Chairmans Comments
S.K. Emery, Chairman

PENSIONS With the economy rapidly moving towards a depression, many members have expressed concerns as to the financial impact stock losses and bank failures might have upon on our company pensions. As reported to you earlier, there are a total of 306,000 AT&T retirees (53,400 Pac-Nev Bell). However, substantial numbers of these recent "retirees" accepted "buy-outs" and were not offered defined pension benefits (total numbers unavailable). While we have been unable to obtain specific and current information as to the integrity of AT&T's pension funds, I can tell you AT&T's pension fund was recently reported at 120% of the Pension Benefit Guaranty Corporation (PBGC) requirements. In addition, for those of you familiar with the AT&T Form 5500 (Annual Federal Financial Statements). You may recall the wide diversification of AT&T's pension funds, investments in government securities, major worldwide corporations (Toyota, Verizon Communications, Time-Warner, Exxon, General Electric, Advanced Micro Devices, Alcoa, Nokia, Swedish Match, Ericsson, Royal Caribbean Cruises, Canadian Natural Resources, Tokyo Electric Power Co., Toshiba, Samsung, Mitsubishi, Glaxosmithkline, Royal Dutch Shell, etc.), and millions of dollars in foreign currencies. Your association was recently made privy to a Reuters newspaper release on Oct. 22, 2008, which contained the following information, relative to the Pension Benefit Guaranty Corporation: "Last year, S&P 500 companies had $63 billion in over-funding in their pension funds, a level not seen since 1995, and going into 2008 were estimating an 8 percent rate of return on their pension assets for the year." "Experts say retirees with traditional defined-benefit pensions have little to worry about. If you're reliant on a 401(k), there is reason to be concerned. Here are some answers to the questions all this raises for those near or in retirement:" "What if the bank or financial company that sends me my pension check each month is in trouble or bought? Could that affect my income? No. They are only the processor of your payment. Your former employer is the one that funds your pension, and pension-plan assets are separate and distinct from all other assets of both your former employer and the third-party check processor." "The Pension Benefit Guaranty Corporation may have lost $3 billion due to bankruptcies and other investments. Should I worry about this fact? If you are one of the 1.3 million people whose employer has gone bankrupt and your pension plan has been taken over by the PBGC, you might find that $3 billion figure disconcerting. However, Jeffrey Spiker (spokesman for the agency) states 'the PBGC has assets of $68 billion, plenty to pay current obligations. Although it has lost money on its equity portfolio, the agency has made money on bonds, where its investments have traditionally been focused.' From last October to the end of August, Spiker says, the PBGC is down about $1.2 billion, or 6%, 'which is not band for this environment.' Also, interest rates have been dropping fast, which lowers the agency's calculation of liabilities. So fast, in fact, that the PBGC is likely to come out of this downturn with a $2 billion smaller deficit than it had last year." Based upon AT&T's dominance in the world of communications, its marketing efforts, and its "base of subscribers", it would appear pensions are not threatened at this writing. S.K. Emery, Chairman

TELCO MEMBERSHIP LIMITED SURVEY (Members Living Outside of the Former Pacific Bell Serving Area) On September 18, 2007, the Association mailed letters to 243 members living "outside of the former Pacific Bell serving area". Our primary purpose was to ascertain how well the Association was serving the interests of those members and whether there was room for improvements in our current plans and programs. The survey asked the following questions… When did you retire from Pacific Bell, What was your job title at the time of retirement, How many years did you work for Pacific Bell (SBC/AT&T), Are you receiving pension and health benefits, What major retiree concerns should the Telco Retirees Association, Inc. prioritize going forward, Do you consider concession service a high priority retiree benefit, Our last pension increase for "all qualified retirees" was granted June, 2000 -- would you be willing to prepare a personal letter addressed to Mr. Randall Stephenson (Chairman/CEO, AT&T), and, Our Telco Association is vitally interested in your personal evaluation of our current efforts to ensure the continuation of promised Pacific Bell pensions and health benefits. 123 recipients of our letter responded to the questionnaire. 53 included significant comments (all favorable) and 70 returned the questionnaire without comments. 73 of the members solicited had retired before 1991. (The vast majority of responses indicated a strong willingness to write a personal letter to AT&T’s CEO). The Association was pleased to receive accolades from 53 members, although we had anticipated some recommendations from members for changes to our current strategies and programs, ensuring the continuation of our health benefits, telephone concession, and pensions.* We have reviewed the results of this limited survey in a recent Board of Directors meeting to determine its full value and our plans for the future. *(Actual comments from members): "Your efforts on [Telephone Concession] should have been applied to our healthcare package where it would have been worthwhile, instead of being a largely wasted issue." "I think the association is the best idea that ever came along. Your work so far has been great." "To ensure perpetuity of our past and present efforts -- we need a ‘Central Office’." "Thank you for your watch-dog oversight to prevent entitlement disallowances. Thank you for maintaining we retirees focus on what’s possible to inattentiveness. Thank you for publicizing and keeping us informed." "You have provided presence to our existence, we have no one else within AT&T to turn to -- WE DO EXIST!" "I believe you are doing the best job possible considering the only weight you have is the size of our membership. I believe that our size is small and if it were not for your strength in presenting arguments and your persistence you would not have made the progress you have thus far. I have tried to recruit more members, but many have said they are already represented by the Pioneers. They don’t seem to believe me when I tell them the Pioneers are in bed with the company." Your Officers and Directors would like to extend our sincerest appreciation to all of our "out of state" members who responded to our survey. We were pleased with the accolades many of you included with your responses. We plan to continue representing "all retired Pacific Bell employees… whether or not they are members." Sumner K. Emery