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Columns

Molly Ivins

Bush has another plan
February 25, 2003

AUSTIN, Texas -- You ain't no John Snow when it comes to pensions. Snow, our new treasury secretary, was CEO of the railroad company CSX Corp. and got a platinum parachute when he bailed. He gets $2.47 million a year for life in retirement benefits. This package was based on the premise that he'd worked for the company for 44 years, even though he'd been there only 25. Now that's creative accounting.

Plus, CSX decided to let him factor in the stock benefits he had received as regular income, instead of just salary, as is normally done. At the same time CSX was giving Snow this lovely deal, it was cutting the health benefits in its retirement plan for lesser workers. Since Secretary Snow is now in charge of pension policy at the Treasury, can we look forward to similar deals for ourselves? Nope, we're in the class that gets the cuts.

The Bush administration has a plan (those are rapidly becoming the six most chilling words in the English language) to de-improve your pension. It allows companies to switch from traditional fixed-benefit retirement plans to what's called the cash-balance pension plan. You will be unsurprised to learn that corporations just love it because it saves them millions of dollars a year, as much as $100 million in the case of huge companies.

Under the administration's proposed rules, companies can eat away at the retirement benefits they owe workers by using "reasonable" interest rates and mortality rates to calculate the value of a pension as the company converts to the cash-balance scheme. Presto: Hey, look honey, I shrunk your retirement package.

The cash-balance plan is particularly harmful to older workers, so if you've got any gray hair, you might want to take a look at what they're about to do to you. Under fixed-benefit plans, retirement is based on the employee's salary and years of work at the company. This gives older workers a chance to rack up benefits. When companies started switching to cash-balance plans, the AARP, the Pension Rights Center, the AFL-CIO and other groups set up a mighty holler. The Equal Employment Opportunity Commission received over 800 age-discrimination complaints. As a result, the IRS stopped approving these conversions in 1999.

But the Bush administration, operating on its cardinal principle -- Whatever Bill Clinton Did Was Wrong -- has naturally decided to reverse course. If Clinton did it, it can't be good (and what splendid results they've gotten so far), so the new rules will give companies that convert to cash-balance plans a tax advantage, as well as giving them protection from age-discrimination suits. Don't you love it? The perfect Bush plan: They get to screw workers and get a tax break, and nobody is allowed to sue.

More than 200 members of Congress have written Bush asking him not to let the proposed rules become law. The General Accounting Office did a study showing that annual pension benefits of older workers can drop by as much as 50 percent under the new plan.

There is a 90-day period for "public comments" on the proposed rules, and it might well behoove you to put pen to paper over this one. The public comment period ends March 13. You can call the Treasury Department at (202) 622-6090 or 6030 to find how to submit a comment. The Communication Workers of America website also has some how-to advice: It's at www.allianceibm.org/pension/treasuryletters.htm.

Rep. Bernie Sanders, the Vermont independent, has a bill to require companies that are going to convert to allow their employees to choose which plan works best for them. The bill requires companies to provide workers detailed information that allows them to make an apples-to-apples comparison.

If you're wondering why you haven't heard much about this, let me suggest two reasons. One is that TV news is in its one-story, Dead Diana mode: All they have time for is Iraq and the occasional nightclub fire. The second is the consequence of having all the media owned by a few giant corporations. It is not in the interest of these corporations to have such news widely reported.

Am I suggesting (gasp!) censorship? Nope, just that even though this affects millions of people, those millions are not a large percentage of the total television audience, and pension de-form is not as gripping as war or nightclub fires. That's the way media gigantism affects news. You can't save your pension with duct tape, so get on this.

To find out more about Molly Ivins and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at www.creators.com. COPYRIGHT 2003 CREATORS SYNDICATE, INC.

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