, if the employer recovers and becomes profitable, they should then reinstate any benefits taken from retirees.”

The NRLN’s 2014 Legislative Agenda advocates legislation to prevent Medicare participants from being denied Medigap coverage due to a pre-existing condition. Our Agenda states:

“…Medigap insurers may not allow retirees to buy into Medigap plans due to pre-existing medical conditions, many of which may have developed while covered by a Medicare Advantage plan, nor can retirees freely switch to plans annually. "

The Affordable Care Act established several rules for Medicare Advantage plans, with similar rules for plans through the new state insurance exchanges:

  • Pre-existing conditions cannot be considered when changing insurance during the annual enrollment period and
  • Community/regional versus age related policy pricing applies to all policies.

These same rules need to be applied to all Medigap polices which currently are governed by prior federal regulations. Currently, seniors cannot shop for lower priced Medigap plans without undergoing evaluation for pre-existing conditions. Consequently, seniors are effectively locked into increasingly more expensive policies.”

This is one of our top legislative initiatives for this year. During the NRLN’s Annual Leadership Conference February 3 – 5, NRLN members will lobby members of Congress to enact legislation to address this disservice to Medicare participants.

Bill Kadereit, President
National Retiree Legislative Network


NRLN Board Adopts 2014 Legislative Agenda and Top Lobbying Initiatives

The NRLN Board of Directors has adopted the NRLN 2014 Legislative Agenda and the Top Lobbying Initiatives.

I want to thank the members of the NRLN Legislative Affairs Committee for their work to gain input form the NRLN-affiliated retiree associations and chapters for the Legislative Agenda. The committee members are Judy Stenberg, Chair, AUSWR – Pension Equity Council OR/WA, Bob Martina, Lucent Retirees Organization, Deb Morrissett, National Chrysler Retirement Organization, and Ray Sternot, AT&T Ameritech/SBC Retirees.

Top Lobbying Initiatives continue to be retirement income security, including protecting Social Security, safeguarding Medicare, and reducing the cost of prescription drugs. I invite you to click here to read the 15-page Legislative Agenda on the NRLN website. If you do not have time to read it, I encourage you to click here to at least read the 3-page Top Lobbying Initiatives. If you have a problem with these links, go to www.nrln.org and click on the Legislative Action link (tab) near the top of the NRLN home page. Here is a summary of our Top Lobbying Initiatives:

  • Protect Social Security through legislation that addresses the long-term funding gap by modest increases in the payroll tax rate and increasing the cap on maximum wages subject to the tax. There is no need to reduce Social Security Cost of Living Allowances (COLAs), do means-testing or make other cuts in benefits. Social Security Trust assets should be insulated from access by Congress to cover other government spending.
  • Safeguard Medicare through legislation that increase the Medicare tax on workers and employers until the taxes again fund 60-65% of the Medicare budget. Set fair and equitable rate formulae for determining physician fees and make adjustments up or down annually.
  • Protect Pension Assets by stopping corporations from using pension assets for non-pension expenses.
  • Protect Retirees in Pension Plan Derisking when a plan sponsor converts its pension plan to an annuity from an insurance company.
  • Change Annual Funding Notices to provide pension plan participants a truer financial status of their pension plans.
  • Corporate Bankruptcy Reform so retirees' pensions and benefits are obligations companies can’t shed.
  • Pension Benefit Guaranty Corp. Reform to ensure equitable calculations of benefit payments to retirees.
  • Protection of Retirees in Mergers, Acquisitions & Spin-Offs by passing legislation that clarifies what a parent foreign owner’s pension plan obligations are and require that Plan fiduciaries should be American citizens.
  • Reduce the Cost of Prescription Drugs through legislation that
    1. Enables importation of safe prescription drugs;
    2. Enables Medicare to take competitive bids for prescription drugs;
    3. Funds the FDA to reduce generic drug approval backlogs;
    4. Prevents drug companies from colluding to control pricing.
  • Maintenance of Cost Protection through legislation to establish a fixed monthly payment to retirees equivalent to the value of the benefits an employer provided prior to the reduction or cancellation of retirement health care, prescription drugs, life insurance, long-term care or other benefits. Companies would receive tax credits that offset MCP payments.
  • Medigap Policies should have the same protections of Medicare Advantage and Affordable Care Act Policies. Specifically, pre-existing conditions should not be considered when changing insurance during the annual enrollment period. Also, community/regional pricing rather than age related policy pricing should apply.

Your help will be needed in 2014 to be an advocate for our Top Legislative Initiatives with your U.S. Representatives and Senators through NRLN Action Alert emails, making phone calls to their offices and visiting with your elected representatives when they are in their home states and districts. Your financial support of the NRLN through an Individual Membership contribution will also be important.

Bill Kadereit, NRLN President
National Retiree Legislative Network


ERISA Advisory Council’s Positive Decision

I have previously written in my messages regarding pension plan de-risking about the importance of coalitions to gain traction on actions in Washington, D.C. To that end, the NRLN is part of a coalition that urged the Employee Retirement Income Security Act (ERISA) Advisory Council to reject a recommendation by the American Benefits Council (ABC) to implement a lengthy rulemaking process by the Department of Labor (DOL) on pension plan de-risking. This process would only serve to delay any action on protecting plan participants from misinformation or the lack of appropriate information from plan sponsors which the DOL could implement through other means.

The coalition that included the NRLN, AARP, AFL-CIO and the Pension Rights Center stated in a joint letter to the Council that the ABC’s insistence upon formal rulemaking is, quite simply, a not-so-thinly veiled attempt to delay the issuance of guidance because of the lengthy duration of the rulemaking process, which can sometimes take years. The co-signed letter noted that pension plan sponsors who wish to move forward on de-risking can do so quickly. While the rulemaking process is taking place, most of the future de-risking transactions would have already taken place before any DOL guidance could be issued. As indicated in a recent survey by Mercer, pension de-risking is expected to accelerate, so the likelihood of more de-riskings in the near-future is a very real possibility.

The NRLN and its coalition partners advocated these points:

  • There is ample precedent for handling these kinds of issues in sub-regulatory guidance and therefore no justification to require the formal rulemaking process by the DOL.
  • To require formal notice-and-comment rulemaking in this context would be tantamount to recommending that DOL sit this out, because most of the de-risking would have already occurred by the time formal rules could be issued. “Sitting this out” is NOT what the Council appeared poised to recommend, so why weaken its recommendations by rendering them moot?
  • This would be a huge disservice to pension plan participants who are in need of basic protections in these transactions.
  • Besides, as several Council members commented in earlier meetings, having received the Council’s recommendations on WHAT it should do, it is for DOL to decide HOW to proceed.
  • They should NOT agree to ABC’s urging that the Council’s recommendations be subject to formal rulemaking procedures.

You may recall that I shared with you the testimony I presented on August 29th in Washington, D.C. at the ERISA Advisory Council’s hearing on Private Sector Pensions De-risking and Participant Protections. Our coalition partners were unified with the NRLN then and continue their advocacy with us now that pension plan de-risking shifts substantial risk to retirees and merits scrutiny from the Department of Labor. Prior to this hearing, 13 NRLN leaders and I were in Washington, D.C. on July 10th to advocate for regulations and legislation to protect retirees in de-risking. We presented the NRLN’s de-risking whitepaper at meetings with Assistant Secretary of Labor Phyllis Borzi, who heads the EBSA, and senior staff members of Congressional committees with jurisdiction over pension issues.

Although the Council’s recommendations to the DOL are not binding, the message to DOL is a step in the right direction. The NRLN will continue to do whatever it can to get regulatory and/or legislative action that will protect retirees in pension plan de-risking situations.

Bill Kadereit, President
National Retiree Legislative Network


Survey Further Validates NRLN Position on Social Security

The results of a survey of older Americans by the Associated Press-NORC Center for Public Affairs Research published on November 3, 2013 further validates the NRLN’s position on Social Security.

  • The poll found support among those 50 and older for raising the cap on earnings that are taxed to fund Social Security. The poll found that 61% of people favored raising the cap. Among Democrats, support was at 73%; among Republicans, it was 45%. The NRLN’s position has been that Congress should address any long-term Social Security funding gap by focusing on modest increases in the payroll tax rate (possibly between 0.5% and 1.5%) and increasing the cap on maximum wages subject to the tax until the Social Security Trust is again adequately funded actuarially. Currently, the cap is $113,700, meaning those earning more do not pay Social Security taxes on wages above that threshold.
  • The poll found passionate opposition (62%) to any change in the way Social Security benefits are calculated that could result in smaller annual raises. The NRLN opposes the Chained Consumer Price Index (CPI) method currently being proposed for calculating Cost of Living Adjustments (COLA). There have been no benefits added to the Social Security system, other than COLA, since 1961. The NRLN opposes any changes in the way the annual COLA is calculated, especially Chained CPI which is less accurate and would result in a reduction in benefits of 3.7% after 10 years, 6.5% after 20 years and 9.2% after 30 years. These cuts would push many of our oldest retirees, including salaried and former union represented retirees, into poverty.
  • Fifty-Eight percent, oppose gradually raising the age when retirees qualify for full benefits. The NRLN opposes raising the Social Security eligibility age. Current and past Administrations and Congresses have known for 30 years that the number of Social Security beneficiaries would double but did nothing to prepare since the last round of changes in 1983 when the Greenspan Commission gradually raised the eligibility for full benefits to age 67, in essence a spreading out of benefits. Spreading out the eligibility age limit was an insufficient action in 1983 and extending the eligibility age limit again would be insufficient and unfair to those who have paid mandatory Social Security taxes to obtain full benefits under current eligibility criteria.

A new round of budget talks underway in Washington, D.C. could produce proposals to change Social Security. In previous budget talks, President Barack Obama has proposed adopting the chained CPI, making it one of the few issues on which he and House Speaker John Boehner (OH-08) agree.

Go to http://abcnews.go.com/Politics/wireStory/poll-older-americans-nix-social-security-20768041 to read the Associated Press article about the AP-NORC Center survey that was conducted August 8 through September 10 by NORC at the University of Chicago, with funding from the Alfred P. Sloan Foundation. It involved landline and cellphone interviews in English and Spanish with 1,024 people aged 50 and older nationwide.

Among the issues in the sample letter to members of Congress in the latest NRLN Action Alert is a statement of the NRLN’s position on Social Security. If you have not sent the sample letter to your Representative and Senators, go to www.nrln.org and click on the Take Action Now! headline near the top of the home page to access the NRLN’s Action Alert.

The NRLN will be your voice in Washington, D.C. to safeguard Social Security, but we need help from you with your letters and phone calls to members of Congress, attendance at town hall meetings, visits to their state and local offices and your support through your individual memberships. Go to www.nrln.org and click on the “Join Us” link in the tabs near the top of the home page.

Bill Kadereit, President
National Retiree Legislative Network


NRLN Standing Firm During Shut-Down

Washington, D.C. is a stranger-than-usual place right now. The streets around the Capitol are a little quieter, many federal buildings and museums are closed. The government is mostly closed for business. This is precisely why the NRLN October fly-in scheduled for this week was cancelled - not many doors are open to the public right now.

The atmosphere may give the impression of little or no activity by our policy-makers. Don’t let the pictures of lighter traffic fool you. There’s much more going on in these barely-staffed offices than you think, and some of these activities should have retirees worried.

You see, the government needs to come up with more money in order to appease members of Congress to offset tax cuts before allowing an increase to the debt ceiling. Yes, there is also a faction within Congress who won’t allow the government to open until there are negotiated agreements regarding the Affordable Care Act, otherwise known as Obamacare, but the real danger to retirees is not a temporary shut-down of the federal government, but instead, it is retirees’ financial security getting caught in the web of negotiations over the debt ceiling.

Our country’s financial standing is endangered by current disagreements on whether or not to raise the debt ceiling by October 17th. After the 17th, there are a series of dates upon which the federal government would be required to pay off debts or face the consequences of default.

It certainly catches our attention at the NRLN because of the risk to retirees in these negotiations. America’s retirees don’t disagree that deep debts are dangerous to us as a nation, but it makes neither fiscal nor moral sense to establish policies during these negotiations that put retirees at risk.

The NRLN is particularly on the alert upon discovering that defined benefit pension plans are considered viable revenue-raisers in the current debt debate. When pension plan sponsors are given a pass by Congress from making tax-free contributions to the plans, the result is greater tax revenue for the federal government. Currently, there is a drive to eliminate the excise tax on medical devices imposed by the Affordable Care Act. This would be fine with retirees, except when their financial security is threatened as a result. For example, one proposal would grant plan sponsors further relief from contributions to pension plans through 2016 in order to gain taxes from corporate revenue that would otherwise be tax exempt.

The NRLN has firmly expressed the concern that missed contributions to the pension plans places these assets in financial peril. The NRLN stands firm in that position now, particularly when nothing else is being offered to offset the risk to retirees.

Lower healthcare costs are important to retirees, without question. However, gaining revenue on the backs of America’s retirees who have already seen their pension assets depleted and/or jeopardized in recent years is unacceptable and we’ve let Congress know it. We will continue to press this point and oppose any and all proposals which threaten retirees’ financial security.

During this shutdown, a lot of negotiations are occurring behind closed doors. The NRLN remains vigilant. All of America’s retirees should, too.


NRLN President Testifies on Pension Plan De-risking

On August 29th, I presented testimony in Washington, D.C. at the Employee Retirement Income Security Act (ERISA) Advisory Council’s hearing on Private Sector Pensions De-risking and Participant Protections.

Others who testified were Karen Friedman, Pension Rights Center (PRC); Karin Feldman, AFL-CIO, and David Certner, AARP. Ms. Friedman cited the NRLN’s de-risking white paper in her testimony. She noted, “…41,000 management retirees at Verizon felt the sting of betrayal when the Prudential annuity was forced upon them without any choice or consent. Their plight has been compellingly described in the National Retiree Legislative Network’s recent paper…” The PRC, AARP and AFL-CIO are unified with the NRLN that pension plan de-risking shifts substantial risk to retirees and merits scrutiny from the Department of Labor and new regulations.

Josh Gothaum, Executive Director, Pension Benefits Guaranty Corporation (PBGC), testified that lump sum buyouts threaten retirement security. He stated that lump sums might be good if one doesn’t expect to live long, but that they pay out less than a monthly pension payment over time and many people can’t manage assets, pay high fees or are cheated and lose assets. Preston Crabill, General Motors, and Phil Waldeck, Prudential, who developed GM’s pension de-risking plan, testified about GM’s de-risking. Two representatives from the insurance/annuity industry and two representatives from university law schools also testified.

De-risking is created through the offering of lump sums, or through transfer from the pension plan to third-party annuities. I noted that both trends are disturbing to the NRLN in that they remove the stability offered by pension plans and the protections of the Pension Benefit Guaranty Corporation (PBGC). Also eliminated are the annual disclosure reports and the minimum funding and fiduciary duty protections required under ERISA. All of which occurs after retirees have made their financial plans for retirement, have reduced income options, and are already receiving their pension payments. Insurance companies continue to seek out more annuity contracts, even in the public sector, which raises concerns about the financial health of these insurance companies as they take on more annuity contracts.

I cited the de-risking actions taken by General Motors, Ford and Verizon and focused on Verizon’s “carve out” of 41,000 retirees opening the door for preferential treatment. Lump sums at least offer participants a choice, but Verizon’s carve out annuity was mandatory. CenturyLink and other retiree associations are concerned about carve-outs and other derivative ideas about how de-risking can be packaged to the disadvantage of retirees.

In concluding my testimony I submitted the NRLN’s white paper on de-risking to the Council and presented the NRLN’s proposals on needed actions by the Department of Labor, the Employee Benefits Security Administration (EBSA), the PBGC and Congress to protect pension plan participants.

The DOL Advisory Council will consider the testimony on de-risking presented and write a report with recommendations to the Secretary of Labor and Assistant Secretary of Labor responsible for EBSA.

Click here to read our testimony. To read the white paper click the “Legislative Action” tab and select “NRLN White Papers”.

Bill Kadereit, President
National Retiree Legislative Network


Cooper Retirees Organization Joins NRLN

The recently formed Cooper Retirees Organization (CRO) has joined the National Retiree Legislative Network. The CRO is uniting Cooper Tire & Rubber retirees in the face of Cooper Tire and Apollo Tyres Europe becoming a wholly owned subsidiary of Apollo Tyres, headquartered in Gurgaon, India, and taking on a $2.1 billion debt to finance the acquisition.

CRO members are concerned the acquisition could place the future of their pension plans at risk if the merged company is not successful and able to properly fund the pension plans. As of December 31, 2012, the fair market value of the salaried defined pension plan’s assets was $409.8 million or 75.2% of the plan’s liabilities of $545.3 million. The CRO estimates that, based on the PBGC’s actuarial assumptions, the salaried defined benefit pension plan is funded at no more than 62.6%.

We spent several weeks helping CRO form its association. Then on July 31st, NRLN leaders hosted a conference call for CRO leaders with officials at the Pension Benefit Guaranty Corporation (PBGC). As you probably know, the PBGC’s mission is to protect the retirement incomes of Americans who are defined benefit pension plan participants. During our one-hour conversation, the PBGC staff members noted they have requested and received information from Cooper and Apollo about the pending acquisition and the status of the funding of Cooper pension plans was discussed. Because the PBGC must honor confidentially agreements, they could not provide any details on the analysis the PBGC is performing, but they did review the scope of their powers and what they review in such acquisition situations. The PBGC requested the CRO provide relevant information. The NRLN assembled information from the CRO and forwarded it to the PBGC the next day.

The CRO advocated to the PBGC that it use its influence to persuade the companies to fully fund the pension plans as part of the acquisition agreement which is expected to be finalized in September or October. The CRO pointed out that all but one of the top Cooper executives supporting the acquisition have been with the company less than seven years. They have placed 1,906,183 shares of Cooper stock in a trust and the conversion of the shares to $66.7 million will only benefit these top executives and board members who are working to execute the merger. Given that the pension plans could be at risk after the merger, this is unfair to the men and women who built the company and were promised a secure pension.

The NRLN will assist the CRO with communications to its members by adding them to the NRLN database and sending out CRO emails until such time that the CRO might decide to have its own email service. We will also help in contacting members of Congress where Cooper has plants in Findlay, OH, Tupelo, MS and Texarkana, TX to engage the legislators to support protecting the pensions.

Dick Stephens is President of the CRO. His last position with the company was President of North American Tire. Other members of the CRO’s current leadership team include:

  • Larry Schock, Treasurer, retired Vice President of Manufacturing Finance
  • Bob Nelsen, Director, retired Plant Manager of Texarkana Plant
  • Dick Teeple, Advisor, retired Chief Legal Counsel

The situation the Cooper Tire retirees are facing with the acquisition is a prime example of why the NRLN developed a white paper two years ago on Mergers, Acquisitions and Spin Offs and revised it in January. We have been using the white paper to advocate the protection of retirees’ pensions and benefits when companies take such actions. (To read the white paper, click on the “Legislative Action” tab above and select “NRLN White Papers".) We expect to know the outcome of this merger situation by October and will use it as an example of the threat that highly leveraged mergers can be to pension plans that are not fully funded.

There are retirees across America who are unaware of the funding status of their pension plans and many of those plans are severely underfunded. Ask your friends if they know the status of their pension plan. Ask them whether they belong to a retiree association. If not, do they think it would be a good idea to form an organization? Recommend to them that they send an email to contact@nrln.org or call toll free 1-866-366-7197 to discuss an affiliation with the NRLN. Also, suggest that they go to www.nrln.org to sign up to receive emails from the NRLN.

Bill Kadereit, President
National Retiree Legislative Network


NRLN Group Represented You in Washington, D.C.

July 10th was a day well spent in Washington, D.C. by NRLN, Retiree Association and Chapter leaders.

Our day began at 7:00 a.m. with a breakfast briefing session on our newly produced white papers on Pension Plan De-risking and Pension Plan Disclosure. By 5:00 p.m. we had engaged in meetings at the Department of Labor and had trekked across Capitol Hill between U.S. Senate and House office buildings for four sessions to advocate protections and clearer disclosures for retirees’ pension plans. Our proposals were welcomed and we had productive discussions. I’m optimistic this effort will eventually lead to better protections for retirees in pension de-risking situations and more transparent disclosures on pension plan funding.

The NRLN had worked with the General Motors Retirees Association (GMRA) in mid-2012 after GM announced a de-risking plan to terminate its defined benefit pension plan for salaried retirees. We prepared a list of issues that GM retirees should consider about a lump sum buyout. Around the same time Ford offered salaried retirees a voluntary lump sum buyout, but did not purchase annuities or terminate its defined benefit pension plan. We saw that there appeared to be several barriers to gaining legal relief because legislation was either prohibitive or so vague that legal action would be an ongoing challenge.

While many GM retirees did not like the de-risking idea of a voluntary plan termination and in their words, “being divorced” from the company they had served for decades, GM did offer a lump sum option and negotiated with Prudential for additional protection to retirees by placing the annuities in a separate account. However, the loss of ERISA protection and PBGC insurance were weak points that we wanted to address.

NRLN Became More Concerned About De-risking

The NRLN became more concerned when it learned that in December Verizon intended to implement the purchase of a group annuity from Prudential for 41,000 of its salaried retirees out of 91,000 pension plan participants. After the $8.5 billion paid to Prudential, the pension plan funding was in worse shape for the 50,000 participants remaining in the pension plan. Supported by the Association of BellTel Retirees, a lawsuit was filed against Verizon’s planned action. In June a federal court judge dismissed the retirees’ lawsuit, but the court left the door open for resubmission of amended claims to be filed.

In February at the NRLN’s Annual Leadership Conference, a presentation was made about pension plan de-risking by Michael Calabrese, NRLN Legislative Adviser, and Curtis Kennedy, one of the attorneys representing Verizon retirees. Shortly thereafter, the NRLN Board approved development a de-risking white paper and NRLN Retiree Associations later pledged the financial support necessary for the preparation of the white paper.

Annual Funding Notices Lack Clarity

In June I requested and received 18 Annual Funding Notices (AFN) from our Associations that represented 26 pension plans covering 2,225,547 pension plan participants. This is 5% of the 44 million Americans under defined benefit pension plans. As I examined the AFNs, I became alarmed at the lack of clarity to reflect the funding status of pension plans and in some cases the documents were deceptive. The Delta and American airlines AFNs disguise the horrible funding shape these plans are in and others like Kodak and Chrysler were extremely weak, but the reported data did not fully disclose all the dangers. The Verizon management plan discloses 100% funding on January 1, 2012 with subsidies but ended 2012, after de-risking, at 66.2% funded on a Fair Market Value basis, down from 75.9% at the end of 2011. I decided I would write a white paper to identify the shortcomings of the AFNs and recommend proposals for more complete disclosures on the actual funding status of pension plans.

In about four months our de-risking white paper was developed and within two months we had our proposals for improving the information retirees receive in their AFN. I encourage you to read these two white papers on the NRLN website at www.nrln.org. Click on the “Legislative Action” link near the top of the home page and select “NRLN White Papers” from the dropdown menu. When on the webpage with the subjects for the white papers, access the first two headings listed in the “Pensions” column.

‘Gang of 14’ Advocates NRLN’s Proposals

As the white papers were being created, it was decided that the issues of pension plan de-risking and disclosures were worthy of having a special meeting in Washington, D.C. to advocate the NRLN’s proposals instead of waiting until our Fall Fly-In on October 7 - 9. This resulted in our “gang of 14” that included:

  • 3 from the Association of US West Retirees (AUSWR)--Judy Stenberg, President of the Oregon and Washington Pension Equity Council, plus Northwestern Bell Association leaders Mary Ann Neuman, past Chair, and Cindy Hadsell.
  • 3 from the Lucent Retirees Organization (LRO)--Joe Dombrowski, President, Frank Minter, Vice President, and Al Duscher, Northeast Region Director.
  • 3 from the National Chrysler Retirement Organization (NCRO)--Jay Kuhnie, President, plus Directors Chris Dyrda and Deb Morrissett.
  • 1 from the NRLN Arizona Chapter—Ken Gornall, Legislative Director.
  • 1 from the NRLN Utah Chapter (being formed from AUSWR UT/ID/MT)--Neil West, President.
  • 3 from the NRLN—Marta Bascom, NRLN Executive Director, Ed Beltram, Vice President – Communications and myself.

Following our breakfast briefing session we left for the Hill. At 9:00 a.m. the Chrysler group from Michigan and I met with Brandon Fisher, a staffer for Representative Tim Walberg (MI-7), who is a member of the House Committee on Education and the Workforce—an important committee for pension legislation. Mr. Fisher was receptive to sharing our proposals with Congressman Walberg.

At 11:00 a.m. our entire group went to the Department of Labor for a meeting with Phyllis Borzi, Assistant Secretary of Labor for the Employee Benefits Security Administration (EBSA). Secretary Borzi brought her top staff members with her to the conference room. I thought this was a positive indication of interest in the issues we were going to discuss. Our meeting lasted a little more than an hour. We had a constructive dialogue with Secretary Borzi and she said she would give considerable thought to our proposals. She said the EBSA could have authority for some of our proposals while others might require legislation.

At 1:00 p.m. our “gang of 14” met with Michael Kreps, Democratic Senior Counsel for the Senate Committee on Health, Education, Labor and Pensions. He has met with the NRLN a number of times in recent years. Once again, he was interested in hearing our proposals and provided constructive comments.

At 2:30 p.m. we were scheduled to meet with Representative Phil Roe (TN-1), Chairman of the House Health, Employment, Labor and Pension Subcommittee, and his Legislative Director, John Martin. Although a vote taking place on the House floor prevented Congressman Roe from joining us, we had an extensive discussion of our de-risking and disclosure issues with Mr. Martin. We will schedule a return visit with Chairman Roe.

At 3:45 p.m. we met with Andy Banducci, Republican Senior Counsel on pension issues for the House Education and Workforce Committee. There was a positive dialogue and he provided insights into which of our de-risking and disclosure proposals might be implemented via regulations and those that would likely require legislative action.

Five of our “gang of 14” who stayed over into Thursday had meetings with Representatives, Senators and/or staff members from one or more of their respective states to advocate our de-risking and disclosure proposals.

I hope you agree that just the few months it took to develop our white papers on de-risking and disclosures and instigate a lobbying effort shows that the NRLN is able to promptly address emerging issues. I’m proud of the way our “gang of 14” represented the NRLN’s newest issues. If you are a member of their organizations, I encourage you to express your appreciation for their efforts on behalf of the 44 million Americans who have defined benefit pension plans.

Click here to view photos from some of the meetings. Check back to see the video clips that will be posted soon with comments by most of the “gang of 14”.


Supreme Court ruling on “pay-for-delay” and other key NRLN proposals

Pay-for-Delay - If over the years you have read the National Retiree Legislative Network’s Legislative Agenda posted on www.nrln.org, you are aware that the NRLN has advocated prohibiting brand-name drug companies from compensating generic drug manufacturers to delay the entry of generic drugs into the USA market. This long-time practice in the pharmaceutical industry is known as “pay-for-delay”.

On June 17th, the U.S. Supreme Court ruled that brand-name drug makers can be sued for violating antitrust laws if they make a deal to pay a potential competitor to delay selling a generic version of a brand-name medicine. The 5-3 decision by the justices is expected to result in additional, less expensive generic drugs reaching consumers in a timelier manner. The Federal Trade Commission (FTC), which has filed lawsuits against “pay-for-delay,” estimates that these types of deals have cost consumers and health plans $3.5 billion annually.

The NRLN believes that the Supreme Court’s ruling was a step in the right direction, but it did not go far enough. We will continue to advocate that Congress pass legislation to make “pay-for-delay” unmistakably illegal. The justices did not rule that “pay-for-delay” deals are usually illegal under the antitrust laws, as the FTC had argued.

The high court’s opinion stated that “large and unjustified reverse payments” [pay-for-delay] from a brand-name to a generic drug company can trigger an antitrust lawsuit. The outcome of each lawsuit will depend on the facts in the case.

The NRLN’s position is that it doesn’t want to see “pay-for-delay” cases dragged through the courts for years while Americans—especially retirees—are denied access to cheaper generic drugs. That is why we will continue to lobby Congress to pass legislation that bans “pay-for-delay”.

Competitive Bidding for Medicare’s Prescription Drug Business - On May 21st, NRLN grassroots members were asked to email their members of Congress the NRLN’s sample letter urging support for the passage of the Medicare Prescription Drug Price Negotiation Act of 2013. This is a high priority for us.

The bills are in the Senate as S.117 and in the House as H.R.1102 and would direct the Secretary of Health and Human Services (HHS) to negotiate prices with pharmaceutical manufacturers that may be charged to Medicare Part D prescription drug plans and Medicare Advantage organizations for covered Part D drugs. This would save Medicare up to $156 billion over ten years while reducing health care costs for seniors.

Importation and Funding for Generic Drugs - The NRLN is also continuing to advocate the reduction of prescription drug costs through passage of legislation that: (1) enables re-importation and importation of safe prescription drugs approved by the Federal Drug Administration (FDA), and (2) Staffs and funds the FDA to reduce generic drug approval backlogs and shorten the lead time necessary to approve generic drugs for use.

If you are among the grassroots members who have emailed nearly 5,600 letters supporting these bills to Washington, thank you for your efforts. If you haven’t emailed the NRLN’s sample letter to your Representative and Senators, please do so by going to the NRLN website at www.nrln.org. Click on the “Pass The Medicare Prescription Drug Price Negotiations Act of 2013” link in the center column.

Bill Kadereit, President
National Retiree Legislative Network

Note: the FDA is now getting increased funding through charging fees in applications for review of generics. Click here to read the article.


NRLN Working With Coalition

Washington, D.C. is often a city for coalitions to advocate issues with Congress. The National Retiree Legislative Network has become a promoter of coalition building, where it makes sense, in order to advance the interests of our members. The force of active coalitions is extremely powerful and only happens when you begin with a strong, credible association.

Last August Marta Bascom, NRLN Executive Director, and I set out to open doors for coalition talks with corporate advocates by visiting leaders from the ERISA Industrial Council (ERIC), U.S. Chamber of Commerce and the American Benefits Council (ABC). In addition, we often have met with retiree plan participant advocates such as international unions, AARP and the Pension Rights Center (PRC). We also consult with D.C. area pension research firms such as the National Institute on Retirement Security (NIRS) and of course meet with numerous Congressional staff leaders. Our agenda then was to seek common ground for actions that would support our belief that defined pension benefit plans were not dead yet and could be reconstituted, and also to set the stage for being able to build other win / win proposals that could be advocated with minimal resistance.

Recently, Marta and Michael Calabrese, NRLN Legislative Advisor, were instrumental in forming a coalition of organizations representing a variety of participant groups as well as key Capitol Hill staff to study and act upon the trend of some companies to convert their pension plans to annuities, and educate Congress and the Administration about the risks to retirees. The risks are many and the legal and financial analysis is complex. Just as important is the political component which often determines when and if government will respond to protect plan participants.

This coalition will be presenting its concerns and exploring potential solutions with Phyllis Borzi, Assistant Secretary of Labor for the Employment Benefits Security Administration. The meeting will be a starting point for our work in pressing the Administration to establish safeguards for plan participants who might otherwise be vulnerable to financial shortfalls.

The NRLN is also working to establish a coalition of plan participant groups as well as industry groups to encourage Congress and the Administration to focus on the discrepancies in the discount rates used in calculating the funding of defined benefit pension plans by companies and the Pension Benefit Guaranty Corporation (PBGC). For different reasons, this has disadvantages for both plan participants as well as companies, which makes the members of this potential coalition quite remarkable. The PBGC’s practice of using a low interest rate to calculate benefits results in a low pay-out for plan participants, especially since the amount is lower than what is published in a plan’s annual notice prior to a plan’s termination, all due to varying discount rates. Companies are opposed to the PBGC’s choice of the lower discount rate because it inflates their financial liabilities. Also, companies oppose the concept of shifting sole authority for setting PBGC insurance premium rates to the PBGC itself. We are advocating discussions among representatives from ERIC, ABC, US Chamber, NRLN, AARP, PRC and AFL-CIO.

This is one of the few areas where participants and industry may have common causes, and while we may part company in terms of advocating solutions, this provides an opportunity for us to unite in order to get so-far uninterested politicians and bureaucrats to raise their heads.

The NRLN’s particular focus on defined benefit pension plans and employer-based retiree health care benefits brings a unique expertise to all negotiations, but we also benefit from having the insights of our coalition partners.

The Pension Rights Center (PRC) is a great partner on pension matters. In fact, we recently commissioned a study through them and work with them on Pension Benefit Guaranty Corporation (PBGC) reforms. Currently, we are in collaboration on long-term plans for defined benefit pensions and serve on the Retirement USA coalition with the PRC, unions and others. The same is true of the National Institute on Retirement Security (NIRS). The NIRS does extensive research on behalf of pension fund managers and participants and are good allies because they want to protect defined benefit pension plans. The NRLN is a financial contributing member of both PRC and NIRS. We also work with the National Committee to Protect Social Security and Medicare (NCPSSM). Both our groups advocate similar positions on Social Security and Medicare. Prescription drug prices and taxes weighing down retirees are also common issues. AARP joins these efforts while also focusing on other issues that affect their other concerns.

You, as part of the NRLN’s extensive grassroots organization active in all 50 states and practically every Congressional District, are another coalition partner. Your commitment to communicate with your elected officials is extremely important to getting the interests of America’s retirees in the forefront of public policy. The NRLN fills a HUGE void in addressing protection of defined benefit pension plans; advocating reforms to corporate bankruptcy laws and PBGC rules to give retirees fairer treatment; safeguarding pensions and benefits in company mergers, acquisitions and spinoffs; reducing the cost of prescription drugs, and lobbying for legislation to establish a fixed monthly payment to retirees for benefits lost after they retire.

The NRLN has done extensive research and written compelling proposals in our white papers on these tough issues. Click here ( http://www.nrln.org/_pvtflyin.html ) to read the NRLN's white papers or go to www.nrln.org and click on the "Legislative Action" tab. As I reported to you in my last President's Forum message, Michael is working with a committee of NRLN Retiree Association leaders to conduct an exhaustive analysis of "de-risking" to determine what, if any, regulatory or legislative actions the NRLN should consider and prepare a white paper with our proposals.

Our Washington, D.C. staff gets calls from retiree advocates and adversaries as well as Congressional staff members asking what the NRLN's view is on specific matters. We have on the NRLN Board a Vice President – Regulatory and his committee responds to proposed regulations being written by federal agencies. We recognize that what a law gives, agency regulations can take away.

So, this is where the NRLN is and we think it is exactly where we need to be: NRLN grassroots lobbying at home; NRLN lobbying on Capitol Hill daily and through use of Fly-ins; coalition lobbying with advocates where we have common ground, and building win/win coalitions with retiree and business advocates whenever there are opportunities.

Please help us help you by making this year your year to make an extra effort to support your NRLN financially. To contribute, click on the "Join Us" tab above, complete the membership contributions form and send a check or use your credit card.


Examining Actions To Take On "De-Risking"

You may be aware that some large U.S. corporations have chosen to pay billions of dollars to position for voluntary terminations of management pension plans. Companies may pass their plan assets and liabilities on to large financial firms and insurance companies in return for a commitment to pay the accrued full monthly plan benefit as an annuity payment to plan participants. Such plan terminations are called Standard Terminations as opposed to Distress Terminations where the Pension Benefit Guarantee Corporation (PBGC) as the ultimate insurer of defined benefit pension plans ends up paying pension payments, usually less than paid if a plan were not terminated.

In Standard Terminations, plan sponsors are able to reduce future corporate pension plan funding obligations and are able to significantly reduce balance sheet liabilities and thus enhance their ability to borrow funds more cheaply. If a company is weak financially, pension plans could fall prey to a Distress Termination because of a bankruptcy proceeding. Retirees might feel more secure with an annuity payment resulting from a Standard Termination, rather than risk having to take a lower payment in a Distress Termination.

This sounds straightforward and, for some, it is. However, companies are looking for new ways to implement Standard Terminations, encouraged by a number of firms who counsel pension plan sponsors in ways to tailor such terminations that could work against current and future retirees. These annuity guarantors are highly motivated to sell companies new termination ideas, and their payoff comes only if and when a plan is terminated.

The NRLN is concerned about the variable latitude that is being taken by companies in what has become known as "de-risking" of pension plans. Or, as one NRLN member has termed it "risk shifting" to retirees.

General Motors was the first large U.S. corporation to recently de-risk its management pension plan. GM voluntarily terminated its plan but offered a lump sum payment option to a select group of participants and advised all other participants that they had no choice but to accept an annuity payment from Prudential Insurance Company. The GM management pension plan was terminated. GM negotiated added annuity protection in its agreement with Prudential.

At about the same time, Ford offered a lump sum pension buyout but only to select retirees. Ford did not take action to execute a Standard Termination. Most recently Verizon did not terminate its pension plan but instead shifted part of its plan assets and liabilities to Prudential to satisfy its plan obligations but only offered annuities to a select subset of management retirees. It’s not clear that Verizon negotiated added protection as did GM.

The Employee Retirement Income Security Act (ERISA), the law that prescribes defined benefit pension plan protections, does allow for Standard (and Distress) Terminations but is vague as to what protections there might be when plan sponsors choose to expand the boundaries of execution of a Standard Termination to include what could be discriminatory selections or exclusions and / or the exhaustion of assets through lump sum payouts that can weaken a plan's asset base over time.

Verizon retirees have filed a lawsuit against the company on a variety of claims. Among them are claims that assert Verizon should not have terminated its obligation to select retirees only, and that the retirees selected lost protection of the Pension Benefits Guaranty Corporation (PBGC) insurance mechanism should Prudential ever fail to make good on annuity payments while others not selected continue to benefit from the PBGC’s insurance protection.

It is not clear how long it will take to litigate the Verizon case or what the outcome might be. It is even less clear that the outcome would apply, win or lose, to another case involving another twist or two by the pension plan sponsor. Advocating changes to ERISA that would define Standard Termination protections may be the only solid solution.

At the NRLN's Annual Meeting in Washington, D.C., presentations were made on February 5th about "de-risking" by Michael Calabrese, NRLN legislative adviser and preparer of a number of our Income Security white papers, and Curtis Kennedy, one of the attorneys representing Verizon retirees. After hearing the presentations, the NRLN Board has reached the conclusion that the NRLN should conduct an exhaustive analysis of "de-risking" to determine what, if any, regulatory or legislative actions the NRLN should consider and prepare a white paper with our proposals. Michael has agreed to work with a committee of NRLN Retiree Association leaders and write the white paper.

Our existing white papers have been funded as Special Projects and most of our Retiree Associations and Chapters have agreed once again to provide a one-time special contribution toward funding that will be used to determine what, if any, regulatory or legislative action we should take to begin advocating those reforms with federal agencies and / or members of Congress. Michael has been commissioned to the start the project immediately so that we may complete it by July 1, 2013.

Our objective is to ensure that retirees receiving defined benefit pensions will not be harmed by a conversion to lump sum buyouts or the purchase of annuities. You will be notified when the white paper has been completed and posted on the NRLN website.

Bill Kadereit, President
National Retiree Legislative Network


Re-Characterizing Old News To Be New News

In July 2010, NRLN Grassroots Network Members were sent a Health Reform Implementation Timeline published by the Kaiser Family Foundation that provided a very concise description of the Affordable Care Act and when its elements would be implemented. Click here to review that document as we approach a virtual tsunami of changes coming in 2013 and 2014.

Major newspaper and magazine writers and political rags will be re-characterizing old news to be new news, and both left and right political spin will resurrect old arguments and bitter politicking.

Forbes' Political Slant:

One such article appeared in Forbes magazine on February 19th that serves to make the point that politicking has already begun. In the article's opening paragraph, the author wrote:

"Though Democrats denied it during the 2012 campaign, Obamacare cut Medicare by $716 billion in order to partially fund $1.9 trillion in new entitlement spending over the next ten years. A big chunk of those Medicare cuts came from the market-oriented Medicare Advantage program. Cleverly, the Obama administration postponed the Medicare Advantage cuts until after the election, so as to persuade seniors that everything would be just fine. But the election is over. On Friday, the administration announced that it would be significantly reducing funding for the popular program."

The Facts Are:

More than a quarter of Americas' seniors participate in Medicare Advantage plans administered by private health care insurance companies. The Centers for Medicare and Medicaid Services (CMS) has announced that as a result of provisions in the Affordable Care Act, it will reduce by 7 to 8% the 12 to 17% subsidies paid to health care insurance companies that provide Medicare Advantage plans.

Unless insurance companies that provide Medicare Advantage plans cut costs, overhead or price margins, older Americans with Medicare Advantage plans are likely to encounter increased prices in 2014 for premiums, deductibles, co-pay or co-insurance. Medicare Advantage Plan participants' choices are Medicare Advantage, traditional Medicare A, B or C or other open market health care plans.

The NRLN's position has been that health care insurance companies that provide Medicare Advantage plans should compete without subsidies. If private health care insurance companies can take business from Medicare on an even playing field, they deserve the business.

Caution When You Read Articles:

So, beware when you read articles about what’s coming in 2013 and 2014. Consult the NRLN website at http://www.nrln.org/ to review our Legislative Agenda to read what we have said about various subjects affected by the Affordable Health Care Act.

In the interest of full disclosure we will continue to post articles that may oppose the NRLN's positions, so please understand that posting them does not mean we agree with them. It is up to you to know what affects you personally and to check out what the NRLN has reasoned, and it is up to us to make you aware of our positions. Where you want to take exception, go to http://www.nrln.org/Feedbackform.php to send us your comments. Or go to http://www.nrln.org/ and click on the "Contacts" tab and select "Contact The NRLN."

Also under the "Contacts" tab is the link to our "Useful Links" webpage. I thought you would be interested in knowing that the NRLN recently added the link to http://www.opensecrets.org/ , a comprehensive resource for federal campaign contributions, lobbying data and analysis. The website is fairly easy to navigate and will provide you with insights into who is making contributions to members of Congress. The NRLN does not make political contributions or wine and dine politicians. We believe that the proposals in our Legislative Agenda that are backed up by our extensively researched white papers should stand on their merits with our elected representatives.


One Battle Down, More To Come

As you know from news reports, Congress battled about the "fiscal cliff" into the first day of the new year before scraping together a limited bill which extends the Bush-era tax rates for most Americans, among other things. However, Congress once again kicked the can down the road on some major fiscal issues.

Our elected representatives in Washington deferred for two months the $1.2 trillion in across-the-board spending cuts (call "sequestration") set to hit the Pentagon and domestic programs, including Social Security and Medicare. Also left for a future fight is the issue of the debt ceiling. Although the U.S. Treasury technically hit the $16.4 trillion limit on December 31, 2012, Treasury Secretary Tim Geithner has resorted to accounting gimmicks to skirt the limit thus buying Congress a couple more months to address the debt ceiling.

The spending cuts and debt ceiling will come to a head just as Congress is expected to conduct debates on a new federal budget. This essentially guarantees that within a few weeks the new 113th Congress will once again be entangled in another fiscal crisis which is sure to revive fights over government spending and programs like Social Security and Medicare.

Since Congress did not reach a deal before midnight on December 31st, technically we did go over the "fiscal cliff". This actually benefited Social Security because the two-year cut in Social Security payroll taxes of two percentage points expired. The NRLN had opposed the cut in Social Security payroll taxes from 6.2 to 4.2 percent for employee and employer. The reduction in the Social Security payroll tax deduction cost the system $103 billion in 2011 and an estimated $112 billion in 2012.

Some members of Congress wanted reductions to Social Security and Medicare as part of the "fiscal cliff" deal. Although changes were not made to the programs in the legislation that was passed on January 1st, the "entitlements" as members of Congress call them will be under attack again in a matter of weeks. I want to thank our Grassroots Network members who responded to the NRLN's December 26th Action Alert and promptly sent nearly 8,700 emails to U.S. Representatives and Senators saying that Social Security and Medicare should be protected and not reduced because of the pending "fiscal cliff".

Although Social Security and Medicare "dodged a bullet" in the "fiscal cliff" legislation, as New York Yankees Hall of Fame catcher Yogi Berra said, "It ain't over 'til its over." With your support, the NRLN will continue to work to safeguard the Social Security and Medicare benefits that you and your employer paid into during your decades of work.

While we believe the long term effect of dismantling or privatizing these programs would be crippling to the economy as well as catastrophic to all retirees, we do believe there are good reasons to cost reduce them and hundreds of other budget items. To do this, rules must be changed to prohibit lobbyists from showering campaign money on the foxes in our hen house.

Bill Kadereit, President
National Retiree Legislative Network


Forming NRLN Chapters

The National Retiree Legislative Network's Board of Directors has approved the addition of NRLN Chapters to its Retiree Association and Individual Members structure. This is in order to reach out to more retirees so we can increase Grassroots Network Members' participation in advocating federal legislation to protect retirement income security and reduce health care costs for current and future retirees.

Chapters are to be Grassroots organizations built around a mix of retirees from various companies and public entities in common geographic areas in the U.S. Some Chapters will build from a base of retirees from a single company with their main focus being on Congress. In contrast, formal Retiree Associations are founded and flourish around a membership that in addition to being focused on Congress also addresses issues related to their former employers. Chapters are not intended to replace or raid associations but will partner with them at the grassroots level. Chapters will be NRLN organizations and will rerceive a myriad of support services and startup guidance from the NRLN.

The leadership team of a Chapter would include a President and officers for Grassroots and Legislative Affairs; Membership, and Communications. There will be local boards established that represent a broad spectrum of companies. Retiree Chapters will receive direct support from our NRLN Regional VPs and the NRLN VP - Grassroots and Legislative Affairs.

Martha Deahl, a US West/Qwest/CenturyLink retiree in Phoenix, has volunteered to serve as the first NRLN Chapter President of the “NRLN AZ Retiree Chapter”. In addition, Martha has accepted the position of NRLN Regional VP - Grassroots for the states of Arizona and New Mexico. We are preparing to launch another Chapter that you will hear about in the near future.

The Chapter structure will provide flexibility to bring together retirees and future retirees who want to unite their common interests in having a voice in Washington, D.C. by advancing the NRLN's Legislative Agenda to protect pensions, reduce health care costs and safeguard Social Security and Medicare.

Individuals reading this announcement who would like to explore forming a Chapter composed of former co-workers, members of a social group, a retirement community or a geographic area should send their name, phone number and/or email address and a brief description of their idea for an NRLN Chapter to nrlnmessage@msn.com or call the NRLN toll-free at 1-866-360-7197.

With your help we can establish Chapters in every state and many Congressional Districts in order to make a positive difference in the lives of retirees by influencing federal legislation.

Bill Kadereit, President
National Retiree Legislative Network


Verizon Retirees' Lawsuit to Protect Pensions

Verizon management retirees filed a federal lawsuit on November 27th seeking to stop the company's $7.5 billion deal which would effectively turn 41,000 defined benefit pensions into annuity contracts with Prudential insurance company. The lawsuit was filed in the United States District Court, Northern District of Texas, Dallas Division, by retirees in collaboration with the Association of BellTel Retirees Inc. The lawsuit requests an immediate temporary restraining order to be followed by a hearing to consider a preliminary injunction.

The Verizon retiree plaintiffs charge that Verizon's plan to transfer the retirees' pensions from the Verizon Management Pension Plan into Prudential insurance annuities violates the federal Employee Retirement Income Security Act (ERISA). One point of contention is that ERISA does not permit Verizon to carve out 41,000 pre-January 1, 2010 plan participants from over 100,000 participants.

Verizon's pension spinoff, expected to close in December, follows similar "de-risking" actions by Ford, General Motors and other companies. What "de-risking" really means is that employers with defined benefit pension plans are avoiding the risks of properly funding their pension trust funds by purchasing third-party annuities and placing future risks on retirees. However, under ERISA it appears that the only “out” for a plan sponsor is a standard or distress termination – and the statute contains detailed rules governing each of those options for offloading pension liabilities, including PBGC review. Thus, ERISA appears not to permit a plan sponsor to simply “sell off” assets and liabilities to a third party with no employment relationship to the participants or retirees or to avoid a PBGC review. The fact that Prudential happens to be an insurance company should be irrelevant.

The NRLN believes that the Verizon management retirees are justified in their effort to contest the company's conversion to an annuity that would eliminate the safety net provided by the Pension Benefit Guaranty Corporation (PBGC) and asserts that Verizon should not be allowed to self-interpret ERISA protections in an attempt to avoid its fiduciary plan funding obligations. Verizon’s announced transfer of pension obligations to Prudential strips retirees of all their protections under ERISA, including PBGC guarantees, leaving only the insufficient and varying coverage of $100,000 to $500,000 lifetime per person cap provided under state annuity guaranty associations.

The NRLN has become increasingly concerned over the trend toward “de-risking” and the stripping of retiree ERISA and PBGC protections. This Verizon action not only strips retirees of their ERISA and PBGC protections, it pushes the de-risking issue one step beyond reason. We continue to lobby Congress to pass our retiree Income Security proposals that include:

  • Protect pension plans through enactment of stronger ERISA laws
  • Protect pension plan assets from misuse by U.S. and foreign corporations
  • Protect pension plans from corporate mergers and acquisitions, including foreign control
  • Protect pension benefits from terminations due to bankruptcy and PBGC takeover
  • Protect Social Security's earned and paid-for benefits

The NRLN will be sending letters to Congressional leaders, the Department of Labor and the PBGC requesting that they oppose Verizon's "de-risking" plan and will be asking all NRLN members to support Verizon retirees by sending Capwiz messages to Congress. While Prudential is currently a sound insurance company, we have witnessed in recent years the demise or taxpayer bailout of too many firms that were once considered to be financial powerhouses.

FDA Bill Advocated b


y NRLN Signed Into Law

Another of the NRLN's prescription drug cost reduction issues has been addressed with President Obama signing into law on October 5th H.R. 6433, the FDA User Fee Corrections Act of 2012. The bill introduced by U.S. Representative Fred Upton (MI-6) on September 19th and passed by the House and Senate amends the Food and Drug Administration's user-fee law to ensure that a new program intended to improve approval times for generic drugs can begin.

The NRLN has advocated legislation to provide funding and staffing for the FDA to bring more safe and less costly generic drugs to the market. Brand drug makers have been able to pay fees to get their drugs through the approval pipe while generic manufactures have not been able to pay approval fees for generics. The result has been a four to five year FDA backlog of generic drugs awaiting approval. The enactment of H.R. 6433 is a win-win for retirees and all consumers because it gives the FDA more funding through user fees to accomplish a more timely approval of new generic drugs.

Earlier this year, I issued a message that the NRLN's advocacy to prohibit brand name drug manufacturers from paying companies to delay the availability of generic drugs was addressed. This came in the form of the U.S. Court of Appeals for the Third Circuit in Philadelphia ruling that brand-name drug companies paying generic competitors to delay bringing their drug to market, absent clear evidence to the contrary, should be viewed as “prima facie evidence of an unreasonable restraint of trade.”

While the NRLN is very pleased with the Third Circuit Court's ruling, we do not want to take the chance that the ruling could be overturned in the appeal process. For that reason, we are continuing to lobby Congress to pass legislation that would make "pay-for-delay" illegal.

We are also continuing to try to reduce the cost of prescription drugs by lobbying for legislation that would: (1) Enable re-importation and importation of safe and cheaper prescription drugs approved by the FDA; (2) Enable Medicare to develop formularies and take competitive bids for prescription drugs.

We do not support unabated drug sales online which has led to the sale of ineffective drugs and misrepresentations.

With your continued support through emails to your members of Congress and Individual Member contributions, the NRLN will get more legislation passed beneficial to retirees. We will also need to defend Social Security and Medicare benefits that Congress seems poised to attack. If you haven't already done so in 2012, please make an Individual Member Contribution of $25, $50, $75 or more. Any amount you can contribute will be appreciated. You may make your check or money order payable to NRLN, Inc. and mail it along with the Membership Contribution Form that can be printed at: http://www.nrln.org/printad.htm . Or, you may make your contribution online with your credit card on the NRLN website at http://www.nrln.org by clicking on the "Join Us" icon at the top of the home page and selecting the “Support the NRLN” link.

Together we will work on retirement income security and the reduction of health care costs.

Bill Kadereit, President
National Retiree Legislative Network

High Health Care Costs Impact Retirees and America's Economy

My attention was drawn to a recent Reuters article pointing out that U.S. health insurance premiums have climbed faster than wages and inflation this year, and look poised to accelerate in 2013. I want to first share with you some important points in the article that threaten to undermine your retiree income security. Then I will comment on my passionate belief that messages the National Retiree Legislative Network has been consistently offering are important calls to move members of Congress to take action.

Reuters reported on a study by the nonpartisan Kaiser Family Foundation and the Health Research and Education Trust. This report is based on data from the study's January-to-May survey of 2,100 public and private-sector employers and reported that:

Premiums for employer-sponsored health plans, which cover about 149,000,000 Americans, grew at 4 percent to $15,745 in 2012.

This year's 4 percent increase eclipsed a general inflation rate of 2.3 percent. Some employers told researchers that insurers plan to push premiums up another 7 percent in 2013.

Premiums for employer health plans have doubled over the past decade, with worker contributions surging, on average, to $4,316 from $2,137 in 2002.

Employer contributions hit an average $11,429 this year, up from $5,866 in 2002. But this year, the impact of the slow economy on insurance premiums also appears to have been magnified by employers switching to lower-cost, high-deductible health plans that increase out-of-pocket expenses for workers.

The study's authors said higher costs still took a bigger bite from the income of middle-class employees, whose wages advanced only 1.7 percent in 2012, as employers shifted more health care costs to their workers.

Company sponsored plans have been the pillar of the $2,8 trillion U.S. healthcare system but that it has been weakened after decades of uncontrolled healthcare cost increases.

Although the study was on health care costs for employers and workers, we can relate the impact of the continuing rise in health care cost to retirees. The ever-increasing cost of health care insurance is one of the main reasons that many employers have reduced or eliminated insurance coverage for retirees. Skyrocketing costs retirees encounter with doctors, hospitals and prescription drugs have had a major financial impact on Medicare and what Medicare beneficiaries are paying out-of-pocket.

The economic future of our country and economic security of retirees and the country itself depend upon finding ways to reduce per capita healthcare costs. You can’t erode fixed income of retirees who are becoming the largest segment of U.S. consumers and expect them to buy goods and services needed to sustain jobs and certainly can’t expect anything but lower per capita federal tax revenue from those on fixed incomes.

Click here to read the entire message.


NRLN MEMBERS WIN!

PHILADELPHIA THIRD CIRCUIT COURT RULES AGAINST PAY-FOR-DELAY

As you know, the NRLN has been advocating for legislation which prevents manufacturers of name brand drugs and generic drug makers from entering into agreements to keep less expensive generic drugs off the market. NRLN Grassroots Acton Alerts, repeated lobbying on the Hill and annual Fly-in lobbying from 2009 through 2011, led to a 2011 bill being introduced in the U.S. Senate, S. 27 – the Preserve Access to Affordable Generics Act, that would stop this practice aptly called "pay-for-delay." At that time the NRLN issued an Action Alert in support of S. 27 and you may have been among the thousands of Grassroots Network Members who sent our sample letter to your Senators urging passage of the bill. This has helped elevate the visibility of this issue before Congress and made our retirees’ position perfectly clear.

While the bill has not yet been cleared for Senate action, a three-judge panel on the U.S. Court of Appeals for the Third Circuit in Philadelphia last week ruled that brand-name drug companies paying generic competitors to delay bringing their drug to market, absent clear evidence to the contrary, should be viewed as “prima facie evidence of an unreasonable restraint of trade.” Several pharmacies and a class of purchasers of the drug K-Dur, a potassium chloride supplement, sued to challenge the settlements Schering-Plough (a unit of Merck & Co.) reached with generic drug companies.

The NRLN is very pleased with the Third Circuit Court's ruling, but we do not want to take the chance that the ruling could be overturned in the appeal process. For that reason, the NRLN will continue to lobby Congress to pass legislation—such as S. 27—that would make "pay-for-delay" illegal.

If S. 27 were to be re-introduced and enacted, the Congressional Budget Office has estimated that the bill would accelerate the availability of lower-priced generic drugs and generate $4.785 billion in budget savings over a 10-year period. Additionally, CBO estimated that earlier entry of generic drugs affected by the bill would reduce total drug expenditures in the U.S. by roughly $11 billion over the decade.

Your NRLN and Retiree Association Leaders have met with staff members of Representatives and Senators and key committees to stress the savings that would be gained by American retirees and the government by bringing high quality generic drugs to the market more quickly and cheaply. We have also advocated our other three prescription drug cost reduction proposals: (1) Enable re-importation and importation of safe prescription drugs approved by the FDA; (2) Enable Medicare to develop formularies and take competitive bids for prescription drugs, and (3) Staff and fund the FDA to reduce generic drug approval backlogs.

The Third Circuit decision is an important victory for retirees and one that bolsters our case before Congress. Your help in the past has made a big difference in telling Congress how important lower prescription drug costs are to you. Your continued lobbying on behalf of securing seniors’ financial stability will be just as important as we move forward in our effort to get Congress to stand up for what is right. Thank you for your help in the past and for your commitment to helping our retirees in the future.

Bill Kadereit, President
National Retiree Legislative Network


GM Does The Unthinkable To Salaried Retirees

"For years I thought that what was good for our country was good for General Motors, and vice versa. The difference did not exist. Our company is too big. It goes with the welfare of the country. Our contribution to the nation is considerable."

That statement was made by Charles Erwin Wilson, former President of General Motors, during a U.S. Senate committee's confirmation hearing in 1953 on his nomination for Secretary of Defense. Mr. Wilson could never have imagined that GM executives in 2012 would take action to eliminate the defined benefit pension for its salaried retirees.

Congress passed the Employee Retirement Income Security Act (ERISA) in 1974 which included the creation of the Pension Benefit Guaranty Corporation (PBGC) to encourage the continuation and maintenance of private-sector defined benefit pension plans. For 38 years responsible U.S. companies funded their pension plans and only a relative few, mostly those who went bankrupt, were forced into an involuntary termination of their pension plans.

GM is washing its hands of its defined benefit pension plan for salaried retirees, and has offered a lump sum pension plan buyout to selected salaried retirees. Those who do not take the lump sum offer and other salaried retirees will have a Prudential annuity purchased by GM. This places financial risks on the salaried retirees and that is certainly not good for them or our country's economy. Although GM's action is legal, it is not morally and ethically right to break the promise to salaried retirees.

The action by General Motors this month to voluntarily eliminate its defined benefit pension plan does away with the federal law protections for salaried retirees' lifetime pension payments and balances GM’s books on the backs of retirees. Ford has offered a lump sum buyout to 95,000 retirees and announced that retirees could take it or retain their current pension – they did not terminate the plan. Chrysler’s Chairman announced last week that Chrysler has no intention of offering a buyout or terminating its pension plan. Did GM management take the low road? Were they also dispassionate about helping Delphi retirees? Should GM retiree club members feel used and betrayed?

The NRLN Staff has been working with General Motors Retiree Association Board Members to create a message to GMRA members about GM's action and a protest letter to GM's top executive. Click here to read the letter to Daniel F. Akerson, GM Chairman and Chief Executive Officer.

Bill Kadereit, President
National Retiree Legislative Network


NRLN Developed A Defined Pension Benefit Buyout Information Sheet

Some companies that sponsor defined benefit pension plans offer lump sum pension buyouts to pension plan participants to reduce their long-term pension plan liabilities.

Ford Motor Company announced on April 27th that it will offer about 90,000 eligible U.S. salaried retirees and former employees the option to receive a voluntary lump-sum pension payment. The General Motors Retirees Association has been informed by several GM retirees that they have been contacted by the Gallup opinion polling organization asking them if they would accept a lump sum "pension buyout" from GM, in lieu of a monthly pension benefit. GM, however, has not recently announced a lump sum pension buyout offer.

When a company offers a lump sum pension buyout, pension plan participants are faced with making a critical decision. The NRLN staff, a small group of Retiree Association leaders and I have developed "A Defined Pension Benefit Buyout Information Sheet" that is part of this message. It is designed to help NRLN Grassroots Network Members with a basic understanding of a buyout offer and the things that an individual needs to consider when making the decision on whether or not to accept the lump sum buyout. This Information Sheet is not exhaustive but provides our initial thoughts on issues retirees need to consider when evaluating a lump sum buy-out offer. It is not our intention to evaluate specific company buyout offers as they are made available. You should contact your company benefits office or retiree association leaders with questions about whether your company is offering a lump sum pension buyout.

Many of you may never be faced with making such a decision. For those who do receive a lump sum buyout offer, we think the information below will be useful to you. You may want to print a copy and save it for reference. Click here to access A Defined Pension Benefit Buyout Information Sheet.

Bill Kadereit, President
National Retiree Legislative Network


EKRA's Breakthrough for Kodak Retirees

EKRA, the association for Eastman Kodak retirees, is demonstrating the value of having a strong organization with numerous volunteers willing to work for the benefit of their fellow retirees. EKRA was formed three years ago when Kodak retirees became concerned about the economic future of their former employer. As you probably know, Kodak filed for Chapter 11 bankruptcy on January 19, 2012.

EKRA leaders have been an advocate for the protection of retirees' pensions and benefits. EKRA had filed motions with the bankruptcy court opposing Kodak's February 27th motion to terminate medical benefits for Medicare-eligible retirees. On April 4th, Kodak withdrew its motion to eliminate medical coverage for Medicare-eligible retirees, announcing that for now benefits will remain the same. The company said it is not currently proposing any other changes to retiree medical and survivor benefits.

In a new motion, Kodak said it supports the formation of an 1114 Committee to “act as the authorized representative of the retirees with respect to any future proposals to modify retiree medical and survivor benefits.”

Bob Volpe, EKRA President, has informed the NRLN that EKRA and its attorney are working to have representation on the 1114 Committee. It is anticipated that the U.S. Trustee responsible for overseeing Kodak's Chapter 11 process may select members of the 1114 Committee this month and negotiations with Kodak could take several months.

I want to commend Bob and Art Roberts, EKRA Vice President, plus the other members of their team who have been diligently working to protect the interests of all Kodak retirees. (Kodak employees and retirees do not have union representation.) Not only has EKRA been active in the bankruptcy process, but leaders have joined with the NRLN and other retiree associations the past three years at meetings in Washington, D.C. to advocate the need for reforms to better protect retirees' pensions and benefits.

During the NRLN's recent Leadership Conference in Washington, D.C., NRLN and EKRA leaders met with high-ranking Pension Benefit Guaranty Corporation officials to discuss the continuation of the Kodak pension plans. The PBGC maintains that Kodak's U.S. pension plans are reasonably well funded and it wants to make sure they stay that way. Furthermore, the PBGC has stated it "will actively participate in Kodak's bankruptcy to protect Kodak's pension plans for their workers and retirees" and has been appointed by the bankruptcy court to the 1113 Committee for Kodak creditors.

While on Capitol Hill, Bob and Art attended meetings that the NRLN scheduled with:

  • Senior Democratic Counsel for the House Education and Workforce Committee;
  • Senior staff members—both Republican and Democrat—on the House Judiciary Committee;
  • Senior Republican Counsel to the Senate Committee on Health, Education, Labor and Pensions;
  • Staff Director for the Subcommittee on Administrative Oversight and the Courts, under the Senate Judiciary Committee;
  • Senior Counsel to the Democratic Staff of the Senate Committee on Health, Education, Labor and Pensions.

The EKRA leaders also met with staff members for New York Senator Charles Schumer, a member of the Senate Finance and Judiciary Committees, and New York Representatives Tom Reed, Kathy Hochul, and Louise Slaughter.

It is this type of dedication to representing the interests of Kodak retirees that the NRLN is pleased to see. Kodak's withdrawal of its motion to eliminate medical benefits for Medicare-eligible retirees is a major breakthrough for EKRA. It could signal a pattern that other retiree associations can benefit from in future bankruptcy proceedings. It also speaks well for Kodak management and the bankruptcy court judge. Anytime a bad situation can be mitigated by reasonable people willing to at least try to accomplish a win/win outcome, it speaks well for the character of the individuals involved.

EKRA officials know that while this step opens a door that is important to them, there is a long road ahead. If discussions break down or other negative conditions develop, the end result will be less certain.

The NRLN will do whatever is needed to help EKRA as it works toward reaching a satisfactory outcome for retirees in the Kodak bankruptcy. And, the NRLN and its member associations will continue to push hard to establish a better legal framework that supports a positive outcome for retirees whose retirement security is threatened.


Advocating Pension Protection and Lower Rx Costs

When the U.S. Senate passed "The American Energy and Infrastructure Jobs Act," also known as the Highway Bill, a provision was included that provided companies with pension plan funding relief. The Senate missed an opportunity to also provide pension plan participants with a greater degree of protection by including a provision proposed by the NRLN.

We submitted to the Senate Finance Committee legislative language for the bill that would require the Pension Benefit Guaranty Corporation (PBGC) to use the same corporate bond yield curve and other assumptions as pension plan sponsors for the purpose of allocating plan assets to pay non-guaranteed benefits when the PBGC takes over a pension plan.

Specifically, the NRLN had proposed that Congress should require the PBGC to use the same corporate bond yield curve and other assumptions as plan sponsors for the purpose of allocating plan assets to pay non-guaranteed benefits. Language in the bill passed by the Senate giving companies additional pension funding relief will serve to widen this disparity.

Simply put, the government is confusing and misleading 44 million insured pension plan participants by requiring companies to send them year after year an Annual Funding Notice that discloses a funding level and projected benefit obligation that are substantially rosier than what the PBGC later calculates as a termination liability.

The Senate chose not to expand the Highway bill, however, now that the Highway Bill is in the U.S. House of Representatives for consideration, there is an NRLN Action Alert for Grassroots Network Members to send the NRLN's sample letter to their Representative to ask him or her to support correcting the Senate's omission. Click here to access the Action Alert.

The NRLN views protection of pension plans assets, protection of Social Security benefits and this PBGC issue as three very important protections for all retirees. Please take the time to let your voice be heard – send a message today.

On another subject important to retirees, high prescription drug prices are a significant contributor to health care costs that have been rising faster than inflation for years. Health care expenditures in the U.S. reached $2.6 trillion in 2010 - more than three times the $714 billion spent in 1990 - and made up 17.6 percent of the gross domestic product. Unless Congress takes action, which it has been reluctant to do, the costs for medicines will continue to eat up more retirement income and an ever-greater share of the federal budget.

I have sent letters to the Senators and Representative who introduced bill in 2011 on prescription drug issues that are among the NRLN's top legislative initiatives. I have asked the lawmakers to re-introduce their 2011 bills in the 2012 session of Congress.

I have asked Wisconsin Senator Herb Kohl to re-introduce the Preserve Access to Affordable Generics Act. The bill would (1) enhance competition in the pharmaceutical market by stopping anticompetitive agreements between brand name and generic drug manufacturers; and (2) support the purpose and intent of antitrust laws by prohibiting anticompetitive practices in the pharmaceutical industry that harm consumers.

My letter to Maine Senator Olympia Snowe requested that she re-introduce the Pharmaceutical Market Access and Drug Safety Act. The NRLN supports the legislative intent of the Senator Snowe's bill that would allow U.S.-licensed pharmacies and drug wholesalers to import FDA-approved medications from countries with tough safety standards, such as Canada, Europe, Australia, New Zealand and Japan, and pass along the savings to American customers. This approach will allow Americans access to more affordable drugs from these countries, which are 35 to 55 percent lower than in the U.S.

In letters to Minnesota Senator Amy Klobuchar and Vermont Representative Peter Welch, I asked them to re-introduce in the Senate and House the Medicare Prescription Drug Price Negotiation Act. The NRLN has advocated the legislative intent of the bills to initiate competitive bidding that would direct the Secretary of Health and Human Services (HHS) to negotiate with pharmaceutical manufacturers the prices that may be charged to Medicare Part D prescription drug plan (PDP) sponsors and Medicare Advantage (MA) organizations for covered Part D drugs for Part D eligible individuals who are enrolled under a PDP or under an MA-prescription drug plan.

Many who follow Washington, D.C. politics are saying that Congress will not pass much legislation this year because it is an election year. The NRLN's view is that since we taxpayers continue to pay for the salaries and benefits of Senators, Representatives and the President we are justified to continue to push hard for enacting legislation that America's retirees deserve to protect their retirement security. We will use this time to make our case for retirees so they may be prepared to help us when they decide to get back to work.


NRLN Addresses Companies' Lobbying for Pension Funding Relief

The National Retiree Legislative Network has learned that companies have been lobbying Montana Senator Max Baucus, Chairman, Finance Committee, on getting relief yet again on pension plan funding obligations. Corporations are asking for a higher discount rate as part of “The American Energy and Infrastructure Jobs Act,” otherwise known as the Highway Bill.

The NRLN does not necessarily object to short-term pension funding relief narrowly tailored to offset the impact of artificially low interest rates. However, I have written letters to Chairman Baucus and Utah Senator Orrin Hatch, Ranking Member of the Finance Committee, urging that any funding relief legislation should include a requirement for the Pension Benefit Guaranty Corporation. The PBGC should be required to use the same corporate bond yield curve and other assumptions as pension plan sponsors for the purpose of allocating plan assets to pay non-guaranteed benefits when the PBGC takes over a pension plan.

Allowing companies to use a higher discount rate for valuing its pension plan assets would widen the disparity between the rosier picture that pension plan participants are given in their Annual Funding Notice and what the PGBC later calculates as termination liability when a plan goes into default. The PBGC’s artificially low discount rate causes tens of thousands of retirees to permanently lose earned and vested benefits that would be paid at least in part if the PBGC used the ERISA (Employee Retirement Income Security Act) discount rate for the purpose of allocating plan assets for benefit payments.

The NRLN has asked the Senate Finance Committee leaders to grant pension plan participants, who may become subject to PBGC jurisdiction, the same consideration as companies in the provisions being included in the Highway Bill. Companies, such as American Airlines, have been granted relief in the past, only to turn around and try to abandon their pension plan and have the PBGC take it over. The NRLN believes that Congress should act to prevent unnecessarily large and permanent losses for pension plan participants.

Click here to read the NRLN's letter to Senator Baucus.


NRLN Advancing 4-Part Effort to Enact Retiree Income Protections 

As companies file for Chapter 11 bankruptcies and others are preparing to march into bankruptcy court, the National Retiree Legislative Network is theonly organization attempting to gain comprehensive legislation and rule changes that protect retirees of companies who reorganize through bankruptcy.

Through research and the unfortunate experiences of our member retiree associations—Delta Air Lines Pilots, General Motors and Chrysler—whose members have experienced the throes of bankruptcy, the NRLN has funded and developed a suite of white papers on Pension Asset Protection, Bankruptcy Reform, PBGC Reform and Mergers & Acquisitions. These legislative proposals describe the harm done to retirees when a company declares bankruptcy and identify the statute changes that need to be made to place retirees' pensions and benefits on a list of obligations that companies can't shed through bankruptcy. We lobby the House and Senate and meet with the staff of the Pension Benefit Guaranty Corporation in an effort to gain these reforms.

Eastman Kodak retirees affiliated with the NRLN through EKRA are highly concerned that Kodak may file for Chapter 11 bankruptcy soon. There were news reports on January 13 that Eastman Kodak is in advanced talks with Citigroup Inc. to provide bankruptcy financing. The NRLN is working with EKRA leaders to set up meetings with New York Representatives and Senators to discuss Kodak retirees' concerns and present the NRLN's white papers on Bankruptcy Reform, PBGC Reform, Pension Asset Protection and Mergers, Acquisitions and Spin-offs. Since there is also a possibility that Kodak could merge with or be acquired by another company, or some of their businesses may be spun off, we are sharing with members of Congress and committee staff members our white paper on needed laws to protect retirees' pensions under these scenarios.

EKRA leaders have done an excellent job of communicating with their members as well as the local and national media to bring attention to the financial risks all Kodak retirees are facing. NRLN and retiree associations' leaders who have experience in these matters are standing with them in meetings in Washington, D.C. while attending the NRLN’s upcoming Annual Leadership Conference in an effort to protect EKRA members and all retirees in the future.

General Motors Retiree Association members are concerned about a January 11 news report that GM may launch a program to "buy out" the pensions of some of its retirees in an effort to reduce its unfunded pension plan liabilities. The article stated that GM's U. S. pension plans are underfunded by $12 billion (not including $2 billion in stock that GM put into its pension plans). Protection of pension assets is a crucial GM retiree issue.

The NRLN is engaged with GMRA leaders to assist in evaluating any offer that GM may make to salaried retirees on the "buy out" of their pensions. We want to guard against retirees unknowingly accepting a "buy out" offer that would be substantially less than 100% of the value of the pension that is owed to them. Retirees need to be aware of how to reach an informed decision on whether or not to accept a lump sum pension "buy out" offer. Both the GMRA and the NRLN are working in tandem to make sure that information is available to those offered the "buy-out" plan.

You may know that American Airlines has filed for Chapter 11 bankruptcy. The NRLN has reached out to American Airlines retiree clubs with an offer to help them form a retiree association. I have communicated that the NRLN can provide value to American Airlines retirees given the NRLN's experience with three retiree associations who have gone through bankruptcy and the NRLN's efforts to gain legislation and rule changes to protect retirees' pensions and benefits. We support the PBGC as it ratchets up pressure on the parent of American Airlines to preserve the pension plans of the airline's 130,000 workers and retirees.

Please read the NRLN's white papers on Pension Asset Protection, Bankruptcy Reform, PBGC Reform and Mergers & Acquisitions. Click here to reach the NRLN webpage where these and other white papers can be accessed. Or, you can click on the "Legislative Action" tab at the top of this and select "NRLN white papers" from the drop down menu.


My Week in Washington, D.C.

Since this is possibly my last message to you in 2011, I want to wish you a Merry Christmas and a Happy Holiday Season. May the New Year provide you good health and prosperity, bring economic recovery for our nation with jobs for the unemployed, and make our world a safer, more peaceful place.

During the week of December 5th, I joined Marta Bascom, NRLN Executive Director, for meetings in Washington, D.C. related to the NRLN's priorities for Pension Asset Protection legislation, changing Pension Benefit Guaranty Corporation (PBGC) rules, reforming corporate bankruptcy laws, and protecting retirees in company mergers, acquisitions and spin-offs.

The NRLN was invited to be a participant in a seminar conducted at the PBGC headquarters to explore ways to support continued use of defined benefit pension plans for more than 44 million American workers and retirees in more than 27,500 private-sector defined benefit pension plans.

The seminar, which had been scheduled for some time, was particularly timely after the PBGC announced in mid-November that it had recorded a $26 billion deficit in fiscal year 2011 which ended September 30th. The deficit was up 13%, or $3 billion, over the previous year. Also, you may have read the November 24th article linked on the NRLN website that serious internal control weaknesses continue to plague the PBGC, according to an independent audit by the agency's inspector general. Among the deficiencies identified were weak internal controls that led to erroneous plan asset valuations and benefit calculations, plus poor management of contractors, including those involved in valuing plan assets when the PBGC assumes responsibility for terminated plans.

Seminar participants were able to engage in a dialogue with Joshua Gotbaum, PBGC Director; top PBGC staff members, Phyllis Borzi, Assistant Secretary of Labor of the Employee Benefits Security Administration (EBSA) and presenters from a number of prestigious think tanks and university business schools.

Among the 60 representatives from organizations participating in the dialogue along with the NRLN were the AARP, AFL-CIO, American Benefits Council, ERISA Industry Council, the National Committee to Preserve Social Security and Medicare and others.

Not only were the strengths and weaknesses of defined benefit pension plans discussed, but also those of defined contribution plans such as 401Ks and IRAs.

I was impressed that there was not a political agenda in the presentations and dialogue. The seminar reaffirmed for me that the NRLN is on the right track with its whitepapers calling for Pension Asset Protection legislation, changing PBGC rules for valuing pension plans and calculating payments to retirees, reforming corporate bankruptcy laws to give retirees a stronger position, and protecting retirees' pensions and benefits in company mergers, acquisitions and spin-offs. (Click here to access the NRLN's whitepapers on the NRLN website.)

Click here to read my entire message.


Super Committee Fails; NRLN Says Stay Tuned

As you may have learned from news reports the Congressional Joint Select Committee on Deficit Reduction—known as the "Super Committee"-- has failed to reach agreement on a plan to reduce the federal budget by at least $1.2 trillion over the next 10 years. According to reports out of Washington, DC the 12-member Super Committee was hung up on taxes and entitlements. Each party blames the other for the failure on the assigned task.

The legislation that created the Super Committee also requires automatic budget cuts if the committee did not produce a proposal that was not subsequently passed by Congress. The automatic budget cuts would include half coming from the defense budget and half from entitlement and domestic spending programs. Social Security, Medicaid and many veterans' benefits and low-income programs are exempt under the budget deficit law. It also limits Medicare to a 2 percent reduction.

By law, 18 percent of the automatic cuts are assumed to come from the government's savings on interest costs from reducing the debt. Out of the $1.2 trillion in automatic cuts, $216 billion would be assumed interest savings. That would leave $984 billion in automatic spending cuts over 10 years. That works out to around $55 billion annually each from defense and domestic programs.

Under the law the automatic cuts won't actually kick in until 2013. Although President Obama has threatened to veto any measure that attempts to turn off the automatic cut trigger, Congress and the President have more than 13 months to possibly modify the law's automatic budget cut requirements.

When the debate begins on possible ways around the automatic budget cuts, the NRLN will serve as a strong voice for the interests of retirees. With your help through letters to your members of Congress, the NRLN will continue to make the case to the lawmakers to protect Social Security and Medicare and reduce the federal deficit by enacting legislation to reduce the cost of prescription drugs paid for by Medicare.

Stay tuned and watch for future NRLN Action Alerts.

Bill Kadereit, President
National Retiree Legislative Network


NRLN Letter to "Super Committee" Members

As you may know from news reports and an NRLN Action Alert, Congress has formed the Joint Select Committee on Deficit Reduction. This so called "Super Committee" of six Republicans and six Democrats from the U.S. House and Senate have been given the task of coming up with proposals to Congress by November 23rd to reduce the federal budget by at least $1.2 trillion.

Under the Budget Control Act of 2011, the proposals that may come out of the "Super Committee" can't be modified by the House or Senate. No filibusters will be permitted and the proposals will be addressed by an up-or-down vote before Christmas. In other words, the proposals will be a take-it-or-leave it proposition. If Congress fails to pass the proposals, automatic cuts will be made across the board early next year, including changes to Social Security and Medicare benefits.

On October 5th, I sent a five page letter to each member of the "Super Committee" to make the NRLN's case to the lawmakers to protect Social Security and Medicare and reduce the federal deficit by enacting legislation to reduce the cost of prescription drugs.

NRLN's message is competing with what "Super Committee" members are hearing from defense contractors, aerospace firms, health care providers and the pharmaceutical industry, who fear the impact of government spending cuts in their areas.

I encourage you to click on the link below to read my letter to each member of the "Super Committee." The posted letter is the one sent to Washington Senator Patty Murray, Democrat Co-Chair. Personalized letters also went to the other 11 members of the "Super Committee" including: Senators Max Baucus (D-MT), John Kerry (D-MA), Jon Kyl (R-AZ), Rob Portman (R-OH), and Pat Toomey (R-PA); and Representatives Jeb Hensarling (R-TX-05), Republican Co-Chair, Dave Camp (R-MI-04), Fred Upton (R-MI-06), Xavier Becerra (D-CA-31), James Clyburn (D-SC-06), and Chris Van Hollen (D-MD-08).

I apologize for the amount of detail you will find in my letter to the Super Committee but I also want you to read all of it. I assure you that our positions taken on your behalf are NOT political and are fact based. We are not party or ideologically oriented, only retiree oriented. The NRLN knows that members of Congress see the same data we used and are well aware that a “real” belt tightening will be politically hard to swallow. Click here to read NRLN's letter to the "Super Committee" members.

Bill Kadereit, President
National Retiree Legislative Network


Documenting Our Cases on Retiree Issues

While members of Congress were away from Capitol Hill during August, the NRLN was working on documenting our cases on three retirement issues that will be part of the information presented to lawmakers and their staffs during the NRLN's September 19th and 20th Washington, DC Fly-In. We researched and wrote our position on Medicare; expanded our position on Social Security and updated our white paper on prescription drug costs.

While I'll present in this message some of the key issues we are advocating with these documents, I urge you to Click Here to access the documents on the NRLN website.

While you are on that webpage, I encourage you to read our other documents that set forth our reasoning on other NRLN top legislative priorities. If you don't invest the time to read the entire document, please read the Executive Summary which is not more than a couple of pages.

The NRLN's position paper on "Protecting Medicare and Trimming the Deficit" urges Congress and the 12-member Joint Select Committee on Deficit Reduction to avoid any reductions in Medicare expenditures that could negatively impact the care that current and future retirees receive from doctors, hospitals and other health care services. We recommend the following five ways to reduce Medicare and health care cost inflation more generally without cutting benefits or quality of care:
  1. Eliminate waste, cut back federal budgets for projects, non-strategic grants and planned budget expenditures and stop authoring wasteful preferential bills and amendments.
  2. Attack Medicare fraud with the full force and effect of the government. Congress must enact laws that contain stiffer federal penalties, including prison time, for defrauding the Medicare system.
  3. Pass legislation that would compel safe importation, competitive bidding, funding to accelerate generic drug sales and eliminate non-competitive practices in the prescription drug industry.
  4. Set fair and equitable rate formulae for determining physician fees and make adjustments up or down annually. Examine costly referrals and redundant visit practices and disallow them.
  5. Finally, Congress must honor its covenant with the American people. The effect of unemployment on payroll tax revenue, the surge in baby boomer eligibility and rising health care costs can’t be offset by slashing Medicare benefits without regard for this covenant. Higher unemployment levels drove payroll tax revenues down from 62.2% of the Medicare budget in 1990 to 38.9% in 2010, a nearly 40% decline. Congress must stimulate job growth and increase the Medicare tax on workers and employers until such time as taxes can again fund 60-65% of the Medicare budget.
In expanding our position on Social Security that was originally written in June to advocate closing the funding gap through modest increases in the payroll tax rate and increasing the cap on maximum wages subject to the tax, we added our opposition to two issues that are now being supported by some members of Congress:

  1. The NRLN opposes any changes in the way the annual Cost-Of-Living Adjustment (COLA) is calculated. One such proposal would shift the current accounting calculations to the less accurate and less-generous Chained Consumer Price Index (CPI) for the current CPI in calculating the COLA. This breaks a promise made by many politicians to not cut the benefits of anyone over age 55.
  2. The NRLN opposes changing the full retirement age to 68 by 2050 and 69 by 2075, and the early retirement age to 63 and 64 in those same years as recommended in the December 2010 Deficit Commission report. The 1983 decision to move the full retirement age to 67 by 2022, representing an average 13% cut in benefits, didn't solve the Social Security funding problem then nor will it do so now. Pushing out eligibility to age 69 without a commitment from businesses to allow employees a chance to work longer would create added erosion of fixed-income purchasing power.
When the NRLN's white paper on "Prescription Drug Costs and Expenditures – A Call for Action" was written two years ago, we calculated that if Congress acted to implement the NRLN's proposals $630 billion could be saved over ten years. With the continued increase in expenditures for prescription drugs in the USA, we now project that $730 billion could be saved over ten years. Our proposals include:

  1. The NRLN advocates free-market competition while also advocating safety in the production and marketing of prescription drugs. Congress should enable the safe and controlled importation of prescription drugs, as well as competitive bidding and robust formularies for Medicare Part D.
  2. Congress should also ensure that the FDA accelerates access to generic prescription drugs. Backlogs of generic drugs awaiting approval have exceeded five years and must be eliminated by providing for user fees and the staff needed to expedite approvals.
  3. Equally important, agreements that might restrain competition among brand-name and generic manufacturers, such as “pay-for-delay” agreements that may keep lower-priced generic drugs off the market, must be further investigated and, if warranted, outlawed.
The above information is a very brief summary of the documents that the NRLN staff has been working on during the past few weeks. Again, I urge you to Click Here to read the full version of the documents which provide the NRLN additional credibility when we share them with Representatives, Senators and their staff members.

Bill Kadereit, President
National Retiree Legislative Network


NRLN "Firefighting" on Capitol Hill

I arrived in Washington, DC on Monday afternoon (July 25th) after deciding to depart the 100-plus temperatures of my Texas home for an even hotter situation, a political heat wave in our nation's capital. NRLN Executive Director Marta Bascom, our strategic advisor Michael Calabrese and I are doing "firefighting" against potential deals by Congress and the Administration that would increase the debt ceiling in a way that would enact spending cuts harmful to retirees, and we hope to advance other important legislative proposals.

Our Tuesday schedule includes attending a hearing on the role of pension plan fiduciaries held by the House Education and Labor Committee. You may recall that our Regulatory Affairs Committee (RAC) sent the NRLN’s comments on this issue to the Employee Benefit Services Administration (EBSA) this spring. We will spend considerable time advocating our pension asset protection, Rx Drug importation and competitive bidding, and PBGC and Mergers and Acquisitions legislative proposals on Tuesday and Wednesday. Meetings are set with the House Ways and Means Committee and Senate Finance Committee staffs and we hope to meet with two other national advocacy organizations to discuss support for our agenda.

While some Democrats have vowed to keep Social Security and Medicare "off the table," news reports are speculating that one or both programs important to retirees could be in the crosshairs of the leaders of both parties. A major threat to Social Security is the possibility of enacting the Chained Consumer Price Index (CPI), a formula change that would cut the Cost-of-Living Adjustment (COLA) for beneficiaries. Over the next 10 years alone, the chained CPI would take $112 billion directly out of the pockets of beneficiaries.

The NRLN's position is that adopting the Chained CPI would ignore consideration for the fact that retirees must spend a much larger share of their income than others on health care, where costs are increasing at a much higher rate than other living costs. A more accurate index formula is needed that reflects these higher costs. In the NRLN's June 27th news release we stated that Congress should address the long-term funding gap by focusing on modest increases in payroll taxes and increasing the cap on maximum wages subject to the tax.

We are advocating for safe Rx drug importation (S.319) and want Congress to immediately pass a bill (S.44) that requires competitive bidding for Medicare Rx business. We say that if they want to cut Medicare costs, why not show they mean it by passing these two important bills. Competitive bidding savings of just 10% would reduce the Medicare prescription drug budget by $5.5 billion a year and lower retiree premiums and copays.

On another Medicare front, a recent Kaiser Family Foundation news report stated that some lawmakers are eying possible changes in Medicare supplemental plans that could increase retirees' out-of-pocket costs. About 17% of Medicare beneficiaries buy Medigap plans to protect themselves from out-of-pocket health care costs and another 34% get such coverage through their former employer.

One proposal floating on Capitol Hill would bar supplemental insurance from completely eliminating out-of-pocket costs – or charge enrollees $530 per year extra if they want to keep such protection. That change could save up to $53 billion over 10 years, according to a chart used during the bipartisan talks led by Vice President Joe Biden. The NRLN flatly rejects this Medicare proposal. If retirees want to spend their money to buy Medigap plans, that should be their choice. Asking them to absorb higher premiums, deductibles or copays is not cost reduction; it is dumping Medicare cost in retired Americans' laps so politicians can avoid raising taxes.

No one can predict with any accuracy what deficit reduction proposals, if any, may go to the House and Senate in the next few days. Whatever takes shape by August 2nd, the NRLN will do its best to represent the interests of retirees.


Social Security and the Four Elephants…..the NRLN Proposal

Well known facts lurk like elephants in all Social Security discussion rooms where “politicians”, “experts”, “advocacy groups” and “frenzied media” hang out. These elephants are basic to Social Security understanding, discussion and solutions and must guide practical and ethical rationale:
  • There have been NO benefits added to the Social Security system, other than Cost of Living Adjustments (COLA), since 1961. And there has not been a COLA for the past two years.
  • Social Security is not a welfare program paid for by the U.S. Government. Social Security beneficiaries and their employers have paid into the Social Security Trust since 1937. In fact, beneficiaries paid in from 1937-42 and the first payout wasn’t until 1942. And every year since 1983, the payroll tax for Social Security has generated tens of billions of dollars in surplus, every dollar of which was borrowed by Congress to cover other federal spending. Our predecessors and we have built up an enormous nest egg sufficient to cover 100% of promised benefits for at least another 25 years for them, us and our successors. This is how most Americans perceive Social Security!
  • The number of “Social Security” beneficiaries will double to over 80 million over the next 30 years, starting in 2010. By 2040, the number of beneficiaries stabilizes. Current and past Administrations and Congresses have known these facts and have done nothing to effectively prepare for them since the last round of changes in 1983. (The Greenspan Commission raised the eligibility for full benefits gradually to age 67, in essence spreading out benefits.)
  • Politicians and some pundits tend to be cowards when it comes to owning up to the fact that a tax increase is not always bad news. It is politicians who have a reputation for perpetuating taxes well beyond the point where they could be rescinded. They simply are afraid of losing votes. The share of wages subject to the Social Security payroll tax has been declining every year for two decades. A small increase in the combination of tax rate (possibly between 0.5% and 1.5%) and the maximum earnings subject to the payroll tax would have solved the problem years ago and can solve it in 2011.
The NRLN believes it is in the best interest of its more than 2,000,000 retiree members that Congress should raise the Social Security tax rate and increase the cap on maximum wages taxed, until such time as the Social Security Trust is again adequately funded, actuarially. The NRLN maintains that this is the only practical and ethical solution, and one that keeps the faith with the American public. Social Security is a generational compact. Today’s retirees helped to pay for their parents – and our children, as workers, help to pay for us, just as their children will for them, if necessary.

Poll after poll shows that the vast majority of all Americans oppose cutting Social Security benefits and favor the NRLN's proposed solution. The Social Security Trust in the future should be insulated from access by Congress and never again be loaned out as a piggybank to cover other government spending.

NRLN Slide Presentation for Recruiting New Members

A "Speakers Bureau" type PowerPoint slide presentation has been created with the intent of communicating vital information about the National Retiree Legislative Network and gaining additional NRLN Grassroots Network members.
Through the 11 slides we explain the NRLN's resources, how we lobby for positive change, the Grassroots Network organizational structure, our legislative actions/top priorities, and how individuals can help the NRLN. Click here to view the slides.

Created to accompany the slides is a brief narrative providing additional information to be used by anyone making the slide presentation to a group of retirees. Click here to view the narrative.

Also, the NRLN gained complementary guidance from a national advertising/public relations firm in the creation of an 8.5 x 14 inch marketing piece that can be used as a handout to individuals and groups. Click here to view and print the document.

I want to encourage NRLN Grassroots Network members to seek opportunities to personally make presentations to retiree groups (i.e. a lunch group) using the "Speakers Bureau" PowerPoint presentation. If you have a notebook computer and if the group can provide a digital projector and screen, you're in business. Any Grassroots Network member who would like to have the slides provided in a PowerPoint file should contact Ed Beltram, NRLN Vice President – Communications at nrlnmessage@msn.com or call toll free 866-360-7197. Ed will provide guidance on making the NRLN presentation.

Your help in spreading the word about the NRLN and recruiting new Grassroots Network members and contributors will be greatly appreciated.

Bill Kadereit, President


Prime Opportunity to Lower Prescription Drug Costs

If you read—and hopefully took action on—the NRLN's recent Action Alerts, you are aware that there are currently three prescription drug bills in the U.S. Senate that are in direct support of three of the four NRLN prescription drug cost reduction proposals for retirees.

We have been advocating legislation:
  1. S.319; Enables re-importation and importation of safe prescription drugs approved by the FDA;
  2. S.44; Enables Medicare to develop formularies and take competitive bids for prescription drugs;
  3. No bill yet; Staffs and funds the FDA to reduce generic drug approval backlogs;
  4. S.27; Prevents drug companies from colluding to control pricing or subvert free markets.

Proposal #3 for staffing and funding the FDA to reduce generic drug approval backlogs is the only one of our proposals not currently in a bill that has been introduced.

We—the NRLN staff and Grassroots Network members—have worked hard over a three-year period to get these three bills on the table and we'll push for Senate passage of these three bills and, if possible, our fourth proposal. Lowering the cost of medicines would free up purchasing power that would help fuel economic recovery without having a negative effect of the nation's deficit. In fact, more purchasing power translates to jobs, more tax revenue and a lower deficit!

The NRLN regularly receives dozens of emails from individuals who are faced with the high and ever increasing cost of prescription drugs. I want to share with you excerpts from four examples of those emails:

"My spouse is a cancer survivor and has type 2 diabetes. She has to have 9 annual prescription drugs plus a couple of other drugs as needed."

"I take 8 prescription drugs. Three of these drugs are generic. The others are costing me $542.00 per month… There are some prescription drugs which I do not even order because things have gotten out of hand since I go into the "doughnut hole" within 3 months into the beginning of the year."

"My husband was very ill in 2008 and due to his illness he has to take several very expensive drugs. It is July 31st and he is already in the proverbial 'donut hole.' I take one drug that does not have a generic and my co-pay for a 3-month supply is $165.00."

"I am 83 years old and have been retired for 21 years. My wife is also 83 years old and has many medical problems. She now is taking seven different drugs, two of which are brand name. Her drug costs now exceed $500 per month which needless to say has put a tremendous strain on our budget."

Last week, March 29-31, Marta Bascom, NRLN Executive Director, and I lobbied on Capitol Hill for passage of these three bills and two other NRLN top priorities. We met with 13 members and their staffs from the House and Senate who serve on committees that have jurisdiction over these three bills and others important to retirees.

If you are not among the NRLN Grassroots Network members who have already emailed 4,648 letters to Senators urging passage of S. 27, S. 44 and S. 319 and to Representatives requesting introduction and passage of similar bills in the House, the Action Alerts and sample letters are still available. Click here to do your part. If you should have trouble with this link, go to the top of this page to access the Action Alerts and sample letters.

There are some influential Senators —Democrats, Republicans and an Independent— who are supporting the three prescription drug bills. Let's do everything we can to get the bills out of committee, passed by the Senate and sent to the House for action there.

Bill Kadereit,
President, National Retiree Legislative Network


NRLN Takes Stand on Fiduciary Duty Protections

In November, the NRLN Board formed a Regulatory Affairs Committee (RAC) to continuously monitor rules proposed by federal administrative agencies charged with implementing legislation and filing comments if rules will substantially impact retirees. This week, the NRLN filed the RAC’s first comments on an issue that could make a significant difference in the protection of retirees' pensions.

Regulatory comments were filed with the Employee Benefits Security Administration (EBSA) in the U.S. Department of Labor (DOL) urging the EBSA to better protect Americans' pension plans by requiring that pension plan fiduciaries for foreign-owned companies and subsidiaries in the USA be subject to the jurisdiction of U.S. courts.

The NRLN's concern is that with more and more foreign companies acquiring or merging with American firms or creating subsidiaries in the U.S., the DOL and the Pension Benefit Guarantee Corporation (PBGC) will be unable to hold foreign fiduciaries accountable for breaches of fiduciary duty that could deplete pension plan assets. Our bottom line is that it is essential that all fiduciaries of U.S. retiree pension plans be subject to the jurisdiction of the U.S. courts. Currently, corporate executives living in and protected by the laws of another country could misstep as a fiduciary and be protected from U.S. legal process but remain beyond the reach of U.S. court jurisdiction.

NRLN Asks DoL for U.S. Fiduciaries for Pension Plans (click here).


NRLN's 2010 Actions and 2011 Outlook

It is appropriate at the beginning of this new year to reflect on a few of the NRLN's major actions in 2010 and comment on what is ahead of us in advocating our top legislative initiatives with the new 112th Congress in 2011. But first I want to thank you, our Grassroots Network Members, for your support both in response to our Action Alerts and your Individual Membership contributions. During the past year, we issued 19 Action Alerts that resulted in 96,454 emails sent to our federal lawmakers. Your 2010 personal contributions amounted to 70 percent of the NRLN's annual budget.

Pension Asset Protection

A great deal of the NRLN's efforts in 2010—including thousands of emails and phone calls to members of Congress from NRLN Grassroots Network members—were directed to gaining legislation to prevent companies from using pension plan assets for non-pension expenses. We came very close to having the NRLN's Pension Asset Protection (PAP) language retained in H.R.4213. Unfortunately, the House Ways and Means Committee's staff did not keep our PAP language in the bill and passed it on May 28th.

Part of the problem of keeping PAP in the bill was that the bill, in addition to containing pension plan funding relief for companies, included urgent measures such as prohibiting cuts in Medicare payments for doctors; federal COBRA premium subsidies for Americans who had lost their jobs, plus various tax provisions. This complexity distracted attention from our PAP proposal.

Although a prime opportunity for PAP was missed, leaders of the NRLN and GM, Chrysler and Detroit Edison met in early June with Michigan Representative Sander Levin, at the time Chairman of the House Ways & Means Committee, to provide him with an understanding of why we are passionate about PAP. Since that time, Representative Levin has been supportive of the NRLN working with the Ways & Means Committee staff to explore the potential for PAP in a stand-alone bill or as a provision in some other bill.

Our experience with PAP in 2010 with Congressman Levin reinforces the importance of personal local contact with members of Congress by Grassroots Network members and Retiree Associations. We will continue to pursue in 2011 passage of a bill that carries our PAP proposal. We must prevail. You are a vital part of the process. Read more...


NRLN's Review of Budget Deficit Commission Outcome

You may have read or heard recent news reports that the federal budget deficit commission failed to garner enough support on Friday, December 3rd to send its report to Congress for action. Eleven of the 18 commissioners voted for "The Moment of Truth" report, short of the 14 votes needed under the terms of President Obama’s executive order last February establishing The National Commission on Fiscal Responsibility and Reform. (Click here to read the Commission's report.)

The NRLN had been closely following the deliberations of the commission and had been doubtful there would be enough votes in Washington's politically divided climate to send its report to Congress with recommendations to enact legislation.

Unlike some groups that urged their members to call U.S. Representatives and Senators last Tuesday with a message of "Hands Off Our Social Security," we elected not to stimulate actions by our members. The calls resulted in an overload of the Capitol Hill switchboard, causing the phone lines to shut down. As you might expect, many members of Congress and their staffs were unhappy with the disruption of their phones and may have done more damage to the issue than good. The NRLN's view was to "keep our powder dry" until there is a genuine issue being considered by Congress on Social Security and Medicare before we call for action by NRLN Grassroots Network members. Our members appreciate knowing that when we ask for action, we are zeroed in on an impending issue that merits their attention. Read more...


Election Day Changes Congressional Landscape

Voters on Election Day changed the Congressional landscape giving Republicans a commanding majority in the U.S. House of Representatives and reducing the Democrats' majority in the U.S. Senate. As you know from news reports, Republicans gained at least 60 seats in the House while the party picked up a definite six seats in the Senate, with two contests still undetermined. This is the biggest shift in Congress since the 1948 election.

What does this shift in the balance of power in the new Congressional session in January mean to the National Retiree Legislative Network? It means that the NRLN's Washington, DC team and our Grassroots Network members across the nation will need to educate the new members of Congress and their staffs about the issues negatively affecting retirement security and why laws need to be enacted to protect retirees' interests. Also, it means there will be new chairs of House committees and many new committee staff members will need to understand why their constituents demand that the new leadership protect Social Security, Medicare, and the pensions and benefits that retirees have earned. Read more...


Insights Into New Health Care Law

I enjoy reading the various Retiree Association newsletters that I receive. When reading the latest newsletter from the Association of US West Retirees Colorado/Wyoming group, I was impressed by a column written by Barbara Wilcox. The column responded to questions from US West/Qwest retirees about the new national health care law.

I've met Barbara at AUSWR meetings and know she is an experienced researcher. I called Barbara and received her approval to share her column with NRLN Grassroots Network members through an email and by posting it on the NRLN website at www.nrln.org . I think you will see below that the questions from US West/Qwest retirees are similar to questions that many other NRLN Grassroots Network members have about the new health care law. I think many of you will be interested in Barbara's answers.

The references to Qwest were changed to the word "Company" so that you might more readily identify with the questions and answers for your own personal situation regarding the new health care law.

I also asked Barbara if she would consider researching answers to questions from NRLN Grassroots Network members that I could periodically share with NRLN email "subscribers." Although Barbara is very busy with a number of volunteer projects, she said she would search out answers as her time permits. If you have questions about the new health care law, send them to nrlnmessage@msn.com . Don't expect an immediate personal response. The NRLN will gather the questions and group those that are similar before forwarding them to Barbara. Barbara will include these NRLN questions in her future columns, as appropriate.

At the end of Barbara's column, I inserted the health care law implementation timeline from the Kaiser Foundation website. At the very end, Barbara has listed a number of websites that are good resources for information about the health care law. If you don't find the answer to your questions on one of those websites, send your questions to the NRLN. Read Barbara's column here...


Health Reform Implementation Timeline

The volume of information we read and hear and the various ways in which political parties, individual politicians and self-interest groups characterize the new Health Care Reform bill is very confusing, even to those who are close to it. The NRLN's Washington team is usually on top of most details and we review many data sources and opinions before publishing what we believe is an objective view of passed or pending legislation, to the extent that it may affect retirees.

We also rely on what we feel are objective outside resources on a variety of subjects. One that I feel is research oriented and less biased than most is the Kaiser Family Foundation. For health care and in particular prescription drug topics, the KFF is usually very thorough and presents its comments in a more understandable way.

Recently, Kaiser published a Health Reform Implementation Timeline that provides a very concise description of the bill and when its elements will be implemented. We hope you agree that the KFF summary helpful. Please keep this as reference that might help answer some of your questions and questions you may get from others. I suggest that you bookmark the Kaiser Family Foundation website at www.kff.org for grassroots and personal use.


Need Remains to Cut Prescription Drug Costs
May 2010

The NRLN continues to use its whitepaper written last year to advocate with members of Congress and their staffs the need for legislation to reduce the cost of prescription drugs. The NRLN is seeking legislation to accomplish the following:
  • Enable re-importation and importation of safe, FDA approved prescription drugs
  • Enable Medicare to develop formularies and take competitive bids for prescription drugs
  • Staff and fund the FDA to reduce the generic drug approval backlog
  • Prevent drug companies from colluding to subvert free market practices.
  • We must continue to remind Congress that until they demand truly competitive markets year-over-year cost and profit increase will not be stopped.

    A recent study showed that American pharmaceutical companies raised prices on their brand-name drugs by 9.3% and on specialty drugs by 10.3% during the same period that the overall consumer price index fell by 0.3%. The NRLN believes these levels of price increases on prescription drugs are unacceptable, especially when retirees must buy their medicines with limited, fixed incomes. The NRLN will continue its efforts to gain legislation to introduce more competition to break the stranglehold that drug companies have on Americans. Read more..


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