AT&T PENSION FUNDING
There has been much published in recent years about how large corporations have underfunded their pension plans and have left their retirees holding the bag. The problem is serious enough that the federal government set up a corporation to oversee the issue. It is called the Pension Benefit Guaranty Corporation or PBGC and was established in 1974. As a result of several major corporations failing to fund their plans either as a result of bankruptcy or just poor management the PBGC put in place certain requirements that provide oversite of pension plans and in some cases actually fund plans that have failed. One such requirement was that each year those corporations that offer pensions must notify their retirees of the level of funding in their plan. Therefore, each year AT&T is required by law to send out a notice to retirees telling them how well their plan is funded. It is called the Annual Funding Notice. I’ve attached a copy of the 2018 Notice for your review. You may be getting a paper copy of the plan in your regular mail. However, if you have elected electronic delivery of information from AT&T Benefits you will not receive a copy of the notice. You will only get a notice saying that it is available on the Fidelity Pension plan website. I have found that it is a little difficult to find, so here’s how you do it. Once you have signed into your plans home page look for the tab “Nonbargained Program of the AT&T PBP Pension.” Then click on the little square called “Quick Links.” You will see the line “Plan Information and Documents.” If you click on that you will find lots of information but look for the line called “Annual Funding Notice.” It usually displays the year of the funding notice as well. I think it is important that you stay informed about issues impacting your pension, so I’m giving you a heads up. This is where the information can be found.
I am telling you this because there has been concern that AT&T hasn’t funded our plan as required by PBGC. If you look carefully at the plan attached, you will see the plan is funded at 91.9%. PBGC requires that plans be funded in at least the 80% range. Each year at our meeting with AT&T at their Annual Meeting, I discuss these figures with them. In our discussions we talk about such things as how the recent acquisitions of DirecTV and Time Warner impact these figures. I’m told the impact is insignificant, primarily because their pension plans obligations are very small compared to ours. I’m also told that AT&T is committed to continuing to fund our plan. We plan to hold them to that commitment. It is your Association working on your behalf!
Monte
I’m sure you have noticed you have a new President and yes, it is true, as of November 29th,
2018 Chuck Gilbert decided it was time to retire as our President. The Board subsequently
elected me to replace him. I will tell you that these are big shoes to fill but, I am proud to be
able to serve the association in this capacity. I congratulate Mr. Gilbert on his retirement and
more importantly on his service to this association over many years. Also, let me remind everyone that it wasn’t just his service to this membership but with his leadership on the Board at NRLN he served retirees all across the country. It is with great regret that he will no longer be with us, as we will miss his leadership greatly. A job well done my friend!! Enjoy your retirement. You have earned it.
With the restructuring of the Board I will serve as President and continue as the liaison with
AT&T. Jane Banfield will serve as Vice President and will assume Chuck’s duties with NRLN.
Also, Dave Dodge has announced his retirement from the Board as well. He plans to continue
to assist us with website management until we find a replacement. We are hopeful to find a
volunteer from our membership who has website design skills. Please, if you or someone you
know has an interest in this position, contact us ASAP. We need your help!
As your new President, I can tell you that the focus of our organization will change very little.
We will continue to work toward insuring that the benefits you were promised will be delivered and that your interests on changes to benefits on a national level will be represented.
I will leave you with this message. It is in your best interest to encourage as many of your
friends to join our association as you can. There is power in numbers! The more members we have the louder our voice is, both with AT&T and with the NRLNand the U.S. Congress.
I wish all a joyous holiday season….Merry Christmas and Happy New Year.
Monte Baggs, President and CEO, Telco Retirees Association, Inc.
Passing of an American hero…..
I start by saying, Hail and Farewell to Senator John McCain. More importantly Hail and Farewell to a real man who served our country as an extraordinary Patriot. I have often driven by the entrance to his ranch near Sedona, Arizona. I have never stopped, but I will next time to remember a true warrior with a salute and Bon Voyage, sic.
Now, on to Telco’s business. It is past time for all our membership to think about stepping up to filling in behind current leadership. We are not to be thought of as permanent fixtures. So, my message is for our 500 plus members to think and act on replacing some of us. For my part I plan to spend the next months recruiting. I for one plan on retiring sometime early next year or sooner if someone steps up.I will always think of myself as a supporting member. I am convinced it is necessary to carry on. Our Parent company, AT&T, must know Retirees are looking after their retirement benefits and pay check. It is for their benefit since they too will be retirees. There are lines on the AT&T quarterly financial report that tell the Retiree’s story. It is to AT&T’s credit they have successfully managed funding the cost of Retirees. It is a very large amount and bears watching. Retiree organizations like Telco must continue to be vigilant and show up at annual meetings the last Friday of April every year. I urge all retirees to think hard about attending a AT&T annual meeting. It is worth your time.
Chuck Gilbert, President, Telco Retirees Association, Inc.
Monte Baggs, TelCo VP, message to Randal Stephenson, CEO and President of AT&T, and his response
Sunday, January 07, 2018 1:44 PM
Mr. Stephenson:
I think you will remember me. We met in Spokane, Washington in 2015 at the AT&T Annual Meeting. We were discussing the move of retirees to the AON Medical Exchanges when you asked me “how’s it going?” I said okay but retirees are skeptical about the move to HRA’s because they feel you won’t continue to fund them next year. Your reply was.” look my brother is getting ready to retire and my Mother would kick my ass if I did that.” We all got a good chuckle out of that and you then invited me to let you know if there’s anything going on that “just doesn’t seem right.” You gave me your personal email address and asked that I use it to keep you informed. I later shared a somewhat edited version of the incident with the members of Telco Retirees. Because of the reactions I got from our membership I later communicated their concerns to you directly.
Once again, I feel compelled to share their concerns with you, but first let me congratulate you on the decision to give a $1000 bonus to your current employees, presumably as a result of the Trump administration tax reduction package. It demonstrates your commitment to your people and their contributions to the business.admirable indeed! I am however, getting some feedback from our membership which I would like to share with you. They ask why is it that the folks who built the foundation upon which you now operate so successfully are not worthy of consideration for any benefit of their contributions? Not only have you been unwilling to give your retirees even the slightest pension adjustment, just prior to Christmas of this year, you asked some of them to repay to you, thousands of dollars due to pension calculation mistakes made by your benefits department. In addition, you are slowly reducing the medical, dental and vision coverage to retirees.even those “grandfathered” retirees who were promised lifetime coverage at no cost to them. Quite frankly, it is like a stiff punch in the stomach to retirees!! Heartless!! It has been almost 20 years since the last pension
adjustment and that was very meager and didn’t apply to all retirees.
Mr. Stephenson, this I not a personal attack on you! We understand you alone, don’t make all these decisions. However, we ask that you review the above facts with your executive staff and urge them to reconsider their decisions to not include retiree’s contributions to the business, as well as the decisions to “take away promised health benefits.” Oh, and don’t forget the Christmas present you asked for!
If there ever was an appropriate time to reconsider your position on the
issues outlined above, this would be it. Your retirees have been some of
your most loyal supporters and we hope to continue that. All we ask is the same considerations.
If you would like more details regarding my comments, please feel free to contact me by email or by telephone at 831-594-3848. I would enjoy talking with you.
Monte Baggs, Vice President, TelCo Retirees Association
Friday, January 12, 2018 2:27 PM
Monte,
Thank you for your note, and yes, I do remember meeting you in Spokane.
Also, thanks for your ongoing support as a shareowner and for your leadership in helping build this company. You and thousands of other retirees worked hard to make AT&T successful and respected throughout the world.
As you know, we operate in a highly competitive, rapidly evolving industry.
Long-term success for our shareholders – including our retirees – requires us to think carefully about how we deploy our available capital. That capital supports many things, from investments in growth and new technologies, to career development for current employees and sustained benefits for eligible retirees. In the face of these and other critical requirements, we are unable to provide a pension increase.
That said, I’d point out that most companies, including most of our direct competitors, no longer even provide company-funded pension programs. In contrast, we not only continue to provide pension benefits to the vast majority of our employees, but we also fund the trusts that support those benefits at a level beyond most other companies. We’ve made the unprecedented contribution of wireless assets to our pension trusts, which effectively makes them close to fully funded – something that’s rare in corporate America these days.
In addition, while most companies have discontinued providing subsidized health coverage for retirees, we are unique in continuing to do so – and with extraordinary benefits that we continue to review and improve over time. In short, I’m proud of the support we provide our retirees and how that support compares with other companies.
Again, I appreciate your many years of dedicated service, and I hope to see you at our 2018 annual shareholders meeting.
Randall
February 6th, 2018 Q&A with MARTY WEBB, Vice President – Global Benefits at AT&T.
MARTY WEBB’S COMMENTS on HEALTHCARE:
AT&T HAS EVAULATED SERVICES AND CREATED TWO DIRECTIONS: HRA FOR USE WITH THE AON RETIREE HEALTH EXCHANGE AND A MEDICARE ADVANTAGE PLAN FOR GRANDFATHERED RETIREES. AT&T CONSTANTLY EVALUATES MORE EFFICIENT, ECONOMICAL WAYS TO DELIVER BENEFITS. LEADERSHIP IS COMMITTED TO THEIR RETIREES AND THERE IS NO CURRENT PLAN TO CHANGE THIS APPROACH.
AT&T CREATED A UHC MEDICARE ADVANTAGE PLAN, AND SEPARATE PRESCRIPTION AND DENTAL FOR ALL GRANDFATHERED RETIREES.
Q The level of customer service appears to be below the standards we had. Is anything being done to improve our customer service?
A. MANAGEMENT IS AWARE OF THE CONCERNS AND WORKS TO IMPROVE CUSTOMER SERVICE THROUGHOUT ALL DIVISIONS AND GEOGRAPHIC LOCATIONS.
Q AT&T provides a good dividend—what are future plans?
A. AT&T IS KNOWN AS A DIVIDEND PAYING COMPANY. IT HAS HAD 34 ANNUAL CONSECUTIVE INCREASES.
Q Since you are unable to discuss the merger, is there anything you can say?
A. GIVEN THE CURRENT LITIGATION, NO COMMENT AT THIS TIME.
Q. There is a letter writing campaign from all retirees, not just Telco, asking for a pension or HRA increase. Will someone respond to these letters?
A.WE DO PLAN TO RESPOND.
Q. At the annual meeting in 2007, Mr. Whittaker proposed a pension increase to a limited number of retirees, retired before 1996 and receiving $1200 or less monthly. His rationale was that: This is poverty level. We would request the Board review this and extend this consideration to those that retired after 1996 and reevaluate the monthly $ amount.
A. THIS QUESTION WAS ASKED BY MONTE BAGGS AND ANSWERED BY RANDALL STEPHENSON ON JANUARY 12, 2018. THE LETTER FROM MONTE AND THE ANSWER FROM MR. STEPHENSON IS PUBLISHED IN FULL UNDER THE PRESIDENT’S MESSAGE TAB OF THE TELCO RETIREES WEBSITE, www.telcoretirees.org.
Q. If AT&T currently is unable to offer a pension or HRA adjustment, will they consider enhanced discount benefits for Cell Phone service and Direct TV? Retiree discounts are much lower than active employees.
A. WE RECOGNIZE AND APPRECIATE AT&T RETIREES SERVE AS AMBASSADORS TO OUR AT&T PRODUCTS AND SERVICES. WE CONSISTENLY EVALUATE OUR CURRENT PRODUCT OFFERS TO ENSURE WE ARE OFFERING THE MOST COMPETITIVE DISCOUNTS THAT CURRENT TAX CONSTRAINTS WILL ALLOW.
Q. Grandfathered retirees that were promised free healthcare, dental, etc. at retirement have seen their benefits reduced from what they were, especially dental. Do you see a return to the original dental services and cost sharing?
A. WHILE NOT TO THE SAME EXTENT AS MEDICAL COSTS, DENTAL COSTS CONTINUE TO INCREASE AS WELL. THEREFORE, AT&T BELIEVES IT IS IMPORTANT TO OFFER A NUMBER OF CHOICES TO GRANDFATHERED RETIREES. AT&T OFFERS GRANDFATHERED RETIREES A CHOICE OF PLANS, INCLUDING A DENTAL HMO, WHERE A RETIREE CAN CHOOSE A PLAN WITH LOW OR NO MONTHLY CONTRIBUTIONS OR A PLAN THAT BALANCES MONTHLY CONTRIBUTIONS AND COSTS INCURRED WHILE OBTAINING SERVICES.
Q. There are many complaints with AON, especially in certain geographic areas. Please give us some insight as to why it is necessary for a middle-man to manage the process?
A. IT IS IMPORTANT FOR US, AND FOR OUR RETIREES, TO ESTABLISH A CONTROLLED, THOUGHTFUL, AND CUSTOMER-FRIENDLY PROCESS, WITH A CREDIBLE PROVIDER, AND STAFFED BY WELL-TRAINED AD STATE-LICENSED BENEFIT ADVISORS. WE WILL CONTINUE TO REVIEW THIS PROCESS IN THE FUTURE.
Q. From what they were, especially dental. Do you see a return to the original dental services and cost sharing?
A. WHILE NOT TO THE SAME EXTENT AS MEDICAL COSTS, DENTAL COSTS CONTINUE TO INCREASE AS WELL. THEREFORE, AT&T BELIEVES IT IS IMPORTANT TO OFFER A NUMBER OF CHOICES TO GRANDFATHERED RETIREES. AT&T OFFERS GRANDFATHERED RETIREES A CHOICE OF PLANS, INCLUDING A DENTAL HMO, WHERE A RETIREE CAN CHOOSE A PLAN WITH LOW OR NO MONTHLY CONTRIBUTIONS OR A PLAN THAT BALANCES MONTHLY CONTRIBUTIONS AND COSTS INCURRED WHILE OBTAINING SERVICES.
Q. There are many complaints with AON, especially in certain geographic areas. Please give us some insight as to why it is necessary for a middle-man to manage the process?
A. IT IS IMPORTANT FOR US, AND FOR OUR RETIREES, TO ESTABLISH A CONTROLLED, THOUGHTFUL, AND CUSTOMER-FRIENDLY PROCESS, WITH A CREDIBLE PROVIDER, AND STAFFED BY WELL-TRAINED AD STATE-LICENSED BENEFIT ADVISORS. WE WILL CONTINUE TO REVIEW THIS PROCESS IN THE FUTURE.
