Posted on 02/07/2008 7:38:58 PM PST by BGHater
Under pressure from employers, the Treasury issued a ruling that allows companies to freeze the pensions of older workers in certain cases without running afoul of laws meant to protect employees' nest eggs.
In addition to validating some pension rollbacks that could save companies billions of dollars, the Treasury's action also could tip the outcome of long-running lawsuits alleging age discrimination by pension plans at AT&T Inc., Cigna Corp., Dun & Bradstreet Corp., El Paso Corp., and other major companies. The stakes are huge: In just the AT&T case, nearly 24,000 current and former workers had opted into a class action as of December, with potential claims exceeding $2 billion.
The companies declined to comment.
The crux of the issue is whether employers that change from traditional pensions to so-called cash-balance plans can freeze the growth of older workers' pensions for months or years following the change -- a phenomenon called "wearaway" -- even as younger workers' pensions continue to grow. Many companies let employees remain in the old plan for a time, but that only delays the onset of wearaway. The Treasury ruled that decades-old "backloading" laws that effectively prohibit companies from temporarily freezing pension growth don't apply when the freeze is delayed, even if it is eventually implemented.
The new rule covers certain plans through 2008, and the Treasury said it intends to issue a rule extending it beyond Jan. 1, 2009.
"The agency charged with enforcing a law to protect older workers has blown a hole in it," says Laurie McCann, a senior attorney at the elderly-advocacy group AARP.
(Excerpt) Read more at online.wsj.com ...
Anyone want to know why the RATs are picking up support and we are losing?
This kind of stuff just makes me furious. When these people hired on to the companies in question, the pension plan was part of their compensation. Now that they are too old to effectively change jobs for a better plan, the companies are being allowed to take it away from them.
If you think that’s something just wait untill those truly bloated public employee’s plans get rolling...There’s not enough money to pay people 100% of their wage throughout their retirement...SS is a drop in the bucket in comparison
What about Congress freezing their pay?
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