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Pension Ripoff

Posts in this section are about pension issues - especially the class action pension suit against AT&T.

Sunday, April 03, 2005

Supreme Court: Age bias need not be deliberate

The Supreme Court made it easier Wednesday for any worker over 40 to allege age discrimination, ruling that employers can be held liable even if they never intended any harm.

About 75 million people—roughly half the nation’s work force—are covered by the decision. However, the ruling makes it clear that older workers will have a high threshold to prove their claims.

Justice John Paul Stevens wrote that in some cases employers are within their rights to treat workers differently because of age.

“Age ... not uncommonly has relevance to an individual’s capacity to engage in certain types of employment,” wrote Stevens, who at 84 is the court’s oldest member.

The ruling sides with older police officers in Jackson, Mississippi, in saying they do not have to prove that the city deliberately tried to discriminate against them, just that the policies disproportionately harmed them. Nevertheless, the high court dismissed the suit, saying officers did not demonstrate that.

The ruling means that older workers now have less of a burden to raise their claim in court when suing under federal law, although ultimately it may still be hard for them to win.

The decision was unanimous in dismissing the police officers’ suit, but 5-3 in holding that such suits are permitted under age-discrimination laws. Chief Justice William H. Rehnquist did not participate in the decision, which was heard in November when he was being treated for thyroid cancer.

The Supreme Court already has said the so-called disparate impact claims are allowed under Title VII of the 1964 Civil Rights Act, which bans discrimination based on sex, religion or race. On Wednesday, justices said it should be no different for age discrimination, although it ruled the scope of liability is narrower.

At issue was workplace polices that appear neutral but actually disproportionately hurt older workers. Advocates for the aging say few employers would ever be up front about intentionally favoring younger workers, making age bias claims hard to win absent the rare “smoking gun.

But employers say allowing disparate impact claims under the Age Discrimination in Employment Act would hinder their ability to make necessary decisions based on age-neutral factors, such as training or performance, even if the impact happens to be greater on older workers.

The ruling in some ways strikes a compromise between the two. On the one hand, it allows older workers to make a disparate impact claim under the ADEA regardless of intent; but at the same time, it permits an employer to cite “reasonable” factors, such as cost-cutting, to justify a practice that penalizes older workers so it prevails at trial.

In a concurring opinion, Justice Sandra Day O’Connor agreed that the police officers’ suit should be dismissed but argued that ADEA bars disparate impact claims. She said Congress never intended such lawsuits because employers should have flexibility to make business decisions that might unintentionally hurt older workers.

Because older workers tend to be longtime employees with higher pay and more benefits, a business might inadvertently violate the law when it cuts expenses, even if no ill intent was involved, O’Connor noted. Her concurrence was joined by Justices Anthony Kennedy and Clarence Thomas.

“There often is a correlation between an individual’s age and her ability to perform her job,” O’Connor wrote. “That is to be expected, for physical ability generally declines with age, and in some cases, so does mental capacity.”

Currently, there are more than 70 million workers who are age 40 or older, and the number is growing. The federal government predicts that by 2010, more than half of all workers will be 40 or older.

Despite the aging trend, lawyers say employers often have economic incentives to weed out older workers. That’s because longtime employees may have higher medical bills and have locked in more expensive salary and benefit agreements.

In the Mississippi case, 30 officers and dispatchers sued over a pay performance plan they said gave substantially larger pay raises to employees with five or fewer years of tenure; as a result, that had an unfavorable impact on employees 40 and over.

The lower courts threw out the suit, reasoning that disparate impact claims were barred.

In its ruling Wednesday, the Supreme Court said that while police officers can get into court to show unfavorable impact, they failed to do so here. It said the city’s explanation that it was trying to make salaries for junior officers more competitive with similar positions was “reasonable.”

“The city’s decision to grant a larger raise to lower echelon employees for the purpose of bringing salaries in line with that of surrounding police forces was a decision based on a ‘reasonable factor other than age’ that responded to the city’s legitimate goal of retaining police officers,” Stevens wrote.

Federal appeals courts previously were sharply divided over whether the 1967 age bias law permits impact suits. Legal experts have said workers making age bias claims generally win their lawsuits less than one-third of the time.

The case is Smith v. City of Jackson, 03-1160.


Credit: pension_watchdog

Posted by Elvis on 04/03/05 •
Section General Reading • Section Pension Ripoff
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Saturday, March 26, 2005

A Different Way To Win

Don’t throw away your AT&T stock proxy information this year.  I know what you’re thinking—We won’t win against the board’s recommendation.  Of course we won’t, but no one expects us to get more than 5% of the vote.  When the cash balance question came up, we got closer to 10%, and we got their attention!  If we do that again it will be viewed as a significant moral victory, and will rattle the cages of the executive committee and the board.

Check out proposal # 8 on this year’s AT&T proxy ballot.  It’s an attempt at forcing executives to use the same retirement benefits as the rest of AT&T’s employees.

Institutional investors (The big players who have millions of shares) rarely vote against recommendations from boards of directors, and they control a huge majority of the vote.  That’s why this proposal will go down in flames, but any significant percentage of votes against the board’s recommendation will help upset the applecart.

Besides, it will cost you nothing, and give you a warm feeling of acomplishment by taking action!

Credit: pension_watchdog

Posted by Elvis on 03/26/05 •
Section Pension Ripoff
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Sunday, March 20, 2005

PBS Special on Retiree Health Care Coverage

If you’re retired and your former company is paying all or part of your health benefits-coverage you think you’ll have for life-then you might want to dig out your old paperwork, put on your glasses (while you can still afford them) and read the fine print.  Why?  It may depend on what your definition of lifetime is.  More and more retirees are finding themselves in court to save the health benefits they thought they were promised. And, judging by the decisions returned in a spate of cases, fine print trumps all.

It’s a story that began in the 1989 when health costs soared and corporations moved quickly to protect their bottom lines by slashing benefits and shifting costs to retirees.  Most companies can cut retiree benefits at will.  For others, fine print in contracts makes it a little trickier, and this is where the latest plot twist is playing out in courts around the nation.

The dictionary definition of lifetime is: “The period of time during which an individual is alive.” Simple enough-if your company promised you benefits for life, you just need to be alive to receive them.  But it’s a difference of opinion over the legal definition that is stirring up trouble for some former union workers.  In recent cases, corporate lawyers are arguing that “lifetime” refers to the life of the contract, not the lifetime of the retiree.  When those contracts expire, they argue, so does the promise of the benefits.

In light of that argument, Basil Chapman, a 60-year-old former worker at ACF Industries, a railcar manufacturer, calls what ACF did to him “a set up.” Chapman, a former union local president who headed a Steelworkers bargaining committee, says his union negotiated lower starting pay for new workers in exchange for lower monthly medical payments for retirees. When the company sued for the right to change the coverage, Chapman was stunned.  To these retirees the agreement with their employer was more than just a promise, it was a contract. “This story is part of a wholesale shift in risk from companies to families,” says David Brancaccio, host of the PBS newsmagazine NOW, which is featuring Chapman in a report on April 1.  “Healthcare costs are rising, but increasingly companies are insulating themselves from these costs with individuals left to shoulder the burden.” With no place for promises on corporate balance sheets, companies are turning to the fine print with their eye on the bottom line. California-based GenCorp is relying on a sentence in an enrollment form their employees signed a decade ago to increase monthly premiums.

GenCorp, formerly the General Tire & Rubber Company, a tire manufacturer you may remember from its slogan: “Sooner or later you’ll own General,” has workers worried that sooner or later they’ll have to drop out of their coverage because it’s too expensive. And while GenCorp is riding all over its retirees, they are not alone. A Kaiser/Hewitt Survey on Retiree Health Benefits shows that a vast majority of large employers say they are “very or somewhat likely” to raise premiums and/or cost-sharing requirements in 2005, including 85% of companies surveyed predicting an increase in contributions to premiums by retirees. More ominously, 8% of employers surveyed eliminated subsidized benefits for future retirees in 2004, and 11% said they are likely to follow suit in 2005.

While most employers haven’t turned to the courts, the trend is on the rise and some are using tactics that are particularly aggressive.  Just ask Basil Chapman, who was sued by ACF after he threatened to take the company to court when he learned he’d be charged for benefits that previously were free.  Chapman’s attorneys say the preemptive move allowed company lawyers to shop for a court where they think they can win a favorable opinion. As these cases make their way through the courts, there’s little risk for the companies, which if they lose, will simply have to resume paying the benefits.  In the meantime, Chapman says, retirees who can’t wait will drop out, and for others it may just end up being a lifetime. “It’s disturbing and scary for older people,” he says.  “They just die.”

For more on this important story, tune into the PBS weekly newsmagazine NOW, airing Friday, April 1, 2005 at 9 P.M. on PBS (check local listings).

Credit: pension_watchdog

Posted by Elvis on 03/20/05 •
Section Pension Ripoff
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Tuesday, March 01, 2005

SBC AT&T Merger

The SBC/AT&T merger should not affect the cash balance class action lawsuit adversely in any way. The merged company will retain all of AT&T’s existing responsibilities and liabilities (My advice is worth every penny you paid for it.  If you’re facing this decision, hire a financial planner! ).

The ACER website has links to more info on the lawsuit - . Major updates are in the works for this site.  The name will be changing from ACE (AT&T Concerned Employees) to ACER, to include retirees.  Changes are scheduled for the next few weeks.

SBC recently discontinued its cash balance formula and returned exclusively to a traditional pension formula (unlike AT&T, SBC never completely abandoned the traditional pension formula; it continued to exist as an alternative to the cash balance formula). Some people have speculated that this has favorable implications for how AT&T employees who are still active after the acquisition may be treated. But neither SBC nor AT&T has made any announcements about this to date.

Credit: pension_watchdog

Posted by Elvis on 03/01/05 •
Section Pension Ripoff
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Friday, October 08, 2004

AT&T Pension Class Action Lawsuit

Plaintiffs are management employees of AT&T who were participants in the AT&T Management Pension Plan as of December 31, 1996.

The proposed class is defined as any and all persons who:

1. Are former or current AT&T management employees,
2. Are currently over age 40,
3. Participated in the AT&T Management Pension Plan on December 31, 1996 and on or after the January 1, 1998 date on which the Pension Plan was converted to a cash balance design.

Checkout THIS WEBSITE and THIS WEBSITE for more info.


AT&T Retiree website - Check out the Pending Legislation and NLRN Legislative News sections

Track YOUR Senators & Representative - Sign up for MEGAVOTE, a weekly summary of roll call votes.  It is easy and spam-free.

AT&T Cash Balance Lawsuit Homepage - (Engers v. AT&T)

Actuarial report on AT&T’s Cash Balance Conversion

AT&T Concerned Employees (ACER)

US Congress - Find & contact your rep & senators. - Go to the Legislation Section (Bill analysis, Track your reps, etc.).

retire.gif width=360 height=272 align=top

Credit: pension_watchdog

Posted by Elvis on 10/08/04 •
Section Pension Ripoff
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