In late June, longtime BellTel Board Member, Don Kaufmann wrote to the leadership of U.S. Department of Labor’s ERISA Advisory Council – about one month before it held hearings to address the growing concern of de-risking.
He was one of the 41,000 Verizon Retirees spun off in 2012. Since that time this same thing has happened to millions of defined benefit retirees totaling over a quarter trillion dollars transferred to insurance companies outside of the safety of the Pension Benefit Guaranty Corporation.
Mr. Kaufmann’s important letter together with our presentation at the hearings helped set the tone of the event.
June 28, 2023
ERISA Advisory Council
Employee Benefits Security Administration
US Department of Labor
Washington, DC 20210
I worked for Verizon and its predecessors for 30 years and received a hard-earned pension. It was called a defined benefit plan. At the end of 2012, Verizon notified me on very short notice that they were offloading my pension to the Prudential Insurance Company.
All this was done unilaterally. I was not given any options or choices, and it occurred without my consent. Prudential, thank goodness, has maintained my payments over the years. I know that ERISA is federal legislation designed to protect pensions such as mine; and, that insurance companies come under state jurisdiction and are not covered by ERISA.
I have heard about the billions of dollars companies are offloading and it is upsetting. As retirees, we are losing important protections. My wife and myself are 80 and thus at an age when we have little chance to make up for missteps. Companies are improving their balance sheets at the expense of lifelong workers, who helped to get them where they are.
Without ERISA protections we have no visibility to the type of investments companies are making with our funds, and there is no oversight on whether the companies receiving the funds have the financial strength to make payments for the duration of the pensioners’ lives.
This situation has gotten even more exacerbated as pension funds have been allowed to be transferred to offshore private equity companies. This results in retirees’ lifelong pensions being controlled by firms they do not know; by managers they do not know who might be looking out only for their own short-term profit, and without any idea what investments are being made.
This is a recipe for a terrible outcome— but only the retirees will be hurt. Pensioners could be left high and dry—again at a time in their lives when they are most vulnerable.
I cannot think of any other current issue that is more Bipartisan than protecting funds earmarked for American workers. Federal legislation is needed to ensure that companies managing retirees’ pensions are held to the highest standards and they have the financial strength to meet all their fiduciary responsibilities.
ERISA was passed by Congress in 1974 to protect American workers. Until recently it has done well. But now corporations and executives have found ways to circumvent the rules and enhance their own short term gains.
Action is needed urgently to amend the rules and put the teeth back into the Employee Retire Income Security Act and protect retirees, like myself. Amending Section 2509.95 of Title 1 of title 29, Code of Federal Regulations is an important first step towards protecting the future of retirees earned pension benefits.
Thank you in advance for your consideration.
Don Kaufmann
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