ProtectSeniors.Org

For Release January 6, 2009
News Contact: 202-434-8193


CONGRESS NEEDS TO ACT NOW TO PREVENT A HEALTH CARE DISASTER

Corporate Claims That Retirees are a Liability to Business
is "Morally Offensive" says Retiree Leader


Lately economists, talk show hosts, journalists and even politicians
are blaming America's retirees and union workers for the economic
downturn, labeling their earned retirement health coverage as "legacy
costs" and calling them too burdensome. "I and tens of millions of
retirees like me worked decades to earn those benefits," said C.
William Jones, a retiree from Verizon Communications and President of
the 100,000 member Association of BellTel Retirees. "For companies to
now imply that retirees are a liability to them and America is
morally offensive and absolutely inaccurate."

Mr. Jones is just one of the retirees calling on the 111th Congress
to act immediately towards passage of a bipartisan bill, titled The
Emergency Retiree Health Benefits Protection Act (in the 110th
Congress), which would prohibit employers from making post-retirement
cancellations or reductions of health benefits that retirees were
entitled to, without placing mandates on the employers as to what
health plans they provide or monetary ceilings on the amount of
health benefits.

According to Paul Miller, Executive Director of the national retiree
group ProtectSeniors.Org, the situation is as dire as the bailout for
the automakers, banking industry and Wall Street. Working the halls
of Capitol Hill, the rapidly growing coalition has already garnered
the support of retirees from 285 companies, 36 unions, 14 retiree
associations and 76 governmental retiree groups.

"There are currently an estimated 18.5 million American retirees and
baby boomers with their health benefits being significantly
threatened. If cancelled by the corporations they once worked for,
most would be dumped into the federal and state healthcare systems.
In effect this means their former employers would be getting an
additional back door federal bailout at the expense of the taxpayer."

The health care coverage Miller is referring to is earned retiree
benefits that tens of millions of Americans earned and paid for
during their working years. He says that for whatever reason, many
corporations never socked that money aside and are using the current
financial turmoil to threaten further cancellations and reductions.
Miller estimates, "if just half of these people (over 9 million) see
their earned retiree health care benefits cancelled or significantly
cut, it would overwhelm an already overburdened government health
care system."

Retirees say companies used the promise of post-employment health
care to induce employees to stay with that employer or, in some
cases, to take early retirement. Companies did not agree to pay
retiree benefits out of the goodness of their hearts or social well-
being; there were significant financial benefits and tax breaks for
them.

Employers benefited financially by not having to pay Social Security
and payroll taxes on these benefits and funding these benefits could
be deferred by companies in years when earnings were low, unlike
payroll that must be paid on time. Since pensions are based on a
percentage of wages, companies also saved on long-term pension costs.

This past September 25, the House Committee on Education and the
Workforce held its first hearing on the legislation. At the time
University Of Alabama School Of Law professor Dr. Norman Stein, an
expert on the nation's ERISA pension law testified in favor of the
bill, saying Congress should pass legislation "that would make it
difficult or perhaps impossible for an employer to terminate retiree
health benefits after an employee has retired." The long time
advisor to AARP and the Pension Rights Center advocated Congress
to "level the playing field for employees with clear, reasonable, and
consistent rules."

Without action from Congress to protect America's retirees during the
worst economic climate since the Great Depression, a nightmare
scenario looms for older Americans that has already claimed retirees
of several large corporations. "America's retirees are not here
asking for a handout or a bailout," said Mr. Miller. "We merely want
companies to live up to the promises they made. Give us the health
benefits we earned and paid for over decades of loyal
service."