Employee Power in Conversions to Cash Balance Plans: Union, Public, and Electronic Voice
Cynthia F. Cohen and Murray E. Cohen
DOI: 10.2190/U2JK-CFC3-CD9B-XY0R
Abstract
Cash-balance pension plans have become attractive to employers as alternatives to traditional defined-benefit pension plans. This has caused many employers to convert from defined-benefit pension plans. Plan conversions, however, do not always work in favor of employees. When plan conversions make some employees worse off than they would have been if the defined-benefit pension plan had been continued, there is often an outcry from employees who seek to make changes in the way the plan is converted. The success of employee appeals is often contingent on the effectiveness of the voice mechanism the employees use. Traditional use of the union as a voice mechanism has the most direct impact on changes. However, an emerging form of voice is electronic voice, or e-voice. This was used by employees at IBM to create awareness not only among employees, but also among the public. Traditional union voice continues to have the largest impact on employers. Alternatives forms of voice, including e-voice and public voice, have less certain impacts and take much longer to play out. The merging of union voice and e-voice has the potential to strengthen both.
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