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CWA Presses IRS to Rescind Proposed Pension Regulations
CWA has joined members of Congress and pension rights supporters in calling on the Treasury Department and the Internal Revenue Service to rescind proposed regulations that threaten workers' retirement security.
Testifying at today's Treasury Dept. and Internal Revenue Service public hearing, Linda Guyer, president of Alliance@IBM, CWA Local 1701, reminded officials that workers rely on the government to set fair ground rules for the terms and conditions of employment, including retirement security. The Treasury Dept. proposal fails this test, she stressed.
If approved, the Treasury Dept. would give corporations broad authority to convert traditional defined benefit pension plans to cash balance plans, costing many workers, especially longtime employees, to lose a substantial portion of their retirement assets.
Members of Alliance@IBM mobilized around IBM's 1999 attempt to unilaterally convert to a cash balance plan, a move that would have cost long term workers 50 percent or more of their pensions, Guyer said. A national campaign, with congressional and community support, resulted in IBM's backing away from full implementation and enabling employees with
40 years of age plus at least 10 years of service to choose which plan better met their needs. However, this meant some longtime workers who didn't meet both criteria still suffered a substantial loss, she noted.
CWA strongly supports legislation to blunt the harsh impact of the proposed regulations. Bills introduced by Rep. Bernie Sanders (I-Vt.) and George Miller (D-Calif.) and in the Senate by Sen. Tom Harkin (D-Iowa) would restore important safeguards, especially for older workers.
These bills would assure fairness by giving employees who are 40 years old or who have at least 10 years of service the option to choose whether to remain in the traditional plan or move to the cash balance plan.
Guyer also stressed the need to prohibit the "wear away" feature in many cash balance plans that requires employees after a plan conversion to work many years before accruing any additional benefits.
"I believe that the Treasury Dept.'s primary concern in these regulations should be the impact on older employees of a conversion to a cash balance pension program," Guyer told the panel.
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Testifying at today's Treasury Dept. and Internal Revenue Service public hearing, Linda Guyer, president of Alliance@IBM, CWA Local 1701, reminded officials that workers rely on the government to set fair ground rules for the terms and conditions of employment, including retirement security. The Treasury Dept. proposal fails this test, she stressed.
If approved, the Treasury Dept. would give corporations broad authority to convert traditional defined benefit pension plans to cash balance plans, costing many workers, especially longtime employees, to lose a substantial portion of their retirement assets.
Members of Alliance@IBM mobilized around IBM's 1999 attempt to unilaterally convert to a cash balance plan, a move that would have cost long term workers 50 percent or more of their pensions, Guyer said. A national campaign, with congressional and community support, resulted in IBM's backing away from full implementation and enabling employees with
40 years of age plus at least 10 years of service to choose which plan better met their needs. However, this meant some longtime workers who didn't meet both criteria still suffered a substantial loss, she noted.
CWA strongly supports legislation to blunt the harsh impact of the proposed regulations. Bills introduced by Rep. Bernie Sanders (I-Vt.) and George Miller (D-Calif.) and in the Senate by Sen. Tom Harkin (D-Iowa) would restore important safeguards, especially for older workers.
These bills would assure fairness by giving employees who are 40 years old or who have at least 10 years of service the option to choose whether to remain in the traditional plan or move to the cash balance plan.
Guyer also stressed the need to prohibit the "wear away" feature in many cash balance plans that requires employees after a plan conversion to work many years before accruing any additional benefits.
"I believe that the Treasury Dept.'s primary concern in these regulations should be the impact on older employees of a conversion to a cash balance pension program," Guyer told the panel.
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