Very interesting indeed. Sue
Date: Tue, 11 Dec 2012 18:18:59 +0000
From: chas.labarge@xxxxxxxxx
To: BPGeconference@xxxxxxxxxxxxx
Subject: [bpgeconference] Verizon Moves Pension Obligations to Prudential - ABC
News
Here's what has transpired with a group of fellow telecom retirees in the
USA when their pensions were suddenly turned into annuities. It will be
interesting to see what the outcome of their appeal might be.
Charlie
From Evernote:
Verizon Moves Pension Obligations to Prudential - ABC News
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http://abcnews.go.com/Technology/wireStory/verizon-moves-pension-obligations-prudential-17926243#.UMaPbJPjmoc
Verizon Moves Pension Obligations to Prudential
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By By PETER SVENSSON AP
Technology Writer
NEW YORK December 10, 2012 (AP)
Phone company Verizon Communications Inc. on Monday said it has transferred
$7.5 billion in pension obligations to Prudential Insurance after a retiree
association failed to convince a court to stop the move.
Members of the Association of BellTel Retirees sued in federal court in Dallas
two weeks ago to stop the deal, saying it would weaken the legal protections
for retirees. It effectively turns the company's defined-benefit pensions into
annuities to be paid by Prudential. Annuities aren't covered by the federal
Pension Benefit Guaranty Corp.
On Friday, the judge ruled that the retirees had failed to show they were
likely to be harmed by the deal.
Curtis Kennedy, a lawyer for the plaintiffs, said they will likely appeal that
decision. If they win on appeal, the companies may have to unwind some of the
deal, he said.
"The legal issues are most significant for not only the group of affected
Verizon management retirees, but for all corporate American retirees whose
pensions are presently being sponsored by their former employers," Kennedy said.
The Verizon plan covered 41,000 management retirees.
New York-based Verizon Communications Inc. has said that the deal lowers the
risk that its pension obligations will end up costing more than projected.
Defined-benefit plans, which guarantee company-paid monthly retirement
payments, are dwindling. Only 15 percent of private-sector workers participate
in such plans, according to the Employee Benefit Research Institute. That 2008
figure was down from 38 percent in 1979. Attachment:
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