Conference 7.286::digital

The Supreme Court recently said that companies can make workers promise
that they will not file future age-bias claims against their employers as a
condition for getting more generous early retirement benefits.  This
decision upholds the legality of SERP incentives to trim payrolls without
opening companies to charges that staff cutbacks illegally target older
workers.

What a great way for DEC to peacefully thin out the ranks of middle management
without triggering another devastating power struggle.  It's been 4 years 
(and 2 months and 26 days) since the last SERP, so a whole new crop of 
retirees has matured (so to speak).

Naw, you're probably right...it's easier to just fire them!

         /dave

    SERP is nearly always about the worst way to "trim middle management",
    you lose people you can't afford to lose, and don't want to lose - and
    seldom get rid of the ones you really want off'ed.
    
    If you want to thin middle management, just do it.  You'd be better off
    making a list and arbitrarily firing every third person on the list,
    than offering SERP in a vain attempt.  After all, it isn't that we
    have some aging, entrechned middle management - we have a young and
    middle aged middle management.
    

You could well get middle managers who SERP out on Friday and return Monday
as contractors.

It could happen.

    The first time around, we lost a bunch of good, highly-experienced
    engineers who were just barely 50, and whom we had a lot of trouble
    getting by without.  So I hope we don't offer the program again; I'm
    afraid of which newly-turned-50 people we would lose this time if we
    did!
    
    /Charlotte

    One of the attractions of a SERP is that it (if defined properly) can
    target higher-salaried folks, making a headcount reduction have more of
    a cost impact.  If there is a small or no front-end lump sum, it can
    actually be less expensive - from a profit viewpoint - than a TFSO.
    The pot-sweetening addition of years to age and time of service affects
    the pension pot rather than the company's cost pot.  While the loss of
    experienced folks is a negative factor, the idea of setting up a cutoff
    of only those with, say, 15 or more years with Digital would allow the
    company to reduce the influence of (us) old-timers and our DEC customs.
    (Note:that was not a negative statement, just a point around one way
    to reduce the cultural wars.)  At any rate, it's an interesting rumor.

    re -1, the real problem in the Corporation has been the engineers and
    others who have been TFSO'ed, no matter what the age. I have a hard
    time believeing that SERP is anywhere near a threat to us that constant
    TFSO's are ( along with a strategy that seems to be leading us to a
    chip maker with 15 or 20 thousand total). If SERP is offered again and
    it is right for some people, then that's a good thing. There are a
    number of folks like me pushing 60 who fear the TFSO axe and the
    resultant difficulties in finding work at our age. MAybe a SERP that is
    offerred to people 55+ would be an answer. 
    HAving said all that, my guess is that our Company is fixated on TFSO
    and will not offer a SERP package, though many other large Corporations
    do. Don't get me wrong; I don't think Digital owes anyone a SERP
    program, and if I get cut, I will be out there doing my damnedest to
    use my skills to find employment. I would however love to have the
    chance to go for early retirement. Then I would still work, but
    probably at something that I would like to be doing that pays less
    well; work back in the schools, or some work on the environment.
    Though I push 60, I still have one in college, and not enough saved to
    be able not to work, though who wants to do that anyway? SERP would
    just give poeple my age another choice point. 

    
    Stanford University offered an interesting SERP-like program about 15
    years ago to try to move out some of the older professors.  The
    incentive to retire was tied to salary like most SERP programs but what
    was different was that the pay out was inversely proportional to a salary 
    within a level.  The idea was that at any level, given a even level of
    experience, those making the most bucks are (on average) the better
    performers.  The lower paid folks were offered a bigger incentive to
    leave.  The program achieved it's goal of inducing the lower performing
    professors to leave; it also pissed off the higher performers who
    stayed but were mad they didn't get offered as much.  I like the idea
    but like all ideas of reducing headcount (attrition, TFSO, SERP) they
    all have pros and cons.

    Greg
    
                                              

    re .5 ---
    
    It dodes hit Digital's cost. IMHO one of the BIG BIG problems with the last
    (and only) SERP was that it was much more popular than expected and the
    company had to pump more cash into the pension pot in a hurry.
    
    Steve ....
    
    

    
    	IMHO, from what I hear and see , SERP would be taken by almost all
    	of the folks in the pool, who could financially handle it. Many who 
    	turned it down the last time through were sorry later that they did.
        Also wouldn't Digital be open to Suit by folks who missed the SERP 
        age by a bit and were subsequently laid off after they reached it, 
        if they then opened it up again ?
    

    	Re: .8 - pump more money into the pension pot???  Why do you
        believe this?  
    
        I will check the last few balance sheets (I haven't really paid 
        much attention the last year or so - since the conversion to a cash
        payout) but for an awfully long time the pension fund was in fact, 
        very over-funded and it was generating enough in returns so that 
        the company did not make any annual contribution. 
    

    RE: .10
    
    I pretty much heard the same thing; in fact, I heard that it has been
    so over funded that the company hasn't had to put anything in since the  
    late 1980s.
    
    Deb

    SERP would be very different this time with a lump-sum package instead
    of the old pension plan. I believe they would have to pay out the lump
    sum retirement when people leave. This could be expensive for the 
    corporation.

    Most of the people I know who took SERP last time took the lump sum. 
    So I don't think it would cost the company more money.  In any case, I
    don't believe we will see a SERP II.  I agree with most of the
    negatives in this string.
    
    Gil