May 18, 2007 Pension Ad Hoc Increase Ed Whitacre, CEO, announced a pension increase for AT&T retirees who retired prior to 1996 and who are currently receiving monthly pension payments of $1,200 or less.  The increases will become effective October 1, 2007. The pension increase will be paid to retirees receiving a monthly service or disability pension, or a survivor annuity.  It will be graded so that service pension-eligible retirees, or their survivors, currently receiving the smallest monthly pensions will receive a greater enhancement.  The increases will range from approximately 6.2% for those currently receiving the smallest monthly payments to 1% for the highest. The Association is pleased some Pacific Bell retirees (especially those on the lower end of the pay scale) will receive a pension increase after many years without adjustments to their monthly pension checks.  However, we find the proposed amounts miserly and abhor the fact the vast majority of retirees will not enjoy a pension increase. Your Association plans to address this issue with Mr. Randall Stephenson, AT&T’s incoming CEO, within the coming weeks. Robert Hinshaw, Treasurer It is with a profound sense of loss our Association announces the planned retirement of our esteemed Treasurer December 31, 2007.  Bob has been a "one-of-a-kind" retiree who has devoted himself to establishing a fiscally sound TelCo Retirees Association financial system.   Through his conservative guidance and concomitant control of operating expenses, the Association has accumulated financial resources in excess of $100,000!  (Which could be expended to fund federal litigation ensuring the continuation of our benefits.) The Officers and Directors extend to Bob and Phyllis our grateful thanks for their dedicated and unselfish efforts in creating a financially sound Pacific Bell retiree association that is the envy of other non-profit retiree organizations.  Because "team Hinshaw" shares a multitude of Association responsibilities (annual dues notifications, labeling for our Newsletters, coordinating membership roster names, addresses, emails, etc., updating email addresses and other duties associated with our "banking" ), they richly deserve the accolades and appreciation from all  Association members. Our Association has begun a search for a replacement for Bob as the Treasurer and his wife Phyllis who functions as the Data Administrator.  We are seeking retirees preferably who have accounting experience in or out of the company and who would like to become a vital part of the TelCo Retirees Association, Inc.  This/these individual (s) must be willing to devote time to the following tasks: Data Base Administrator (Monthly) Process new applications and checks to the data base for renewals (approximately 200 per month).  Mail renewal notices, process checks, post payments to data base, endorse checks and prepare deposit slips, update all change of address and email changes, send email list to webmaster, send updated membership roster to webmaster, maintain current file of membership applications and update data base for non-renewals and deaths. Treasurer Deposit new member and renewal checks, issue bill payment checks, maintain account registers and prepare various financial and administrator reports, manage corporate funds and investments, maintain corporate banking relationships and interact with our accountant and prepare various corporate tax statements and other filings for federal and state governments. Bob Hinshaw is interested in coordinating this "transfer of responsibilities" with retirees who have a desire to become an active part of our organization.  Those interested should contact Bob at 619-583-2633 or trabob@cox.net. Telephone Concession Service The AT&T Retiree Coalition invited Mr. Joe Barton (lead attorney) and Mr. Marc Machiz (Partner of Cohen, Milstein, Hausfeld & Toll, P.L.L.C.) to review the class action law suit during our annual Coalition meeting in San Antonio, TX on April 26, 2007. The federal judge responsible for hearing the telephone concession lawsuit against AT&T has set a trial date for the case to begin November 26, 2007. It was the opinion of the trial lawyers that a "request for damages" will be submitted during the trial and have asked the AT&T Retiree organizations to review and submit their recommendations as to the extent of the "damages" retirees have experienced with the loss of their promised telephone concession service. Since a "reinstatement" of the original telephone concession benefit is unlikely, a "cash settlement" will be offered in return for the reduction of the telephone concession benefit.   The TelCo Retirees Association will propose a $20 per month cash settlement for all Pacific Bell retirees impacted by the subsequent reductions in the promised telephone concession benefit, (less than the monthly $25 but more than the $69.26 quarterly reimbursement after FICA taxes).   On October 1, 2005 SBC "introduced" the "600 Minutes" long distance plan replacing the previous $25 monthly stipend.  We are unsure at this writing what specific amount the class action law firm will submit to the federal judge for compensation. Death Benefits The same Washington, D.C. law firm prosecuting the "class action telephone concession lawsuit" has also been researching the merger agreements between Pacific Telesis Group and SBC to ascertain what (if any) agreement was made to ensure the continuation of death benefits for retirees.   On May 8, 2007 the following message was received from the attorneys, "We have reviewed the merger agreements between SBC and Pacific Telesis and do not believe they provide much assistance regarding the reduction of the Death Benefit.  We suggest your association attempt to secure back copies of benefit documents issued by Pacific Telesis/SBC/AT&T attesting to the continuation of company provided death benefits.  We are currently exploring this suggestion. The Association has also discussed this entire issue with the lead attorney prosecuting the death benefit issue for the US West Retiree Association, who has challenged Qwest about their recent decision to reduce all retiree death benefits to $10,000!   Based upon the information provided, we contemplate his personal attendance at our Officers and Directors August Board Meeting.  This issue is of paramount importance to all Pacific Bell/Nevada Bell retirees who were promised a death benefit equal to their last year’s average salary! Proxy Statements Sad to say, but all AT&T proxy statements (Items 3,4,5,6,7,8) on the proxy card were defeated by shareowners at the annual meeting.  AT&T’s efforts to avoid the restrictions contained in the proxy statements were evident in the final votes of shareowners.   Nonetheless, our first "venture" into the world of stockholder proxies was quite successful.  The "corporate proxy" calling for the election of AT&T Directors by majority shareowner votes forced AT&T to change its corporate bylaws permitting a radical change in voting procedure. Also, the proxy statement submitted by Director Monte Baggs calling for specific changes in the severance policy for senior officers caused AT&T to "offer"  a similar but less onerous proposal for shareowner approval at the annual meeting The Board of Directors will review the possibility of future proxy statements as the need arises. Cingular Wireless Your Association has been involved in negotiations with AT&T Cingular to offer retirees who order "new" AT&T Cingular service a 19% discount and two free Pantech C3 camera phones (normally retail for $199.99 each).  This offer only applies to "new subscribers." We are in the final stages of placing this offer on our website with a "link" to AT&T.  More information later when the plan goes into effect. Vail Award One of our members, Mr. John Kerby-Miller, a retired District Manager, was recently awarded a Vail Award (personally signed by the Chairman and Chief Executive Officer of AT&T).  The award was presented "FOR SKILLFUL HANDLING OF AN EMERGENCY SITUATION." While jogging in Carmel, CA one day, John Kerby-Miller noticed a woman runner had collapsed.  There were several people at the scene who were trying to assist her because she had no pulse.  Mr. Kerby-Miller and a bystander immediately began administering CPR.  Mr. Kerby-Miller started chest compressions and the bystander provided mouth-to-mouth resuscitation.  They continued to administer CPR until the fire department arrived with a defibrillator and they were able to regain her pulse.  The victim was transported to the Monterey Hospital where she fully recovered.  The fire department advised the victim probably would not have survived without the combined efforts of Mr. Kerby-Miller and the bystander. The TelCo Retirees Association, Inc. joins Mr. Whitacre in congratulating John for his quick action in saving a life. AT&T Retiree Coalition Meeting San Antonio, TX April 26, 2007 Attendees:   AT&T - Dick Sibbernsen, Executive V.P. Sue Colburn, V.P. Benefits Marty Webb, AVP - Retirement Plans Jeff Mains, Executive Director, Health Plans Deb Trammell, Executive Director, Medical Plans Operations Jan Harvey , Director, Health and Eligibility Michael Muskopf, Director, Pension Plan Operation   Kathy Wilkinson, Director, Benefits Liaison David Martin, AVP, Corporate Human Resources Katie Brooks, Director, Benefit Communications Retiree Coalition: Bruce Beckman, President, Ameritech JoAnn Alix-Gagain, President, SNET S.K. Emery, President, TelCo Retirees Association Chuck Gilbert, VP, - TelCo Retirees Association Monte Baggs, Director, TelCo Retirees Association Kathy Maher - Board member, AT&T Legacy Retiree Association Medicare Part D What do we expect for Medicare reimbursements this year?   AT&T expects Medicare subsidy payments (based upon the 2005 annual report) will total $90,000,000 for 2006.  This subsidy estimate is taken into account when we develop medical plan contributions for the current year.  Therefore, the reduced costs from the Medicare Act are shared with retirees through reduced contributions. Prescription Drugs Retirees report Caremark refuses to ship drugs without a credit card on file. Answer:  Caremark ships drugs without a credit card on file.  Prior to 2005, the drugs would be shipped providing a $100 credit limit was not exceeded, including the drugs that were being ordered.  Effective in 2005, that limit was increased to $200.  If an order exceeds $200, a credit card or some other method of payment is required. How will retirees be able to prove that they met the actuarial equivalency test? Answer:  Retirees are strongly encouraged to retain their equivalency test letters for future reference.  However, Hewitt will fulfill future requests for the letters as well. Survivor Benefit in Pension Plan The Summary Plan Description for the PTG Pension Plan makes reference to the 15 year period of service, but not specifically with respect to the timing of commencement of the annuity for the surviving spouse.  The Pension Plan is being administered by Fidelity consistent with the official plan document.  We are currently in the process of updating our Summary Plan Descriptions for our pension plans.  We will include the requested information in the next pension SPD that we publish (subject to review by our legal department).  Our Survivor Benefits Unit (SBU) which is currently Fidelity routinely informs the surviving spouse with respect to his or her pension rights once the SBU is contacted and informed a participant has died.  While the surviving spouse may not be aware of the rules surrounding the timing of the commencement of the pension benefit, they are quickly made aware once they establish contact with the SBU. Death Benefit Info The Survivor Benefits Unit (SBU) has a check list it uses to ensure that beneficiaries of the deceased participant are informed and obtain all of the benefits to which the beneficiaries are entitled. Concession Will AT&T retirees get SBC@home?  When will they receive it? Answer:  We are currently reviewing concession policies to determine our path forward. Coordination With Medicare What charges are applied to the deductible? Answer:  When Medicare is the primary coverage for the retiree, the Medicare Allowable Amount is the amount applied to the deductible and out-of-pocket maximum. Out of Pocket Maximum (OOP) The OOP maximum is based on salary at the time of retirement - retirees do not make the income in retirement that they made as an active employee. Answer:  Since AT&T does not have access to all of the potential income a retiree may have in retirement (savings, investments, Social Security, employment, etc.), utilizing the individual’s income at retirement was our best alternative. AT&T Active Managers and Certain Management Retirees It is our intent to migrate AT&T active managers and certain management retirees (retired 3/1/90 of later) to the AT&T Medical Plan.  In addition, there may be some other modifications to that plan (for example: potential changes in deductibles and co-pays) in accordance with US Treasury regulations governing Health Savings Accounts (HSAs). Coalition Attendees Chet Przybyslawski, Ameritech (left), Bruce Beckman, Ameritech, Sue Colburn, AT&T, Marty Webb, AT&T, Chuck Gilbert, TelCo, S.K. Emery, TelCo, Kathy Maher, AT&T Legacy, JoAnn Alix-Gagain, SNET. Sumner K. Emery, President