TelCo VP M. Baggs’ request…..AT&T CEO R. Stephenson’s response

Sunday, January 07, 2018 1:44 PM

Mr. Stephenson:

I think you will remember me. We met in Spokane, Washington in 2015 at the AT&T Annual Meeting. We were discussing the move of retirees to the AON Medical Exchanges when you asked me “how’s it going?” I said okay but retirees are skeptical about the move to HRA’s because they feel you won’t continue to fund them next year. Your reply was.” look my brother is getting ready to retire and my Mother would kick my ass if I did that.” We all got a good chuckle out of that and you then invited me to let you know if there’s anything going on that “just doesn’t seem right.” You gave me your personal email address and asked that I use it to keep you informed. I later shared a somewhat edited version of the incident with the members of Telco Retirees. Because of the reactions I got from our membership I later communicated their concerns to you directly.
Once again, I feel compelled to share their concerns with you, but first let me congratulate you on the decision to give a $1000 bonus to your current employees, presumably as a result of the Trump administration tax reduction package. It demonstrates your commitment to your people and their contributions to the business.admirable indeed! I am however, getting some feedback from our membership which I would like to share with you. They ask why is it that the folks who built the foundation upon which you now operate so successfully are not worthy of consideration for any benefit of their contributions? Not only have you been unwilling to give your retirees even the slightest pension adjustment, just prior to Christmas of this year, you asked some of them to repay to you, thousands of dollars due to pension calculation mistakes made by your benefits department. In addition, you are slowly reducing the medical, dental and vision coverage to retirees.even those “grandfathered” retirees who were promised lifetime coverage at no cost to them. Quite frankly, it is like a stiff punch in the stomach to retirees!! Heartless!! It has been almost 20 years since the last pension
adjustment and that was very meager and didn’t apply to all retirees.
Mr. Stephenson, this I not a personal attack on you! We understand you alone, don’t make all these decisions. However, we ask that you review the above facts with your executive staff and urge them to reconsider their decisions to not include retiree’s contributions to the business, as well as the decisions to “take away promised health benefits.” Oh, and don’t forget the Christmas present you asked for!
If there ever was an appropriate time to reconsider your position on the
issues outlined above, this would be it. Your retirees have been some of
your most loyal supporters and we hope to continue that. All we ask is the same considerations.
If you would like more details regarding my comments, please feel free to contact me by email or by telephone at 831-594-3848. I would enjoy talking with you.

Monte Baggs, Vice President, TelCo Retirees Association

Friday, January 12, 2018 2:27 PM

Monte,

Thank you for your note, and yes, I do remember meeting you in Spokane.
Also, thanks for your ongoing support as a shareowner and for your leadership in helping build this company. You and thousands of other retirees worked hard to make AT&T successful and respected throughout the world.

As you know, we operate in a highly competitive, rapidly evolving industry.
Long-term success for our shareholders – including our retirees – requires us to think carefully about how we deploy our available capital. That capital supports many things, from investments in growth and new technologies, to career development for current employees and sustained benefits for eligible retirees. In the face of these and other critical requirements, we are unable to provide a pension increase.

That said, I’d point out that most companies, including most of our direct competitors, no longer even provide company-funded pension programs. In contrast, we not only continue to provide pension benefits to the vast majority of our employees, but we also fund the trusts that support those benefits at a level beyond most other companies. We’ve made the unprecedented contribution of wireless assets to our pension trusts, which effectively makes them close to fully funded – something that’s rare in corporate America these days.

In addition, while most companies have discontinued providing subsidized health coverage for retirees, we are unique in continuing to do so – and with extraordinary benefits that we continue to review and improve over time. In short, I’m proud of the support we provide our retirees and how that support compares with other companies.

Again, I appreciate your many years of dedicated service, and I hope to see you at our 2018 annual shareholders meeting.

Randall

February 6th, 2018 Q&A with MARTY WEBB, Vice President – Global Benefits at AT&T.

MARTY WEBB’S COMMENTS on HEALTHCARE:

AT&T HAS EVAULATED SERVICES AND CREATED TWO DIRECTIONS: HRA FOR USE WITH THE AON RETIREE HEALTH EXCHANGE AND A MEDICARE ADVANTAGE PLAN FOR GRANDFATHERED RETIREES. AT&T CONSTANTLY EVALUATES MORE EFFICIENT, ECONOMICAL WAYS TO DELIVER BENEFITS. LEADERSHIP IS COMMITTED TO THEIR RETIREES AND THERE IS NO CURRENT PLAN TO CHANGE THIS APPROACH.
AT&T CREATED A UHC MEDICARE ADVANTAGE PLAN, AND SEPARATE PRESCRIPTION AND DENTAL FOR ALL GRANDFATHERED RETIREES.

Q The level of customer service appears to be below the standards we had. Is anything being done to improve our customer service?

A. MANAGEMENT IS AWARE OF THE CONCERNS AND WORKS TO IMPROVE CUSTOMER SERVICE THROUGHOUT ALL DIVISIONS AND GEOGRAPHIC LOCATIONS.

Q AT&T provides a good dividend—what are future plans?

A. AT&T IS KNOWN AS A DIVIDEND PAYING COMPANY. IT HAS HAD 34 ANNUAL CONSECUTIVE INCREASES.

Q Since you are unable to discuss the merger, is there anything you can say?

A. GIVEN THE CURRENT LITIGATION, NO COMMENT AT THIS TIME.

Q. There is a letter writing campaign from all retirees, not just Telco, asking for a pension or HRA increase. Will someone respond to these letters?

A.WE DO PLAN TO RESPOND.

Q. At the annual meeting in 2007, Mr. Whittaker proposed a pension increase to a limited number of retirees, retired before 1996 and receiving $1200 or less monthly. His rationale was that: This is poverty level. We would request the Board review this and extend this consideration to those that retired after 1996 and reevaluate the monthly $ amount.

A. THIS QUESTION WAS ASKED BY MONTE BAGGS AND ANSWERED BY RANDALL STEPHENSON ON JANUARY 12, 2018. THE LETTER FROM MONTE AND THE ANSWER FROM MR. STEPHENSON IS PUBLISHED IN FULL UNDER THE PRESIDENT’S MESSAGE TAB OF THE TELCO RETIREES WEBSITE, www.telcoretirees.org.

Q. If AT&T currently is unable to offer a pension or HRA adjustment, will they consider enhanced discount benefits for Cell Phone service and Direct TV? Retiree discounts are much lower than active employees.

A. WE RECOGNIZE AND APPRECIATE AT&T RETIREES SERVE AS AMBASSADORS TO OUR AT&T PRODUCTS AND SERVICES. WE CONSISTENLY EVALUATE OUR CURRENT PRODUCT OFFERS TO ENSURE WE ARE OFFERING THE MOST COMPETITIVE DISCOUNTS THAT CURRENT TAX CONSTRAINTS WILL ALLOW.

Q. Grandfathered retirees that were promised free healthcare, dental, etc. at retirement have seen their benefits reduced from what they were, especially dental. Do you see a return to the original dental services and cost sharing?

A. WHILE NOT TO THE SAME EXTENT AS MEDICAL COSTS, DENTAL COSTS CONTINUE TO INCREASE AS WELL. THEREFORE, AT&T BELIEVES IT IS IMPORTANT TO OFFER A NUMBER OF CHOICES TO GRANDFATHERED RETIREES. AT&T OFFERS GRANDFATHERED RETIREES A CHOICE OF PLANS, INCLUDING A DENTAL HMO, WHERE A RETIREE CAN CHOOSE A PLAN WITH LOW OR NO MONTHLY CONTRIBUTIONS OR A PLAN THAT BALANCES MONTHLY CONTRIBUTIONS AND COSTS INCURRED WHILE OBTAINING SERVICES.

Q. There are many complaints with AON, especially in certain geographic areas. Please give us some insight as to why it is necessary for a middle-man to manage the process?

A. IT IS IMPORTANT FOR US, AND FOR OUR RETIREES, TO ESTABLISH A CONTROLLED, THOUGHTFUL, AND CUSTOMER-FRIENDLY PROCESS, WITH A CREDIBLE PROVIDER, AND STAFFED BY WELL-TRAINED AD STATE-LICENSED BENEFIT ADVISORS. WE WILL CONTINUE TO REVIEW THIS PROCESS IN THE FUTURE.

Q. From what they were, especially dental. Do you see a return to the original dental services and cost sharing?

A. WHILE NOT TO THE SAME EXTENT AS MEDICAL COSTS, DENTAL COSTS CONTINUE TO INCREASE AS WELL. THEREFORE, AT&T BELIEVES IT IS IMPORTANT TO OFFER A NUMBER OF CHOICES TO GRANDFATHERED RETIREES. AT&T OFFERS GRANDFATHERED RETIREES A CHOICE OF PLANS, INCLUDING A DENTAL HMO, WHERE A RETIREE CAN CHOOSE A PLAN WITH LOW OR NO MONTHLY CONTRIBUTIONS OR A PLAN THAT BALANCES MONTHLY CONTRIBUTIONS AND COSTS INCURRED WHILE OBTAINING SERVICES.

Q. There are many complaints with AON, especially in certain geographic areas. Please give us some insight as to why it is necessary for a middle-man to manage the process?

A. IT IS IMPORTANT FOR US, AND FOR OUR RETIREES, TO ESTABLISH A CONTROLLED, THOUGHTFUL, AND CUSTOMER-FRIENDLY PROCESS, WITH A CREDIBLE PROVIDER, AND STAFFED BY WELL-TRAINED AD STATE-LICENSED BENEFIT ADVISORS. WE WILL CONTINUE TO REVIEW THIS PROCESS IN THE FUTURE.










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