Newsletter

Your Association held its Quarterly Board of Directors meeting in Orange County on August 15-16, 2006. The agenda was wide-ranging and encompassed a financial review, the NRLN (Chicago) Board of Directors meeting, membership, our website, (telcoretirees.org) the induction of Mr. Larry Love to our Board of Directors (replacing retiring Director Mr. Clifford Woodrell), a presentation of the Orange County’s Public Employees Retirement Plan (by Mr. Reed Royalty, former Pacific Bell Vice President and currently President of the Orange County Taxpayers Association).

Also reviewed was the status of the Telephone Concession Class Action lawsuit, the Association’s plans for the introduction of AT&T proxy statements, current UHC issues involving difficulties in resolving disputes, and AT&T’s refusal to grant an Ad Hoc pension increase to Pacific Bell retirees.

The next Board of Directors meeting is scheduled for November 1^st and 2^nd in San Diego. We welcome your comments and suggestions regarding retiree issues impacting your quality of life.

Director Lee Brown assumed a leadership role as Membership Chairman for the Association and asks that your suggestions and recommendations for the expansion of our membership be directed to his office. You may reach him at 1-800-698-4239. (A staff member with IBEW will answer your call…ask for Lee. Or you may go through our website in the "Contact" link)

While our total membership remains close to the 2,000-member level, it has become apparent our roster is diminishing due to retiree deaths and illnesses. There are approximately 30,000 Pacific Bell/Nevada Bell retirees and it is self evident your Association has been unable to identify and recruit the vast majority of these retirees. While Officers and Directors are considering a number of options to "reach out" to these retirees, your personal involvement in this effort is critically important.

The TelCo Association recently mailed a personal letter to each of you stressing the importance of expanding our membership (including a membership application) and asked for your assistance in passing the application along to a non-member retiree. This effort was an abysmal failure since we only received 11 new applications.

In contrast, Mr. Mike Mahoney, an Association member in Paso Robles, has recruited a vast number of retirees to our Association through his involvement with Pioneer Association members and other retirees groups living in and around Paso Robles. His "recruiting success" is founded upon a belief in the Association’s objectives for the protection of retirees’ benefits, his wide acquaintanceship in the Paso Robles area and "always having a membership application available!" (Thank you, Mike, for all that you do for the TelCo Association.)

Director Lee Brown will soon be requesting your personal involvement in the Association’s plans for the expansion of our membership. Look for more information on this subject in the coming weeks.

The Class Action lawsuit presently being litigated by the Washington, D.C. law firm (Cohen, Milstein, Hausfeld & Toll) is now accepting "Class Members" who wish to be a party to this federal lawsuit.

The complaint filed against SBC (and its predecessors) concerning the management of and the reduction of benefits by the SBC Telephone Concession Plan alleges that SBC violated nearly every provision of the Employee Retirement Income Security Act (ERISA) governing defined benefit plans with respect to the SBC Telephone Concession Plan by failing to treat the provision of the Telephone Concession to retirees as an ERISA covered employee benefit plan.

This lawsuit is filed on behalf of the following groups of retirees and employees (retirees of SBC or a predecessor of SBC including, but not limited to, Ameritech, Pacific Telesis and Southern New England Telephone) who were entitled to receive the Telephone Concession Benefit after they retired; or current or former employees of SBC with more than five years of service during the time that SBC had a policy to provide employees with a Telephone Concession Benefit upon retirement.

If you fall under the aforementioned categories and wish to become a part of this Class Action lawsuit, please write Dana Frusco, (Cohen, Milstein, Hasufeld & Toll), 1100 New York Ave. NW, Suite 500, West Tower, Washington, D.C. 20005 and request a questionnaire for interested Class Members. If you have email, visit their website:

The TelCo Retirees Association’s financial summary presented by Treasurer Robert Hinshaw was inspirational, and his commitment for the continued solvency of the Association’s budget is self-evident from the revenue/disbursements outlined in his review.

Here for your edification are some highlights from his 2006 (7 month) financial summary:

…. Investments - $55,000 in CD’s (depending upon purchase date, earning 3.71% to 5.25% for a total of $1,522 since April of 2005). All interest earned is carried forward and compounded with each CD when it is renewed - AT&T Common Stock ($4,036).

The SEC requires a shareholder to own shares valued at over $2,000 continuously for at least 12 months - and continue to own a qualifying number of shares through the date of the annual meeting in order to sponsor a stockholder’s proxy.

Association members should be reminded that Officers and Directors serve without compensation, and all expenses above $500 must receive Board of Director approval. As we now enter the world of AT&T stockholder proxies, the expansion of the AT&T Retiree Coalition, and support for the National Retiree Legislative Network (and its national Congressional efforts to protect pension and health benefits of retirees) we are anticipating substantial increases for legal and other issues.

Director Donna Portzer has assumed primary responsibility for our TelCo Retirees Association website and has been extensively involved in upgrading its content. She is also reviewing a number of future enhancements in concert with Director Lee Brown and his organization’s Webmaster.

Donna suggests if you have not recently visited our website www.telcoretirees.org that you do so to "update" yourself on benefits, the AT&T link for the In Memoriam information and other items vital to retirees and their benefits. (She also suggests that you provide our website address to other "non-member retirees" as a means of encouraging their membership in the Association.) And…don’t forget your password to the Members Only link, which is: ma-bell.

Your Association President wrote Mr. Edward E. Whitacre, Jr. on July 12, 2006 stating the failure of SBC/AT&T to grant Ad Hoc pension increases to its retirees. Included in that letter was a review of retiree pension increases since 1984. (1984...4.5% increase, variance by years of retirement; 1986...4.5% increase, variance by years of retirement; 1989...5. -10% increase, variance by years of retirement; 1995...1-10% increase, variance by years of retirement; 2000...3-45% increase (45% granted retirees who retired before 1966 - 34 years of retirement).

The letter closed with a summation of the astronomical increases in basic cost of living expenses (income taxes, gasoline, home maintenance costs, utilities, health and automobile insurance, etc.).

"As President of the TelCo Retirees Association, Inc. and representing thousands of former Pacific Bell/Nevada Bell managers and non-management retirees, I respectively urge your thoughtful consideration and approval of an Ad Hoc pension increase for Pacific Bell/Nevada Bell retirees."

(A copy of the response letter from Sue Colburn, AT&T Vice President, Benefits, follows.)

I am responding to your recent letter addressed to Mr. Whitacre dated July 12 requesting consideration of an Ad Hoc pension increase for former Pacific Bell/Nevada Bell management retirees.

First of all, I want to stress that Mr. Whitacre, his direct reports, and the Board of Directors recognize and appreciate the years of leadership provided by these loyal and dedicated former managers. They understand and appreciate the contributions these individuals made to the business as active managers and the commitment they continue to exhibit as retirees in supporting the company’s position on a number of difficult legislative issues.

While no Ad Hoc increase in planned at this time, I want to assure you that we in Benefits review and analyze the status of pension annuities on a periodic basis. This was recently conducted and did take into account the various out of pocket expenses you outlined. With that, our findings were recently presented to Mr. Whitacre.

The fact that no Ad Hoc is planned does not mean that the personal situations of our retirees are unnoticed or not appreciated. It is simply the result of analyzing inflationary trends, considering prior Ad Hoc increases as well as other benefits provided by the company to retirees, and weighing and balancing all the other demands of the business at this very critical and competitive time in our industry.

(I recently mailed a follow up letter to Sue Colburn requesting information germane to the "periodic studies" that AT&T conducts relative to pension annuities. At this writing, I have not received a response.)

Vice President Jack Land was elected as a Director of the NRLN during their mid-year meeting in Chicago this year. During that formal Board of Director’s meeting, considerable discussion centered upon "membership obligations" related to "offering" TelCo Retirees Association members the opportunity of becoming an individual member of the NRLN.

We as an Association are a fully accredited member of the NRLN and pay an annual membership fee of $3 per member ($6,000 per year). This permits us to have an Association member serve on their Board of Directors and to receive a wealth of information pertaining to legislative issues vital to retirees’ pension and health benefits (as posted on our website).

The dues structure for "participating Associations" in the National Retiree Legislative Network carries with it an "obligation" to acquaint our membership with the NRLN retiree organization and to provide our members with a "membership application" in the event they would like to become a supporting (individual) member and receive the NRLN Newsletter direct. The suggested individual dues structure ranges from $15, $20, $25 (or more if you can).

Jack Land informed us that a letter is now being prepared for mailing to all members that will include background information on the NRLN as well as an NRLN individual membership form. The TelCo Retirees Association remains neutral on this individual membership issue and leaves the decision as to whether or not you wish to become an individual member in the NRLN to your own discretion.

t has been the goal of your Association to submit stockholder proxy statements during annual stockholder meetings to gain credibility and leverage with AT&T management, to publicize issues and to engage/recruit members with incremental action and "victories". "Proxy activism" has generated considerable publicity for the retiree associations of Lucent, Verizon and Qwest and they have received high levels of support from their shareholders. In addition, the retiree groups have generated considerable publicity in major newspapers and financial magazines.

To this end, we have engaged the services of a Washington, D.C. law firm to provide our Association with research, advice and counsel as we develop plans for the submission of proxy statements. The submission date deadline for next year’s AT&T stockholder meeting is November 11, 2006.

Also for your information, many of the issues we would like to select for our proxy statements (pension increases (COLA’s), AT&T reductions in retiree health benefits and the investment policies of the company’s pension plans) are generally not permissible issues under SEC rules for a proposal printed in the company’s proxy statement. Areas open with a low risk of "omission" and likely high share owner support include "shareholder approval of golden severance agreements, limiting executive retirement and severance (total post-employment compensation), requiring a majority share owner vote to elect candidates for Board of Directors and requiring share owner votes on the Board of Directors compensation committee report.

We also plan to explore retiree representation on the AT&T Board of Directors as well as the election of independent Directors (not those chosen by the Chairman of the Board).

Your Association has long considered the purchase of TelCo Retiree Association Lapel Pins to assist with recognition and recruitment. (The pin will depict the two bells utilized on our official correspondence stationary and other documents.) One bell will be blue in color, the other white, indented on a polished brass background.

To assure that all TelCo Retirees Association members desiring such a Lapel Pin receive one, we need to know the volume necessary to place the order.. Consequently, if you wish to obtain a Lapel Pin, please write a note to the TelCo Retirees Association, Inc. P.O. Box 600067, San Diego, CA 92160-0067. (And please confirm your mailing address…since we find a number of our members change addresses and fail to notify us.)

"The TelCo Retirees Association, Inc. is dedicated to protect, enhance and assure the continuation of retirees' pensions and other benefits promised by the company at the time of their retirement."

Your suggestions and recommendations for the future growth of our membership will be greatly appreciated by your Officers and Directors. (TelCo Retirees Association, Inc., P.O. Box 600067,
San Diego, CA 92160-0067) email Info@telcoretirees.org