Telephone Concession Update S.K. I finally have an update on the litigation. Yesterday afternoon, the judge issued his decision on Phase I and found in favor of plaintiffs and the class. In short, we won Phase I: the Court concluded that the OOR Concession is a pension plan, which means, among other things, that the benefits can't be cut and can't be eliminated and should mean that the $25 cap imposed in 2003 and the elimination of cash payments in 2005 were illegal. The decision is attached. As the Court had bifurcated (or split) the case into two Phases, we now proceed to Phase II, which will determine what portions of ERISA Defendant violated (some of which won't be contested), the remedy (i.e. damages) and how much in benefits (both past and future) each participant (i.e. employee or retiree) is entitled. From here, two things will likely happen. First, we will issue a formal notice to the class advising them of the status of the case. Second, we will propose a schedule to Defendants on Phase II -- I can't tell you exactly how long Phase II will take, but it should be much shorter than Phase I. Please feel free to call me or email me with any questions. Please feel free to pass this on others at your association and the other AT&T Retiree Associations. Joe Barton R. Joseph Barton, Esq. Cohen Milstein Hausfeld & Toll, PLLC 1100 New York Avenue, Suite 500 Washington DC 20005

Message from the President Your board meets 4 times a year. We met last week for 2 days. It was our second meeting this year. FROM THE BOARD ROOM - Looking around Your board of directors consists of 12 members. Every face is a person we have all known for 30 plus years. We started as Coin Collectors, Installers, Service Reps, etc, etc, etc. most have been retired for more than 20 years. We believed our retirement years were secure….We worked for a company in the Bell System, part of the mighty AT&T CO. And then the mighty fell under the gavel of one judge and no jury, i.e., Judge Green. That was in the 80’s. A smaller company within the old Bell System…SBC by name had a vision. Build…Build…Build. And the New AT&T rises like phoenix from the ashes of a proud yesterday. Monte Baggs and I reportrd to our board on our recent attendance at the AT&T Co. share holder meeting. Telco and other associations like ours co-sponsored Proxies focused on Executive Compensation. We hope as share holders to be part of the process…. to have an avenue to provide input to the decision makers before they decide. The Proxy garnered 47% of the shareholders vote. To AT&T’s credit they earlier had made changes to the older practice. But, the opinion of 47% says the process needs more fine tuning…..more input earlier from concerned share holders….stake holders all, including 600 thousand AT&T retirees. Mr. Stephenson, AT&T Co .Chairman, CEO and President introduced his board and executive officers. An impressive lot by reputation, personal accomplishment, experience, education and current leadership in their respective business environment. An example is August Busch III past CEO of the largest brewer in this world. He eyed each speaker on the floor. He took notes during the proxy session. He listened to the retirees and other stock holders presenting their case for issues that affect us all. He was not alone in his interest. The share holder meeting went about 2 hours. Mr. Stephenson led the way. He stood in front of the podium. He addressed each speaker by name. Some he obviously knew. The atmosphere was cordial and to the point. Mr. Stephenson’s answers and what I chose to call his vision regarding the future of communications gave me a clear message…He understands his companies roll as the largest communications company in this world. A single word stood out "Connectivity". He paraphrased a great author when he used the phrase, "What business are we in?" AT&T is in the Connection business. Amen! He pointed to a vast array of offerings. For me it was very refreshing to see our AT&T leader do his "shtick." He was in my mind selling AT&T. And I found him believable. Later I talked with executives who worked with him. I asked how he impressed them. Their answer, "The right man at the right time." If you are a share holder I urge you to read your share holder report. This is the NEW AT&T. Competitive…really competitive. It is like having a 500 pound tiger as a pet…..He eats a lot. He needs much room to roam. He marks territory. He protects his domain. He is very agile. And when necessary he will surprise by easily climbing his favorite retreat…a tree. He watches the world go by as he prepares for his next accomplishment. I believe these new leaders have great potential. With their collective strength they could perform magic. You know the old vaudeville saying," You haven’t seen anything yet." The potential is there. Now on to us, the retirees. Mr. Stephenson numbers us in the 600 thousand, the largest body of retirees. These are not his exact words but this is how I heard it. You retirees helped make it all happen by building AT&T’s foundation. You are not forgotten. He did not promise anything. But he and his board and his executives know we are here and we will not go quietly into the night. We insist on being treated fairly by the 500 pound tiger. S.K. Emery our active Chairman and Monte Baggs have direct access to the AT&T executives who administer retiree affairs. Monte Baggs and I met with them for 5 hours the day before the share holder meeting. They are listening and we are listening. They are candid and we are candid. As you would suspect there are 2 sides to most every happening. The first part of the meeting was more grim than grin. Monte and other association leaders shared retirees real experiences…They were not pretty. Folks, no one was smiling. But, it was clear to Monte and me that everyone in the room shared a willingness to fix the problems that nag retirees. There is a plan. And we are all working it. Enough for now. Representing so many good people is a humbling experience. I can use some! Chuck Gilbert Your President

Retirement Documents When we formed the Telco Retirees Association, Inc. in early 2003, we requested copies of members retirement documents (especially those containing specific references to corporate promised pension, health, and telephone concession benefits). Many of our "early members" shared their retirement documents with our association. Because of the E.E.O.C./U.S. Supreme Court rulings and the uncertainties now facing the continuation of our company health benefits, we are asking for copies of those retirement documents you currently possess that clearly define the perpetuity of your promised health benefits. Please send your copies to: Telco Retirees Association, Inc. P.O. Box 600067 San Diego, CA 92160-0067

Membership Contributions Your association has been overwhelmed by the numbers of contributions we are receiving in support of our budget plan to create a $100,000 fund to support a possible federal Class-Action lawsuit in the event AT&T announces the termination of health benefits for Medicare eligible retirees in 2009. (Or to fund a state and federal legislative program -- administered jointly between the NRLN and our association -- to require corporations to honor health benefits promised to employees at the time of their retirement). We especially wish to thank those of you who have generously supported this effort with contributions from one hundred dollars to five hundred dollars!!! At this writing, our treasurer reports contributions from our members now total: $3,697!!!

AT&T Shareowner Proxies (April 25th, 2008) We are pleased to share with our membership the results of the AT&T stockholders votes on the proxies submitted at this year’s annual meeting: A proposal recommending additional reporting of political contributions made by AT&T, which was defeated by a vote of 68.1 percent against to 31.9 percent in favor. A proposal asking AT&T to exclude return on pension plan assets in determining performance-based compensation, which was defeated by a vote of 54.2 percent against to 45.8 percent in favor.* A proposal to amend the AT&T bylaws to require an independent lead director, which was defeated by a vote of 60.6 percent against to 39.4 percent in favor. A proposal to modify benefits under AT&T's supplemental executive retirement plan, or SERP, which was defeated by a vote of 64.2 percent against to 35.8 percent in favor.* A proposal calling for an advisory vote by stockholders to approve compensation for named executive officers, which was defeated by a vote of 56.3 percent against to 43.7 percent in favor.** * * = Submitted by the SNET Retiree Association ** = Cosponsored by Ameritech Retiree Association and Telco Retirees Association, Inc. Your Officers and Directors will consider sponsoring a similar AT&T proxy proposal for the 2009 annual shareowners meeting.

 

Chairman’s Comments The recent decision by the E.E.O.C. that United States corporations are no longer obligated to provide health benefits to retirees who are Medicare eligible was reinforced when a petition authored by A.A.R.P. (and supported by the N.R.L.N.) was denied by the United States Supreme Court on Monday, March 24, 2008!! The potential magnitude of these federal agency decisions upon 53,400 Pacific Bell (Telesis, SBC, AT&T) retirees was immense. Consequently, your association sought assurance from AT&T Health Benefits that our corporate promised retiree health plans would remain in effect, going forward. AT&T has assured us they have no plans to alter "wrap-around" Health Benefit Plans for Pacific Bell retirees!! ("Wrap-around" means "wrapped around" the U.S. government Medicare program). Your association has devoted a great deal of time to the issue of our promised health benefits. We challenged SBC when they arbitrarily transferred over 500 million dollars from our pension funds to health benefits in 2004/2005. We also challenged this decision with ERISA (Employees Retirement Income Security Act). Unfortunately, ERISA governance law permits the transfer of pension funds by a corporation for its health benefit programs. (Monies transferred for this purpose cannot be in an amount that places the Company’s Pension Plans in jeopardy).   The following letter to Mr. William Blase, Sr. Ex. Vice President was mailed on April 3, 2008, seeking a definitive response to our promised health benefits: April 3, 2008 Mr. William Blase, Sr. Ex. Vice President AT&T 175 E. Houston St., Room 1230 San Antonio, TX 78205 Dear Mr. Blase, The Telco Retirees Association, Inc. seeks your personal intervention in an issue of singular importance to thousands of AT&T retirees. The SBC October 2004 Summary Plan Description graphically describes the Medical Expense Plan as well as the rules of eligibility for certain retirees of Ameritech, SNET and P.T.G. Ameritech Medical Expense Plan for Retirees "You are eligible to participate in the Program if you left the Company prior to Jan. 1, 1986, for Management Employees and Jan. 1, 1987, for Bargained Employees."   PTG Medical Expense Plan for Retirees "You are eligible to enroll for coverage under the PTG Medical Expense Plan (MEP Option) or an HMO or MHMO, if available in your area, if you retired before Jan. 1, 1987 with either a service or disability pension from the Pacific Telesis Group Pension Plan or the previous Pacific Telesis Group Pension Plan for Salaried Employees."   SNET Medical Expense Plan for Retirees "The Program is designed to provide medical coverage for the following individuals: regular full-time or part-time Management Employees who retired prior to Jan. 1, 1985, regular full-time or part-time Bargaining Unit employees who retired prior to January 1, 1988. In a February 19, 2008 letter authored by Ms. Kathy Wilkinson (enclosed) she states, "The Ameritech Medical Expense Plan, the Pacific Telesis Group Medical Expense Plan for Retirees, and the SNET Medical Expense Plan are legacy plans that were sponsored by Ameritech, Pacific Telesis and SNET, respectively, to provide medical coverage for retirees who terminated employment before a date specified by each company. The dates differ because the companies took this action at different times. All of these plans cover both bargained and management retirees including the Pacific Telesis Group MEP, as noted on page 6 of the SPD. When these companies merged with SBC, the eligibility provisions of the legacy MEP plans were not changed." The term "legacy" is defined in legal terms as a "will." The Telco Retirees Association, Inc., and the AT&T Retiree Coalition firmly believe employees who retired under the conditions cited in the aforementioned Summary Plans Descriptions for Ameritech, SNET and Pacific Telesis Group were granted health benefits in perpetuity. Sincerely, Sumner K. Emery Chairman cc: AT&T Retiree Coalition

Treasurer's Report REVENUE     DUES & DONATIONS SUB TOTAL TOTAL NENBER DUES 29,875.00   MEMBER CONTRIBUTIONS 3,697.00   DIVIDENDS & INTEREST     STOCK DIVIDENDS 68.00   OTHER 40.00           REVENUE TOTAL $33,680.00 EXPENSE     BANKING 228.84   MAILING 1342.98   PRINTING & REPRO 2428.89   OFFICE SUPPLIES 210.68   MEETINGS 3579.14   PROFESSIONAL SERVICES 2014.00   NRLN DUES 3500.00   MISCELLANEOUS 34.00           EXPENSE TOTAL $13,338.53         REVENUE Vs. EXPENSE $20,341.47

AT&T Coalition Update In the a.m. of April 24th, prior to the AT&T Annual Meeting our coalition group, consisting of Telco Retirees, ACER (AT&T Retirees), SNET (Southern New England Telco retirees) and AASBCR (Ameritech Retirees) held a meeting to discuss how we should approach our meeting with Marty Webb, AT&T Vice President of Human Resources. We also talked about how we can improve communications within our group in order to maximize interactions with AT&T. We all agreed it would be a good idea to name our "coalition" and develop a web site. The domain "AT&T Retirees" is being reserved. We agreed it would be a good idea to use one common domain with links to each group in order to maximize interest and improve our efforts to recruit retirees. We will be holding quarterly conference calls to discuss what issues are current and determine if they are common to each group. We also discussed the recent coalition survey conducted by the other groups (Telco retirees did not participate). Due to the short time frame allowed to summarize the results we agreed to provide the results to AT&T but not provide conclusions. In the p.m. of that same day we met with Mr. Webb and his staff. There were a total of nine members of Mr. Webb’s staff including himself and one member of Hewitt & Associates staff. The agenda included: Telephone Concessions — Sherry Karram from New Jersey was there to describe how they are trying to standardize the numerous offerings across the country emphasizing self service. They are also trying to include the full array of products including video, dsl and voice. She predicted it will take two to three years to complete this task. Dependent Audit Results — Jeff Mains explained that the intent of this effort, despite appearances, was to be certain that only qualified dependents were on the rolls as retiree dependents. Because retirees either forget the rules or are never fully aware of them many, many dependents stay on the rolls even after they no longer qualify. This audit removed many thousands of people who were not qualified. In all approximately 4-5% of dependents were removed and COBRA was offered to all that qualified. Future audits will be on a sample basis. Prescription Drug RFP — Marty Webb and Jeff Mains discussed how the exhausting 9 month process was approached and what went into it. They pointed out how few providers there are who are able to handle an account the size of AT&T and that indeed Caremark won the bidding for 2008-2009 primarily based on their relationship with CVS and the fact that it would least disrupt the existing base of employees and retirees. They pointed out that they focused primarily on price but paid attention to the process as well. Annual Enrollment — Marty Webb and Rob Oberg from Hewitt discussed the "disaster of 2008 enrollment." Mr. Webb stated that he understands the difficulties we are having and their performance was (and still is) unacceptable. Mr. Oberg made it clear that it was "Hewitt" not AT&T. He accepted full responsibility for what is taking place. They explained that because of the size of the population involved they had to move the data bases to a new "platform." In the process human mistakes entered in to the equation and as things got progressively worse they had to add many new people and, as you would expect, new people made things worse in many instances. Mr. Webb described how they formed a team that met daily. Many of the meetings were "heated" as he described them. They describe how the normal "processes" just broke down. Hewitt has hired almost 600 new people in their call centers. It takes 8 to 10 weeks to fully train a representative. They feel 10-15% of the systems need automation fixes at this date. They feel they are close to getting the ship "righted." Recent audits indicate an 85% positive rating. The training is going okay but is still an issue. The tenor of the meeting was very good and we were surprised and delighted at the candidness of the AT&T and Hewitt personnel. They are very determined to stay close to the issues that impact retirees. In the a.m. of the 25th we attended the AT&T Annual Meeting. It was an upbeat and somewhat gala event. Randall Stephenson, the new chairman mingled amongst the crowd and was very at ease. He gave his perspective on the business and was extremely up beat. He called the new direction of the business "connections." He said we connect things, people, data bases etc. He was refreshing. The retirees presented the usual stockholder proposals regarding executive pay etc. Although the votes were close they were about the same as last years results and none were passed. It is imperative that we convince our constituents to vote their shares!!! Monte Baggs, Vice President

Why We Need to "Grow" Our Membership Membership in an organization is the "Life Blood" of that organization; every organization needs to grow in order to survive. The TELCO Retirees Association has a unique make up of older members; therefore we lose more through natural attrition then most other organizations. We need to grow our membership faster, to defy the law of averages. The key to recruiting new members lies with our current members, officers, and directors creating a positive attitude and fulfilling our duties, extolling the virtues of our "Mission Statement". Selling the value and benefits of being a member of TELCO should be an ongoing priority. The current economy, cost of living, matters of pensions, medical, healthcare, etc. are issues that the leadership of TELCO are constantly battling to combat the AT&T Company’s general apathy towards retirees. Showing strength in numbers sends a powerful message to our former employer, from the people that built the business. As an association we have tried all types of advertising in various medias to reach the over 50,000 retirees. The best type of advertising is "word of mouth." Please use the application in this newsletter to get the word out and keep the blood flowing in this hard working dedicated organization. Lee Brown Membership Chairman