Call Your Senators Regarding HR 1102!

All:

Please see important information below regarding HR 1102 and take action today, people in Florida take note that Senator Connie Mack is on the Senate Finance Committee that is doing the markup on this bill. Either call or fax your Senator today!

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PLEASE CALL both your senators today. The latest language being incorporated in the senate version of HR1102 would legalize *EVERYTHING* IBM did with pension conversions in both 1995 and 1999. If it passes without modification, our lawsuit will be thrown out of court. (Our lawsuit, BTW, is proceeding well; the class certification hearing is scheduled for tomorrow at 2:00!)

CALL both your senators BEFORE Sept 7 and tell them this is a completely unacceptable action for Congress to take. (According to the current schedule, the bill will be marked up by the Senate Finance Committee on Sept 7, and then sent to the full senate for a vote on Sept 22.) Just go through the following steps for each of your senators:

1) Find the phone number for your senator's office. All phone numbers are listed on the following web page:

<http://www.senate.gov/contacting/index.cfm;

2) Call the senator's office, and use the following script:

- I have an urgent message for the senator about the Roth version of the Portman/Cardin bill on pension reform. Can I speak to whichever staff person works on pension issues? (Write down the name of the person you get transferred to, introduce yourself, and ask if you can have their direct number.) Once you get to an appropriate person, read the following: - If the senate bill includes direct references to cash balance plans and other hybrid conversions, it could inadvertently legalize what IBM and other companies have done to reduce their employee's pensions. Please do NOT do this. Many lawsuits are pending against these companies; we deserve our day in court! I will be very disappointed in the senator if the bill is passed with any direct references to cash balance plans included. - If the senate decides to address wear away in their version of the bill, that would be great. But only if wear away is defined to apply to ALL plan amendments, regardless of whether they involve cash balance plans, and is calculated to include any earned early retirement subsidies. - The house version of the bill reduced the protections on early retirement subsidies. This is also not acceptable. Any pension amounts that I have already earned need to stay protected, regardless of whether part of the formula is technically an early retirement subsidy. This is especially critical in high tech industries where workers generally retire early, and switch to a less stressful vocation for the last decade of their employment. - If they want more information on the technical concerns you are raising, refer them to the <http://www.cashpensions.org; web site, or the Pension Rights Center, or me.

Thanks! Janet Krueger 507 529 8777 ext 110 IEBAC (IBM Employee Benefits Action Coalition)

-------- Prior notice about Portman-Cardin Bill ----------- From: <jkrueger@andrewscg.com Date: Tue Aug 29, 2000 4:35pm Subject: WRITE to the Senate...

A sample letter relative to the senate version of HR1102 is now included under pension protection on <http://www.PoliticalVoice.com;. To send a version, just go to:

<http://www.PoliticalVoice.com;

First register with the site. If you don't want to be added to any mailing lists, click the 'no spam' box. Then select Pension protection twice, and take PRO option. You can add a personalized prolog to the letter, and with one click, send it to your senators, the whole finance committee, the president and vice-president, and your representative.

This is one of the MOST important things we've done this year. PLEASE do it. TODAY!!! If we lose this battle, all of our lawsuits against cash balance conversions could go down in smoke, and already earned early retirement subsidies could be revoked. The senate vote is scheduled for Sept 7; we don't have much time...

After you do your part, forward this to your friends and family and convince them to write as well. It is easy and fast.

If you would prefer to send a personalized letter or call your senators on the phone, that would be great as well. We WILL make a difference if every senator hears from his/her own constituents about how important this is...

Janet Krueger 507 529 8777 ext 110

----Sample letter-------------------- Letter Body

I vigorously oppose changes to the pension laws indirectly recognizing the legality of cash balance plans.

Across the country, employees are pursuing claims under ERISA and the ADEA against employers who have amended their traditional pension plans by adopting a cash balance or other hybrid plan formula. Until these employee challenges are resolved by the courts, it would be inappropriate for Congress to take any position -- or even imply -- that cash balance or hybrid plans are illegal only if they cause participants' benefits to 'wear-away' following the amendment. Despite the loud protests from the benefits consulting community to the contrary, employers use cash balance conversions plan primarily to reduce their pension expense for financial accounting purposes. While employers have the right to change their plans, I trust members of Congress agree that employees have a right to know what has happened to the pension promise they have relied on for their entire working career.

I urge Congress to decline invitations to enact legislation providing cash balance plans with special treatment, or indirectly recognizing the legality of such plans by defining them. While I support strong new disclosure laws and rules prohibiting amendments to defined benefit plans which impose a wear-away of accrued benefits, any such legislation should apply across the board to all defined benefit plans. No reason exists to single out or define a cash balance plan except to give the appearance of Congressional approval to the existence of these plans prior to the courts having an opportunity to rule on employee claims under existing law.

I also oppose the following egregious sections from HR1102, the recently passed house version of this bill, which could harm defined benefit pension plan participants:

-- Section 405(b)(1) - engrossed version:The intent of this section is stated in the last paragraph of Section 304(a)(3) in the House version. 'To permit elimination or reduction of early retirement benefits, retirement-type subsidies, and optional forms of benefit that do not have material value for a plan's participants.' This section can further reduce or eliminate significant pension rights, ultimately reducing some pensions by as much as 50%.

-- Section 701(a)(2) and (b)(1)(A):This section gives preferential treatment to individual plan documents in lieu of protections provided by ERISA law (IRC 411(d)(6)). The protection of accrued benefits in IRC 411(d)(6) should remain.

-- Section 620 (Amendment - Congressman Ballenger):This amendment would prohibit the Secretary of Labor from litigating claims against a plan sponsor for breach of fiduciary responsibility if a settlement of a private suit is reached between a plan participant and the fiduciary. No regulatory agency should be inhibited from carrying out its appointed mission, particularly with respect to protecting constituents who may otherwise be unable to protect themselves.

-- New Introduction Amendment (S.2853 - Senator Grassley):This possible new introduction permits the distribution of pensions to plan participants before severance from employment. This amendment must be fortified with a number of protections: 1) The transition is with the approval of the plan participant.2) Personalized, detailed, timely disclosure is provided so that a plan participant can make an informed choice.3) The lump sum, if selected, includes the value of any early retirement subsidies.

Congress needs to be extremely cautious about making arbitrary changes to the ERISA laws. Numerous federal lawsuits are pending relative to cash balance conversions. National media focus and pending lawsuits have effectively halted harmful corporate conversions for the time being. Congress should not rush in with new regulations to constrain future conversions, which have the potential to adversely impact current court cases. The courts should determine which ERISA and ADEA laws have been violated and what the redress should be. Employees already victimized by cash balance conversions deserve their full day in court!

The final version of the Comprehensive Retirement Security and Pension Reform Act of 2000 should stick to addressing IRA and 401(k) limits; save the 50+ supposedly minor ERISA reforms for separate legislation at a later date.

Please schedule a series of hearings and public commentary, with an end goal of creating comprehensive pension reform legislation that would both simplify the system for pension plan administrators and better protect and clarify the rights and earnings of pension plan participants.

That is all employees really want: The ability to understand what their employer has promised them, and a way to enforce that promise.