From IBM to Hershey to Hertz and CBS, hundreds of big businesses are dropping traditional pension plans for so called "cash balance accounts" under which companies simply set aside an annual percentage of a worker's pay for retirement. CBS News Chief Washington Correspondent Bob Schieffer reports.
IBM employees cried foul when their plan was changed. When they went to court to block it, IBM backed off a little, but today the workers crowded into the capitol to give congress an earful.
"Most workers have no idea what their rights are," says former IBM employee Janet Kroeger.
Since traditional pensions were usually tied to salary, workers like Kroeger planned on earning the bulk of their retirement funds during later years when they were making top wages. As such, the new plan will mean less money for senior workers.
IBM executives countered they had little choice in the increasingly competitive market place. "We don't have enough money to go around and give everybody every thing that everybody wants," said a company spokesman.
U.S. Rep. Bernard Sanders, I-Vermont, wondered why a top IBM executive hadn't considered that when he negotiated his own retirement plan. "He negotiated for himself a one million dollar a year pension plan when he retired," Sanders said. "He's very concerned about the issue."
Congress is considering requiring companies to give workers more information and more pension choices. Sen. Patrick J. Leahey, D-Vermont, wants an immediate crackdown before "Hundreds of thousands, even millions of workers in this country get screwed."
The problem is that Congress has put off so much of its work to the last minute that finding time to create any real legal remedies before adjournment may be difficult, if not impossible.
Copyright 1999 CBS. All rights reserved.
CBSNews.com staff CBSNews.com staff