The Official On Line Newsletter of Bell Atlantic Retirees.
1.5 BILLION SHARES SUPPORT RETIREE PROPOSALS
Association President C. William Jones, Vice-President of Finance, Robert A. Rehm, and Vice-President of Member Development, John A. Parente traveled on April 25 to the 2001 Verizon Shareholders Meeting in Memphis, Tennessee. They were there to present three proxy matters proposed by Association members on the annual meeting agenda. The trio, and the presentations they made, received a warm welcome from many of the approximately 180 combined shareholders, company staff and union representatives. The business of the day was the management of Verizon and anger among shareholders and the retiree body that the company board is not truly independent, and as such are heaping upon themselves gluttonously generous bonuses, stock options and perks, funded by retiree pension funds. The retiree association was challenging the company again at the shareholder meeting to help create change in the corporate culture by requesting the support of owners of more than two billion shares of Verizon stock - some owned by retirees, individual stock owners and others institutional investors. The three retiree proposals were: A) To require shareholder approval for future Golden Parachutes; B) To require a more independent Verizon board of directors and; C) To eliminate earnings on excess pension funds in the Calculation of Executive Incentive Compensation. The proposals won wide support from the shareholder body with preliminary 32%; 30% and 19% of the votes, respectively. Combined, the three proposals won some 1.5 billion, (Yes, you read correctly, that is billion with a "B") shares in support of your Association's proposals. Retiree John Parente, whose proposal to require an independent Board of Directors gained some 540 million shareholder votes said, "the current Verizon board is not an independent group and that is what we are calling for in this proxy proposal. The board sets salaries and when it gives its own leader, Mr. Seidenberg, raises the last three years from $1.1 million to $3.1 million to $13.1 million Ñ all before bonuses - it makes one wonder. With six interlocking directors it is one of the least independent in Corporate America's Bill Jones, presenting the proposal on the Calculation of Incentive Compensation, scolded company leadership for using an accounting technicality to boost corporate profits with retiree pension fund earnings, to make the bottom line look better and to puff up officer bonuses. This was the first time this proposal was presented and it won a strong 340 million or so shareholder votes. Said Jones, "Current formulas mislead investors, encourage short-term thinking by executives, boosts their incentive pay and harms retirees, for whom the funds were put away in the beginning. This encourages top executives to reduce retiree benefits in order to maximize pension fund surpluses, which now amount to over $22 billion. This unethical practice should be stopped." Winning almost 576 million shareholder votes or 32% was a proposal put forth by retiree Robert A. Rehm on Executive Severance Agreements (AKA: Golden Parachutes). In his presentation at the Memphis meeting, Mr. Rehm denounced the hypocritical practice of Verizon executives giving themselves excessive severance agreements that allow them to walk away with enormous golden parachutes regardless of why they are leaving the company. He said, "These allow the top officers to walk away with tens of millions if they please and virtually without cause, while the retirees are paid back for their years of loyalty with cuts in their benefits and eroding pension buying power" In addition to representatives from the Association of BellTel Retirees, a delegation from the Communication Workers of America, led by Ed Creegan, Representative for District 1 for New York, New Jersey, and New England for the CWA National Retiree Council, President of Local 1106 Retirees Organization, and past President of CWA Local 1106 in Queens were present in force. The team from the CWA even took out an advertisement in a local Memphis business publication, stating that the trust that the company has broken among the retiree body must be repaired. The CWA retiree's ad said, "Verizon is reneging on the contractual agreements it made with workers...The company has broken faith with tens of thousands of retirees who haven't had an increase in their monthly pension benefits in more than a decade. This isn't a money problem -it's an issue of priorities. Verizon has a $22 billion surplus in its pension plan, but it chooses not to provide fair pensions for the people who built the foundation for Verizon's success. That broken trust must be repaired." This Association echoes that statement by the CWA, that the company must act immediately to repair the trust they have broken with more than 165,000 retirees on the Bell Atlantic/NYNEX side of the company alone, lest they forget, we are shareholders too!
While our retirees are battling in Washington just to keep the benefits Verizon claims it can't afford, all in the interest of the bottom line, the co-chief executive officers are pocketing a king's ransom. Charles Lee, formerly head of GTE, and Ivan Seidenberg, formerly head of Bell Atlantic, are rewarding themselves richly for the merger of their companies with a tidy sum of $52.5 million - each - in the form of a merger bonus. Not bad for a few months work. The money is being called "founder's grants" of securities, where each received options to buy 650,000 shares, which would be worth $44.9 million if Verizon shares rise 10% annually during the terms of the grants. The shares have an exercise price of $43.34, and become exercisable in June 2003. In addition, both also received stock options: Lee's are worth $30.1 million and Seidenberg's are valued at $50 million. "Those are pretty heavy amounts of equity to be giving out just because there has been a combination of companies," according to Judith Fischer, managing director of Executive Compensation Advisory Service. "These awards are getting so large, they have become a snowball that is growing and growing, and companies are latching on to any reason to explain them to shareholders and the public at large." Just to make sure the co-CEO's can get by and meet their cost-of-living-expenses during this current stock market slowdown, both also received raises in their salaries and merger retention bonuses. As such, Lee's pay leaped 42% last year from $10.6 million to $15.1 million and a one time compensation package of salary, bonus, use of the company's aircraft, and other pay worth $4.2 million. Seidenberg salary went from $13.2 million to $15.1 million, and a bonus of $3.8 million. Both also received "performance share retention units" in recognition of the new company that is meant, "to retain, energize and motivate employees." If over a five-year span, the company reached certain revenue and earnings-per-share goals, they will pocket $7.5 million each. The management of Verizon must be held accountable for these ridiculously excessive compensation packages, basically at the expense of retirees on fixed incomes, some of whom have trouble just paying their bills. These executives should be ashamed of lavishing such riches on themselves when their own retirees must struggle just to make ends meet. Is any worker or executive so irreplaceable that they would be worth so much? We think not. The only answer could be that the Board of Directors has let these men run amuck and abuse the fiduciary powers entrusted to them - shame on you!
Verizon 2000 Executive Compensation Executive Salary, Bonus, Other* Stock Options** Ivan Seidenberg President & Co-CEO $15.6 million $94.9 million Charles R. Lee Chairman & Co-CEO $15.0 million $75.0 million Lawrence Babbio V. Chairman & Pres. $9.6 million $69.6 million Michael Masin V. Chairman & Pres. $9.6 million $45.5 million Frederic Salerno V. Chairman & CFO $8.8 million $55.8 million Dennis Strigl CEO Verizon Wireless $8.9 million $39.6 million
*Includes 2000 portion of merger bonus, ** At 10% for 10 years Reprint from CWA handbill distributed at the Verizon Annual Meeting
For a stimulating review of what inflation has done to your pension see our Figures page. Also review the "not so easy to figure" bottom line of your Pension Plan Assets. It clearly shows how we arrived at our "rainy day" 22 Billion Dollar surplus from reading the Verizon Annual report and Pension Summary.
Fellow Retirees, It is hard to imagine that we are celebrating the occasion of our fifth Annual Membership Meeting. Who would have thought when we met in Hicksville, NY in 1997 and talked about attending the NYNEX Annual Shareholders Meeting, that we would be here today talking about the results of our three proxy proposals that we presented at the first Annual Verizon Shareholders Meeting. Who would have thought, at that time that, our meeting this year would be better attended than the Verizon meeting. Our second Annual Membership Meeting, in Boston, MA, was a major step in solidifying our relationship with our New England brothers and sisters. This was the year that we moved from primarily a New York group to a representative of all New York and New England telephone retirees. Our third meeting, held in Atlantic City, NJ was another significant step in our development. We, following the merger of NYNEX and Bell Atlantic, embraced retirees from New Jersey Bell, Bell of Pennsylvania, the Chesapeake and Potomac Companies and Diamond State Telephone Company. Our Association had also changed its name to a more generic "BellTel" suspecting that our parent company might possibly merge again. We also announced the formation of our Legislative and Litigation Agenda and reported the votes for our two proxies presented at the Bell Atlantic Annual Meeting in Atlanta, GA. At our fourth Annual Membership Meeting in Syracuse, NY last year we gave updates on our progress towards filing a class action lawsuit, our legislative initiative and our plans for the Bell Atlantic/ GTE Annual Meeting in Denver, CO. At that time the merger had not yet been consummated but we did know that the new name was to be Verizon.
Here we are a year later, bigger and stronger than we have ever been. Our proxies achieved record high votes -- 32% for the "Golden Parachute" proposal, 30% for the "Independent Board" and a surprising 19% for the brand new "Vapor Profits" proposal. Let me spend an extra minute on that one, not just because I proposed it with Joe & Ann Ristuccia but because it breaks new ground and hits very close to a major retiree issue -- the hoarding of our pension funds by the company. An accounting rule allows the company to report earnings in the pension fund surplus as income, which boosts earnings per share, a component of executive compensation. In the year 2000, the pension fund contributed 30% to net income and 20% to earnings per share. In other words, a disincentive exists as far as improving pensions and benefits because that would reduce the contribution to executive compensation and reduce earnings, a measure which Wall Street follows closely. This proposal will definitely turn some heads and will, no doubt, garner much larger votes in the future.
What do we have to look forward to in 2001 and beyond? Of course we will be working very hard to advance our legislation. And we will have lots of help. The newly formed National Retiree Legislative Network, Inc., of which your Association is a founding member, is up and running. I am also proud to report that Board Member Joe Ristuccia and I both hold leadership positions in this newly formed organization. This group will be working on advancing retiree-friendly legislation, opposing retiree-hostile legislation and drafting legislation where we feel there is a need. Other founding associations include: US West/Quest, GE, GM, Prudential, SNET, Johns Manville, Western Union and the IEEE. There are many others that will be joining with us shortly. This organization will give us a truly national presence and representation in several industries --- a necessity for legislative success.
Our litigation is still moving slowly along. We cannot rush the process because our adversary is formidable and the issue has failed in the courts on a number of occasions in cases brought by other retirees. I need to put in another plug for help. We started down this road because you, our members, told us that it was important to you and that you would support our efforts. Well, you have supported us financially but we need more people to stand up and tell their healthcare horror stories. I do not mean that you must appear personally, but you must be willing to make a deposition. We have organized a snowball fight, we have the lawyers ready to throw the snowballs and we now need you to provide the snowballs! Write or e-mail us and, in addition to your story, tell us that we have your permission to use your story and your name. We cannot succeed without you. Each of the past years we have been proud of our accomplishments and excited about our plans for the future. This year is no exception. The entire Board of Directors joins me in thanking you for your continued support --- both moral and financial.
What would you say about a person who over the past 20 years in their "spare time" has carried the 1992 Olympic torch; worked on a team restoring the historic Chalfonte Hotel at Cape May, New Jersey; served as an actor in the re-enactment of the infamous "Loomis Gang" robberies along the Adirondack Scenic Railroad in upstate New York; and served as a volunteer for the 1996 Atlanta Olympics and the 2000 Goodwill Games in Lake Placid. Well, Pat George does call retirement, "her great adventure." But to friends and other volunteers with the Association of BellTel Retirees, this 1994 retiree from NYNEX is among other things, irrepressible, vibrant, and dynamic, with a get the job done attitude. When she is not out skiing, hiking, canoeing, biking and walking on the beach, Patricia P. George is working behind the scenes as one of the driving forces for the effort to protect and win back retiree pension and benefit rights. For the past four plus years, She has worked closely on behalf of retirees in upstate New York communities and making an impact throughout the entire national retiree organization. This May 11 at the Association's Annual Membership Meeting in Atlantic City, NJ, Pat was named to the important position of National State Representative Coordinator. This is a group of retirees scattered throughout the 50 states, who serve as key point persons for the Association's grassroots efforts. Pat's job, and that of our State Rep's and State Rep. Helpers includes working to increase membership, build the retiree mailing list, attending retiree meetings, luncheons, picnics and volunteer events, to spread the word and answer retiree questions about the important work being done by the BellTel Retirees organization and our legislative efforts in Congress. But Pat is exceptional, not just for what she does, but how she does it. Pat's telephone company career began as an Administrative Clerk at the Supply House filling orders for equipment for company Installation/Repair and Cable Trucks with NY Tel. She fondly recalls the pleasure derived from speaking with plant employees throughout the state over her career. Her time at the company also took Pat to Plant Staff, Sales Department, and the Power Industry, which she recalls as quite exciting during the Northeast Blackout of November 1966. Her final role with the company prior to retirement in 1994 was for the Public Relations&Customer Outreach Department. Several years ago when she was asked to help spread the word about the newly formed Association of NYNEX Retirees she admits to being hesitant. However, the realities facing retirees convinced Pat she should get involved. "I felt secure and confident all promises of benefits programs would be honored. It is unconscionable that Verizon, with billions in the pension funds, continues to take away benefits promised as a condition of loyal employment." Pat has several now not so secret tactics to getting the word out about the Association, including: placing newsletters on post office, grocery store, diner, senior centers bulletin boards; She always carries a newsletter in her pocket to give out at parties, restaurants, movies, shopping; She uses internet websites and places "free" ads in newspapers; She's always outreaching to friends to see if they know telephone employees/retirees; She includes membership flyers in personal correspondence to friends asking if they would post them in the cities and towns where they live. Pat really enjoys being a State Rep., in part because it keeps her in touch with other telephone retirees. "As soon as you meet someone who also worked for the telephone company you are instantly friends! It's like magic! We are really a unique family." Pat thanks for all of your efforts and for allowing all of us to be part of your extended family. If you would be interested in joining Pat George and her team of State Representative Helpers within your state or local community or if you would like to volunteer in another way, give us a call. You can call the Association office at 631-367-3067 or write the Association at: P.O. Box 33, Cold Spring Harbor, New York 11724.
Retirees Tread Water as Qwest CEO Soars
Joe Nacchio, the guy who runs your telephone company, pocketed $97 million last year. Irv Troudt, one of the guys who built your telephone company, got $13,000 from pension payments last year. He's had one cost-of-living pay increase in five years. One would think Nacchio would be grateful to retirees like Troudt who spent their lives building the company that has helped Nacchio succeed. Though not crying poverty - thanks to Social Security income and other investments - US West retirees say they feel largely ignored by US West and its new owner, Qwest, when it comes to living up to spoken promises made years ago for inflation pay increases. "We helped build this company," said Russ Steen, 70, who spent 33 years with US West's predecessor, Ma Bell. "We hung out on the poles in ice storms. That's what hurts." Troudt started out in 1955 making $45 a week, building telephone plant and stringing cable across the Front Range. "I started out at a low-paying wage, but I was always told there were great benefits working for the phone company," said Troudt, also 70. "I was working for retirement." Nacchio doesn't have to worry about retirement. At 51, he's the seventh-highest-paid person in the nation, according to the May 14 issue of Forbes magazine. The wealth, which came primarily from cashing in on stock options, makes him the top-paid executive in his industry, telecommunications. You would have to work at Burger King for 8,000 years before you made what Nacchio collected in 365 days. The equivalent of just one day's work for him could buy a single-family home in Denver. He makes more than the Beatles, which brought in $70 million last year; Tiger Woods, who tallied $53 million; and even more than movie stars like Tom Cruise, who reeled in $43 million. And Nacchio is still pulling in stock-option riches. In just the first three months of this year, he sold stock options worth nearly $40 million. During that span, nine other Qwest executives and directors pulled in about $20 million from stock sales. Since 1997, Nacchio has sold $244.2 million in Qwest stock, federal Security and Exchange Commission records show. Given those numbers, it doesn't seem quite right that Qwest could be dickering over modest cost-of-living pay increases in the pension plans of US West retirees like Troudt. The Association of US West Retirees is asking for an across-the-board 15 percent pension increase for people who have been retired three years or more. Nelson Phelps, executive director of the association, said the cost of living in Denver has gone up 38 percent in the past 11 years, yet retirees have had just one pension increase, of 2.9 percent, during that time. A Qwest spokesman couldn't say how much such an increase would cost the company because "we really haven't considered it." Sure, Nacchio's leadership has gotten Qwest where it is today. He's not afraid to make unpopular decisions. And he's made shareholders happy. Qwest's stock value has increased 640 percent since Nacchio took the company public in 1997. So far, Qwest has managed to keep its head above water in hard economic times, unlike a number of other start-up telecom companies that went public the same year. ICG Communications and Teligent Inc. are both in the throes of financial crisis, and Level 3 Communications has seen its stock price plummet 90 percent in the past year. Shareholders also watched Nacchio steadily improve US West's service record and smooth over bad feelings between the old US West and its labor union. But if it weren't for US West, Nacchio might not be outperforming his New Economy competitors or collecting the magnitude of stock option riches he has so far. US West provides a steady income from its 25 million local phone customers and has helped insulate Qwest from the deteriorating long-distance markets, which put the hurt on competitors such as WorldCom, AT&T and Sprint. Before last summer's merger, Qwest made most of its money from long-distance and Internet revenues. Qwest's stock trades at about $39 a share, compared with WorldCom's $18 and the $22 stocks of Sprint and AT&T. Nacchio says his own compensation is an unrelated issue. He says Qwest already has a great pension plan: It's ranked in the 90th percentile among plans offered by similar companies and offers more perks - such as free phone service - that Qwest isn't obligated to give. And Nacchio isn't sorry he's cashed in telecom riches. "I know they are big numbers, but I'm neither apologizing for it nor am embarrassed for it," Nacchio told reporters. "It's the way it works when you're successful in a start-up company," he said. "I made shareholders a lot of money. And part of the deal is when they make a lot of money, I make a lot of money." True, that's the way capitalism works. And Nacchio was smart enough to broker the deal to buy US West. "It was one of the better acquisitions we saw last year," said Tom Burnett of Merger Insight in New York. "I think Qwest has way outperformed (the competition) and he deserves credit for that." But guys like Troudt and Steed deserve some credit, too.
Last August, the Third Circuit Court of Appeals (DE, NJ, and PA & Virgin Islands) ruled that the Age Discrimination in Employment Act (ADEA) can and does apply to retired individuals. The decision rendered in the case Erie County Retirees Association v. County of Erie said that a corporation may violate the Act if it provides less generous health benefits to 65 and older retirees without satisfying certain ADEA requirements. Unhappy with the potential implications of that case, employers appealed to the U.S. Supreme Court to overturn the ruling, but on April 16, 2001 the high court declined to hear an appeal, allowing the ruling to stand. In light of this decision, the Association of BellTel Retirees is examining whether or not Bell Atlantic may have discriminated against its own retirees with regard to the health care plans now in force and, if so, what is the legal recourse for our retirees? The Erie case was based on the fact that retirees under 65 who are not Medicare eligible received their full amount of benefits, while those over 65 who are Medicare eligible received benefits only to supplement Medicare coverage. The Third Circuit reviewed the benefits provided to both groups of retirees and determined that the benefits offered to retirees 65 and older were inferior to those offered to those 65 and under. Under the ADEA, it is unlawful for an employer to discriminate against a worker on the basis of age with respect to the terms and conditions of employment. An employer can satisfy the ADEA by providing to older workers either benefits that are equal to the benefits provided to younger workers or benefits that are lower in amount and have the same or higher cost as benefits provided to younger workers (referred to as the "equal cost" and "equal benefits" test). The ADEA realizes that certain benefits become more expensive as people get older. Older workers may not be required to pay a greater proportion of the premium than younger workers. In applying the ADEA to retirees, the Third Circuit Court has ruled that an employer may not lawfully eliminate or offer less generous health coverage for over 65 retirees, unless it can prove that the benefits offered satisfy either the "equal cost" or "equal benefits" test. If the plan, provided to Medicare eligible retirees, provides inferior benefits (including less choice for doctors and services), the employer runs the risk that an ADEA challenge could be raised. How this decision will affect our own retirees has yet to be determined, but this is an issue that your Association will be bringing up with its legal advisors. Stay Tuned.
You are not alone. That is the message being sent from retirees and retiree groups around the country to members of this Association, as we continue our fight for retiree economic justice. Back several years ago, it was the advocacy of the Association of BellTel Retirees that brought to the forefront the dire need for legislation in Congress to correct the problems of retiree health benefits. At first, it was the work of just a few retirees of this group and then with the support of our growing membership, things really began to take off. As our group matured in stature and size, we began to look externally to how other retirees throughout America were being affected. Lo and behold, many others were facing the same dilemmas as our own retirees, so we began talking strategy and realized we had a solid foundation to build a strong national network of retirees from some of the most Blue Chip companies in America. With the introduction of the Emergency Retiree Health Benefits Protection Act of 2001 retirees coast-to-coast, from all walks of life have joined with us to campaign for HR1322. Together we have created the National Retiree Legislative Network (NRLN) a Washington, D. C. based organization, of which the Association of BellTel Retirees is a founding member, to fight for passage of HR1322 and other legislative measures vital for the protection of retiree benefits, pensions, and rights. (visit the NRLN on the web at www.NRLN.org) The members of this group, telephone company retirees included, are responsible for making this country what it is today. They built the cars America drives, the jet planes that defend our country, among so many other things. These retirees are the heartbeat of America. Here is an introduction to a few of the organizations that make up NRLN and some others who serve as our allies in this vital fight:
National Association of Retired Sears Employees (NARSE)
Johns Manville Retiree Association
Association of US West Retirees
The National Association of Prudential Retirees (NAPRI)
REPA (Retired Employees Protective Association)
SNET The Southern New England Telephone Retiree Association Inc. (SRA)
The Institute of Electrical and Electronics Engineers, Inc. (IEEE)
At the BellTel Newsletter's press deadline, AARP is still not on board in support of HR 1322. In order for HR 1322 to pass, AARP's support in Washington is vital. Please write AARP and urge them to declare their support this important piece of legislation. Write to: Mr. Marty Corry Director of Federal Affairs AARP Ñ 601 E Street NW Washington, D.C. 20049 Email: firstname.lastname@example.org (Att: Mr. Corry) Mr. David Certner Sr Coordinator, Economic Issues/ Federal Affairs AARP Ñ 601 E Street NW Washington, D.C. 20049 Email: email@example.com (Att: Mr. Certner)
One member wrote informing us of a costly mistake that caused her unexercised stock options to expire years early. We are reprinting this information to prevent other retirees from facing the same problem. She writes: "I want to thank you for all you are doing for us retirees through the Association. My husband and I are both retired after 32 years and have been members of the Association for a while now. We look forward to the newsletter and the informative articles. We are in the process of spreading the word on H.R. 1322 and will keep you informed of the progress. The second reason for writing is in hope that my story might help someone else to not make the same mistake. In reviewing some files recently, I became aware that the stock options we were given in 1994 from NYNEX expired in March of 2000 rather than 2004 as I had originally been told. I never realized that once you retire the expiration date changes. I did receive a form shortly after I retired that gave a new date but nothing was highlighted to get your attention. Needless to say, retiring was a life change that's right up there on the stress level charts, and I must have just filed it away not realizing the date had changed. My lack of attention to detail has cost me a good deal of money. I called the Key Trust Company of Ohio to see if there was any grace period or if I had any recourse, but they basically said, tough luck. The thing that bothers me is that no attempt was made to inform me that the expiration date was approaching so that I could exercise my options. Somehow I feel the company has some obligation or responsibility to at least notify me, but evidently, they do not see it that way. Thank you again for all your work on behalf of all the retirees."
United States Congressman John F. Tierney (D - MA), author of the Emergency Retiree Health Benefits Protection Act of 2001 was introduced to a standing ovation from over 300 gathered retirees on May 11th at the Tropicana Resort in Atlantic City, as he prepared to give the keynote address to the 5th Annual Membership Meeting of the Association of BellTel Retirees. Association President Bill Jones who introduced Congressman Tierney said, "This is the first time we have ever had an outside speaker at our meeting. But I guess we should not call the Congressman an outsider, because John Tierney was the person who had the courage to stand up and be counted as a fighter for retiree rights. He was the person that was willing to author and be the Chief Sponsor of the Emergency Retiree Health Benefits Protection Act of 2001. This bill is without a doubt, the most important thing that our Association has embarked upon since our inception in October 1995." The Congressman, whose own mother Doris is a retiree from New England Telephone, and is a very active member of her Local Pioneer Life Member Club in Salem, MA, spoke with enthusiasm to the audience made up of retirees from 11 states, some as far as Florida and New Hampshire, about the battle shaping up in Congress to win passage of HR 1322. Tierney encouraged retirees to continue to pull together for this all-important measure. He said, "I need you - the retiree's to help me get Congress to support HR 1322. This is not a partisan bill. This is about quality of life, about promises made!" He then implored the group to become more active in the fight to pass HR 1322, saying "Don't write a letter and leave it there. Continue to push for a commitment from your Representative." Doris Edwards, a 1991 NYNEX retiree and now an officer of the AFL-CIO's Senior Action Council, commented that as a company retiree, she was very impressed with the meeting, its attendance and about how passionate and committed Congressman Tierney is to the group and its legislation. She added that the AFL-CIO's Senior Action Council stands united with the Association pushing HR 1322 and that the union will "be out among our membership trying to recruit support for this important bill." Among other familiar faces in the crowd was a long-time friend of retirees, Ed Creegan, Past President of CWA Local 1106, President of Local 1106 Retirees and Representative for District 1 for the CWA National Retiree Council; and Elliot Gallant past President of CWA Local 1199 (Western Electric/Lucent) and member of the Board of Directors for Local 1104 Retirees. Both spoke at length, gave their support to the Association's work and promised to push for passage of HR 1322.
Association President Jones and the other volunteer officers of the Association reported on the significant progress the retiree group has made, in the last twelve months, since the last Annual Membership Meeting hosted by upstate New York State retirees in the City of Syracuse. At the top of that list of successes, was the introduction of the Emergency Retiree Health Benefits Protection Act at the tail end of the 106th Congress (October 2000) and then reintroduced in the current Congress, where it now has a strong 72 co-sponsors. Mr. Jones also detailed how the Association also sponsored three measures on the proxy at this year's Verizon Annual Meeting, gaining some 1.5 billion-shareholder votes. Many of the retirees gathered marveled at how the little retiree organization that started half-a-dozen years ago had grown and really begun making a positive impact for retirees.
Association awarded 5-year service/recognition awards to Volunteer Board Members: Parente, Ristuccia, Kucklinca, Jones and Rehm. Not pictured is Association Co-Founder Ed Ward.
United States Congressman John Tierney addresses the crowd of 300 retirees in Atlantic City, N.J.
On April 2, 2001 the U.S. Supreme Court declined without comment, to review an 11th Federal Circuit Appeals Court ruling that Georgia-Pacific violated ERISA in calculating the Cash Balance Pension Plan. The loss means that Georgia-Pacific and other companies using the same calculation measures will need to recalculate the pension benefits of certain retired & active employees Some retirees and active employees of our own company say that Verizon used the same calculations as Georgia-Pacific in converting from the defined benefit pension plan to a cash balance plan. The Federal Courts said that such a formula results in unlawful age discrimination and a lower dollar figure for the retiree that must now be corrected, so that retirees will now get the pension benefit, which they are entitled to under the law. The lower court ruled that cash balance arrangements are actually defined benefit plans, and payments should be calculated by: A) projecting an employee's balance forward to normal retirement age, using a rate of interest specified by a plan and; B) then discounting the retirement benefit back to an employee's departure date, using a rate of interest specified in Treasury regulations. In this case, the plaintiff, Georgia-Pacific retiree Jerry L. Lyons was paid a lump sum of $36,109.15 after he left the company, but based on the formula that the court said should have been used, Mr. Lyons should have received nearly $50,000. Georgia-Pacific claims that now they and other companies using the Cash Balance Plan will now be obligated to pay hundreds of millions of dollars more than they said they would under their previously sponsored plans. All Salaried Verizon employees, active or retired (retired Bell Atlantic - South after 1/1/96 or retired Bell Atlantic - North after 1/1/98) should contact the In-Touch Center, to request a re-calculation of their pension based on compliance with Treasury regulation 417 pursuant to the Federal 11th Circuit's decision in Lyons vs. Georgia Pacific. For more information about this important decision, you can visit this Internet address: http://www.plansponsor.com/content/magazine/whipsawd. If you have already contacted the In-Touch Center and have received a response from Verizon stating that they are in compliance, you should file a claim. Details on how to proceed with a claim will be explained in the letter that you get in your response from the In-Touch Center. If you would like to request a recalculation, and have not already reached out to the In-Touch Center or Bell Atlantic's Plan Administrator, put your request in writing and send it certified mail (with return receipt) to the following two addresses: 1.Bell Atlantic In-Touch Center Bell Atlantic Claims and Appeals Group Box 435 Little Falls, NJ 07424-0432 2. Bell Atlantic Plan Administrator 13100 Columbia Pike, C-14 Silver Spring, Md. 20904
According to The Verizon Annual Report, Verizon has used the pension fund gains to boost their bottom line by a staggering 30% this year. That is more than seven times the average of most U.S. companies. Across the country overall pensions are expected to prop up profits to corporations by $23 billion or 4% up from 2.5% or $20 billion in 1999, according to a Federal Reserve analysis of 350 companies in the Standard & Poor's 500 (source: USA Today, March 19, 2001). While many see 2000 as a down year for the market, last year at Verizon, the pension fund gains were $3.489 billion, up a mind boggling 81% from 1999. Nationally, many pension funds lost money overall. Almost 25% lost money, their worst year since 1987, according to a survey of more than 400 plans by Plan Sponsor magazine. Regardless of its good luck and prudent investments in the market with our retirement dollars, Verizon it seems won't spend any of it on the former employees, claiming the funds are earmarked for a "rainy day." Mr. Seidenberg and Mr. Lee, if you haven't noticed, your retirees have had their umbrellas up for the last decade clamoring for ad-hoc increases and, a return of the benefits they were promised and earned.
List of 72 Co-sponsors of HR 1322:
Tierney (MA) - Author Hilliard (AL) Pastor (AR) Miller (CA) Lantos (CA) Lee (CA) Sanchez (CA) Sherman (CA) Berman (CA) Filner (CA) Waxman (CA) Millender-McDonald (CA) Napolitano (CA) Woolsey (CA) Holmes-Norton (DC) Hastings (FL) Thurman (FL) Lewis (GA) McKinney (GA) Underwood (GU) Mink (HI) Abercrombie (HI) Schakowsky (IL) Rush (IL) Costello (IL) Evans (IL) Davis (IL) McGovern (MA) Meehan (MA) Frank (MA) Olver (MA) Capuano (MA) Markey (MA) Delahunt (MA) Wynn (MD) Conyers (MI) Dingell (MI) Bonior (MI) Kilpatrick (MI) Kildee (MI) Sabo (MN) Oberstar (MN) Thompson (MS) McCarthy (NY) Hinchey (NY) Maloney (NY) Towns (NY) Crowley (NY) Nadler (NY) Owens (NY) Andrews (NJ) Payne (NJ) Brown (OH) Tubbs-Jones (OH) Kucinich (OH) Kaptur (OH) Defazio (OR) Hooley (OR) Murtha (PA) Holden (PA) Borski (PA) Fattah (PA) Brady (PA) Langevin (RI) Kennedy (RI) Sandlin (TX) Frost (TX) Gonzalez (TX) Christen-Christensen (VI) Sanders (VT) Kleckza (WI) McDermott (WA)
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