Article 43

 

Pension Ripoff

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

Sunday, March 20, 2005

PBS Special on Retiree Health Care Coverage

If you’re retired and your former company is paying all or part of your health benefits-coverage you think you’ll have for life-then you might want to dig out your old paperwork, put on your glasses (while you can still afford them) and read the fine print.  Why?  It may depend on what your definition of lifetime is.  More and more retirees are finding themselves in court to save the health benefits they thought they were promised. And, judging by the decisions returned in a spate of cases, fine print trumps all.

It’s a story that began in the 1989 when health costs soared and corporations moved quickly to protect their bottom lines by slashing benefits and shifting costs to retirees.  Most companies can cut retiree benefits at will.  For others, fine print in contracts makes it a little trickier, and this is where the latest plot twist is playing out in courts around the nation.

The dictionary definition of lifetime is: “The period of time during which an individual is alive.” Simple enough-if your company promised you benefits for life, you just need to be alive to receive them.  But it’s a difference of opinion over the legal definition that is stirring up trouble for some former union workers.  In recent cases, corporate lawyers are arguing that “lifetime” refers to the life of the contract, not the lifetime of the retiree.  When those contracts expire, they argue, so does the promise of the benefits.

In light of that argument, Basil Chapman, a 60-year-old former worker at ACF Industries, a railcar manufacturer, calls what ACF did to him “a set up.” Chapman, a former union local president who headed a Steelworkers bargaining committee, says his union negotiated lower starting pay for new workers in exchange for lower monthly medical payments for retirees. When the company sued for the right to change the coverage, Chapman was stunned.  To these retirees the agreement with their employer was more than just a promise, it was a contract. “This story is part of a wholesale shift in risk from companies to families,” says David Brancaccio, host of the PBS newsmagazine NOW, which is featuring Chapman in a report on April 1.  “Healthcare costs are rising, but increasingly companies are insulating themselves from these costs with individuals left to shoulder the burden.” With no place for promises on corporate balance sheets, companies are turning to the fine print with their eye on the bottom line. California-based GenCorp is relying on a sentence in an enrollment form their employees signed a decade ago to increase monthly premiums.

GenCorp, formerly the General Tire & Rubber Company, a tire manufacturer you may remember from its slogan: “Sooner or later you’ll own General,” has workers worried that sooner or later they’ll have to drop out of their coverage because it’s too expensive. And while GenCorp is riding all over its retirees, they are not alone. A Kaiser/Hewitt Survey on Retiree Health Benefits shows that a vast majority of large employers say they are “very or somewhat likely” to raise premiums and/or cost-sharing requirements in 2005, including 85% of companies surveyed predicting an increase in contributions to premiums by retirees. More ominously, 8% of employers surveyed eliminated subsidized benefits for future retirees in 2004, and 11% said they are likely to follow suit in 2005.

While most employers haven’t turned to the courts, the trend is on the rise and some are using tactics that are particularly aggressive.  Just ask Basil Chapman, who was sued by ACF after he threatened to take the company to court when he learned he’d be charged for benefits that previously were free.  Chapman’s attorneys say the preemptive move allowed company lawyers to shop for a court where they think they can win a favorable opinion. As these cases make their way through the courts, there’s little risk for the companies, which if they lose, will simply have to resume paying the benefits.  In the meantime, Chapman says, retirees who can’t wait will drop out, and for others it may just end up being a lifetime. “It’s disturbing and scary for older people,” he says.  “They just die.”

For more on this important story, tune into the PBS weekly newsmagazine NOW, airing Friday, April 1, 2005 at 9 P.M. on PBS (check local listings).

Credit: pension_watchdog

Posted by Elvis on 03/20/05 •
Section Pension Ripoff
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Tuesday, March 01, 2005

SBC AT&T Merger

The SBC/AT&T merger should not affect the cash balance class action lawsuit adversely in any way. The merged company will retain all of AT&T’s existing responsibilities and liabilities (My advice is worth every penny you paid for it.  If you’re facing this decision, hire a financial planner! ).

The ACER website has links to more info on the lawsuit - http://att.nac.net . Major updates are in the works for this site.  The name will be changing from ACE (AT&T Concerned Employees) to ACER, to include retirees.  Changes are scheduled for the next few weeks.

SBC recently discontinued its cash balance formula and returned exclusively to a traditional pension formula (unlike AT&T, SBC never completely abandoned the traditional pension formula; it continued to exist as an alternative to the cash balance formula). Some people have speculated that this has favorable implications for how AT&T employees who are still active after the acquisition may be treated. But neither SBC nor AT&T has made any announcements about this to date.

Credit: pension_watchdog

Posted by Elvis on 03/01/05 •
Section Pension Ripoff
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Friday, October 08, 2004

AT&T Pension Class Action Lawsuit

Plaintiffs are management employees of AT&T who were participants in the AT&T Management Pension Plan as of December 31, 1996.

The proposed class is defined as any and all persons who:

1. Are former or current AT&T management employees,
2. Are currently over age 40,
3. Participated in the AT&T Management Pension Plan on December 31, 1996 and on or after the January 1, 1998 date on which the Pension Plan was converted to a cash balance design.

Checkout THIS WEBSITE and THIS WEBSITE for more info.

Links

AT&T Retiree website - Check out the Pending Legislation and NLRN Legislative News sections

Track YOUR Senators & Representative - Sign up for MEGAVOTE, a weekly summary of roll call votes.  It is easy and spam-free.

AT&T Cash Balance Lawsuit Homepage - (Engers v. AT&T)

Actuarial report on AT&T’s Cash Balance Conversion

AT&T Concerned Employees (ACER)

US Congress - Find & contact your rep & senators.

cashpensions.com - Go to the Legislation Section (Bill analysis, Track your reps, etc.).

retire.gif width=360 height=272 align=top

Credit: pension_watchdog

Posted by Elvis on 10/08/04 •
Section Pension Ripoff
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