March 30, 2007 A number of recent issues have emerged that warrant members’ immediate attention. The forthcoming AT&T Annual Shareowners Meeting (April 26, 2007) in San Antonio, TX involves a number of shareowner proxies that will warrant members’ support.  Unfortunately, the two (2) shareowner proxies promulgated by your Association will not appear in the AT&T Annual Report because AT&T changed its corporate bylaws shortly after we filed our proxy with the Securities & Exchange Commission, permitting the election of AT&T Corporate Directors by majority shareowner vote.   The second Association supported shareowner proxy (filed by Director Monte Baggs) proposed the following:  "Resolve, that the shareholders of AT&T, Inc. hereby amend the Company’s bylaws, in compliance with applicable law, to require that the Board of Directors seek shareholder ratification of any severance agreement with a senior executive officer, including any future, renewed or modified ‘golden parachute’ and ‘golden good-bye’ severance plan, providing benefits with a total value that exceeds 2.99 times the sum of the executive’s base salary plus target bonus." ("Benefits" shall be defined to include all compensation not already earned or vested prior to termination, including lump sum payments, prerequisites , consulting fees, ‘gross-up’ payments to offset tax liabilities, fringe benefits, extra service credits or additional benefits under a retirement, and any equity grant or the value of accelerated vesting of equity grants.") On January 25, 2007, AT&T’s Assistant General Counsel wrote the Securities & Exchange Commission seeking the right to deny publication of Mr. Baggs’ proxy in the Annual Stockholders Report (based upon the fact "The Board of Directors must obtain shareholder ratification of any severance agreement with a senior executive officer that provides for severance benefits in excess of the stated 2.99 limit.  In addition, AT&T has made some modifications to the proposed AT&T severance policy.  For the reasons set forth above, AT&T continues to believe that it may omit the proposal from its 2007 proxy statement under rule 14a-8). On February 23, 2007, Mr. Baggs received a copy of an SEC letter addressed to AT&T stating, "You represent that matters to be voted on at the upcoming shareholders’ meeting include a proposal sponsored by AT&T seeking approval of a policy that would require prior shareholder approval of certain future severance agreements or employment agreements with severance provisions.  Accordingly, we will not recommend enforcement action if AT&T omit’s the proposal from its proxy materials."   While the TelCo Retirees Association and Mr. Baggs "struck out" on his proxy, you will be pleased to learn a similar proxy promulgated by the Ameritech Retiree Association has. at this time, survived AT&T’s challenge and should appear in your AT&T Annual Report.  We recommend your shareowner votes for this proxy. Telephone Concession Class Action Lawsuit The Class Action lawsuit against AT&T’s draconian reductions in our promised telephone concession service continues to progress through the federal court system.  The lawsuit has survived AT&T’s challenges for its dismissal, as well as their request to have the lawsuit transferred to another federal court jurisdiction.  (The Washington, D.C. attorney prosecuting this Class Action lawsuit plans to attend the AT&T Retiree Coalition Meeting in San Antonio, TX on April 26, 2007.) Death Benefits The legal analysis of the merger agreement between the Pacific Telesis Group and SBC continues at this writing.  We were advised a lawsuit challenging AT&T’s "right" to modify the Yellow Page Directory death benefits might not be appropriate based upon AT&T’s claim of "reservation of rights."  We remain hopeful that based upon variances in retirees’ benefits; a review of the merger agreement may develop a foundation for future legal action. Medicare Part B Reimbursement It is vitally important when a retiree or his or her spouse becomes eligible for Medicare Part B premium reimbursement from AT&T (age 65), that the retiree initiates a request for reimbursement because reimbursement is not automatic or retroactive!  (Recently, a member of our Association delayed filing for his spouse’s Medicare Part B reimbursement due to a communication misunderstanding.  The loss of past reimbursement was substantial.) Retirees should contact the Eligibility and Enrollment Vendor to enroll in AT&T’s Medicare Part B premium reimbursement program, AT&T Health Benefit Enrollment Center, Benefit Determination Review Team, P.O. Box 1407, Lincolnshire, IL 60069-1407.  (This information appears on our website, www.telcoretirees.org) Membership Donations Since the publication of the $500 donation (generously received from Arlene Wright, a member residing in Arizona), the Association has been the recipient of large numbers of members’ donations included with membership renewals.  We gratefully acknowledge your support (as well as your letters attesting to the importance of an independent retiree organization).  Treasurer Bob Hinshaw indicates a steady "build-up" of our financial reserves augurs well for the TelCo Retirees Association, Inc. if we are forced to initiate a federal lawsuit to protect our promised death benefits. A Man for All Seasons Sad to say, but our Association has witnessed a loss of members over the past years.  Many of you will recall former co-workers and associates who played a vital role in your Bell System careers.  Such an individual was Charles Mahoney from Petaluma, CA.  "Chuck" possessed those special qualities that exemplified the "spirit of the Bell System."  (Honesty, fairness, a caring for others and active in a number of retiree organizations.)  Chuck Mahoney was our TelCo Retirees Association, Inc. "Ambassador" in the greater Petaluma area and was responsible for large numbers of "new members."  The Association extends our deepest sympathy to the Mahoney family.  We will miss him greatly. AT&T Retiree Coalition Meeting  San Antonio, TX April 26, 2007 The retiree associations of Ameritech, SNET, AT&T Legacy and the TelCo Retirees Association, Inc. will hold its second Coalition meeting in San Antonio, TX next month.  Attendees will include the Presidents of the retiree organizations, senior officers and staff members of the AT&T Benefit organization and Mr. Joe Barton, Sr. Attorney, (Telephone Concession Class Action lawsuit).  Vice President Chuck Gilbert and Director Monte Baggs are also scheduled to attend this conference. Because the AT&T Annual Shareowners meeting is scheduled for April 27, 2007, the majority of Coalition attendees will also "stay over" to attend this critically important AT&T stockholders’ meeting. Discontinuance of Concession Service and Change in Employee Residence Recently, three (3) members of our Association receiving telephone concession service inside and outside of service areas changed their residential address.  They were subsequently notified by AT&T "Their telephone concession service was being terminated!" The TelCo Retirees Association challenged this issue and received the following information from an AT&T Senior Consultant (HR Policy Group): Mr. Emery, Per our conversation this morning, I am responding to your requests for information pertaining to retirees who move and remain outside of an AT&T (former SBC) service area.  Per the policy that covers the PacBell retirees dated 9/2000, section IV of the West Region telephone concession states the following: IV.  DISCONTINUANCE OF SERVICE AND CHANGE IN EMPLOYEE RESIDENCE Discontinuance of concession service results in a loss of grandfathered concession class.  Employees who live in the service area are then eligible for Class E only.  (See below for exceptions).  The current administrative practice, which is subject to change, is not to discontinue grandfathered concession, when the discontinuance of concession service is less than 60 days. Changes in employee residence may also result in loss of grandfathered concession. Employee Residence Location as of Dec.31,1998 Employee Moves to New Residence Location Concession Inside service area Inside service area Retain same concession Inside service area Outside service area No concession Outside service area Inside service area Vertical Services ONLY Outside service area Outside service area No concession I have attached the policy for the West Region along with a bulletin that was communicated in 1995 for the Southwest Region which details the out of region concession guidelines when an employee or retiree moves out of the service area.   Hopefully this information will be helpful in providing the retirees with the guidelines for concession discontinuance for residential moves.   (Editor’s Note: There is reason to suspect this "AT&T Retiree Telephone Concession ruling" is disingenuous since we were not aware of such a ruling until 3 weeks ago when members of the Association contacted our office seeking information on their loss of the concession benefit.  Further, the graph itself made no reference to "retirees.") Longevity Occasionally, in our communications with TelCo Association members, we discover a retiree who is a living example of the "Bell System."  Such a person is Mrs. Audrey Ratkovich who will celebrate her 98th birthday in June of this year.  Audrey began her Bell System career on September 9, 1930 in Santa Ana, CA, and while the majority of her career assignments were in the Plant Department; her capabilities in the world of training and statistics took her into the Traffic, Commercial and Training Departments throughout the southern California area. Audrey retired at age 55 with 37 years of service with Pacific Telephone on June 26, 1964.  What makes Audrey so unique was the fact her mother and father "owned" the telephone exchange in Milo, Iowa in the early 1900’s.  Audrey was often placed on her mother’s lap to "assist" with the "three cord board" in handling customer calls. The TelCo Retirees Association extends our very best wishes to our "oldest" member Audrey Ratkovich" on her 37 years of Bell System service and her upcoming birthday; Congratulations, Audrey! Pension "Ad hoc" Increases Many of you have written to us over the past months concerning a lack of pension increases (and demanding to know…what, if anything, we are doing about it!). You need to know "ad hoc" pension adjustments are not mandatory and are not included in our retirement pension documents.  Ad hoc pension adjustments only come about through a recommendation from the AT&T Chairman and concurrent approval by the AT&T Board of Directors.  Having said all that, you should be aware over the past years retirees have received numerous special pension increases. 1984 4.5% pension increase (depending upon your retirement date) 1986 4.5% pension increase (depending upon your retirement date) 1989 5 - 10 % pension increase (depending upon your retirement date) 1995 1 - 10 % pension increase (depending upon your retirement date) 2000 3 - 45%* pension increase (depending upon your retirement date) *Granted to those who retired prior to 1966 (34 years of retirement!) Your President has addressed the issue of a retiree ad hoc pension adjustment annually with Mr. Whitacre, calling attention to the paucity of past cost-of-living adjustments, ongoing increases in "company provided" medical benefits (co-pays, deductibles), state and federal tax increases, gasoline price increases, etc.  We also direct his attention to the Pacific Telesis Group (AT&T Pension Trust Fund) net assets as reported annually in AT&T’s 5500 report that reflects ample funds to support an ad hoc pension adjustment. We plan to address this issue again in June citing the Pacific Telesis Group merger with SBC, effective April 1, 1997 (no April Fool’s joke for Pacific Bell retirees) and it has been seven (7) years since an ad hoc pension increase has been granted to Pacific Bell retirees TelCo-Postmasters If you are one of the 700 TelCo Retirees Association members without internet access, you need to thank Patty Torrance and Sandy Keel  (both retired Pacific Bell managers) who stuff, stamp, label, seal….and then mail your Newsletters.  These two ladies make sure your Newsletters are mailed to you promptly. We just thought you ought to know what a vital part they play in our ongoing retiree communications.  (Thanks, Patty and Sandy, for all you do for the Association.) Sumner K. Emery, President