|
Friday Alert March 20, 2008
Alliance for Retired Americans
888 16th Street, N.W. - Washington DC, 20006 - (202)
974-8222 - www.retiredamericans.or
Retirement Security of Bear
Stearns Employees Up in the
Air
Sunday’s sale of Bear Stearns, the
nation’s fifth largest investment bank, to J.P. Morgan
Chase for $2 per share has not only shaken financial markets,
but also left the retirement of many of the company’s
14,000 employees up in the air. According to The New
York Times, Bear Stearns employees own approximately 30% of
the firm. As many as one third could lose their jobs if
the purchase is approved, and many have little retirement
investments outside of company stock. Shares of Bear Stearns
traded at $132 last fall, and the $2 offered by J.P. Morgan
represented less than one-tenth of their value on Friday.
Many employees are now hoping to ruin the deal in order to sell
their stock at a higher price. Former CEO James E.
Cayne, who was paid more than $232 million between 1993
and 2006, is expected to receive around $13.4 million in the
deal. “Loyal employees who gave decades of their
lives to this company are about to walk away with
nothing,” said George J. Kourpias,
President of the Alliance. “Corporate executives
must be held accountable and subject to the same pension deals
and retirement benefits as their employees.”
Pfizer Executives Rake in
$56.8 Million for Retirement
While
pharmaceutical companies have recently sought to justify rising
drug prices by claiming an industry-wide decline, two Pfizer
executives also retired in 2007 with sweet deals - a combined
$56.8 million in compensation. Research Chief John
LaMattina left the company with a departure package
worth $22.6 million, which included $3.3 million in severance
pay, $13.5 million through a Pfizer retirement plan, and $5.3
million as a “pension enhancement.” Former CFO
and Vice Chairman David Shedlarz retired with
$34.2 million in compensation, largely invested in the Pfizer
plan. Company CEO Jeff Kindler, who
remains in place, received $9.5 million as part of his regular
package. “These golden parachutes are paid for on
the backs of seniors struggling to afford their medicines.
I am appalled at the unchecked power and greed of these
companies,” said Edward Coyle, Executive
Director of the Alliance.
Plans for New Votes in
Florida and Michigan “Dead” and “All But
Dead”
Senator Hillary
Rodham Clinton’s hopes of ending the Democratic
presidential primaries with dramatic victories in Florida and
Michigan grew dim this week, as Florida officially scuttled
plans for a new vote and Michigan lawmakers appeared far from a
deal. The Washington Post reported that Florida
Democrats on Monday had declared dead their plans to hold a
do-over presidential primary to settle the dispute over whether
their delegation to the national convention in Denver will be
seated. Karen Thurman, Democratic Party
chair in Florida, announced the decision, saying thousands of
people had responded negatively to her proposal for a
vote-by-mail primary in early June. That leaves the fate
of the state's delegation in the hands of the Democratic
National Committee and the campaigns of Sens. Clinton, who
captured the most votes when Florida held a primary on Jan. 29,
and Obama. Similarly, Michigan State Senate Democrats
emerged from a closed-door caucus on Tuesday morning and
proclaimed that an idea floated by top Michigan Democrats to
create a special June 3 primary election is all but dead.
The Michigan Legislature, which would vote on approving a new
election, is deeply torn because of cost, legal questions and
logistical difficulties. Some party officials voiced
guarded hope that a deal could be reached before the week ends,
when lawmakers start a two-week recess. Florida and
Michigan were stripped of their delegates for violating party
rules when they held their contests in January.
Workers Raid Their 401(k)
Accounts in Effort to Stem
Foreclosures
Struggling to save their homes
from foreclosure, more Americans are raiding their 401(k)
retirement accounts to pay their bills — and getting
slammed with taxes and penalties in the process, according to
retirement plan administrators. Rather than borrow money
from their 401(k) accounts, which would have to be paid back, a
growing number of beleaguered families have been cashing
out. According to USA Today, new figures from
plan administrators show the number of 401(k) "hardship
withdrawals" is up in early 2008 compared with the same period
last year. During the first month of the year, as the
economic slowdown tightened pressure on mortgage holders,
hardship withdrawals rose 23% at plans that Merrill Lynch
administers, compared with the same period in 2007.
Merrill Lynch found that the primary reason for the rise in
hardship withdrawals was to prevent foreclosure or
eviction. Likewise, in the first month of the year,
compared with January 2007, Great-West Retirement Services saw a
20% increase in hardship withdrawals to save a home. For
workers, the consequences of raiding a 401(k) plan can be
severe. About 85% of employers bar employees from making
contributions for six months after taking a hardship
withdrawal. Worse, employees who pull money out of
tax-deferred 401(k) plans before age 59 1/2 generally must pay a
10% penalty on top of the taxes owed. “The
repercussions of the housing crisis are all around us, including
in depleted 401(k) plans,” said Ruben
Burks, Secretary-Treasurer of the Alliance.
Western Regional Conference
is This Monday
Starting in just four days
– March 24-26 – the Alliance will hold its first
regional conference of 2008 in Las Vegas, NV. Featuring
speakers such as U.S. Rep. Shelley Berkley
(NV-01), the Western Regional Conference will provide a forum
for activists to work together and prepare for November’s
Presidential election. Attendees will learn how to get
seniors and other retirees registered and voting, increase
grassroots advocacy and educate federal, state and local
legislators on issues like Medicare, Social Security,
prescription drugs, and retirement security. Locations and
dates for later conferences are: Northeastern Regional
Conference, April 17-18, 2008 in Philadelphia, PA; Midwestern
Regional Conference, April 28-29, 2008 in St. Louis, MO; and
Southern Regional Conference, June 4-5, 2008 in Orlando,
FL. For copies of the official registration form for any
of the four regional conferences, call 1-888-373-6497, email
Joni Jones at jjones@retiredamericans.org,
or visit our website at www.retiredamericans.org.
Did You
Know...
Wholesale prices for the top-selling
50 brand-name medications rose by about 6% in 2005, 7% in 2006,
and 8% in 2007 (Los Angeles Times).
Become part of a progressive grassroots movement!
Join the Alliance
____________________________________________________________________
Alliance for Retired Americans 815 16th
St, NW Washington, DC 20006 www.retiredamericans.org
|
