A big thank you Ed for the many details of ibms recent past history for employee uses of KY. To even conjecture that ibm would not ax retiree health care is borderline asinine.
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--- In ibmpensionissues@..., edward_berkline <no_reply@...> wrote:
Have you not been paying attention over the last 20+ years?
In 1991, IBM changed the old Service and Earning pension formula, reducing the percentage used in the calculation from 1.5% to 1.35%. A 10% cut.
Also in 1991, IBM placed a cap on the amount they would pay for retiree medical benefits. Although the cap wasn't reached until around 2000, this meant that those who retired before 1992 with the promise of fully paid lifetime medical insurance would now have to pay for it. A broken promise to those already retired.
In 1995, IBM again modified the pension formula, reducing the typical pension from 40% of final average salary to 30% for someone with 30 years of service. A 25% cut.
In 1999, IBM forced the majority of employees into the Cash Balance plan. This reduced a typical pension annuity to less than 20% of final average salary. Another 30% cut on top of the prior 25% and 10% cuts.
They also forced the vast majority of employees into the Future Health Account for retirement medical insurance. For retirees under the FHA plan, it means that they may have to pay $100k or even $200k out of their own pocket for IBM medical insurance during their lifetime.
In 2004, IBM excluded all new hires from participating in the pension plan, and excluded them from receiving any IBM contribution to the FHA plan. They have to pay 100% of all retiree medical insurance. Add another $50k to the numbers above for those folks.
In 2007, IBM froze the pension plan and ended future accrual of pension benefits.
ALL (I repeat: ***ALL***) of these things were done to cut expenses to IBM. This resulted directly in increased profits, and by way of the executive bonus formulas which are tied to earnings per share, increased the bonuses that the executives received.
If you read the fine print in your IBM benefits documentation, you will see that darn phrase that says IBM reserves the right to change benefits at any time in the future.
Although your pension in protected by federal law, your medical benefits have no protection at all. IBM has screwed the retirees in the past. That's documented fact. They could do it again at any time. I haven't claimed that they definitely will do this. But they certainly could. And history says they will not hesitate when it comes to improving the bottom line.
IBM has been improving its profitability almost exclusively by cutting costs for the last 20 years. At some point, you run out of things that can be cut. It seems to me that retiree benefits must be getting close to the top of the list.
--- In ibmpensionissues@..., Just Puttin' <JustPutt2@> wrote:
Edward,
I don't know about your history with IBM, mine was 33 years, I will tell you this, the IBM Corporation is NOT about to do as YOU state,,,??'IBM has plenty of cash on hand, but the executives could be very tempted to cut medical benefits as a way to boost profits and enhance their bonuses.'??
To EVEN conjecture such an idea is borderline slanderous, IMHO
What documentation do you have that would support that premise?
??
________________________________
From: edward_berkline <no_reply@...>
To: ibmpensionissues@...
Sent: Sunday, November 4, 2012 11:00 PM
Subject: [ibmpensionissues] Re: U.S. companies take aim at pension risk with lump-sum offers
??
What a bunch of fantasy conjecturing! ?? Current earnings have
almost little or NO impact on a company's Pension funding or
healthcare benefits.
Although current earnings don't affect the pension fund, ALL healthcare benefits, both for current employees and retirees are paid from income as an operating expense. As revenue goes down, it becomes harder to pay for those medical benefits. IBM has plenty of cash on hand, but the executives could be very tempted to cut medical benefits as a way to boost profits and enhance their bonuses.
I'm not saying that I think they will do that, but the pressure will be there. Earnings reports from the last 5 years or more show that almost all of IBM's profit growth has come from cutting expenses.
--- In ibmpensionissues@..., Just Puttin' <JustPutt2@> wrote:
What a bunch of fantasy conjecturing! ???? Current earnings have almost little or NO impact on a company's Pension funding or healthcare benefits.
What if the sky falls tomorrow, before noon?
