From: Association of BelTel Retirees Inc.
Federal Court Action Seeks to Reverse Spin-Off to Prudential Insurance Annuity Plan
Cold Spring Harbor, NY – November 29, 2012– Management retirees of Verizon Communications Inc. (NYSE: VZ) have filed a federal lawsuit to halt their former employer’s
plan to sell off 41,000 Employee Retirement Income Security Act (ERISA) protected pensions to the Prudential Insurance Company of America (NYSE: PRU) in exchange for providing Prudential with $7.5 billion in Verizon retirees’ pension assets. If the pension spinoff, which was expected to close in December, is not halted, beginning in January 2013, Prudential will replace retirees’ pensions with insurance annuities that are not ERISA-protected.
Attorneys Curtis L. Kennedy of Denver and Bob Goodman of Dallas representing retirees in conjunction with the 128,000 member non-profit Association of BellTel Retirees Inc. (www.BellTelRetirees.org) have filed for a request for an immediate temporary restraining order to be followed by a hearing to consider a preliminary injunction in the United States District Court, Northern District of Texas, Dallas Division charging that Verizon’s plan to transfer the retirees’ pensions from the Verizon Management Pension Plan into Prudential issued insurance annuities violates federal ERISA law.
On October 17 Verizon surprised 41,000 pre-January 1, 2010 company management retirees when it disclosed the transaction. Retirees claim the conversion to an annuity wipes out the federally insured pension safety net provided by the Pension Benefit Guaranty Corporation (PBGC) and is an effort to sever retirees ERISA protections, as well as the company’s fiduciary responsibilities to the very retirees who built their company. The Verizon Management Pension Plan currently has approximately 100,000 participants, including plaintiffs.
Retiree association President C. William Jones said, “On behalf of 41,000 Verizon retirees scattered across the country, who are being given no choice, no voice and no protection in the transfer of their pension assets, we are calling upon the company to reverse this action and halt this predatory business transaction that will impact many retired Americans, who labored a lifetime to fund their earned pension benefits.”
Retirees note that Prudential could also sell or transfer all or part of its ownership of the annuity asset to another company. While Prudential looks and sounds like a solid insurance company, the retirees say America’s history is littered with the carcasses of many once-great and too-bigto-fail financial powerhouses such as: AIG, Kentucky Central Life Insurance Co, Executive Life, The Equitable Life Assurance Society (Equitable Life), Lehman Brothers and Bear Stearns.
Update: Court backs Verizon’s pension-shifting move
(Bloomberg) — Verizon Communications Inc. pension-plan beneficiaries lost a bid to block the company’s transfer of $7.5 billion in plan obligations to Prudential Insurance Co. of America.
U.S. District Judge Sidney A. Fitzwater in Dallas this month denied a request by two retirees who worked for a Verizon predecessor to issue an order stopping the deal, saying they failed to show a “substantial likelihood of success on the merits” of their case. Read the full story.
What To Do If Your Pension Is Frozen Or You’re Offered A Lump Sum
By Ashlea Ebeling, Forbes Staff
Do you now or have you ever participated in a “defined benefit” pension plan–the kind where a private sector employer promises a set monthly check based on your salary, years of service and retirement age? Are you now retired and receiving a monthly pension check?
If you’re one of the estimated 44 million Americans who can answer yes to either question, be on the alert for an e-mail or letter announcing “Important Changes to Your Retirement Benefits.”
There are three types of changes you might be confronted with, all part of an effort by older companies to reduce the risk on their balance sheets of guaranteeing employees’ retirement security.