Since our last newsletter (May 18, 2007), a plethora of old and new issues have occurred that directly impact Pacific Bell retirees; an AT&T Ad Hoc pension increase for retirees who retired before 1996 and are currently receiving a monthly pension payment of $1,200 or less (details should become available within the next few weeks).  The pension increase to become effective October 1, 2007.  A response from William R. Drexel (AT&T Sr. VP/Assist. Gen. Council) relative to our challenge involving Yellow Page Death Benefit reductions, a response from Susan M. Colburn (VP-Benefits) to our members" pension letter to Mr. Randall Stephenson AT&T CEO (no response at this writing to our Telco Corporate Letter), and U.S. West/Lucent retiree associations Amicus Briefs before U.S. District Courts.

June 30, 2007
 
Mr. Randall Stephenson, Chairman & CEO
AT&T, Inc.
175 E. Houston Street
San Antonio, TX 78205
 
Dear Mr. Stephenson:
 
"QUI TACET CONSENTIVE" (WHO IS SILENT GIVES CONSENT!)
 
The TelCo Retirees Association, Inc., representing all former Pacific Bell/Nevada Bell retirees, takes umbrage with the iniquitous corporate decision to grant a long overdue ad hoc pension increase to "selected" AT&T retirees (a pension income of $1200 a month or less and retired prior to 1996.
The audacity of AT&T's senior officer and our "well compensated" corporate Board of Directors to approve a meager pension increase for a small number of well deserving retirees, and totally disregard the income plight of thousands of former Bell System retirees (whose quality of life has  been similarly affected by today's cost of living) is callous and uncaring.
 
Indeed, a historical review of the former Bell System and its operating companies, fails to indicate any ad hoc pension increase granted upon an "income qualification basis."  For clarification of this issue, I have included a copy of a January 28, 1998 letter from SBC Communications, Inc. of the Pacific Telesis Group pension increases since 1984, as well as a May 18, 1995 letter from Vice President J. R. Moberg outlining a December 31, 1994 pension increase for salaried employees.  The pension increases ranged from 1% to 10%, once again based upon the pensioner's date of retirement without any reference to the individual's current pension check.
 
On  July 1, 1984 Pacific Telesis retirees were granted a "special increase in pensions of 4.5%!"  (Payable for those whose pensions were effective after October 1982 or earlier.)
 
In 1989 a 5% to 10% increase, again the actual amount depending upon the individual's retirement date.
 
Effective June 1, 1995 the Board of Directors of Pacific Telesis Group announced a special one-time pension increase to employees who retired on or before December 31, 1994 under the Pacific Telesis Group Pension for Salaried Employees.  The percentage ranged from 1% to 10% dependent upon the individual"s retirement date.  (See attachments)  
 
On June 16, 2000 the SBC Pension Plan Service Center announced an ad hoc increase.  The increase amount was determined by the pension start date.  Before 1966, the pension increase was 45%!  The pension increase scale ranged downward from January 1, 1981 to December 31, 1988 where the pension increase amount was 3%.  (The vast majority of pensioners.)
 
A cursory review of Pacific Bell"s/Nevada Bell's ad hoc pension increases from December 1970 to June 2000 indicates the only qualifiers for a pension increase were the pensioner's date of retirement and the percentage factors being granted.  
 
On January 11, 2007 I received a copy of the AT&T, Inc. and the AT&T Umbrella Benefit Plan No. 1 & 2 for the period of January 1, 2005 through December 31, 2005.  (The most recent Summary of Employee Benefit Plan Information for the 2005 Calendar Year.) .The last available 5500 Annual Report.
 
Department of the Treasury, Internal Revenue Service
 
December 31, 2005 - Merger of Four Plans into the "SBC Plan."  (SNET, Pacific Telesis Group, Ameritech Management Plan and Ameritech Pension Plan)
 
Value of Interest in Master Trust Investment Accounts - (Net assets end of year)
$29,539,148,000.00* (Schedule H 5500, Department of Labor Employee Benefit Security Administration)
 
Benefit Claims Payable (end of year) - $38,099,000.00* (Schedule H, Form 5500, 2005, Page 12)
 
(In light of the above disparity between assets and liabilities, an argument for a "new look" (by your office) at ad hoc increases for AT&T pensioners is not only logical but profoundly warranted.)
 
The "Smart Money" Magazine (dated July 2007) carried an article by Mr. Roger Lowenstein stating, "Mr. Whitacre's pension and deferred compensation totaled $158.4 million (according to the corporate library, "the richest retirement in America.")
 
*And in that same publication by Mr. Lowenstein wrote,  "A more damning comparison is to AT&T's retirees.  Their pensions have been frozen.  The poorest, some 88,000 workers who retired before 1996 receive pensions of $14,000 a year."*
 
*Obviously, Mr. Lowenstein was not privy to the "actual pensions" being received by hundreds of Pacific Bell/Nevada Bell retirees "as well as thousands of pensioners in the former Bell System companies who now make up the "new AT&T."
 
I sincerely hope you will take the time to read the many letters addressed to you by Pacific Bell/Nevada Bell retirees.  Their daily struggles to meet their medical expenses, utilities, mortgages, food, clothing, gasoline, etc. are graphically described in their correspondence and make a compelling argument for a "second look" at the proposed AT&T ad hoc pension adjustment plan.
 
You have a unique one-time opportunity, Mr. Stephenson, as the Chief Executive Officer to capture the admiration and support of thousands of former AT&T employees and managers by reconsidering the "Whitacre" decision and to include the many other retirees who have been equally harmed by the escalating cost of living without adjustments to their pensions since the year 2000.  
 
In closing, may I be permitted to include a quote from Winston S. Churchill, "It is no use saying we are doing our best, you have to succeed in doing what is both necessary and ethical."

Sincerely,

Sumner K. Emery, President

Yellow Page Death Benefits
 
AT&T
 
Mr. Sumner K. Emery, President
TelCo Retirees Association
San Diego, CA 92160
 
Dear Mr. Emery,
 
I received your correspondence dated June 21, 2007 regarding the decision to change the company paid life insurance benefit for individuals who retired from bargained positions at Pacific Bell's Yellow Page Directory.  I've also had an opportunity to review our prior correspondence with you on this matter.
 
The Yellow Pages business unit changed the life insurance benefit for its employees that retired from bargained positions. The life insurance benefit plan was amended to provide $15,000 of company-paid life insurance, and these retirees were given the opportunity to purchase additional life insurance the extent their company-paid life insurance was reduced. This change was precipitated by many factors, including the demands of a highly competitive marketplace.
 
The Yellow Pages business unit negotiated with the unions that represent its active employees to change the life insurance benefit that they would receive in retirement. This collective bargaining agreement applies only to active employees who retired prior to the expiration of the contract, and it only applies through the expiration of the bargaining agreement.
 
The bargaining agreement does not apply to existing retirees.  However, in view of its desire to provide consistent life insurance benefits for all retirees from bargained positions, the Yellow Pages business unit elected to similarly modify the retiree life insurance benefit for its existing retirees.  The change with respect to existing retirees was effective January 1, 2007.
 
You provided excerpts from several benefit plan communications that state the company-paid life insurance benefit for these retirees would equal one times their base pay, with reductions that apply between ages 66 and 70.  You specifically note provisions in some of these publications that state this company-paid life insurance benefit would be provided "for the rest of (the retiree"s) life."  However, you failed to note that these publications also include a clause that says the company continues to have the ability to amend or terminate benefit plans, including the company-paid life insurance benefit.  There is also a statement that any change that is made will not affect an individual's right to any benefit to which he or she has already become entitled.  In the context of retiree life insurance, the combination of these clauses means that the death benefit would not be reduced for individuals who died prior to the effective date of the change.
 
The decision to change retiree life insurance benefits was made after much consideration.  We recognize and appreciate the contributions that our retirees made to the success of our company.
 
That appreciation is reflected in some of the best retiree benefits afford by any company in America.  We continue to strive to provide a valuable benefit package while balancing the costs of providing those benefits with the ability to efficiently and effectively continue operating in the dynamic and competitive telecommunications environment.  While many companies have taken drastic steps to reduce or eliminate their benefits, AT&T continues to provide a competitive and comprehensive benefits package for retirees that we believe is both fair and sustainable for the long term.
 
We appreciate your interest in this matter and the other matters that we have dealt with your and your organization in the past.  We respect and value your comments and hope that we can continue to have a healthy and productive dialogue on matters such as these that are in our mutual interests.
 
Sincerely,
 
William R. Drexel
Senior Vice President and Assistant General Council

On June 29, 2007 U.S. West filed a challenge in federal court contesting a previous ruling (in favor of Qwest Communications International) that denied a petition to overturn the reductions in pensioners company promised death benefits. (Qwest reduced pensioners basic life insurance coverage to a maximum of $10,000!)
 
In their brief, U.S. West states "Plaintiffs seek an order striking or reforming any amendment, including Plan Amendment 2006-1.  Plaintiffs seek an order requiring the Plan to notify estates and beneficiaries of Plan Participants who have been cheated out of the minimum Plan benefits that they are entitled to demand payment of the correct amount of Plan benefits, together with prejudgment and post-judgment interest."
 

On July 9, 2007 Mr. Scott M. Lempert Esq. (attorney for the Lucent retiree organization) filed a challenge in federal court stating "the district court"s dismissal ruling (on their initial lawsuit) hinged upon its erroneous conclusion that all death benefits must be welfare benefits.  When the law and the record are considered, it is apparent that this Death Benefit was a pension benefit, not a welfare benefit.  The attorney further stated "a review of the district court"s opinion shows that it failed to credit and recognize the significance of the allegations in the Amended Complaint, which established that AT&T and Lucent acknowledge the Death Benefit to be a "defined benefit" in all their operative ERISA plan instruments."
 
Your retiree association is closely monitoring both of these legal filings and have invited Mr. Curtis Kennedy (attorney for the U.S. West retiree association) to attend our October Officer/Director meeting for the purpose of updating us on the trials progress.

Recently, a member (Mr. Clarence Johnson, Clovis, CA) contacted our association "regarding reimbursement for hearing aids."  A review of SBC"s summary plan descriptions issued in January 1991 and July 1996 specifically excluded reimbursement for hearing aids.  We elected to pursue this issue with AT&T"s benefit group.  We are informed an October 2004 "SBD" does in fact provide a reimbursement up to $1,000 for Pacific Bell/Nevada Bell retirees who retired before 1987.
 
The document states "participants in an MEP option are eligible for: a hearing test/exam, when Medically Necessary, reimbursement of up to $1,000 of expense incurred to purchase a Medically Necessary hearing aid appliance(s) in any rolling 36-month period, reimbursement for the cost of repair of your hearing aid appliance (the cost for the repair does not count toward the $1,000 cap). Special reimbursement rules apply under the hearing benefit provisions. If you do not follow the special rules, you will not be reimbursed. The charts that follow indicate how to be reimbursed for: Medically Necessary hearing tests/exams, Medically Necessary hearing aid appliances, repairs to hearing aid appliances.
 
(You will need to obtain a prescription or letter from your physician to establish the Medical Necessity of the hearing test and/or hearing aid appliance.  When you file a claim for reimbursement, the prescription or letter must accompany your claim)." (Thank you, Mr. Johnson!)

The federal court hearing on this issue remains scheduled for early in November.  All impacted Pacific Bell/Nevada Bell retirees will be apprised of the court findings and will have an opportunity to file a claim for reimbursement.
 

We continue receiving inquiries from our membership as to the "availability of discounted" Cingular Wireless service.  WE HAVE PLACED AN OFFICIAL AT&T OFFERING FOR THIS SERVICE ON OUR WEBSITE!  IF YOU HAVE NOT VISITED OUR WEBSITE IN SOME TIME, PLEASE DO. http://www.telcoretirees.org

(For our "non email" members please contact your AT&T business office and indicate you are inquiring about the discounted Cingular Wireless service.)

In a recent newsletter we announced the planned "retirement" of Mr. Robert Hinshaw, Treasurer.  "Bob" is truly a "treasure" and has, through his diligence and personal effort, placed our retiree association in the forefront of most retiree organizations.  Our "ledger" reflects prudence and good judgment and the accumulation of resources and prompt payment of all legitimate expenses.
 
We are canvassing a list of "San Diego County retiree members" whose backgrounds and interests would seem to make them an excellent candidate for appointment to our Officer/Director association.  If you, or someone you know, would like to be considered for this position please contact Mr. Robert Hinshaw at
619-583-2633 or at his e-mail bobhinshaw@cox.net.
(No serious candidate will be overlooked!!!)

Sumner K. Emery, President