TelCo Retirees Association, Inc.:Newsletter September 2005

September 2005 TELCO RETIREES ASSOCIATION, INC. September 15, 2005 To Our Members: As you are aware, Pacific Bell retirees are confronted with a number of issues that negatively impact our quality of life. (Telephone concession service - for those living outside of an SBC serving area, radical changes in health benefits for managers retired after 1-1-91 and a lack of pension increases since June 2000! (See enclosed letter to Mr. Edward Whitacre, CEO.) On the “good side,” Pac Bell retirees living “within an SBC serving area” have been granted “unlimited long distance service” and (for all of us) SBC has elected to accept the federal government’s 28% subsidy and will continue providing pharmaceuticals through Caremark! Here, for your edification, are some issues important to our membership: CPUC Complaint On September 2, 2005, Mr. Jack Land, Vice President, and I attended a preliminary hearing in San Francisco before Administrative Law Judge Victor Ryerson. Representing SBC was Attorney Garrett Wong and members of his staff. The primary purpose of the hearing was to determine “whether Defendant‘s Commission-approved tariff, Schedule Cal. P.U.C. A5, which by its terms authorizes certain favorable tariff treatment for a class of retirees, including the Complainant, is mandatory or permissive as a matter of law.” Judge Ryerson committed both parties to meet and confer by September 20, 2005 and to file respective case management statements no later than September 30, 2005, if unable to reach a compatible settlement. Following adjournment (and at the request of Judge Ryerson), Mr. Wong, his staff and Mr. Land and myself met to discuss the issues. During this meeting, Mr. Wong informed us our complaint could be moot since SBC, during past years, had filed addendums to the tariff (which in essence nullified the benefits promised to Pac Bell retirees at the time of their retirement). When I requested a review of these addendums, Mr. Wong stated he would mail copies to me the following week. (I informed Mr. Wong I was totally surprised by this announcement since I had specifically asked the employee at the California State building when I secured a copy of the tariff, “Were there addendums or subsequent changes to the tariff in this file?” He responded, “No!” An SBC staff member stated, “Mr. Emery, I visit California State buildings frequently as part of my responsibility and I can tell you “I don’t believe any two of our state buildings have the same records on file!”) I have since received copies of the addendums from SBC and , as stated by Mr. Wong, the Tariff A5 no longer ensures telephone concession benefits for retirees living outside of an SBC serving area! Based on the above developments, our formal Commission complaint is lacking in foundation and the Association will negotiate a closure with the SBC legal department prior to September 30, 2005. CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE EMPLOYEE RETIREMENT SECURITY ACT (UNITED STATES DISTRICT COURT, WESTERN DISTRICT OF TEXAS, SAN ANTONIO, DIVISION). This Class Action lawsuit was filed on behalf of the SBC telephone concession plan and all other persons similarly situated. The plaintiff in this action is Mr.Frank Stoffels. (Mr. Stoffels is a Pacific Bell retired employee presently living near Carson City, NV) Following is the NATURE OF THE ACTION: This is a civil enforcement action brought pursuant to Section 502 of the Employee Retirement Income Security Act of 1974 (ERISA) and concerning the establishment and maintenance by Defendant SBC Communications, Inc., and its predecessor and successor companies (hereinafter “SBC” or “the company”) of a benefit for certain of its retirees variously described as the “telephone concession” and the “employee discount” promising that benefit to employees who met the requirements for a Service or Disability Pension (The “telephone concession” or “SBC Telephone Concession Plan”). The Telephone Concession was originally offered to retirees receiving a service pension or disability pension from the Company’s Pension Plan although Defendant SBC purported to change the terms of the benefit from time to time. The fundamental premise of this lawsuit is that by informing employees that they would receive the Telephone Concession when they retired with a Service or Disability Pension, and by providing the Telephone Concession to retirees, Defendant SBC (and its predecessors) have established and maintained a “defined benefit plan.” Your President has been in contact with a member of the law firm promulgating this Class Action lawsuit. We have indicated our Association’s interest and support for their Class Action lawsuit and have offered our services as an “interested party.” (We are not contemplating the “financial underwriting” of this lawsuit.) At this writing, we have provided the law firm with copies of our regulatory complaint, the SureWest Telephone Company’s request to terminate their Telephone Concession Plan (which was denied by the CPUC) and a copy of the US West retirees’ federal lawsuit against the Qwest Corporation, which was adjudicated in favor of the US West Retiree Association). For retirees living “outside” of an SBC serving area who must make a decision on the “new 600 minute” concession plan…we suggest you apply for the 600 minute plan in order to be a party to the above Class Action lawsuit. (We are currently seeking legal advice as to whether the Association should make our list of retirees (living outside of an SBC serving area) available to the Washington, D.C. law firm. We will, of course, seek your written permission before providing this information. (The US West Retiree Association did provide a list of their “impacted” retirees to the law firm prosecuting their Class Action complaint.) MANAGEMENT HEALTH PLAN 2006 Following our Association meeting with the SBC Health Benefit officers and staff in San Ramon on August 4. 2004, we held a telephone conference with them on September 7, 2005 to discuss a portion of our initial agenda not covered during the August 4th meeting. Here, for your information, is a summary of the telephone conference call. Outside Network Area SBC has stated retirees “living outside of a Network area” who elect to “opt in” will receive the same financial benefits of those living “inside a Network area.” SBC is “expanding its Network areas and Preferred Care Providers.” (The present Network Service area of 2 PCPs, 2 OB/GYNs and 2 Pediatric PCPs within 5 miles and a Network hospital within 15 miles remains as is.) SBC stated that if a retiree wants “clarification” as to their “Network area,” or Providers , they may go online to http://www.myuhc.com (UHC website). Once you log on, select Physicians and Facilities or you may call UHC Customer Service at 1-877-506-7221. Deductibles We have expressed the Association’s concern about the proposed level of “deductibles” in the new 2006 Health Plan. SBC continues to state 70% or more of the retired managers impacted should realize a “reduction” in their “out of pocket” expenses when compared to the current Custom Care Plan “contributions and deductibles.” I presented one member’s example of a cost comparison, utilizing the SBC “health computing” method. (SBC asked to have a copy of his “computations” in order to do an “analyses” of his findings.) After receiving the member’s permission, a copy was sent to San Antonio. HMOs SBC officials stated that we have 23,000 Pacific Bell retirees and 11,000 participate in an HMO medical plan. Pacific Bell (according to SBC) has more “contracted” HMOs than any other part of the SBC corporation. Further, the testimony from SBC health officials is to the effect the three “major HMOs (Kaiser, Pacific Care and Health Net ) provide excellent health care for retirees at a very competitive cost. SBC is awaiting completion of the HMO/Medicare contractual negotiations before they can enter into an SBC contract. (As of this writing, it is anticipated that “new HMO health plans” will be available for retirees’ consideration early in October. Indexing SBC health documents make references to the effect “the 2006 health plan expense for retirees is subject to indexing.” SBC explained this statement during the telephone conference and indicated “Corporate medical expense plans are subject to federal government reviews” that could impact the “indexing” of participants’ costs. SBC has no control over this governmental requirement. Vision and Dental Care Vision and dental care are to be included in the 2006 health benefit plan. FORMATION OF AN “ALL SBC RETIREE ORGANIZATION” The TelCo Retirees Association, Inc., in concert with Ameritech, SNET and AT&T retiree organizations, will meet in Chicago, IL on October 26th - 27th to discuss plans for the organization of an “All SBC Retiree Association.” We believe it’s imperative all SBC retirees form an “umbrella organization” if we are to bring the full force of our members and our stock ownership to bear upon the SBC Corporation. Areas planned for discussion during the October meeting in Chicago include: What type of organization should we have (incorporated, non-profit, financial considerations, bylaws, officers/directors, headquarters, legislative, proxy statements, attendance at annual shareholder meetings, etc., etc.?) We plan to keep all of you informed as to the critical issues involved in this undertaking and will seek your advice and counsel. MEMBERSHIP MEETING Carmichael, CA, Elks Lodge, 5631 Cypress Ave. September 28th , 9:00 A.M. to 12:30 P.M.! We have received attendance plans from many retirees, some from out of state. It is imperative if you have not yet made your attendance plans known, please do so now! The Association must pay the Elks Lodge for each member or guest attending so it’s important that we have a firm attendance count. Looking forward to seeing you there! Sumner K. Emery, President September 6, 2005 Mr. Edward E. Whitacre, Jr. Chairman/CEO SBC Communications, Inc. 175 E. Houston Street San Antonio, TX 78205 Dear Mr. Whitacre: …With all due respect, Sir, why is it your oft repeated statements of “always personally responding to employees’ and retirees’ letters” consistently fails to include correspondence from the TelCo Retirees Association, Inc.? …Even when the original correspondence, dated July 5, 2005, included over 200 personal letters from Pacific Bell retirees who were asking consideration for a pension adjustment. Our Association represents thousands of former Pacific Bell employees scattered throughout 42 different states. The vast majority of our retirees are SBC stockholders and are well acquainted with your personal compensation, your retention bonuses and other company provided benefits. Be assured, we do not begrudge these corporate perks, indeed, your personal commitment to the future success of SBC bodes well for the security of our Defined Benefit Pensions,. We recognize, also, that Ad Hoc Pension “Adjustments” for retirees are not mandatory but subject to your recommendation and the subsequent approval of the Board of Directors. The grievance issue for Pacific Bell retirees has been the “taking away” of our promised company benefits. (Telephone concession service for those living “outside of an SBC serving area”) and the proposed radical cost increases associated with the “new” 2006 health plan for Pacific Bell managers who retired after 1-1-91! Compounding all of this, was the personal slights to Pacific Bell retirees when your office promulgated a $10,000.00 annual “stipend” for all current and retired corporate Directors for their “health and communication needs.” All of this while retirees have witnessed annual salary increases (and bonuses) for managers and salary “adjustments” for represented employees. And, lastly, the recent comment of Mr. Randall Stephenson, SBC’s Chief Operating Officer, to Ms. Leslie Cauley (USA Today), “For a company of this size, $4 billion is very little money” in reference to the Internet Protocol TV project, begs the question, “Can’t SBC grant a pension increase to its retirees without placing the corporation’s financial structure in jeopardy?” “The time has come, the walrus said, to speak of many things…of sailing ships and sealing wax…of cabbages and kings!” And maybe, just maybe, a Pension Increase for SBC pensioners who continue supporting SBC in numerous external affairs issues (including UNE-p and the pending corporate merger with AT&T). The Association trusts that you, your corporate Executives and the SBC Board of Directors will give this letter the consideration it so fully deserves. Sincerely, Sumner K. Emery, President Click here for MS Word version of this Newsletter. Reminder to Members: Please notify us at Info@TelCoRetirees.org if you change your e-mail address so that you will continue to receive messages from our office.
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September 2005

TELCO RETIREES ASSOCIATION, INC.

September 15, 2005

To Our Members:

As you are aware, Pacific Bell retirees are confronted with a number of issues that negatively impact our quality of life. (Telephone concession service - for those living outside of an SBC serving area, radical changes in health benefits for managers retired after 1-1-91 and a lack of pension increases since June 2000! (See enclosed letter to Mr. Edward Whitacre, CEO.)

On the “good side,” Pac Bell retirees living “within an SBC serving area” have been granted “unlimited long distance service” and (for all of us) SBC has elected to accept the federal government’s 28% subsidy and will continue providing pharmaceuticals through Caremark!

Here, for your edification, are some issues important to our membership:

CPUC Complaint

On September 2, 2005, Mr. Jack Land, Vice President, and I attended a preliminary hearing in San Francisco before Administrative Law Judge Victor Ryerson. Representing SBC was Attorney Garrett Wong and members of his staff. The primary purpose of the hearing was to determine “whether Defendant‘s Commission-approved tariff, Schedule Cal. P.U.C. A5, which by its terms authorizes certain favorable tariff treatment for a class of retirees, including the Complainant, is mandatory or permissive as a matter of law.”

Judge Ryerson committed both parties to meet and confer by September 20, 2005 and to file respective case management statements no later than September 30, 2005, if unable to reach a compatible settlement.

Following adjournment (and at the request of Judge Ryerson), Mr. Wong, his staff and Mr. Land and myself met to discuss the issues. During this meeting, Mr. Wong informed us our complaint could be moot since SBC, during past years, had filed addendums to the tariff (which in essence nullified the benefits promised to Pac Bell retirees at the time of their retirement). When I requested a review of these addendums, Mr. Wong stated he would mail copies to me the following week.

(I informed Mr. Wong I was totally surprised by this announcement since I had specifically asked the employee at the California State building when I secured a copy of the tariff, “Were there addendums or subsequent changes to the tariff in this file?” He responded, “No!” An SBC staff member stated, “Mr. Emery, I visit California State buildings frequently as part of my responsibility and I can tell you “I don’t believe any two of our state buildings have the same records on file!”)

I have since received copies of the addendums from SBC and , as stated by Mr. Wong, the Tariff A5 no longer ensures telephone concession benefits for retirees living outside of an SBC serving area!

Based on the above developments, our formal Commission complaint is lacking in foundation and the Association will negotiate a closure with the SBC legal department prior to September 30, 2005.

CLASS ACTION COMPLAINT FOR VIOLATIONS OF THE EMPLOYEE RETIREMENT SECURITY ACT (UNITED STATES DISTRICT COURT, WESTERN DISTRICT OF TEXAS, SAN ANTONIO, DIVISION).

This Class Action lawsuit was filed on behalf of the SBC telephone concession plan and all other persons similarly situated. The plaintiff in this action is Mr.Frank Stoffels. (Mr. Stoffels is a Pacific Bell retired employee presently living near Carson City, NV)

Following is the NATURE OF THE ACTION:

This is a civil enforcement action brought pursuant to Section 502 of the Employee Retirement Income Security Act of 1974 (ERISA) and concerning the establishment and maintenance by Defendant SBC Communications, Inc., and its predecessor and successor companies (hereinafter “SBC” or “the company”) of a benefit for certain of its retirees variously described as the “telephone concession” and the “employee discount” promising that benefit to employees who met the requirements for a Service or Disability Pension (The “telephone concession” or “SBC Telephone Concession Plan”). The Telephone Concession was originally offered to retirees receiving a service pension or disability pension from the Company’s Pension Plan although Defendant SBC purported to change the terms of the benefit from time to time.

The fundamental premise of this lawsuit is that by informing employees that they would receive the Telephone Concession when they retired with a Service or Disability Pension, and by providing the Telephone Concession to retirees, Defendant SBC (and its predecessors) have established and maintained a “defined benefit plan.”

Your President has been in contact with a member of the law firm promulgating this Class Action lawsuit. We have indicated our Association’s interest and support for their Class Action lawsuit and have offered our services as an “interested party.” (We are not contemplating the “financial underwriting” of this lawsuit.) At this writing, we have provided the law firm with copies of our regulatory complaint, the SureWest Telephone Company’s request to terminate their Telephone Concession Plan (which was denied by the CPUC) and a copy of the US West retirees’ federal lawsuit against the Qwest Corporation, which was adjudicated in favor of the US West Retiree Association).

For retirees living “outside” of an SBC serving area who must make a decision on the “new 600 minute” concession plan…we suggest you apply for the 600 minute plan in order to be a party to the above Class Action lawsuit. (We are currently seeking legal advice as to whether the Association should make our list of retirees (living outside of an SBC serving area) available to the Washington, D.C. law firm. We will, of course, seek your written permission before providing this information. (The US West Retiree Association did provide a list of their “impacted” retirees to the law firm prosecuting their Class Action complaint.)

MANAGEMENT HEALTH PLAN 2006

Following our Association meeting with the SBC Health Benefit officers and staff in San Ramon on August 4. 2004, we held a telephone conference with them on September 7, 2005 to discuss a portion of our initial agenda not covered during the August 4th meeting. Here, for your information, is a summary of the telephone conference call.

Outside Network Area

SBC has stated retirees “living outside of a Network area” who elect to “opt in” will receive the same financial benefits of those living “inside a Network area.” SBC is “expanding its Network areas and Preferred Care Providers.” (The present Network Service area of 2 PCPs, 2 OB/GYNs and 2 Pediatric PCPs within 5 miles and a Network hospital within 15 miles remains as is.) SBC stated that if a retiree wants “clarification” as to their “Network area,” or Providers , they may go online to http://www.myuhc.com (UHC website). Once you log on, select Physicians and Facilities or you may call UHC Customer Service at 1-877-506-7221.

Deductibles

We have expressed the Association’s concern about the proposed level of “deductibles” in the new 2006 Health Plan. SBC continues to state 70% or more of the retired managers impacted should realize a “reduction” in their “out of pocket” expenses when compared to the current Custom Care Plan “contributions and deductibles.” I presented one member’s example of a cost comparison, utilizing the SBC “health computing” method. (SBC asked to have a copy of his “computations” in order to do an “analyses” of his findings.) After receiving the member’s permission, a copy was sent to San Antonio.

HMOs

SBC officials stated that we have 23,000 Pacific Bell retirees and 11,000 participate in an HMO medical plan. Pacific Bell (according to SBC) has more “contracted” HMOs than any other part of the SBC corporation. Further, the testimony from SBC health officials is to the effect the three “major HMOs (Kaiser, Pacific Care and Health Net ) provide excellent health care for retirees at a very competitive cost. SBC is awaiting completion of the HMO/Medicare contractual negotiations before they can enter into an SBC contract. (As of this writing, it is anticipated that “new HMO health plans” will be available for retirees’ consideration early in October.

Indexing

SBC health documents make references to the effect “the 2006 health plan expense for retirees is subject to indexing.” SBC explained this statement during the telephone conference and indicated “Corporate medical expense plans are subject to federal government reviews” that could impact the “indexing” of participants’ costs. SBC has no control over this governmental requirement.

Vision and Dental Care

Vision and dental care are to be included in the 2006 health benefit plan.

FORMATION OF AN “ALL SBC RETIREE ORGANIZATION”

The TelCo Retirees Association, Inc., in concert with Ameritech, SNET and AT&T retiree organizations, will meet in Chicago, IL on October 26th - 27th to discuss plans for the organization of an “All SBC Retiree Association.” We believe it’s imperative all SBC retirees form an “umbrella organization” if we are to bring the full force of our members and our stock ownership to bear upon the SBC Corporation. Areas planned for discussion during the October meeting in Chicago include: What type of organization should we have (incorporated, non-profit, financial considerations, bylaws, officers/directors, headquarters, legislative, proxy statements, attendance at annual shareholder meetings, etc., etc.?)

We plan to keep all of you informed as to the critical issues involved in this undertaking and will seek your advice and counsel.

MEMBERSHIP MEETING

Carmichael, CA, Elks Lodge, 5631 Cypress Ave. September 28th , 9:00 A.M. to 12:30 P.M.!

We have received attendance plans from many retirees, some from out of state. It is imperative if you have not yet made your attendance plans known, please do so now! The Association must pay the Elks Lodge for each member or guest attending so it’s important that we have a firm attendance count.

Looking forward to seeing you there!

Sumner K. Emery, President

September 6, 2005

Mr. Edward E. Whitacre, Jr.
Chairman/CEO
SBC Communications, Inc.
175 E. Houston Street
San Antonio, TX 78205

Dear Mr. Whitacre:

…With all due respect, Sir, why is it your oft repeated statements of “always personally responding to employees’ and retirees’ letters” consistently fails to include correspondence from the TelCo Retirees Association, Inc.? …Even when the original correspondence, dated July 5, 2005, included over 200 personal letters from Pacific Bell retirees who were asking consideration for a pension adjustment.

Our Association represents thousands of former Pacific Bell employees scattered throughout 42 different states. The vast majority of our retirees are SBC stockholders and are well acquainted with your personal compensation, your retention bonuses and other company provided benefits. Be assured, we do not begrudge these corporate perks, indeed, your personal commitment to the future success of SBC bodes well for the security of our Defined Benefit Pensions,.

We recognize, also, that Ad Hoc Pension “Adjustments” for retirees are not mandatory but subject to your recommendation and the subsequent approval of the Board of Directors.

The grievance issue for Pacific Bell retirees has been the “taking away” of our promised company benefits. (Telephone concession service for those living “outside of an SBC serving area”) and the proposed radical cost increases associated with the “new” 2006 health plan for Pacific Bell managers who retired after 1-1-91!

Compounding all of this, was the personal slights to Pacific Bell retirees when your office promulgated a $10,000.00 annual “stipend” for all current and retired corporate Directors for their “health and communication needs.” All of this while retirees have witnessed annual salary increases (and bonuses) for managers and salary “adjustments” for represented employees.

And, lastly, the recent comment of Mr. Randall Stephenson, SBC’s Chief Operating Officer, to Ms. Leslie Cauley (USA Today), “For a company of this size, $4 billion is very little money” in reference to the Internet Protocol TV project, begs the question, “Can’t SBC grant a pension increase to its retirees without placing the corporation’s financial structure in jeopardy?”

“The time has come, the walrus said, to speak of many things…of sailing ships and sealing wax…of cabbages and kings!” And maybe, just maybe, a Pension Increase for SBC pensioners who continue supporting SBC in numerous external affairs issues (including UNE-p and the pending corporate merger with AT&T).

The Association trusts that you, your corporate Executives and the SBC Board of Directors will give this letter the consideration it so fully deserves.

Sincerely,

Sumner K. Emery, President
Click here for MS Word version of this Newsletter.

Reminder to Members: Please notify us at Info@TelCoRetirees.org if you change your e-mail address so that you will continue to receive messages from our office.