Pension Action E-Newsletter

February 5, 2008

PRC Urges Congress to Protect Pensions When Companies Enter Bankruptcy
Legislation giving workers and retirees new protections when their companies go into bankruptcy has been introduced into Congress. In letters to all Members of Congress, the Pension Rights Center urged legislators to support the pension provisions of the Protecting Employees and Retirees Act of 2007. This legislation would allow victims of fraud in 401(k) savings plans and workers whose pension benefits are not fully guaranteed by the Pension Benefit Guaranty Corporation to file claims if their companies are in bankruptcy. The legislation would also require companies to terminate pensions for their executives when they terminate the pensions of their rank-and-file employees. Read our summary of the Protecting Employees and Retirees Act of 2007 in the Legislation section of our web site.

New Tool Helps Investors Figure Out Salaries of Top CEOs
Ever wonder what the CEO of a Fortune 500 company earns?  A new tool helps investors find out. Recently, salaries of top executives have come under fire because companies continue to pay CEOs hefty salaries while cutting pensions, salaries and other benefits for their hardworking employees and retirees. The easy-to-use Executive Compensation Reader gets its information from the financial statements companies are required to file with the government and can serve as a great resource for those wondering about the pay packages companies give to their executives.

Airline Claims Rising Fuel Costs Could Threaten Pilot Pensions
Continental Airlines sent its 4,500 pilots a memo urging them to help the company reduce costs by limiting the amount of fuel they put in their planes. In what some may consider a veiled threat to pilots’ retirement security, the memo also says that adding too much fuel to the planes could threaten pilot pensions. The airline wrote that “adding fuel indiscriminately …ultimately reduces profit sharing and possibly pension funding.” You can see the memo in this CBS video report, which focuses on the safety aspect of planes carrying less fuel.

Articles Examine Whether IBM’s Enhanced 401(k) Can Match Frozen Pension Plan
Effective January 1, IBM froze its pension plans by stopping employees from earning additional benefits and closing the plans to all new employees. Employees now participate only in the company’s beefed up 401(k) savings plan. Two articles in the Journal News, including one article quoting Karen Friedman, the Center’s Policy Director, provide a helpful overview of the IBM situation. The second article offers comments by IBM employees on the likely impact the freeze may have on their retirement security.

EEOC Ruling Allows Employers to Cut Health Benefits for Older Retirees
The Equal Employment Opportunity Commission has ruled that employers can reduce health insurance benefits for Medicare-eligible retirees age 65 and older without violating federal age discrimination law. The ruling isn’t without controversy – the AFL-CIO takes the position that the EEOC ruling is necessary in order to preserve health benefits for younger retirees. AARP and the National Legislative Retiree Network have strongly protested the ruling as being unlawful and unfair to older retirees.

Did you know?
Starting this year, a provision of the Pension Protection Act of 2006 requires plans to use a new interest rate to calculate lump-sum distributions from pension plans. Read our summary of this provision in the Legislation section of our web site.

Pensions in the News
These and other recent articles can be found in the Pensions in the News and PRC in the News sections of our web site.

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