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Central Pension Fund NBC News
and The Wall Street Journal Expose “I’m a Goldwater conservative, a Vietnam vet and a Republican, but I’d support a union coming in here if it would force the company to open up its books on what it’s doing. If I were 10 years younger, I would have left. It tells you something about a company when it does something like this to people.” These were the words of David Finlay as reported in The Wall Street Journal July 27, 2000. That evening Mr. Finlay was also interviewed on the "NBC Nightly News" with Tom Brokaw. Why were The Wall Street Journal and NBC so interested in Mr. Finlay? Had he been the subject of a mass firing by a non-union employer? Had his job been shipped off-shore to Taiwan or Korea? Had his wages been cut to compete with cheap imports? No, Mr. Finlay was interviewed because he is a victim of what many of the largest and most prosperous companies in America are doing to their employees--secretly cutting their pensions. Too late too many of these employees, like Mr. Finlay, are recognizing the value of belonging to a union. Mr. Finlay is a long-time senior engineer for the IBM Corporation. He is 55 years old and expects to retire in 10 years. He calculates that the changes which IBM has made to its pension plan during the 1990s will lower his expected annual pension from $71,200 to $57,700--a 19% cut. Mr. Finlay and thousands of his fellow employees at IBM have only recently begun to understand the magnitude of the Company’s pension cuts--although the cuts were being imposed throughout the 1990s. The reason the employees awoke so late was that each time the cuts took place they were not announced as cuts but rather as “improvements” or “modifications” to make the pension plan more attractive to younger workers, or more in keeping with industry practices. Union representatives are trained to immediately spot these kinds of corporate gimmicks. Loyal, long-time employees like Mr. Finlay are not. IBM accomplished its pension cuts--and the hundreds of millions of dollars of cost savings to the Company--through a series of pension plan “conversions.” First from a traditional defined-benefit plan to something called a “pay equity” plan and then last year, to a “cash balance” plan. According to The Wall Street Journal, in 1999 IBM saved $184 million from its latest pension change. And IBM is far from alone in pension cutting, indeed, it is in the middle of a national trend of such cutting. Examples of other large companies that have also engaged in recent pension plan “conversions” are Dow Chemical Co., Motorola, Lucent Technologies Inc., Kmart Corporation, MCI Communications, the Southern Co., Manpower Inc., the Casual Corner Group, CBS Inc., Ameritech Corp. and U.S. West Inc. While this wave of pension cutting is in itself reprehensible, the NBC and The Wall Street Journal investigations focussed on the deception with which the cuts are accomplished. In virtually every case, employees were never told of the negative future effects these plan “conversions” would have on their retirement security. And under current law, companies have no obligation to do so. At the end of the day, this sorry story once again points out what members of the International Union of Operating Engineers have always known, and what Mr. Finlay and his colleagues are now learning the hard way--the best protection for pension benefits is a union contract. Originally
published in the International Operating Engineer |