Retirees Beware - Medical Benefits for Life Won't Be There

Have you taken or are you considering taking early retirement because your company is guaranteeing medical benefits for life?

Well, the story of Evo Alexandre should be instructive for you:

Evo Alexandre of Moraga California,72, took early retirement in 1986 from Kaiser Aluminum Corp. The company gave him an incentive: guaranteed medical insurance for life.
But 2 years ago Kaiser Aluminum, filed for bankruptcy and told salaried retirees like Alexandre that they would need to pay $130 per person per month to retain their benefits. They had no choice to go along. Then, on Jan. 1, 2004 Kaiser doubled the premium to $522 per couple per month. That comes to $6,300 per year. Two weeks later, the company asked a bankruptcy court to let it terminate medical benefits for all its retirees, salaried and nonsalaried alike, and it did so, effective May 31.

That's free to zip, zilch in less than 20 years. No health insurance.

What will retirees do if their company defaults on its promise? What can they do? Medicare will not help.

According to the Employee Benefits Research Institute, a Washington D.C. nonprofit, a person who is 55 today will need:

• $151,000 in cash to cover gaps in Medicare coverage if he/she lives til 80
• $330,000 in cash to cover gaps in Medicare coverage if he/she lives til 90
• $0.5 million dollars in cash to cover the gaps if he/she lives til 100

Before its too late:

1. lobby our irresponsible leaders to make health care insurance a national priority and explore ways to guarantee health insurance for all - if we can put a man on the moon, can't we have a hospital bed for him too?
2. lobby to let retirees cash out medical benefits and take it with them that way corporations can't plead mercy before courts when they have gone bankrupt
   

Read more: "Retiree Benefits Dwindling" by Carolyn Said

If Your Company Execs Are Being Invetigated - Your Job Maybe At Risk

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Today, Computer Associates International Inc. said it plans to lay off about 5% of its employees.

Last week, former Chief Executive Sanjay Kumar and former sales chief Stephen Richards were indicted on charges including securities fraud and obstruction of justice.

Are these linked?

Consider that crimes by a company's executives costs the company prestige and lots of money in:
- outside attorneys to deal with regulators
- fighting shareholder lawsuits
- lost managment productivity
- lost customers

New company managers brought in to deal with the crimes committed by old company managers will look for cost cutting measures. These measures will be focused on those areas that are most in control of management, namely salaries.

If your company is under investigation for crimes committed by your company's management, you might want to pay attention and start looking for a new company to work for.


WSJ.com - CA Will Lay Off 5% of Work Force To Trim Its Costs: "Computer Associates International Inc. said it plans to lay off about 5% of its employees"

Think you can't compete because jobs are going overseas?

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Stories coming out of China and reported in the business press show a startling new reality; in the words of one Chinese worker:

"People felt that they were doing a very good job, but their salary increases weren't ideal. "
- Auditor for PricewaterhouseCoopers' Beijing office

Wages are rising in China because workers are wanting to enjoy their materials comforts.

Chinese professionals are getting riled over the often-huge differences in pay between local and expatriate staff.

It is likely that within 3 years, wages in China for white collar workers will have increased so much that U.S. companies will no longer find it attractive to outsource jobs off-shore.

Think about what you can do to take advantage of this coming trend:
- increase your skills on using a computer
- take classes in using applications such as Excel, accounting, and Web page design (you don't need a computer science degree to learn these applications)
- if you need to, move to an area of the country like Phoenix or Atlanta where companies are growing because of cheaper standard of living

At Work in China: Workers Want More Money and More Free Time to Enjoy It

There's Hazards and $$$ in Garbage

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Check out: CollectiveGood Inc., a cellphone recycling and refurbishment organization that works with Staples Inc. to take care of used phones.

Do cellphones need to be recycled? Why? Here's are some facts to consider:

> An astounding 100 million cellphones will be taken out of service in the U.S. this year, says Yankee Group Inc., a technology research firm in Boston. The majority, an estimated 60% to 70%, will be saved in closets or desk drawers, say environmental and industry groups. Only about five million will be refurbished or recycled, these groups say. That means at least 25 million phones will end up tossed in the trash in the U.S. alone.

> Cell phones contain contain several toxic materials -- lead, cadmium, mercury and materials that can degrade into arsenic contain several toxic materials -- lead, cadmium, mercury and materials that can degrade into arsenic

> Lifecycle on a cellphone has dropped to 1.5 to 2 years; that is, most of us get a new phone every other year, throwing away the old one.

> A study funded by the Environmental Protection Agency earlier this year found that the lead levels in cellphones were above a threshold that would cause waste to be classified as hazardous in many casesA study funded by the Environmental Protection Agency earlier this year found that the lead levels in cellphones were above a threshold that would cause waste to be classified as hazardous in many cases

What can you do? Contact eletronics manufacturers to see if you can work with them to pick-up old products and return them to the company for proper disposal.

Why would the company want to pay you for that? In a word: liability

Better to Own or Rent?

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Well, that depends. If you live in Grand Rapids, you should probably buy; if you have a business in Grand Rapids, you should probably rent. If you live in the SF Bay Area, start praying.

Why the difference? Companies that rent don't have to show their rent lease as a liability.

So what? To start with, it understates the debt a business has and therefore understates the risks it faces.

Do companies sell their buildings and lease the facilities back to hide their liabilities? Here are some examples on how businesses enter into arrangements on buildings, aircrafts and more from the Wall Street Journal:

• When UAL Corp., parent of United Airlines, filed for Chapter 11 bankruptcy protection in December 2002, its most recently audited balance sheet showed $25.2 billion of assets and $22.2 billion of liabilities. Not included: $24.5 billion in noncancellable operating-lease commitments, mostly for aircraft.

• US Airways Group Inc., which recently filed for Chapter 11 bankruptcy protection, showed only $3.15 billion in long-term debt on its most recently audited balance sheet, for 2003, and didn't include the $7.39 billion in operating-lease commitments it had on its fleet of passenger jets.

• Drugstore chain Walgreen Co. shows no debt on its balance sheet, but it is responsible for $19.3 billion of operating-lease payments mainly on stores over the next 25 years.

Read more:

How Leases Play A Shadowy Role In Accounting