I should like to express to all of our members the sincerest appreciation of your Officers and Directors for your continued support of our TelCo Retirees Association, Inc. Without your advice and counsel and your personal willingness to help shoulder the responsibility, it's highly unlikely we could have achieved our goal of developing a truly independent Pacific Bell retiree organization.

The TelCo Retirees Association, Inc. received its authorized Fictitious Name on February 6, 2003. We received our federal Employer Identification Number (EIN) on August 12, 2003. Our initial State of California incorporation was approved January 7, 2004. The IRS non-profit status was approved on April 28, 2004. On August 12, 2004, we were required to "restate" our State of California Articles of Incorporation. We received non-profit status by the State of California Franchise Tax Board on September 8, 2004.

All of the above was to ensure that our membership funds would not be expended for state or federal income taxes.

The TelCo Retirees Association, Inc. is committed to achieving the goals enumerated in our Mission Statement. Our last cost of living pension increase (Ad Hoc) was granted in June 2000. The SBC annual Internal Revenue report for the year ending December 31, 2003 reflected "19,126 retired participants/beneficiaries received pension payments of $478,809,000.00 . The Pacific Telesis Group Pension Plan for the year- 2003- $4,006,507,000.00 - 2004 - (Not available until the first quarter 2006)

Your Association has aggressively petitioned SBC for an overdue pension increase for Pacific Bell retirees during past years, all without success. We plan to continue this effort. Unfortunately, Ad Hoc pension increases are subject to the Chairman's recommendation and approval by the SBC Board of Directors.

The TelCo Retirees Association, Inc. filed a formal complaint with the CPUC in May 2005 challenging SBC's right to modify telephone concession benefits in violation of the existing tariff. Unfortunately, subsequent addendums placed by SBC in 2004 nullified the basis of our complaint. We currently plan to support a Class Action lawsuit filed by a Washington , D.C. law firm against SBC for violations of the promised telephone concession benefit.

Health benefits for managers who retired after 1/1/91 will be radically changed commencing January 1, 2006. Your Association continues to be actively involved with SBC's Health Benefit organization in attempts to modify the proposed deductible amounts and other issues. Unfortunately, corporations have the legal right to modify or terminate health benefits under a "Reservation of Rights" clause that appears in our health benefit documents. The National Retiree Legislative Network is actively seeking Congressional support to place corporate "Health Benefits" under the ERISA federal legislation. Your personal support of this legislation with your Representatives would be welcomed.

There are 23,000 retired Pacific Bell employees. At this writing, your Association has over 2,000 members. Mr. Lee Brown (Membership Chairman) is responsible for membership activities and encourages all of you to assist in this endeavor. We have learned that our "members" are the best source of recruiting.

All of your Officers and Directors are committed to the expansion of our membership and will, upon request, attend any Pacific Bell retiree meetings and luncheons. The strength of our organization is directly related to the size of our membership.

In closing, the TelCo Retirees Association, Inc. is an active participant in forming an SBC All Retirees Association (Ameritech, SNET, AT&T, TelCo). At this writing, all retiree association Presidents are in agreement to the formation of this "umbrella" total SBC retiree organization.

"Until one is committed, there is hesitancy, the chance to draw back…and always ineffectiveness." Goethe

Charles Gilbert, President/CEO