Article 43
Pension Ripoff
Posts in this section are about pension issues - especially the class action pension suit against AT&T.
Saturday, December 05, 2009
Qwest To Freeze Management Pension Plan
By Jerry Geisel
Business Assurance
November 3, 2009
Qwest Communications International Inc. is freezing its defined benefit pension plan for management employees, effective Jan. 1.
The Denver-based phone and Internet provider on Monday said it is freezing the plan to save money. It estimates that the freeze will generate annual savings of about $60 million.
It is important for us to reduce costs, yet maintain competitive benefits and compensation for our employees. By continuing to match employees contributions to our 401(k) plan, provide solid health benefits and not reduce salaries, we believe we are better positioned for future success,” said Edward Mueller, Qwest chairman and chief executive officer, said in a statement.
Under Qwests 401(k) plan for management employees, the company matches 100% of employees’ salary deferrals, up to 3% of eligible pay.
The soon-to-be-frozen pension plan has two designs, with employees who did not have at least 20 years of service as of Dec. 31, 2000, and those hired after that date accruing benefits through a cash balance design. In that design, employees receive annual credits equal to 3% of eligible pay, while their account balances are credited with interest based on the 30-year U.S. Treasury bond rate. Employees with longer service earn benefits in a traditional service-based program.
In its third quarter, Qwest reported net income of $136 million on $3.1 billion in revenues, down slightly from the comparable period a year ago when it reported $145 million in net income on $3.4 billion in revenues.
Section Pension Ripoff •
View (0) comment(s) or add a new one •
Printable view • Link to this article •
Home •
Idearc And Verizon Sued By Retirees
Involuntarily Switched to Financially Challenged Spin-Off Pre-Bankruptcy
Marketwire
December 1, 2009
Telephone company retirees have filed a complaint for proposed class action relief under the Employee Retirement Income Security Act (ERISA) charging that they and over two thousand others were involuntarily switched in November 2006, post-retirement, from the financially secure Verizon Communication Inc. pension plans to pension plans sponsored by a newly spun-off company, Idearc Inc.
Less than 2 years after Verizon transferred the retirees, Idearc encountered financial problems and began cutting back various earned retiree benefits. These benefit reductions were not experienced by retirees remaining in Verizon’s pension plans. In March 2009, Idearc filed for Chapter 11 bankruptcy.
In mid-November, 2006, after each Plaintiff had been retired for at least ten years, they together with more than 2,000 others were involuntarily reclassified and switched into pension plans run by Idearc. All three Plaintiffs were fully vested in the Verizon pension plans with rights to continued payment of monthly annuities and other Verizon welfare benefits. No party received any Plaintiff’s consent to be switched over to Idearc’s pension plans. From the point of the spin off, concluded on November 17, 2006, Verizon treated the retirees’ rights to the usual Verizon retiree benefits as being terminated.
Plaintiff Philip A. Murphy, former President of CWA Local No. 1301, a resident of Mills, MA, retired from a predecessor of Verizon in 1996. Plaintiff Sandra R. Noe of Ipswich, MA and Plaintiff Claire M. Palmer of West Newton, MA both retired from predecessors of Verizon in 1995 and had for years been participants in Verizon pension plans. None of the Plaintiffs had actually ever worked for Idearc.
When retirees tried to administratively challenge their involuntary transfer to Idearc and its pension plans, without going to court, the respondent companies stonewalled and missed mandated deadlines to respond to the retirees’ internal claims. The retirees’ proposed class-wide administrative claim sought to remedy the mistreatment accorded to both non-management and management retirees who have suffered tremendous losses not suffered by their fellow retirees who were not transferred to Idearc. The respondents refused to treat Plaintiffs’ internal claims as class-wide claims.
Therefore, Plaintiffs filed a proposed class action on November 25, 2009 in the U.S. District Court for the Northern District of Texas, Dallas Division. The Complaint filed in Civil Action No. 3:09-CV-2262 charges pension plan administrators with numerous ERISA violations including:
-- Failure to provide requested plan documents;
-- Breach of fiduciary duty for refusal to disclose pension related plan information;
-- Breach of fiduciary duty for failure to comply with pension plan document rules;
-- Various other ERISA violations justifying court ordered declaratory, injunctive and other equitable relief;
-- Unlawful refusal to make payment of Verizon pension plan benefits; and
-- Unlawful interference with retirees’ rights to receive Verizon retiree pension and welfare benefits.
The Federal Complaint states that when Verizon transferred hundreds of millions of dollars in surplus pension assets to Idearc in November 2006, no pension plan language identified and traced the transferred monies to actual liabilities owed to particular plan participants for the payment of pension benefits. When Verizon conducted the transfer, there were no existing plan terms giving the plan sponsor or any other entity the authority to change the status of the retirees.
“What Verizon did to these retirees is disgraceful,” said C. William Jones, who heads the ASSOCIATION OF BELL TEL RETIREES, a retiree activist organization. “They are ducking a fiduciary responsibility to employees who gave decades of service and earned these benefits. These pension funds were set aside over the years for the benefit of employees who worked 20, 30 or more years and earned their pensions over their careers. It is reprehensible to refuse to provide plan documents so retirees can make informed judgments on the state of their pension plan and other benefits which they earned during their working years.”
The Complaint asks that all retirees who were transferred to Idearc be put back into Verizon’s pension and welfare benefit plans. It also asks that Verizon’s and Idearc’s pension plan administrators be order to pay a daily penalty for failure to timely provide requested records.
The complaint is posted HERE.
Plaintiffs’ counsel can be contacted at: CurtisLKennedy at aol.com
---
Idearc Inc., Verizon Communications Inc. sued by retirees
Dallas Business Journal
January 4, 2009
Three former Verizon Communication Inc. employees have filed suit against Yellow Pages publisher Idearc Inc. and Verizon Communications Inc. The trio claims their retirement benefits were rolled under the umbrella of Idearc without their consent after the corporation spun off from Verizon in June 2006.
The class-action suit also lists as plaintiffs up to 2,000 former Verizon employees whose retirements were involuntarily switched post-retirement from Verizon’s pension plans to a plan run under Idearc.
The three defendants said in a statement that two years after the retirement accounts were moved from the more financially secure Verizon to Idearc, Idearc began experiencing financial difficulties and started cutting back on earned retiree benefits, the plaintiffs claim.
Dallas-based Idearc told the Dallas Business Journal Monday that the company does not comment on pending litigation. Alberto Canal, a spokesman for Verizon, said Monday, “The press release issued by the Association of BellTel Retirees is unfortunately inaccurate. All of the transferred retirees, including the three named plaintiffs, retired from business entities that were separated from Verizon to form Idearc more than three years ago.”
Canal added, “Verizon properly transferred their post-retirement benefit responsibility to Idearc, along with over $750 million to fund their pension benefits. Contrary to allegations, documents were provided to these plaintiffs, as required by federal law, and their internal claims were timely reviewed. Suggestions to the contrary are incorrect and misleading to Idearc retirees.”
Idearc, which filed for Chapter 11 bankruptcy in 2009, officially emerged from bankruptcy with a new name Monday: SuperMedia Inc. (NASDAQ-SPMD )
The lawsuit alleges that Verizon and Idearc breached their fiduciary duties to disclose pension plan information to the plaintiffs, failed to comply with pension plan documentrules and interfered with the retirees’ rights to receive Verizon pension benefits.
---
Yellow Pages publisher Idearc Inc. said Monday it has changed its name to SuperMedia Inc. (SPMD) as it emerges from bankruptcy protection.
The company’s Chapter 11 plan was approved by a bankruptcy judge in Dallas last month and went into place Dec. 31, cutting its debt to $2.75 billion from $9 billion and wiping out stock holders.
SuperMedia’s banks and bondholders will receive new common stock in the company, which was spun off from Verizon in 2006, in return for reducing the debt.
Section Pension Ripoff •
View (0) comment(s) or add a new one •
Printable view • Link to this article •
Home •
Monday, November 16, 2009
Five Years Later
When the power of Love overcomes the love of power, the world will know peace.
- Jimi Hendrix
Five years ago - the CWA AND AT&T DISCARDED US.
Some folks have new jobs and NEW CAREERS.
Some are HOLDING ON to what they have, and STILL LOOKING for MEANINGFUL WORK.
Some cling to the belief that RETRAINING is the answer.
Some lost A LOT.
Some lost HOPE.
Some SEE NO LIGHT and may be ready to GIVE UP.
Some remain DISGUSTED by OUTSOURCING, the RECESSION, and things like the SELF SERVING INTERESTS of unions DISGUISED as ORGANIZED LABOR MOVEMENTS - especially when creeps like CWA big-shot RALPH MALY are mentioned.
Four years ago the Supreme Court ruled AGE BIAS NEED NOT BE DELIBERATE.
Now this…
IF THE CWA DESERVES ANY RESPECT - they’d be supporting the EEOC, instead of the SAME OLD CRAP.
The EEOC filed a Complaint in August of this year concerning AT&T’s practice of NOT REHIRING PEOPLE who went out on VRIP and other force reduction programs. The Complaint says that this is part of a PATTERN of AGE DISCRIMINATION. Over the years, a lot of people have commented about being blacklisted from being rehired.
The EEOC attorney who is handling the case is Louis Graziano. His email address and telephone number are 212-336-3721.
This case is not associated with the CASH BALANCE CASE, Engers vs. AT&T.
The complaint will be on the AT&T RETIREES WEBSITE.
Section Dealing with Layoff • Section Pension Ripoff • Section American Solidarity • Section Telecom Underclass • Section About Article 43 •
View (0) comment(s) or add a new one •
Printable view • Link to this article •
Home •
Wednesday, November 11, 2009
Johne Deere Retirees Loose Medical Insurance
5,000 Deere retirees lose health benefits suit
By George C. Ford
The Gazette
October 17, 2009
A federal judge ruled Friday in a class action that Deere & Co. had not breached promises made to 5,000 retirees when it removed them from the company health plan.
U.S. District Judge Charles Wolfe handed down a 44-page ruling after two weeks of testimony in a bench trial in U.S. District Court for the Southern District of Iowa in Davenport. Wolfe said Deere had properly informed the retirees that their benefits were subject to change or termination at any time.
He also ruled that the company had not violated federal law under the Employee Retirement Income Security Act when it altered the medical benefits.
Attorney Susan Martin of Phoenix, who represented the Deere retirees, said Friday she had not decided whether to appeal.
The suit was filed in September 2008 by Deere retirees from Des Moines, Dubuque, Johnston, Ottumwa, Waterloo and Hazel Green, Wis.
In September 2007, the company removed the 5,000 so-called “flex” retirees, including former salaried and non-union workers, from its group health insurance plan.
Deere instead offered a program that combined a health savings account with new health care plans for retirees who were not eligible for Medicare. For Medicare eligible employees, the new program combined retiree medical credits with a Medicare Advantage plan.
Deere contended that the new program provided the retirees with more choices for health care.
Martin argued that the retirees had been exploited and misled by Deere about their health benefits. She called it a repeated, widespread and systematic practice.
Deere contended that the company had informed employees in writing of its right to change, modify or terminate coverage at any time. “The court has found the testimony of plaintiffs concerning their claims quite vague in most respects and less credible than the testimony of the witnesses presented by defendants and the plan documents that corroborate those witnesses’ testimony,” Wolfe wrote in his ruling.
Deere representatives could not be reached for comment.
Dave DeWitte contributed to this report.
Section Pension Ripoff •
View (0) comment(s) or add a new one •
Printable view • Link to this article •
Home •
Thursday, October 22, 2009
The Next Casualty of Wall Street
Pensions: The Next Casualty of Wall Street
By Mark Brenner
Counterpunch
October 20, 2009
Nobody wants to admit it, but the next casualty of the Wall Street meltdown will probably be your golden years. For years corporations have been trying to choke the life out of traditional pensions, working hard to get out from under the riskand the costחof providing for their retirees. Between last years credit crunch and changes to federal pension laws, they may get their wish.
Nearly $4 trillion worth of retirement savings were wiped out in the first weeks of the 2008 financial freefall. Half of the drop was concentrated in traditional pension plans, also known as defined-benefit plans. While most workers in these plans havenҒt had their monthly benefits cut, unlike the 46 million people riding the stock market with 401(k) defined-contribution plans, the storm clouds are gathering.
Labor needs a strategy to protect what weve won. But holding our ground requires moving from defense to offense. If the pension crisis is going to be solved for union members, it has to be solved for everyone.
UNCOMFORTABLE ARITHMETIC
Even before the financial crisis, traditional pensions were a vanishing breed. Thirty years ago more than a third of the private sector workforce had traditional pensions. Last year that number was down to 16 percent.
Driving the decline were employers looking to get off cheap, eliminating pensions entirely when they could get away with it, and when they couldnҒt, shifting to 401(k)s. These programs were legalized in 1978 and were originally designed to supplement traditional pensions. Now theyre choking them out like kudzu.
Corporations got a great deal, paying about half what they used to towards their workersҒ retirement by the 90s. Even more importantҗas anyone who has opened their 401(k) statement recently can attestthe move shifted risk off companies and onto us.
Traditional pensions were a collective solution to a collective problem. Young and old contributing together smoothed out insecurity for all. Now itגs just you and the stock marketwith far less in your pocket.
Even before the crash, studies showed that 401(k)s leave workers with 10 to 33 percent of what traditional pensions provide. Given the 30-year squeeze on wages, most people havenגt saved much either, which explains why more than half of all 401(k) participants have less than $75,000 when they retire.
WHATS IN STORE?
Even for those with superior defined-benefit plans, the last 20 years have been rocky. Companies spent much of the 1990s gaming the system, siphoning off pension funds to pad the bottom line.
At the start of this year the nation’s defined-benefit pension plans had only about 75 percent of what they owed participants. Companies may need to contribute as much as $100 billion to cover these gaps.
Although Congress waived compliance with new pension rules this year (see page 9), the law will eventually take effect, and will force employers to cover these pension gaps. Rather than clean up their act, more and more employers are looking for the exit. By April of this year nearly a third of Americas largest companies had frozen their pension plans.
Many others are invoking the nuclear option, declaring bankruptcy as a way to unload their pension plans on the taxpayers. Unfortunately, the Pension Benefit Guaranty Corporation (PBGC), established in 1975 to backstop private sector pensions, is already reeling from a decade of high-profile and expensive pension defaults at companies like United Airlines and steelmaker LTV.
Nine of the 10 largest pension defaults in history occurred since 2000, leaving the PBGC with a deficit of $11 billion at the end of 2008. That gap could swell to more than $100 billion over the next few years, amounting to a backdoor bailout for big corporations, and a bitter pill for abandoned retirees.
Workers at Republic Steel saw first hand how it works when they had their pensions cut by $1,000 a month in 2002 by the PBGC and then cut again in 2004. Five workers from the Lorain, Ohio, plant committed suicide after the first time their pension was diminished. In the second round of cuts, retirees like Bruce Bostick, former grievance chair for USW Local 1104, saw their retirements fall from $1,047 a month to $125.
The situation for public sector workers isn’t much better. Although 80 percent of public employees have traditional pensions, those benefits are now in the cross-hairs of conservative and liberal politicians. Two-thirds of public sector pension plans are underfundedto the tune of $430 billionחand state and local budget crises are pitting taxpayers against public employees from California to Maine.
ANCHORING RETIREMENT
For nearly 20 years the various financial bubblesfrom the dot-com frenzy of the 1990s to the recent housing market run-upחpapered over the urgent need to address the faltering retirement system.
Wall Streets collapse last year revealed how the current patchwork of retirement plans is failing almost everyone. As with health benefits, union workers with stable pensions increasingly find themselves on an island of security in a sea of uncertainty. But the water is rising rapidly.
As the debate over the auto bailout and state budget crises revealed, defending your own decent pension is tough work when half the workers in the country donҒt have any retirement at all.
The PBGC - which has been swimming in red ink since 2002 - is currently set up to pay less than half of what people were promised. If the funding gaps widen, it could fall to pennies on the dollar.
There will be calls to bail the PBGC outwhich needs to happen - 1.2 million people now depend on it. A sensible demand is to make it function more like the FDIC, by guaranteeing 100 percent of pension benefits up to a reasonable threshold.
But reform cant stop there.
If it does, workers are on the same path as before the economic collapse, with a temporary reprieve. Employers will still seek to drive union workers down to non-union standards and dump more risk onto individuals.
We need to return to the original vision of Social Security: a program that (like in Western European nations) can actually pay for most of your old-age living expenses.
Mark Brenner writes for Labor Notes, where this article originally appeared.
NOW WALL STREET WANTS YOUR PENSION TOO
TRANSIT STRIKE AND PENSIONS
THE NEXT RETIREMENT TIME BOMB: PUBLIC PENSIONS
Section Pension Ripoff • Section Dying America •
View (0) comment(s) or add a new one •
Printable view • Link to this article •
Home •
