Printer-Friendly
Email this Story
Post a Comment (0)
Sumerduck Man Leads Compensation Crusade
Sumerduck Man Leads Compensation CrusadeBy Bill Walsh
Times-Democrat Staff Writer
A bit threadbare and moth-eaten they may be, but a pair of familiar adages go a long way toward explaining Jim Casey's challenge.
One is the old saw about the speed at which the gods' mills grind. The other has to do with the similarities between making sausage and enacting legislation, and how you really don't want to be a witness to either.
Casey, a resident of Sumerduck for nearly a decade, is president of protectseniors.org, an organization that has championed a bill that has been kicking around the halls of a slow-grinding Congress since 2000.
It has never yet made it out of committee, but Casey is hopeful that, with Democrats in charge of both houses of Congress and the White House, HR 1322 may make it further this year, and may actually someday make it into law.
The bill essentially reverses the effect of Sprague vs General Motors, a Supreme Court decision from the late 1990s that codified a company's "reservation of rights," Casey said.
The rights U.S. Companies reserve is their ability to renege on their contractual obligations to retirees with impunity, Casey said.
"The law of the land is Sprague vs. GM, which says that there is a hidden benefit practice [between employers and employees] that has these words in it: 'We reserve the right to change, amend or terminate at any time in the future,'" Casey explained last week.
Essentially, companies can — and are, in increasing numbers in a poor economy — tell their retirees that health-care coverage is no longer part of the deal.
It would be one thing if retirement health-care coverage were a gift — and that is the way Corporate America is spinning it, Casey said.
It is not. Retirement benefits, including health-care coverage, are earned, Casey argues, and paying off deferred obligations should be no different from meeting current payroll obligations.
But they are.
Attorney Michael Gordon wrote a bill that latter became the law commonly referred to as ERISA, the Employee Retirement Income Security Act, Casey noted.
ERISA mandates that companies which offer pensions to their employees must set money aside to fund them.
"[Gordon} intended to put health care in that bill," Casey said, "so that health-care coverage would also be funded. When it came down to getting the pension bill passed, the health benefit got taken out."
Within days, Casey said, Gordon, who died in 2004, had penned HB 1322, The Emergency Retiree Health Benefit Protection Act, which mandates that companies offering health care in retirement must likewise set money aside to pay for the program.
Pensions and retirement health care are voluntary promises to employees, Casey noted. "But if you give [a pension], it's got to be there at the end," he added. "That's the thing about ERISA. You don't have to give a pension plan, but if you do, it has to be funded."
With health insurance coverage, companies can simply walk out on the deal.
"Our bill would be an add-on to ERISA, which would simply say that, oh, yeah, by the way, it also means health care, health coverage [is funded]," Casey said. "Whatever you voluntarily give during the employees' lifetime, and that includes retirement benefits, you have to fund."
Rep. John Tierney (D-Mass.) introduced the bill in 2000. It has languished in committee ever since. The late Sen. Paul Wellstone once introduced an identical bill in the upper chamber, where it had a similar fate.
"We expect this year to get a lot of flak and not get too far because there are other issues," Casey said. "But what is going on at the same time is the...universal health-care issue. Our whole idea would be moot if we get nationalized health care. On the other hand, any national plan that retirees could afford would be less than many of them have right now. But the greater good for the greater number, and we would find another horse to ride if that comes to pass.
"For us, we are working on the 'meantime.' In the meantime, let's get this little problem fixed, let's fix it so retirees don't get hurt.
"In reality," he mused, "we are looking at another seven to 10 years [to get the bill passed], even with Obama pressing it and pushing it. The insurance industry is a very tough lobby."
This is an issue that is intimately involved with others getting national attention these days.
Would it drive the cost of the Big 3's automobiles even higher and make them even less competitive with foreign car makers who don't have so many retirees?
Not really, Casey said.
The Big 3 have already been setting money aside for health-care coverage for retirees.
Would it be impossible for companies to fund?
Not really, Casey said.
For one, salaries of "the top six people at Verizon could have paid for [Verizon's retirees' health-care coverage], over the last four or five years," Casey — himself a Verizon retiree — insists.
Verizon — and hundreds of other companies — "could have done the funding by not giving [so much] money to their executives," he claims.
And besides, the bill contains a clause that provides a waiver releasing companies that can convince the Department of Labor that compliance would break them financially.
"You're not going to pass any law if it is going to bankrupt anyone," Casey said. "We have taken a lot of flak for the [waiver] wording from our own members. But it has to be in there, or we will never get the law passed.
"The reality of getting legislation passed is you have to take the extremes and wipe them out. You are going after that middle area; that is the reality you face."
In reality, Casey is not hopeful that progress will be made in leaps and bounds this year. Perhaps, he said, the 112th Congress might be more receptive.
Protectseniors.org has about 60,000 members, including about 100 or so, Casey reckons, in Fauquier County, mostly phone company retirees. Those interested in the legislative effort can join online.
Dues, essentially, are voluntary, with about a third of the members paying, on average, about $25 a year in support of the effort.
Companies are well within their rights to quit offering pensions and other retirement benefits, Casey said.
"But there is a penalty to the company for doing that," he added. "All of a sudden, people want more cash in their hands, and companies have to pay more employment taxes."
Unfortunately, companies are also within their rights to break commitments made years ago. That is patently unfair, he said.
"In the past, they made a promise, and you got less in your paycheck, less in your pension, because you were looking at the health-care component."
Failing to pay the deferred compensation is morally reprehensible, even while it is perfectly legal.
HB 1322 would change all that.
"This is not a dastardly bill," Casey said.
You must be logged in to post a comment.