Retiree Health Benefits Act of 2005

IBEW urges rejection of any proposal that would attempt to cut Social Security benefits or otherwise hurt workers in risky privatized Social Security finance accounts, or raise the retirement age, which already is scheduled to increase to 67. The IBEW position is that forcing workers to stay on the job even longer to collect the benefits they have spent years paying for would be cruel and unnecessary. It is also inconceivable that workers in physically demanding jobs, as is the case with a large number of IBEW members, would be forced to work longer by increasing the retirement age. Chairman William Thomas was expected to include Social Security privatization in the Pension Protection Act of 2005 (H.R. 2830), but did not. Thus, it appears that the Social Security issue is dead for now. The general political climate has thwarted any desire to implement the president’s scheme. The IBEW took no position on H.R. 2830, the “Pension Protection Act of 2005,” or S. 1783, the “Pension Security and Transparency Act of 2005” understanding that the ultimate effect of the proposed bills would encourage employers to cease offering their employees a defined benefit pension. Rather, the IBEW lobbied to urge the inclusion of two separate provisions to the bill. The first was for multi-employer pension plan reform as proposed by the Multi-Employer Pension Plan Coalition, a group of employers and unions involved in the construction, trucking, and food service industries. The second was for a two-part change to Section 420 of the Internal Revenue Code as outlined in S. 1573 the “Retiree Health Benefits Act of 2005.” The language of S. 1573 is included in S. 1783. The language proposes two changes to Section 420 of the Internal Revenue Code to ensure that retirees, such as those at Lucent Technologies [an IBEW/Communication Workers of America (CWA) employer], will continue to receive retiree health care benefits. First, the bill would permit substituting the statutorily mandated maintenance-of-cost requirement with the retiree health care benefits as negotiated under the collective bargaining agreement between IBEW/CWA and Lucent Technologies. Second, the proposed legislation would permit Lucent to pre-fund a retiree health care trust by providing an exception from the current-law restriction that allows a transfer to fund retiree health care costs for only the current year. Enactment of this legislation is vital to the retirement security of approximately 117,000 retirees and their dependents. Changes to Section 420 is a collaborative labor/management effort. [Ltr. 9/29/05]