Bush signed into law on Thursday, 8/17/2006, the Pension Reform act. Buried in the 907 page bill is a provision that will allow my former employer, UPS, to convert my 17 years of vested interest in UPS's defined benefit pension plan into a "cash balance plan." A worker at my age can expect to lose from 40% to 60% of anticipated pension benefits under such an arrangement.
And I am not the only loser. All of the 44 million Americans that qualify for a defined benefit pension and think they will be collecting it, are in for a rude awakening.
The bill is structured to encourage employers to convert their old defined benefit pension plans to "cash balance plans," Over 842 companies have filed preliminary papers to indicate their intent to convert their defined benefit pension plans to "cash balance plans." The remaining +29,000 copanies that have promised their employees a defined benefit pension will be under intense pressure to follow suit.
I have to go now and rub lotion on my rear end. It's really sore. And I think I am going to throw up.
But before I go, here is some more info that you may wish to be aware of. The bill in question also had some specific parts to it that directly were specific to UPS (multi employer pension funds in particular). UPS's political action committee, UPSPAC was a corporate sponsor of Newt Gingrich's "Contract On America." Over 80% of UPSPAC money goes to Republicans. They are /or were, the fourth largest political action committee in Washington, DC. UPS's former chief financial officer is Gary MacDougal, the former head of the Illinois Republican Party.