Pacific Bell’s Telephone Concession benefit was granted to employees (and retirees) following 25 years of service and to certain management employees - based upon their level of management and job responsibilities (regardless of years of service)

The concession benefit included monthly exchange service, a "reasonable" amount of toll usage charges (later changed to $20 monthly), service connection and installation charges, extension telephones, and where appropriate, a second residence. This benefit underwent a company change on July 7, 1985 when Pacific Telesis modified System Instruction 25 and established a $35 monthly "cap" for retirees "living outside of a Pacific Telesis serving area."

On March 31, 2000, Pacific Telesis Out of Region pensioners were informed that "SBC" would implement a new tax policy for telephone concession reimbursement.

In March 2003, SBC announced a new telephone concession of $25 for retirees living "outside of an SBC serving area." The concession "reimbursement" to be paid quarterly to Acordia.

On October 1, 2005, Out of Region telephone concession reimbursement was replaced by SBC with a "Block of Time 600 Minutes SBC Long Distance Plan." This plan provided 600 minutes of direct-dial SBC domestic long distance calls per month. The "new plan" provided no allowance for exchange service charges.

On August 17, 2004, the TelCo Retirees Association, Inc. filed a formal CPUC complaint against SBC predicated upon violations of California Tariff (CAL PUC A5).
(In January 2005, the TelCo Retirees Association mailed a letter to the President of the CPUC requesting the status of our formal complaint. We were informed, "We lost your formal complaint and request you resubmit the documents!"

On September 2, 2005, the President and Vice President of TelCo Retirees attended a CPUC pre-hearing conference in San Francisco before Administrative Law Judge Victor D. Ryerson. During the hearing, SBC legal representatives announced all telephone concession tariffs for Out of Region retirees had been cancelled! This "unannounced" action by SBC nullified our formal complaint and forced a withdrawal of our CPUC legal action effective December 21, 2005.

CLASS ACTION LAW SUIT

On March 24, 2005, the Washington, D.C. law firm Cohen, Milstein, Hausfeld &Toll filed a class action complaint against SBC Communications, Inc. and the SBC telephone concession plan for violations of the Employee Retirement Security ACT (ERISA). This is a civil enforcement action brought pursuant to Section 502 of the Employee Retirement Income Security Act of 1974 concerning the establishment and maintenance of Defendant SBC Communications, Inc. and its predecessor and successor companies, promising the "Telephone Concession" or "SBC Telephone Concession Plan."

The fundamental premise of this law suit is that by informing employees they would receive the Telephone Concession when they retired with a service or disability pension, SBC became responsible for compliance with a myriad of statutory and regulatory obligations that apply to such plans under the provision of ERISA.

(The TelCo Retirees Association, Inc. has taken an active role in this Class Action Law Suit and provided substantial amounts of historic documentation of changes to our "promised" Telephone Concession Benefits.)

In February 2006, the Plaintiffs (Cohen, Milstein, etc.) filed an amended complaint on behalf of retirees of SBC, Southern New England Telephone, Ameritech and Pacific Telesis who received the Telephone Concession Benefit after they retired; and (2) current or former employees (including retirees of SBC with more than 5 years of service during the time that SBC had a policy to provide employees with a Telephone Concession Benefit upon retirement.

On May 21, 2008, the federal judge issued a decision on Phase I and found in favor of plaintiffs and the class. The Court concluded that the OOR (Out of Region) is a pension plan, which means the benefits can’t be cut and can’t be eliminated and should mean the $25 cap imposed in 2003 and the elimination of cash payments in 2005 were illegal.

The federal court bifurcated (split) the case into 2 phases. The court will now proceed to Phase II which will determine what portions of ERISA Defendant violated, the remedy (damages) and how much in benefits (both past and future) each participant (i.e.) employee or retiree is entitled.

(On Monday, April 20, 2009, I received the following e-mail from Mr. R. Joseph Barton the lead attorney for the Class Action Law Suit.)

"The trial of Phase II (the last phase) is now set for February 2010 (it was set for December 2009 but the case was unfortunately transferred to a new judge). The prior judge (Judge Justice) had issued a number of favorable rulings in our favor. I will make my first appearance before the new trial judge (Rodriguez) tomorrow.

"You know that we provided notice to the Class represented and I appreciate all your help with that."
R. Joseph Barton

The TelCo Retirees Association, Inc. has undertaken a vital role in this Class Action Law Suit and we plan to continue to do so until all impacted Pacific Bell retirees receive compensation for the loss of their promised telephone concession benefits.

Sumner K. Emery, Director