March 8, 2000 New York Times

The Electronic Rank and File

By VIRGINIA MUNGER KAHN

Last October, as an uproar over the move by I.B.M. from a traditional pension plan to a cash balance plan was peaking, a group of employees at Bell Atlantic set up a Web site intended to address questions about their own pension plan.

In the weeks that followed, executives at Bell Atlantic were deluged with e-mail messages and letters expressing outrage at a similar move by the company, even though the switch had taken place two years earlier. "I've been here 26 years, and I have never seen such an outpouring," said Janice Winston, co-founder of the Bell Atlantic Employee Coalition for Retirement Security, which set up the Web site, bapensions.org.

On Jan. 19, Bell Atlantic blinked. It told 20,000 employees with 15 or more years of tenure that they would be given their benefits under a modified traditional plan if the company's analysis found that they would be better off than under the new pension plan. Generally, younger employees can do better under cash balance plans, but workers of middle-age and older often do worse, with some seeing the value of their retirement benefits drop as much as 50 percent.

Bell Atlantic denied that it had been influenced by the employee group. "We would have come to this decision had there been no Web site," said a spokesman, Steven Marcus. "We have a long tradition of staying in touch with our employees."

That is not how Ms. Winston sees it. "They knew they couldn't go forward with employee morale the way it was," she said. "I believe our Web site was key."

At a time of declining membership in traditional blue-collar unions, the Internet is spawning a new form of collective organization that is enabling once-compliant white-collar workers to put pressure on management. Though some coalitions that are formed around Web sites and fueled by e-mail and Internet chat rooms may be fleeting, and though such groups do not enjoy the legal protections that old-style unions do, they have proven to be a potent weapon that many companies must come to grips with.

The model for this new worker activism was established by I.B.M. employees after the computer giant announced its pension conversion plan last May. Originally, I.B.M. said it would allow about 30,000 employees who were near retirement to stay with the traditional plan. In September, however, it more than doubled that number to 65,000. What happened? I.B.M. employees used their computers to band together, to create programs that compared the old plan with the new and to lobby legislators in Washington against the change. The company's decision came within days of a Congressional hearing on cash balance plans.

"I just don't see how we could have done it without the Web," said Lynda French, who created www.cashpensions.com, one of the best-known sites associated with the I.B.M. employee effort. With more than 97,000 site visits and with links to government agencies, Congressional offices and other employee-sponsored Web sites, cashpensions.com has become a fount of information for organizers at other companies.

Indeed, since the I.B.M. backpedaling, employees at several large corporations besides Bell Atlantic have established Web sites and chat rooms dedicated to pension issues, including att.nac.net for AT&T employees and dukeemployees.8m.com for Duke Power employees. In addition, employees at SmithKline Beecham and the Williams Companies have set up sites at clubs.yahoo.com.

The Coalition for Retirement Security (www.pensions-r-us.org), a nonprofit umbrella organization for employee groups that is based in Springfield, Mass., has been active in getting several of these sites off the ground. "We have so many new groups coming on, it's amazing," said Paul R. Edwards, the founder of the organization.

The results have often been impressive. More than 20,000 hits have been recorded at att.nac.net since that site was set up in December with the aim of rolling back AT&T's switch in 1997 to a cash balance plan. "We have copies of hundreds of letters written to our executives," said one AT&T organizer, who insisted on anonymity. "They would never have been written without the Web site." (So far, however, AT&T is not bending to the pressure, saying it has "no plans" to change its pension plan.)

Even the Labor Department has got into the online act, setting up a special section on cash balance plans at www.dol.gov and an e-mail address to take comments and answer questions. "We've found the Internet to be one of the best ways to get information out to the public," Labor Secretary Alexis Herman said when asked about the Web site. "As the old saying goes: 'knowledge is power,' and this type of information empowers workers to make the right choices."

None of this new activism could have happened without the Internet, in the view of Ms. French, who recently retired from I.B.M. She noted that the conversions had been going on for years with not a peep of protest. "Employees didn't understand," she said. "Now, it's very difficult not to."

Some employers play down the importance of Web protests on their policy making.

"We didn't need to look at the Web sites to know what our employees were thinking," said Jana Weatherbee, an I.B.M. spokeswoman. "We heard their concerns and we made adjustments."

Still, some people think the Web's role as a conduit for employee grievances will only grow. "Once this tool is understood, employees will seek to improve all their benefits programs," said David Wray, president of the Profitsharing/401k Council of America, an association in Chicago of employers with defined-contribution pension plans. "This will have a powerful impact on the workplace over the next 10 years."

Ms. Winston is already looking beyond pension issues. "Now that we understand how our retirements can be affected by decisions in Congress and by our employers, we feel we have to make active decisions to protect our rights," she said. "We hope to branch out into health benefits."

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