Why should I care about Verizon retirees, Pundt v. Verizon federal litigation?
This is a good question, especially if you are a retiree who came out of the CWA or IBEW.
In 2012, over 41,000 Verizon management pensions were transferred to Prudential Insurance Company and converted into group annuities. That is what started the ruckus in the first place.
Since your pension is still intact and coming monthly from Verizon, why should you be concerned about what happened to a bunch of management pensions? After all, your pension wasn’t affected, was it? The answer is a loud: “Yes it was!”
Verizon paid Prudential around $8.5 billion to transfer $7.5 billion of management pensions. The $1 billion “sweetener” came from the pension assets remaining with Verizon and covered Verizon’s costs and expenses. In other words, Verizon took this money from YOU!
The retirees sued and took it all the way to the 5th Circuit Court of Appeals, which ruled in favor of Verizon, finding that no “harm” was done to retirees. What happened next is astonishing.
Overcoming odds of less than one percent, the Association of BellTel Retirees led litigation was granted a Writ of Certiorari by the United States Supreme Court!
That means the highest court in the land threw out the 5th Circuit’s ruling and told them to think again. The U.S. Supreme Court asked the 5th Circuit to go back to the drawing board and reevaluate whether there was in fact “harm” done to retirees.
This is important to everyone with a Verizon pension. Why? Because your pension is expected to be next up on the conversion block. Verizon has demonstrated that it desperately wants to get out of the pension and benefits business and right now one of the few things that can stop them is the United States Supreme Court. Our Association has worked long and hard to get to that point and we are the only ones fighting, let me repeat the only ones fighting!
When Verizon gets around to dealing with your pension and transfers it to a group annuity owned by an insurance company, you will lose all protections from ERISA, the federal law passed in 1974 and signed by President Gerald Ford to protect the retirement assets of Americans with pension plans from the private sector.
Once your pension is converted you will lose the “insurance protection” provided by the Pension Benefit Guaranty Corporation, along with losing all uniform protections from creditors, and ERISA’s fiduciary standards.
We need your help. Now that you realize that this is an important battle that you cannot simply watch from the sidelines, we need you to get involved for your own future. We need to put pressure on state legislatures to pass laws protecting retirees in pension de-risking transfers.
There have been a lot of articles written about this subject both in this newsletter and in the Senior Advocate from our sister organization, ProtectSeniors.Org. You can download those newsletters from our website, if you don’t already have them.
We have to do this together. In the coming months you will be asked to make a simple call or write a short letter using the website from ProtectSeniors.Org. We can’t do it without an army of fellow retirees and this advocacy does not come free. We need your support. We will “carry the ball.” We just need the handoff from you. Stay tuned and please act now to become a staunch advocate and protector of your own retirement future.