Pension Action E-Newsletter

April 11 , 2008

Pension Rights Center Seeks Withdrawal of Cash-Balance Revenue Ruling
In a letter to Treasury Secretary Henry M. Paulson, the Pension Rights Center calls for the withdrawal of Revenue Ruling 2008-7, which purports to legitimize “wearaway” in certain cash balance conversions that took place before the enactment of the Pension Protection Act of 2006 (PPA). “Wearaway” in cash balance conversions is an unfair corporate practice that was outlawed by the PPA because it can result in devastating losses of expected pension benefits for older workers. Read the Center’s letter, which points out that the Ruling goes against congressional intent, and conflicts with the language of the law and the controlling regulation. The Center also wrote a press release and sent a letter to key members of Congress. 

If you think Revenue Ruling 2008-7 is unfair and should be withdrawn, use our web site to send a  letter to let Secretary Paulson know your concerns.

Department of Labor Seeking Comments on Model Notice
The Department of Labor has proposed a model notice for plan administrators to send to participants in underfunded multiemployer pension plans that are deemed to be in “critical status” (also known as the “Red Zone”). The notice, required by the Pension Protection Act (PPA), is meant to explain potential pension benefit cutbacks workers may face because their pension plan is in the Red Zone. Read our summary of the model notice and follow the instructions to read and comment on the proposed model notice (appearing on page 5 of the DOL proposal). Be sure to tell the Department of Labor whether you think the model notice clearly explains the possible benefit cutbacks. Read our summary of the PPA’s provisions requiring Benefit Cutbacks in Multiemployer Plans.

Shareholders Meetings on the Horizon
More and more individuals and organizations are using annual shareholder meetings to try to influence the way companies are run. Just last year, the Association of BellTel Retirees introduced a winning proxy proposal at Verizon’s 2007 shareholder meeting that gave shareholders a say on pay packages for highly-paid executives. This year, the Association plans to introduce a proposal that would reduce the possibility of conflicts of interest by requiring the board of directors to select as its chair a person who has not served as the company’s CEO. Read more about the proposal in the Action section of our web site and learn more about shareholder resolutions and how they allow shareholders to have an impact.

Below are the dates of some important shareholder meetings. Let us know if there are others you’d like us to add to the list.
 
April 23 – General Electric – Erie, Pennsylvania
April 29 – IBM – Charlotte, North Carolina
May 1 – Verizon – Lincoln, Nebraska

Did you know?
On April 1, workers in some traditional pension plans started receiving notices informing them that, because of their pension plan’s funding status, they may not receive all of the pension benefits that were promised to them. To help workers understand who might receive such notices and what benefits might be cut, we have published two new fact sheets, “Benefit Cutbacks in Single-Employer Pension Plans” and “Benefit Cutbacks in Multiemployer Pension Plans.”

Articles of Interest