Bulletins
May 24, 2016
U.S. Supreme Court hands Verizon retirees victory, vacates decision in pension spin-off case
Decision by nation’s highest court gives shot in the arm to federal litigation about $8.5 billion telecom de-risking of 41,000 pensions
In a significant victory for a group of Verizon retirees whose pensions were spun off by the company, the U.S. Supreme Court vacated a lower court decision and sent the case back to be re-evaluated, giving the class action suit, advanced by the Association of BellTel Retirees Inc (BellTel), a significant shot in the arm.
The case, 15-785 Pundt, Edward v. Verizon Communications, et al, centers on whether retirees can seek relief over Verizon’s decision to sell off their defined benefit pension assets to an insurance company and use pension fund money to effectively pay for corporate expenses.
The retirees, represented by attorneys Curtis L. Kennedy of Denver and Robert E. Goodman, Jr. of Dallas, on behalf of the BellTel Retirees, argue that the original court decision allowing the company to go forward with the pension transaction was in violation of the federal ERISA law of 1974. That law was authorized by Congress and signed into law by President Gerald Ford.
The Fifth Circuit Court of Appeals originally ruled in favor of Verizon but on May 23 the U.S. Supreme Court vacated that decision and granted the plaintiffs’ petition for a writ of certiorari. In its decision, the High Court ordered the Fifth Circuit to reconsider its reasoning, particularly in light of another recent case that was remanded to the lower courts, Robins v. Spokeo.
At issue in both cases is whether the plaintiffs can show they suffered “concrete harm” as a result of the company’s actions. The Verizon retirees argue that the company, in selling off pension assets to Prudential Insurance Company as a group annuity, is putting all retiree pensions at risk. In question is the use of an approximate additional $1 billion of pension assets, used to pay expenses related to the $7.5 billion spin-off transaction.
Also being reviewed in the Pundt case is the statute of limitation on proof of harm. Currently a person would have no recourse if their pension assets were lost or severely damaged, beyond two years after the pension spinoff transaction occurs.
“The order by the U.S. Supreme Court to vacate the lower court decision and send it back to be completely re-evaluated is a huge vindication of our argument,” said BellTel Chairman Jack Cohen. “The court has sent a powerful message that Verizon retirees – and, by extension, millions of others whose pensions have been de-risked – cannot simply be dismissed. When our assets were sold off without our consent we sought relief through the federal judicial system and now, the highest court in the land, said that our concerns have standing and we must continue to be heard. On behalf of our 134,000 members, we will not stop the fight for our retirement security.”
“Retirees were made a promise by their former employers and by Congress through ERISA that our pensions would be protected. In many cases, we accepted lower salaries throughout our working lives in exchange for that guarantee,” said BellTel President Jack Brennan. “Now those protections are at risk and we remain vigilant in our pursuit of every remedy, including this potentially momentous case, to ensure America’s retirees are not left abandoned and destitute by the current pension stripping craze.”
“This case is very important not only for this group of retirees but for potentially millions of other Americans who have defined benefit pension protections,” said Kennedy. “All of corporate America is closely watching the impact of this case and now it is clear that the Justices of the United States Supreme Court will also be watching. We look forward to once again making our case.”
The Washington D.C. based national Pension Rights Center has filed an amicus brief in support of the pensioners. Last summer and again in April 2016, the International Monetary Fund (IMF) expressed seriousconcern about the U.S. and global economy from pension de-risking, if so much pension risk is heaped onto just a few too-big-to-fail insurers.
Retirees are concerned that if Prudential or a successor experiences a default or asset shortfall, the previous ERISA guaranteed federal Pension Board Guaranty Corporation (PBGC) protection to which pensioners were entitled, has been replaced by a patchwork of insurance industry regulations controlled state guaranty associations, which are not pre-funded in the case of catastrophic financial loss. Insurance annuities are backed only by varying coverage – determined by state of residence – from $100,000-$500,000 in lifetime per person cap.
The retirees also argue that Verizon did not adequately refute the claim that the pension plan transfer was highly discriminatory, nor did the lower court compel the corporation to address the argument that retirees were not consulted and given a fair choice in the matter. Other companies transacting similar de-risking lift-outs, such as General Motors and Ford, gave their retirees notice and a choice of accepting a lump sum before they transferred their pension plans to Prudential.
MAJOR WIN FOR RETIREES IN CONNECTICUT LEGISLATURE! 6/4/2015 The bill, H.B. 6772, restores creditor protections to retirees who lost those protections in pension de-risking transfers. Without this protection, after a pension de-risking transfer, creditors could garnish annuity payments, even those designed for retirement. ProtectSeniors.Org was instrumental in drafting and was the sole lobbying organization working for the bill’s passage. James Casey, President of ProtectSeniors.Org said, “This is a major accomplishment for our organization, and is the first step in providing much needed protections for retirees in pension de-risking transfers.” He continued, “Many retirees are simply unaware of the risk associated with pension de-risking. We thank Rep. Robert Megna (D-97), Chair of the State Insurance Real Estate Committee for introducing the bipartisan bill and co-sponsors Rep. Livvy R. Floren (R-149), Rep. Louis P. Esposito (D-116) and Senator Henri Martin (R-31).” Jack Brennan, President of the 130,000 member Association of BellTel Retirees, said, “This is a major win for retirees in Connecticut and for ProtectSeniors.Org. Our hats go off to ProtectSeniors.Org which conceptualized the bill and really made this happen.” Retiree Ed Chromczak, resident of Beacon Falls, Connecticut, said “After working for Bell Atlantic for over 35 years, it was a shock to me that I had to worry about pension de-risking at this stage of my life. I greatly appreciate this legislation, which provides relief and reduces anxiety on my part. I appreciate our state legislators for doing their part, and thankfully we have ProtectSeniors.Org as a watchdog group looking out for retirees and keeping a close eye on the new generation of corporations looking to improve their bottom line on the backs of their retirees. My thanks also go out to the BellTel Retirees for spearheading efforts to protect its retirees from the beginning. None of us could have done this individually and it took the group’s organization and leadership to finally accomplish this legislation.” The link to the legislation can be found at: http://www.cga.ct.gov/2015/TOB/H/2015HB-06772-R00-HB.htm
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Another large corporation dumps retiree earned benefits GE Cancels Retiree Healthcare We need you to write your media outlets Another large corporation has announced its plans to cut healthcare benefits to its retirees. General Electric (GE), a company that clearly was built on the shoulders of its employees, announced it will no longer honor retiree health plans. GE joins a list that includes IBM, Time Warner, DuPont and countless more. These employees took lower salaries over their careers for promises into their retirement years now only to find that those promises are broken! Our organization, ProtectSeniors.Org, is fighting this practice via Senate Bill 2418 which would make it difficult for companies to reduce or eliminate retiree earned benefits. We need you to write your local media outlet and then share this with as many people as you can to get the word out. Click on the TAKE ACTION link to begin. Take Action!
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July 23, 2014 The leadership of ProtectSeniors.Org is pleased to introduce our new bill to protect retiree benefits – S. 2418, The Bankruptcy Fairness and Employee Benefits Protection Act of 2014, introduced by Senator Rockefeller (D-WV) and Senator Warren (D-MA). This bill addresses our primary concern by seeking to make it more difficult for companies to reduce or eliminate the pay and benefits that their employees and retirees were promised, and earned, over their careers.
This critical piece of legislation has the potential to impact 14.3 million retired Americans, should corporations continue the practice of terminating or reducing benefits under the federal bankruptcy code. Senators Warren and Rockefeller, through our countless meetings over the last several months, recognize the hard work put in by retirees during their many years of service to corporations throughout the country and that they earned those promised benefits. Corporations must be forced to make good on those commitments to workers. Anything less would be a breach of a commitment by the corporation. Retirees and workers are only asking for what they earned and were promised over decades of work.
S. 2418 takes our goals a step further by pushing for the cessation of companies shifting their bankruptcy costs onto the backs of employees and retirees. This bill launches significant protections for retired Americans and employees, and ensures the critical healthcare and pension benefits they earned will be there upon retirement. The leadership of
ProtectSeniors.Org thanks the Senators for their tireless support, and we look forward to securing the passage of this exciting legislation.
Our efforts have now moved to the U.S. House of Representatives where we are looking to have a companion bill introduced in early September when Congress reconvenes after their six-week summer recess. We have identified several key members in the House who we believe will be champions of this effort. Once we have a House bill introduced we can begin, for the first time, to have identical legislation moving through both the House and Senate.
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Most seniors really don't need life insurance; if they do, they can get it cheaper elsewhere |
Death benefit our members should be aware of
A death benefit that is available to those members that were on the Bell Atlantic payroll as of August 1986. This benefit is over and above the life insurance that our members receive from the company. The life insurance is one years salary at the time of death or what the salary was when you retired. That benefit begins reducing at the age of 65 and goes to 1/2 of your salary at the age of 70. It does not reduce any more that 50% of the years salary at the time that you retired. The death benefit would be also a years salary, but no more than $39,000.00. That amount of money does not reduce with age. The company does not inform our members of this benefit. It is very important that you call the benefits center. For Verizon benefits, the number is 1-855-489-2367. For retirees transferred to Idearc/SuperMedia the number is 800-345-2345. Ask if you qualify for this death benefit and if you do, ask them to send you a certificate acknowledging this benefit for your records. A family member has one year from the time of your passing to collect this benefit. After the one year the death benefit is gone. Please pass this on to as many of our retired and active members that were on the payroll as of August 1986. When you call the Benefits Center you want Life Events and then Benefits Center and they will send you a confirmation if you are eligible. I was informed you must be pension eligible to receive a confirmation.
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A campaign encouraging people to enter an emergency contact number in their mobile phone's memory under the heading "ICE" (i.e. In Case of Emergency), has rapidly spread throughout the world as a particular consequence of the recent terrorist attacks in London. Originally established as a nation-wide campaign in the UK, ICE allows paramedics or police to be able to contact a designated relative / next-of-kin in an emergency situation. The idea is the brainchild of East Anglian Ambulance Service paramedic Bob Brotchie and was launched in May this year. Bob, 41, who has been a paramedic for 13 years, said: "I was reflecting on some of the calls I've attended at the roadside where I had to look through the mobile phone contacts struggling for information on a shocked or injured person. Almost everyone carries a mobile phone now, and with ICE we'd know immediately who to contact and what number to ring. The person may even know of their medical history." By adopting the ICE advice, your mobile will help the rescue services quickly contact a friend or relative - which could be vital in a life or death situation. It only takes a few seconds to do, and it could easily help save your life. Why not put ICE in your phone now? Simply select a new contact in your phone book, enter the word 'ICE' and the number of the person you wish to be contacted. Further reading from another email. Subject: ICE
It's so simple that everyone can do it. Please do. |