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Christine Roman: IBM, ending its long-time practice of giving solid, dependable pensions to its loyal workers, the pensions that help to build the American middle class.
Karen Friedman: There will be thousands of workers who are gonna lose, ur, thousands and thousands of dollars of benefits.
Christine Roman: The company says it's following, quote, "....a global strategy to move toward defined contribution retirement plans for both existing employees and new hires." That means, freezing pensions and pushing employees into more unpredictable 401(k)s.
Karen Friedman: IBM is saying we are forgoing our pension obligations to our workers and instead we're basically gonna tell people that they have to save for themselves.
Christine Roman: An IBM employee group that advocates unionizing denounced the benefit cuts. Quote, "...the next generation of workers will be in worse shape financially than this one. It is obvious that corporations of today do not value the work employees do."
Christine Roman: Indeed, IBM is the latest to jettison its pension plan. Nearly half of traditional pension plans have disappeared in the last decade. At IBM, 125,000 current retirees will not be affected, 117,000 current employees will.
Christine Roman: Among the complaints from some IBM workers on a web log:
"Thanks, IBM. What are the executives sacrificing for the benefit of competitiveness?"
"That pension plan was the carrot that kept us from looking outside of IBM for opportunities. ...IBM, over the next 5 years, will see a healthy level of voluntary attrition of experienced and skilled professionals..."
Christine Roman: Pension experts say, defined benefits, good for employees, are giving way to defined contributions, good for companies.
Jack Vanderhei (Emplovee Benefit Research Institute): There are going to be those employees who do better under the defined contribution plan and those that don't do as well.
Christine Roman: He says IBM's new 401 (k) program appears generous, but the burden is now shifting to the American worker.
Christine Roman: Christine Roman, CNN, New York.
Note----------
jettison: to get rid of something or decide not to do something any longer.
attrition: when people leave a company or course of study and are not replaced.
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