Article 43

 

Pension Ripoff

Posts in this section are about pension issues - especially the class action pension suit against AT&T.

Friday, October 19, 2012

AT&T Pension News October 2012

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A friend at AT&T mailed this blurb today:

Pension voluntary funding announcement

To:  All AT&T domestic Employees covered by AT&T Pension Plans (excluding AT&T Government Solutions and AT&T Technical Services)

Supervisors, please share this information with your bargained employees who do not have email access.

AT&T continues to provide retirement benefits, including pensions, to our employees and retirees at a time when only about one-third of Fortune 500 companies provide ongoing pensions. As reported in our annual report, we ended 2011 with $10.2 billion more in pension liabilities than assets in our pension trust, which was largely due to the economic downturn.

To address this deficit, today we announced plans to voluntarily contribute to our pension trust a preferred equity interest in our growing wireless business, valued at $9.5 billion. While we estimate our required funding for 2013 would be only about $300 million, our Board of Directors, my leadership team and I agree it’s important that we continue to strengthen our pension fund to help ensure earned benefits will be there for our approximately 600,000 U.S. employees and retirees. This proposal requires approval by the U.S. Department of Labor.

This contribution will help us significantly improve the funding of our pension, enhancing its strength at a time when many companies have eliminated pensions. And funding the pension this way addresses our pension commitments while giving us the financial flexibility to continue to invest in our business and return value to our investors including the hundreds of thousands of you who are also shareholders in our company.

I’m proud that we’ve found an innovative approach that will enhance the strength of the pension fund. It’s the right thing to do for our employees, our company and our investors.

Randall

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AT&T Seeks to Stoke Pensions With $9.5B in Shares

Associated Press
October 19, 2012

AT&T Inc., the largest phone company in the U.S., said on Friday that it is seeking government approval to contribute a stake in its wireless business worth $9.5 billion to the trust that pays pension benefits for its 360,000 retirees.

AT&T’s pension plan was underfunded by about $10.2 billion at the end of last year. If approved by the Department of Labor, the move would extinguish most of that liability by transferring equity in the company from shareholders to the pension fund.

The shares would entitle the fund to cash dividends of about $560 million per year. AT&T promises to prioritize this payment over dividends and buy backs for common shareholders, but doesn’t expect it to have to choose: the $560 million would be just 4 percent of its 2011 free cash flow, or the cash it earns from operations less capital expenditures.

The Dallas-based company also said that the move won’t significantly affect its earnings.

The Communications Workers of America, the largest union that organizes AT&T workers, said it is “pleased to see that AT&T is taking steps to further strengthen its defined benefit pension fund.”

“AT&T’s announcement comes at a time when many companies have moved in the opposite direction, eliminating or underfunding their pension plans and putting workers’ retirement security at risk,” the union said.

AT&T shares fell 40 cents to $35.62 in midday trading, in line with market indexes.

SOURCE

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RLPC: BellSouth bondholders grapple with changes

By Natalie Wright
Reuters
Decmber 4, 2012

AT&T is shocking BellSouth bond investors with news of an under-the-radar filing that transfers ownership of AT&T Mobility from BellSouth to its parent company, AT&T, sources told Thomson Reuters LPC.

When AT&T acquired BellSouth in 2006, AT&T also acquired BellSouth’s 40 percent economic interest in AT&T Mobility LLC, formerly Cingular Wireless LLC. The remaining 60 percent of Mobility was owned by AT&T Inc.

With the transfer of ownership of BellSouth’s 40 percent stake in AT&T Mobility, a significant portion of BellSouth assets will be stripped away from debt investors. BellSouth bondholders will no longer have AT&T Mobility assets supporting BellSouth bonds.

“I’m not happy about it,” said one BellSouth investor. “It makes BellSouth bonds the same as any other OpCo.”

In December 2010, AT&T filed an application under the Universal Licensing System, under the FCC, requesting pro forma transfer of control of AWACS Inc and its wireless licenses from New Southwestern Bell Mobile Systems Inc to AT&T Teleholdings Inc. The filing has been consummated, according to the ULS website.

“As part of an internal corporate restructuring that is planned for December 31, 2010, NSBMS will merge into AWACS, leaving Teleholdings as the direct parent of AWACS, which will be the surviving Entity,” an attachment in the ULS application said. The ULS is the database and application filing system for most wireless radio services, according to the website.

Sources note that the ownership change allows AT&T to sell off BellSouth wireline assets, without concurrently any losing ownership of the wireless business previously under BellSouth’s umbrella.

A spokesperson for AT&T declined to comment.

While analysts say the ownership transfer is allowed under the bond indenture, investors were blindsided by the lack of transparency surrounding the transfer, as the company had not previously indicated a change in ownership structure would take place, sources said.

Investors are surprised that the transfer is occurring, given that BellSouth bondholders will be subordinated, and will no longer have 100 percent draw to the wireless assets in terms of cash flows.

“They stripped away a big portion of the assets without letting anyone know,” said one senior credit analyst. However, the effect on BellSouth bonds in terms of pricing is unclear.

“Insurance companies may not be looking to move the bonds at this point in the year,” said one market strategist, adding that the bonds may also face liquidity concerns.

On November 30, AT&T completed an exchange offer in which $1.6 billion BellSouth bondholders tendered their bonds, and exchanged them for new AT&T senior notes. However, over $6.5 billion of debt will remain at BellSouth following the exchange offer. Only about $1 billion of this debt, the BellSouth 4.020 percent senior notes due 2021, carries an unconditional guarantee by AT&T. The remaining bonds are supported only by BellSouth assets.

SOURCE

Posted by Elvis on 10/19/12 •
Section Pension Ripoff
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Saturday, October 15, 2011

The Theft Of The American Pension

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In the last decade, the country’s biggest companies have raided worker benefits for profit. An expert explains how

By Thomas Rogers
Salon
September 17, 2011

These days, NOBODY EXPECTS to have a LIFELONG CAREER at one company anymore. And so the idea of having a pension from one single employer seems very alien to a lot of people, especially young people. 

Yes, we’re moving towards a more mobile workforce where people don’t stay around for life at their jobs. But the companies were taking aim at the older people who had already been there for a whole career and were not mobile and didn’t want to leave their jobs because they wanted to keep the money coming in and to pay their bills and build up their pension. The purpose of changing the plan wasnt to make it better for a mobile workforce. It was to take away what the nonmobile workforce had already built up.

Take the retirees of GenCorp. They had been promised their retiree health coverage in writing, but employers put little clauses into the plan documents that said, We reserve the right to change the benefits. The participants didn’t know that clause was in there and assumed when their employers said, If you take early retirement, we promise we’ll continue your health coverage until youre 65 and you can qualify for Medicare. On that kind of promise people said, OK, that sounds pretty good. After a few years, the companies turned around and said, You know what, we can’t afford that. When the retirees challenged them in court, the employers pointed to those little clues in small print deep in the document. So even when they had these benefits promised to them in writing, they legally lost. Union employees had physical legal contracts that had been collectively bargained that said, We promise you lifetime coverage. So the employers claimed, We didn’t mean your lifetime, we meant the life of the contract, and it worked.

Do you think part of the problem is also we have a cultural disdain for the elderly in this culture?

Yes, they were human resources. They were something that could be converted into income, and the thought that this might affect them and their families of course was not the first thing on their list.

I did see a certain reflexive disdain for the plight of some of these groups. One of the earliest incidents where employers aggressively cut retiree health benefits by suing the retirees was with the John Morrell meat-packing plan in Sioux Falls, Iowa. People had this notion, “Oh, these meatpackers: Who are they to whine they’re not getting this healthcare?” So I went out there and met with these folks. Among them were very elderly gentlemen who had worked at that plant from the time they were in high school. They took a time out to go to WWII and then went back and worked in the plant. They were your basic salt-of-the-earth folks. They did not have lavish pensions or retiree healthcare. It was these folks, the backbone of America, who were affected by this, not a bunch of greedy old people.

In a few short years, a lot of baby boomers are going to be looking at their pensions and realizing those aren’t there anymore. What kind of effect do you think that this is going to have on the economy and future of the country?

What we saw here were two generations that SHOULD HAVE been the best off. They had everything: a pension, retiree healthcare, death benefits - and look at whats happened to them. Now compare them to the current generation where people are working without pensions. If they have a 401(k), they’re lucky if they have anything saved in it participation rates are low and people can’t afford to put money aside and if they do, they dont know how to invest it, and if the market goes down they lose a lot of it. The 401Ks DON’T WORK and that’s the thing that’s supposed to be replacing pensions.

Pensions have been decimated for the people who seem to have the most secure retirement, and without Social Security a lot of these people would be destitute. In many cases, thats all they have. I think we’re seeing how critical it is to see some absolute guaranteed benefits in old age. I could see that if people didn’t have that, this country would start to look a lot more like a third-world country.

How does this change?

There are rules under pension law that are supposed to protect people. It would be helpful if they were actually enforced. There is a rule that says that pension assets are to be used solely for the benefit of retirees or the plan participants. That sounds pretty straightforward, but as I’ve noted in the book there are so many loopholes. In the book I talk about how they withdrew billions from the plans, sold assets from the plans, and used assets from the plans to pay executives. All of this is contrary to the intent of pension law, which is that the assets were there protected supposedly for the benefit of the people who earned them, and taxpayers subsidized it, meaning that if employers put money in, it would grow tax-free. Thats why a lot of this is abuse of taxpayers. It’s the company taking advantage of what should have been a tax break to help employees and using it to benefit shareholders and executives.

This was not a crisis that had to happen. It was manufactured. It wasnt an accident, and it’s profited companies greatly.

Thomas Rogers is Salon’s Deputy Arts Editor.

SOURCE

Posted by Elvis on 10/15/11 •
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Saturday, December 05, 2009

Qwest To Freeze Management Pension Plan

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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.

SOURCE

Posted by Elvis on 12/05/09 •
Section Pension Ripoff
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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

SOURCE

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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.

SOURCE

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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.

SOURCE

Posted by Elvis on 12/05/09 •
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Monday, November 16, 2009

Five Years Later

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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.

Posted by Elvis on 11/16/09 •
Section Dealing with Layoff • Section Pension Ripoff • Section American Solidarity • Section Telecom Underclass • Section About Article 43
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