NWB/U S West Retiree Association, Inc. NON PROFIT ORG. 205 Heritage Circle North U.S. POSTAGE Burnsville, MN 55337-2667 PAID NWB/U S West Retiree PERMIT NO. 3844 Association, Inc. Directors: MPLS MN Chairman Larry Smith, Fargo, ND 701-235-1300 [email protected] Address Service Requested Vice Chairman Jim Burns, Omaha, NE 402-333-2697 [email protected] Secretary Rose Bailey, Sioux Falls, SD 605-336-7771 [email protected] Arnie Albrecht, Roseville, MN 651-489-1972 [email protected] Marlyn Beaudine, St Cloud, MN 320-253-6232 [email protected] Ada Bork, Omaha, NE 402-572-9277 [email protected] Tom Burns, Papillion, NE 402-597-6205 [email protected] Dick Johnson, Blaine, MN 763-757-1962 [email protected] Roger Williams, Waterloo, IA 319-236-0595 [email protected] The Retiree Guardian is the newsletter of the Association of U S West Retirees in Iowa, Minnesota, Nebraska, North Dakota and South
Dakota. We publish on a quarterly basis.
(NRLN) in Washington, D.C. Washington, in (NRLN)
or www.qwestretiree.org or
North, Plymouth, MN 55447-3566. A portion of your dues goes to support the National Retiree Legislative Network Legislative Retiree National the support to goes dues your of portion A 55447-3566. MN Plymouth, North,
www.uswestretiree.org
Revenue Code, however, dues are not deductible on your personal tax returns. Records are kept at 45 Jewel Lane Jewel 45 at kept are Records returns. tax personal your on deductible not are dues however, Code, Revenue
U S West Retirees West S U NWB/U S West Retiree Association, Inc. is a nonprofit tax-exempt organization under Section 501(a) of the Internal the of 501(a) Section under organization tax-exempt nonprofit a is Inc. Association, Retiree West S NWB/U
Association of Association Please return this form and your check to the above address. above the to check your and form this return Please
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NWB/U S WEST RETIREE ASSOCIATION, INC. ASSOCIATION, RETIREE WEST S NWB/U
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& A IOW Retiree Advocates: Retiree THE RETIREE SUMMER 2005 GUARDIAN NEWSLETTER OF THE ASSOCIATION OF U S WEST RETIREES Now bringing you news from Association members in all 14 U S West states. AMESSAGE FROM THE PRESIDENT Dear Fellow Retirees, We must be constantly vigilant to assure the continuation of rights and benefits we earned as employees. I’d like to share with you a letter I wrote on all our behalf to Cynthia P. Delaney of the Qwest Legal Department regarding Qwest’s potential removal of the death benefit from our pension plan.
PRESIDENT’S LETTER Cynthia, The Association of U S West Retirees In your May 9 e-mail which you has now appealed to three different broadcast to all AUSWR Board Executive Vice Presidents of Human members and directly to the Plain- Resources at Qwest in the last tiffs, you stated rather sarcastically, eighteen months to sit down and “What I still fail to understand is discuss this matter and bring it to an why you would bring such a suit (the amicable resolution, so that retirees “Pension Death Benefits” case) now. can act with certainty in their estate Qwest has not eliminated the death planning and can do their best to benefit and as far as I am aware, has provide for their loved ones after made no statement to the retirees their death. about doing so for one and one-half Mimi M. Hull We understand, as you iterated in years.” We are very surprised that our telephone conversation, that you would say you fail to understand, considering everyone currently employed at Qwest is working the detailed explanation set forth right in the text of very hard to ensure that Qwest remains a viable the Amended Complaint and after you heard our in- economic entity. What you need to also understand is depth reasoning during our prolonged telephone that the many thousands of retirees worked very hard conversation on Friday, May 6. during their careers to build a strong company which The retirees of MT. Bell/PNB/ NWB/U S West has hit upon hard times through no fault of the and Qwest have been in limbo regarding the current retirees. These retirees have seen a $5.2 billion administration’s threat to cancel the death benefit in surplus in the Plan evaporate during the reign of Mr. the Pension Plan for almost two years. As you will Nacchio while under the stewardship of a Board of recall, the decision to “eliminate” this benefit for Directors that essentially remains intact. During their retirees who have a “qualified beneficiary” has only working years, these employees, both management been postponed, not withdrawn, by the Company. (continued on page 2)
INSIDE 2 4 6 7 9 10 12 Chairman’s A View From Legal Activities Health Care Retiree NWB/U S West In The Media Message Washington for Post ’90 Advocacy Annual Meeting Retirees
WE WERE THE OPERATORS AND REPAIR CLERKS, THE INSTALLERS AND LINEMEN, THE ENGINEERS AND NETWORK PLANNERS, THE CRAFT AND MANAGEMENT EMPLOYEES OF EVERY DESCRIPTION WHO BROUGHT TELECOMMUNICATIONS TO THE HOMES, BUSINESSES, AND INSTITUTIONS OF 14 STATES. NOW WE ARE UNITED IN OUR COMMITMENT TO PRESERVE AND ENHANCE THE RETIREMENT BENEFITS PROMISED TO US AND TO THOSE WHO FOLLOW US AS TODAY’S ACTIVE EMPLOYEES. AMESSAGE FROM THE PRESIDENT (continued from page 1) and bargained-for, deferred income in the form of and purchase life insurance to replace this poten- promised future benefits in retirement, including tially lost benefit. the provision of one year’s final pay to be paid to a Also, please understand that AUSWR and its qualified beneficiary, upon the death of the retiree. general membership insist that Attorney Curtis It was never communicated to any of the Kennedy go forward with the Kerber v. Qwest case retirees who draw an annuitant pension from the concerning the “Pension Death Benefits.” Of course Qwest Pension Plan that this benefit could be the best course of action for the company would be withdrawn at the whim of a current, but fleeting VP to immediately do the right thing and acknowledge of HR. As a matter of fact, all retirees who had the that the Pension Death Benefit was, indeed, billed as opportunity, and elected, or continue to elect a a protected fully funded and accrued pension lump sum payment from the pension plan, have benefit, not something that can be taken away at the been and continue to be paid an actuarial whim of present or subsequent top leadership. This equivalent of the death benefit. It is simply was the action taken by U S West top leadership discriminatory, then to single out and threaten a with regard to the health care benefits for over group who elected a yearly pension, or did not have 30,000 pre-1991 retirees and their beneficiaries. a choice, with the cancellation of this deferred There is no good reason Qwest cannot continue to compensation. set the standard for proper treatment of retirees This action is being instituted now, so that within the former Bell System. Considering the past retirees can proceed with planning knowing that threats about ending the Pension Death Benefit, this death benefit is a vested benefit under ERISA, once and for all, CEO Dick Notebaert, EVP Barry and if our cause does not prevail, they can explore Allen, and others should memorialize a written other options, including what services that this guarantee to assure retirees that the Pension Death money was supposed to provide for their loved Benefit can always be counted on and it will never ones, can be accessed through governmental pro- be taken away by either this company administra- grams, including the Medicare/Medicaid pro- tion or any successor company leadership. visioning of nursing home care and other end of I sincerely hope that this will answer your “why life services that survivors might need to access. now” question for once and for all. I hope that this will help you to understand the urgency of getting this issue resolved, since most Mimi M. Hull of our retirees, at their ages, cannot simply go out President, Association of U S West Retirees CHAIRMAN’S MESSAGE
Greetings friends, the promises made to us in retirement. I’d like to thank the 207 of our Both Curtis Kennedy and Jim Norby Association members who made the noted that as a retiree group, we are trek to Fargo for the May 19th Annual unique among corporate entities in Meeting. It was a tremendous success, America, unusual in our solidarity and and continues to remind me of the focus on important issues. power we have as a group to influence The more members we have, the company policies toward retirees. Our stronger we become. So I encourage speaker Curtis Kennedy brought that you to renew your membership, con- message home very effectively. You tinue your active participation in the can read more about his talk on page Association, and work to recruit a few 10 and 11. of your retiree friends who haven’t yet Every meeting of NWB/U S West made the commitment to join us. Give retirees I’ve attended is energizing. It’s Larry Smith them a call. Buy them a lunch. Show great to see old friends, talk about old them the Retiree Guardian. Tell them times, and renew the enthusiasm we have for what we’re doing and why. We’ll all be better for stating strongly to Qwest our intent to hold them to (continued on page 3)
2 The Retiree Guardian / Summer 2005 DO YOU KNOW WHAT’S SO SPECIAL ABOUT JULY?
It’s the month when memberships in the Association expire. Is my membership going to expire? Check it out. Look at the line above your name on the address label. If it reads ‘Renewal Date - Jul 2005’ your membership will expire this July. Renewing your membership NOW means benefits are uninterrupted. You’ll continue to receive “The Retiree Guardian” newsletter; “breaking news” e-mail messages if you have access to the Internet, and you’ll be listed in and receive the new Membership Directory that’ll be distributed this fall. What do I need to do? Fill out the Membership Application form on the back page, send your dues check, payable to the NWB-U S West Retiree Association, and mail both to Jack Olson, Treasurer, 45 Jewel Lane North, Plymouth, MN 55447-3566 1 year Membership - $20.00 per person/per year - New Renewal Date July 2006 2 year Membership - $40.00 per person/per year - New Renewal Date July 2007 Why should I renew my membership? I’m glad you asked! Seven Benefits of Membership in NWB-U S West- Qwest Retiree Association
1 Solidarity Our NWB-U S West-Qwest Retiree Association, through effective networking, and joining with the some 18,000 current members of the 14-state AUSWR (Association of U S WEST Retirees) are achieving positive, constructive dialogue with Qwest leadership - and, when necessary, protesting and fighting for our rights. You can help build our strength in numbers and bring even more credibility with politicians, regulators, community leaders and news media. 2 Quarterly Information As a member, you’ll receive The Retiree Guardian, an informative, highly respected quarterly newsletter with 16- to-20 pages of news, thoughtful commentary, and member feedback on critical retiree issues. 3 E-mail Network & Web Site If you have access to the Internet, almost daily you’ll receive critically important information on retiree benefits and other issues from Qwest, the Association, news media and other sources. The AUSWR website (www.uswestretiree.org) is a comprehensive source of information about the Association, its legislative and legal efforts, copies of news articles from major publications, newsletters and a frequently asked question section covering many benefit issues. 4 Retiree Directory Listing A new Member Directory will be printed in the Fall of 2005. Join before we go to press and you’ll be listed in and receive a copy of the Directory. It’ll list member names, addresses, e-mail addresses and phone numbers. You’ll be able to get back in touch with friends and co-workers you’ve lost track of, and they’ll be able to contact you. Members joining after the Directory is printed will be printed on addendum pages in “The Retiree Guardian” which can be inserted into the directory. 5 Retiree Advocate Program This innovative, highly effective program enlists retiree experts who help you navigate through problems with benefits and other issues. The service continues for your loved ones, in the event of your death or incapacitation. 6 Legal Options, Negotiations From its very beginning some six years ago, our Association has pledged to support and work toward a healthy, financially sound company; this is to our benefit. We are proud of Qwest’s “Spirit of Service” that we exemplified throughout our careers. We’ve achieved much through open, objective dialogue with Qwest’s top management, but when we feel we’re not being properly heard, the AUSWR’s highly effective legal team goes to bat for us. Great progress has been made in regard to concession service, health care, pension death benefit and other crucial areas. Again, we sincerely want the Company to succeed, but not at our expense. 7 National Strength Part of your Association dues goes to support the National Retiree Legislative Network (NRLN) based in Washington, D.C. Headed by Jim Norby, former Chairman of the NWB/U S West Retiree Association and former AUSWR President, this dynamic group is increasingly reported on in national news media and is our powerful voice in Congress and elsewhere. The NRLN’s sole purpose is to represent senior issues. It does not have interests in insurance, travel or senior related businesses.
Summer 2005 / The Retiree Guardian 19 milestones The following information is also available on-line at the Qwest Pioneers web page: www.qwestpioneers.org/about/deathsandretirements.asp
(continued from page 17) Sena, Mary Ann Talmon, Lonnie F. Martinez, Joseph D. Shober, Charles F. Veylupek, Joseph C. Mascarenaz, Jolene Smith, Ann Marie T. Sims, Diane A. Weis, Judith K. Mercer, Anne L. Smith, Ronnie D. Starley, Larry R. Montoya, Margine A. Speranza, David A. Suiter, Lonnie P. New Mexico Pearce, Marlies S. Spink, Timothy W. Tolar, Mark S. Baca, M Alberta Pendley, Robert K. Springer, Kenneth L. Trujillo, Leroy Crone, T David Reed, David W. Steele, Leo M. Turner, Dorothy R. Donigan, Patrick J. Rogers, Betty P. Stoffan, Terrill L. Van Zandt, Bruce Robert Garcia, Gerald A. Tsoufakis, Linda S. Stringer, Marilyn Blue Vogel, Danny R. King, Stephen Viertel, Linda S. Strode, Raymond L. Walter, Sheryl Lawton, Carol A. Warner, Randy D. Swayzee, Kenneth W. Weatherford-Smith, Marilyn Lopez, Joyce Tucker, Rosalie A. Willie, J S Lujan, James R. Washington Voakes, Robert J. Winings, Daniel K. Martinez, Alfredo V. Alexander, Sandra M. Walters, Rosemarie B. Yule, Roberta J. Myers, Marie R. Allen, George A. Wolf, Randee R. Otero, Bruno R. Barber, William C. Wright, Cecelia K. Iowa Holmes, Sally W. Reyes, Ruben Baty, Robert E. Wyatt, Patti A. Baker, Mary E. Hoskins, Judy Anne Rusher, Bonnie J. Bendix, Pamela M. Yang, Charlene Linda Boehm, Luann K. Ingemann Jr, Thomas J. Salas, Leroy Benedict, Derek S. Zepeda, Edward Christian, Karen K. Le Dell, Cynthia L. Stone, William A. Clark, Don S. Clark Jr, Lyle W. Meyer,Joseph P. Taylor, Vera F. Culbert, Barbara A. Colorado Dickens, Mary F. Michalec, Joanne Davies, Allen L. Alegria, Carol Dingman, Michael R. Miller, Denise M. Oregon Egan, Johanna S. Alex, Robert J. Fox, Violet R. Miller, Gary C. Blake, Jane M. Espinoza, Jennie C. Bell, Anna M. Freestone, Mary Jo Ogren, Kimberly K. Branstetter, Leslie D. Filkowski, Leslie G. Boyce, John L. French, Kathleen R. Otto, Timothy E. Burnacci, Margaret L. Gentzler, Carole A. Bristow, Gary Lynn Giaffoglione, Cheryl C. Running, Michael A. Graves, Loren E. Hartman, Teresa M. Burt, Dennis W. Hoffman, William P. Scanlon, Michael T. Graville, Robert L. Heck, Robin L. Carmer, Richard G. Howard, Ruth H. Shepard, Sharon N. Gregg, Lainnie M. Johnson, John E. Casper, Vickie L. Howell, Alexis J. Swoboda, Kristine D. Herman, Dianne L. Johnson, Thomas J. Claussen, Gary D. Johnson, Diane M. Thaxton, Thomas K. Hill, Mitchell W. Johnson, William D. Colberg, Janet I. Lawless, Sharon K. Trebesch, Donna M. Hoots, James M. Jones, Marie C. Elder III, Guy E C Lee, Deann J. Troje Jr, Frank J. Jensen, James C. Kaiser, Karen S. Espinoza, Elvira R. Martin, Marylou Williams, Catherine Laber, Roberta F. Kalapaca, Dorothea J. Fletcher, Eileen M. Mitton, Peggy D. Wilson,P atrick B. Lane, Jory P. Klinkhammer, Michael R. Fox, Robert L. Nardini, Deborah L. Young, Christopher L. Lewis II, Edward A. Knebel, Edward M. Funk, Michael B. Olson, Larry A. Zulkosky, Kathleen A. Minkler, Victor S. Lawson, Fred C. Gallegos, Ralph Passmore, Linda Lea Morris, Charles E. Mangiaracina, Mark H. Garrett, John H. Plank, Madonna A. Montana Mrowka, Kathleen Lee Marvin, Dennis R. Gayman, Diane M. Rice, Patricia E. Harlan, Kim C. Piazza, Ingrid Ness, Claire D. George, Elaine M. Sabin, Karen L. James, William R. Pirnie, Jerry D. O’Brien, Allan E. Gettman, Deborah L. Schaefer, Catherine K. Kasper, Kenneth C. Rhodes, Judy A. Pair, James R. Giron, Peggy D. Sipes, Paul A. Morgan Jr, John R. Rosebrook, Gail E. Powell, Nancy W. Greeno, Sandra L. Suchet, Charles A. Mundt, Blaine G. Rosecrans, David F. Reierson, William E. Groomer , Linda S. Theiler, John J. Muster, Marcia J. Schoorl, Sherry M. Riley, Dennis M. Hane, Christine M. Wilson, Victor M. Schreiner, Gary W. Tegge, Lorena F. Scharer, Thomas A. Hess, Sandie M. Stockstad, Sharon A. Williams, Faune G. Schramm, Jan E. Kaufman, John D. Idaho Trenary, Mark E. Youmans, Michael S. Sweetman Jr, John J. Lacy, Suzanne E. Boldman, Peggy L. Williams, Sherry L. Thurston, Michael A. Ling, Susan Rose Folwell, Kenneth D. South Dakota Treptow, Fred L. Marquez, Janice S. Geiger, Patricia J. North Dakota Bedford, Harlan D. Martin, Richard M. Grose, Michele I. Brothers, Kerry A. Bravo, Regina M. Wisconsin Martinez, Wilford J. Hatfield, Kathryn A. Gwin, Richard A N Dusenberry, Barbara A. Arnold, Margaret A. McConnell, James Martindale, Charles L. Lee, Brian McElroy, Mark R. Medders, Gary C. Nebraska Souter, Teresa A. Wyoming McMahan, Michael R. Miller, Pamela K. Adkins, Jolene S. Stone, Valerie S. Belanger, Kenneth P. McNa, Susan K. Ulmen, Philip H. Ashley, Gregory C. Dow, Robert W. Nelson, Frederick A. Wyrick, Sharon F. Bagg, Deborah K. Texas Elwood, Margaret J. Nelson, Richard S. Christians, Judith A. Hall, Gary R. Hall, Dennis L. Norris, Jeff M. Mississippi Cochran, Shirley A. Johnson, Kevin E. Novoseletsky, Emil M C Kloostra, Evelyn J. Dobbins, Willis E. Utah Lucero, Albert E. Pavilanis, Ed Galvin, Cheryll K. Bergen, Patricia J. Rosendahl, J Douglas Phillips III, Sherman W. Minnesota Kempnich, Gerald L. Blackburn, Lorena J. Swenson, Max L. Piatek, Zbigniew S. Anderson, Margaret K. Kyte, Jaymi S. Bradley, Kathleen B. Werbelow, John M. Pierce, Elizabeth K. Baran, Elizabeth M. Mace, Linda K. Cherry, George H. Plumb, Sidney R. Bradshaw, Jeanne M. Manley, RuthAnn B. Child, Gay D. Richardson, Dorothy Sue Burwell, Gail D. McGill, Marcia J. Cordova, Laura M. Riley, Kristen K. Clark, Carole J. Novak, James R. Cranfill, Carol S. Roberts, Judith A. Dahlstedt, Cynthia J. Peterson, Robert R. Daniels, Jeralyn Royer, Kit L. Ford, Frank L. Peterson, Scott A. Dosen, Lorraine M. Ryan, James E. Goedtel, William L. Purchase, Kathryn A. Elison, Margo D. Sango, Candus S. Guimond, Robert D. Rippey Jr, James C. Hansen, Vickey E. Scotty, Richard. Hage, Judith K. Rouse, Bonita Louise Marshall, Larry S. Hanson, R Carmel Rusk, Joseph D. Martinez, Deborah A.
18 The Retiree Guardian / Summer 2005 CHAIRMAN’S MESSAGE (continued from page 2) your efforts. butions to the Association. I’d like to welcome Roger Williams to the I’d also like to congratulate Jim Shaw, who Board of Directors. Congratulations, Roger! We’re received the Association “Above and Beyond” looking forward to working with you. Award at our Fargo Annual Meeting. The award is Eldon Ranney, long-time board member and richly deserved. supporter of our organization, is stepping down Have a great summer! from the board. Thanks for your service, Eldon. We welcome your continued membership and contri- Larry Smith, Chairman
MEMBER COMMENTS...
To Phyllis Kielblock, I continue to be impressed with how responsive Retiree Volunteers are when asked for help. You, obviously, are on the top of the list. This is the first time (at least that I remember) that I asked for help from Mary Ann (Neuman), and she responded immediately. Lynn Lindquist mentioned that he had lost contact with most of the people he had worked with, and seemed anxious to regain contact. As a sidelight, Jan Stoney, via e-mail, asked me if I had Lynn’s e-mail address. I didn’t but through the magic of the internet found him in Minnesota, and made the contact. There are probably many other former NWB’ers out there somewhere who would like to belong to the Association if they only knew we existed. -- Leo Graff, Omaha, NE
To the Editor, Loranda (Wanda Farrell, St Paul, MN, joined the Retiree Association in October 1999. She passed away in July 2004. The note below came from her husband, W.H. Farrell, who renewed membership in his own name. He thanks us when Qwest should get the credit – but we appreciate his kind words anyway. -- Phyllis Kielblock, Executive Secretary “My wife Wanda (Loranda) was always highly interested in the Retiree Association. Thanks to her, I am today receiving half of what her pension was and should support the organization that made that happen.” Thanks. --Will Howard Farrell, St. Paul, MN
FROM THE EDITOR...
If any of you have never attended an Association annual meeting, I can say after going to my first one in Fargo, you should definitely put next year’s meeting on your schedule. For me it was good to put faces with e-mail names and voices on the phone from monthly board conference calls. It was easy to see that even if there were no outstanding program and speakers, this meeting was a success in the opportunity it provided for old friends to gather. I’m already looking forward to the next one. As always, if you have any comments or questions, pass them on to your retiree advocates or to me. And keep involved in the Association. -- Jerry Miller
Summer 2005 / The Retiree Guardian 3 AVIEW FROM WASHINGTON NRLN PRESIDENT’S REPORT (Special to The Guardian – past the time, to render a series of Summer Issue) -- April 7, 2005 amendments to the act that will restore some of the damage and As I’m sure you all know by plug some of the holes. now, the NRLN’s mission is to do As I write this (mid April) the whatever we can at the Congres- NRLN staff in Washington is busy sional level to promote legislation writing a platform on which to that protects retirees from the base a Bill to be introduced into encroachment of our incomes Congress. This will require a great while in retirement. We have inter- deal of time and effort – without preted this to include pensions that guarantees – to get members of we earned and health care benefits Congress to act on these changes we were promised. Even though A.J. (Jim) Norby despite opposition from the steady our charter, in the strictest inter- stream of lawyers and lobbyists pretation, does not include Social Security and acting on behalf of corporations. Nevertheless, it is Medicare issues, we have decided to at least study, imperative that we make the effort. debate, and arrive at a position on the Social Let’s examine a few of the leading elements of Security issue. This process has just begun. In the our proposal. next issue of the NRLN newsletter, The Focus, will Court decisions and congressional action be an article that discusses the history of Social enabling money and Plan assets to be allocated Security. We, at this point, take no position on the through transfer out of the pension plans for other many proposals made on Social Security. We have, uses have eroded the strength of pension plan however, formed a committee of outstanding, well- assets. Clearly, the intent of Congress in enacting read retirees who, in a bipartisan way, will study ERISA was in large part to assure that Plans and and monitor the debate. Later, the NRLN and its their assets were to be used solely for the benefit of Board of Directors will carefully consider alternate Plan beneficiaries. Unfortunately, many exceptions positions. This is going to be a contentious, perhaps have been carved away from the assets in one way divisive issue, but we must step up to the plate and or another. (e.g. Congressional action and court take a stance. decisions.) Additionally, and unfortunately, it is I would like to discuss in this issue of “The permissible to allow a pension fund to pay for View” a legislative initiative that the NRLN has “early outs” and their monetary enticements. Also, undertaken. The reason that so many of us find that pension funds have been tapped for voluntary lay- we’re in a financial bind is that while we were off bonuses, sometimes amounting to as much as a tucked away in retirement tending to our grand- year’s salary or wages. This cost is normally paid children, our family and gardens, our former for from corporate operating expenses. And, finally, employers were off to Washington to see how they such added payments are not accounted for in the could change to their advantage the rules set down calculation of the liabilities and, thus, are under- in a law that was to protect our pensions. The stated. Surplus pension funds also may be used to Employee Retiree Income Security Act was passed establish health care Trusts 401(h). This has the into law in 1974. It took eleven years to wind its effect of lowering the pension fund base which way through Congress. Its fundamental intent was makes it more vulnerable to under funding and less to protect retirees’ pensions. Since that time, there able to weather a financial market turn down. The have been scores of amendments, maybe hundreds, company reaps the benefits of dual advantages of to the original bill. None of these amendments, that offering retiree health care while not having to we know of, enhanced the protection of retirees. contribute current revenues to pay for it. All, in one form or another, took something away The plot thickens. Under current law the com- that in the final analysis favored our pany is not required to report detailed former employers. What we have left, information on how it calculates its I’m prone to say, resembles a piece of funding status. No one, then, includ- swiss cheese. It’s full of holes! ing the Federal Government, can Therefore, we think it’s time, maybe (continued on page 5)
4 The Retiree Guardian / Summer 2005 milestones The following information is also available on-line at the Qwest Pioneers web page: www.qwestpioneers.org/about/deathsandretirements.asp
Recently Deceased Davis, Richard H. Finley, Laverda Wyoming Demarce, Ethel C. Gamm, Donald L. Cisneros, Amelia Retirees – Donohoe, Mary H. Haldeman, Mae 1st Quarter 2005 Eggleston, Rebecca T. Utah Herbert, Ralph A. Ellsworth, Oreen F. Allred, Patricia A. Juvan, William C. Arkansas Farris, Jack Brown, H Ann Van Dine, N Louise Albert, John A. Hilmer, Albert D. Carver, Helen C. Hassel, Lester L. Janssen, Donald P. Corbeil, Manda M. Jurgens, Cynthia A. Dubois, Richard Recently Retired Arizona Keating, Leone A. Jachmann, Lydia J. Employees – Burig, Beatrice M. Krafka, Edward J. Johnson, Ethel R. 1st Quarter 2005 Carruthers, Phyllis M. Poole, Vern B. Justice, Shirley V. Selix, Virginia R. Kerr, Lorraine S. Colee, Ruby F. Arizona Contreraz, Timothy R. Taft, Betty J. Lamph, Jane C. Tetmeyer, Margaret A. Mcintire, Brigham O. Allen, James D. Corbett, Ann M. Allen, Loretta Carlise Davis, C G Thompson, J C Nelson, Engar A. Myerhoff, G Raymond Till, Regina E. Talmage, William H. Roundy, Iona Anaya, Barbara A. Duffy, Edward L. Andersen, Donetta R. Ertz, Betty H. Vanwoert, Alice T. Wandler, George F. Saunders, Fern Leon Wallace, Anna B. Baldwin, Charles A. Franklin, Jerald R. Beicht, Douglas D. Greer, Blanche Idaho North Dakota Allen, Lee R. Hanson, Florence E. Washington Bragg, Winda S. Heller, Geraldine D. Bright, Judy L. Holifield, Rosie M. Booth, Sherman C. Rader, Robert H. Adams, E T Coleman, Ethel R. Wasylow, Patrick J. Barber, D M Bushway, David W. Jarvis, Harold L. Buxton, Teddy L. John, Gerald A. Fields, Ardella G. Barth, William K. Goddard, Robin Nadine Nebraska Bell, J N Chiarini Sr, Robert A. Jones, Marion L. Coker, Virgil L. Lemon, Patricia R. Kropp, Ted C. Borre, Junior W. Benjamin, E. Parris, Janet E. Burton, Kenneth D. Benson, A G Colella, M Angela Miller, Patricia L. Colon, Nancy M. Miller, Ronald V. Pridmore, B Lois Gindt, Daniel Bishop, H L Venn, Andrew G. Hopkins, Nevin W. Bones, H T Couture, Robert L. Mossinger, Jacquelyn Dougherty, Harry E. Nicodemus, Rosemaire Vanzago, Walton M. Boothby, Frances Minnesota Brathovde, Patricia I. Enis, Annette M. Rains, W Glenn Enright, Teresa L. Reistad, Loren E. Bauman, Arthur C. New Mexico Burns, M Benson, Borghild F. Gallegos, Patricia C. Carlson, Phyllis J. Ericson, Max A. Shimerdla, Teresa L. Evans, James M. Wagner, Thurston Colford, Jeanne Horton, Willie W. Carmichael, Miriam Craddock, Harold R. Kuenstler, Murrell J. Clark, Myrtle M. Fekete, Barbara A. Dahl, Louise M. Shaw, Neva J. Crosby, Brian P. Fink, Larry D. California Giurlanda, Rocco M. McCarn, George B. Deziel, Helen N. Cummings, Earl A. Dimaio, John Oklahoma Desmarais, Albert H. Goedhart, Brenda G. Ecklund, Howard E. Clark, Patricia J. Dixson, Florence G. Gonzales, Ernest A. Colorado Groh, Peter D. Anderson, A Franklin Felty Sr, John D. Smith, Reba M. Douglas, B R Frentress, Robert Dubois, Kenneth E. Hagg, Dale L. Anderson, Le Roy K. Harlow, Stephen E. Andrus, James I. Graves, Geraldine M. Oregon Elliott, Todd K. Hall, Patrick H. Alexander, Donald L. Fielder, R F Hartman, Gerald W. Aspinwall, Darrell D. Hillman, LaVonne R. Becker, Rose Marie Hammerlind, Gerald O. Bailey, Jerry D. Fingerhut, M H W. Hansen, Harold Baldwin, F B Froehler, Ronald Hine, Karen J. Donahoo, William C. Huff, Terry A. Eye, Joan M. Hilber, Edward J. Bryson, H. Girard, Wesley S. Homan, Emogene K. Christenson, G A Hager, G M Jacobi, Marsha L. Fox, Dennis C. Jasuale, James P. Hill, Gordon Johnson, Bonita Cowley, Marie B. Hansen, E L Juenemann, Mary V. Dunkin, H K Harrison, James H. Jones, Vicki L. Hill, Rowland D. Kennedy, Cathleen M. Holt, Charles M. Litterick, Irene R. Ewalt, E A Hawkins, Margaret L. Mueller, Mary K. Goudge, Laverda J. Hicks, Lillie M. Lax, Russell J. Kruse, Evelyn C. Lybeck, Dennis E. Mackey, Mildred H. Nelson, Floyd A. Hayes-Cook, Russell A. Hutchison, M L Nelson, Mildred F. Heiberg, Marian Jess, S L Mahoney, William T. Mccarty, Kenneth V. Mayer, Franklin D. Raborn, Patricia J. Nelson, Rose S. Housley, R V Koenig, Janet D. Olson, Eunice N. Huston, George F. Kriss, Helen A. McCoy, Michael S. Roberts, Helen P. McDonald, John F. Thayer, Steven R. Owens, Thomas P. Jones, J F Lavalle, C U Schmidt, Kathleen S. Kenny, Emmett F. Lee, Geraldine E. McPherson, Doreen M. Trevithick, Richard A. Moraine, Richard A. Vance, James E. Shoultz, George L. Kinyon, Charles B. Leonhard, George H. Shull, Aurora B. Krog, W Lindquist, Francis V. Morben, Kay L. Waymire, Clifford E. Murray, Linda C. West, Cleo J. Simmons, Richard Wayne Lewis, Lynn B. Mcginley, Mary L. Smith, Blanche A. Mason, Ethel E. Mckay, Gretchen A. Parra, Carlos H. Woodruff, Dwight A. Perguson, Jimmie D. Young, Judy E. Thielen, Norma E. Mcafee, Donald M. Mulligan, Robert J. Voss, Donald M. Willhoft, James O. Odem, Jean I. Peters, Keith M. Pickrel, Greg J. Florida Wallstedt, Ruby T. Zellner, Fran Peterson, Frank T. Wengeler, Dolores F. Roselle, Robert S. Reach, Yvonne M.A. Johnson, Donald Reyes, Ruben R. Scherer, Gene E. Zimmerman, E Lucille South Dakota Schroeder, John L. Hall, Ethel H. Seal, Anna Rhodeos, Gloria Belinda Missouri Harter, Bertha I. Smith, Patrick R. Robb, Robert G. Georgia Robledo, Rodolfo A. Dayson, Elnora D. Klamen, Jeff B. Koerner, Mabel H. Thorsen, H G Voels, Dawn Velder, Donald E. Rustad, Gary C. Montana Williams, J B Ryan, Carolyn M. Iowa Sanchez, Ruben Brekke, Marjorie H. Cowles, Maurice G. Texas Wooten, Ellen L. Dufresne, Louis H. Ashby, Carolyn K. Sanfilippo, Anthony J. Buff, Harriette P. Serpa, Melvaceleste B. Carlson, Virginia R. Fanning, Michael M. Beddo, Kathy Wisconsin Clement, Dorothy O. Freeburg, Lester V. Breidenstein, Blanche M. Hedeen, Lois C. (continued on page 18)
Summer 2005 / The Retiree Guardian 17 CURTIS KENNEDY ADDRESS (continued from page 11)
Many people don’t agree with me, and don’t them up and have them pay out punitive damages think that what I’m doing is necessary and worth and whatever, because it doesn’t help the company. the trouble. “Can’t we just trust these people? What But how were they going to get this MCI deal? This have they done?” I heard this all the time when I is the way they think. They were going to fire was fighting the health care issue. “What are you so 12,000 workers. Is that good for the country? What worried about?” the heck? That’s good for the officers. And there’s Well, I know I’m not always right, but I can other ways Qwest could survive. But get the MCI guarantee you when it comes to these employee deal, consequently getting rid of 12- to 15-thousand benefits issues, I know what’s going to happen to people, as soon as we do it, that’s horrible. I’d like them. Your company’s going to find every way to to see the company survive, but not on the backs of weasel out, and dump you, and dump the problem 15,000 families. somehow. So we’ve got to use the existing laws, “By the way, that brings me to an issue we keep we’ve got to ask for help, we’ve got to fight, we’ve promoting in all of these groups. If you don’t have got to take preemptive measures. And you’ve got to Qwest as your service provider, for some reason get involved, which you are, and support this you signed a sweetheart deal with Verizon or I don’t organization so it can continue to do these things. know, some of these other companies, you’ve got to With the potential MCI think about what you’re merger, the death benefit doing. Every one of you would be one of many should have no qualms about targets. There’s a real tax supporting Qwest, and incentive for them to having them as your eliminate that. If you cut the telephone provider. Even if death benefit, you get what’s it’s $5.00 more a month. known as a curtailment How many subscribers who income gain. On the are paying whatever a month company bottom line, they does it take to pay your get to write that they’ve health care bills? You need to earned income by getting rid help the company survive. of a liability. Something like You need to tell your friends a $300-million gain. to buy Qwest. Even if you One of the things we hear about the competition don’t want to see happening out there. Somebody’s is the company giving out charging $20 a month for lump sum payment plans in this. Someone’s charging lieu of severance. They gave $25. Think about it. There’s a out a lump sum payment to lot of you out there who 13,000 people under the Joe Naccio regime. A half- don’t have Qwest as your telephone provider, and year to a year of pay, instead of coming out of you’re kind of shooting yourself in the foot, operating revenue, it came out of the pension plan. indirectly. So the $10 you’re saving a month could They can’t do that any more. The pension plan go a long way to help the company meet its doesn’t have enough money in it to constitute a expenses. So, go back there and change. Switch surplus that would allow them to give that away. By back over to Qwest, and support the organization. the way, who does the surplus belong to? Judges “I hope I have answered your questions and I ruled it belongs to the company. The company used haven’t offended too many of you with my the surplus as severance pay. Spent it all. They frankness about what’s going on. I don’t want you should have put it back into the pension fund from to leave with the impression that you should be which it came, but... Then, looking for more funds, alarmed about the condition of the Qwest pension the company eyes the death benefit. plan. What you should leave with is the Responding to a question about the potential understanding that you cannot trust the leadership Qwest-MCI merger, after covering possible conse- to look after you, to do what’s in your best interest. quences, Curtis said, “Let me comment further. I And the Bell-shaped head has to get changed. And support Qwest. I’ve got a lot of my investments in you need this Association to fight for you. Because Qwest. And I think that we’ve got to see this if you didn’t have this organization, they would company survive. Obviously. I don’t want to beat have already run over you.”
16 The Retiree Guardian / Summer 2005 AVIEW FROM WASHINGTON (continued from page 4) verify with accuracy the worth of the Fund. pension plan participants to acquire any meaningful There are serious flaws and omissions today in trust or verifications to the assertion that the the practice of discharging the fiduciary respon- pension plan is “secure”. sibility by the Pension Plan Trustees and Advisors. Other issues, such as audits, timeliness, and The ERISA statute (Section 1103) states that “a actuarial assumptions need to be addressed in any fiduciary shall discharge his duties with respect to plan for amending the ERISA law. the Plan solely in the interests of participants and This review is by necessity a very brief over- beneficiaries.” Something has been clearly lost in view of some of the short comings of the present the current diluted conception of “fiduciary” under ERISA law. It may be boring, but it impacts us all ERISA. Let me share just a few of the many financially; and is, therefore, worth studying. My examples: comments have been lifted, plagiarized, and According to a study in 2002, about 69% of otherwise borrowed from an accumulation of work corporate profits reported in 2001 were “derived” done by a committee of legal experts. The Lucent by companies including into their bottom lines Retiree Association quarterbacked the data inflated estimated gains in value of their pension gathering and included the solicitation from legals funds. Additionally, it has been estimated that 2001 and other experts throughout the country. As corporate profits, some $150 billion, did not really mentioned before, the accumulated data, along with exist. This speaks volumes about how ERISA recommendations, is now in the hands of the legal fiduciary responsibilities have been corrupted. staff in Washington (NRLN). When the platform is ERISA’s main goal was to assure adequate written, it will be reviewed and voted on by the funding of defined benefit pension plans. Yet, NRLN Board of Directors. At that point, we shall according to published sources as announced by the endeavor to find a courageous Congressperson and United States Treasury Department, “American Senator to introduce the bill into Congress. We pensions are under funded by some $300 billion” – shall, once again, call on the necessary grass roots in other words, some $300 billion short of paying support to get the measure passed, and, believe me, the legal promised pensions according to the given the present composition in Congress, that will ERISA law. not be a “walk in the park” – it will be a “dog fight”. There are a number of peculiarities of ERISA Somehow, someway, we must prevail. that combine to render it virtually impossible for God speed and good luck.
HEALTH INFORMATION ON THE WEB There are a number of new websites on the Internet with health information for older adults. They are:
Your Gateway to Health and Aging Resources on the Web (www.healthinaging.org/agingintheknow1). Includes general information about diseases and disorders afflicting older adults. NIHSeniorHealth (nihseniorhealth.gov2), National Institutes of Health’s Web site for older people. It includes easy-to- understand information for novice computer users. There is information about diseases and sleep disorders. Health Compass (www.healthcompass.org3). To help older adults find and evaluate reliable information about aging and health and utilize and navigate the Web to better understand medical research. Hospital Compare (www.hospitalcompare.hhs.gov4). It shows how most of the country’s general hospitals perform compared with state and national averages, and against local competitors. Medicare (www.medicare.gov5). Starting in January, the program added information on: cardiovascular screenings that check your cholesterol and other blood fat (lipid) levels once every five years; diabetes screening tests up to twice a year for people at high risk for the disease; and an initial physical exam done within six months of enrollment in Medicare Part B, for which the beneficiary has to make a 20% co-payment. Preventing health problems can save you money. The premiums for Medicare Part B, covering doctor visits and other outpatient services, are expected to rise 14% to $89.20 per month in 2006, up from $78.20 this year.
Information from The Wall Street Journal, Encore, April 17, 2005.
Summer 2005 / The Retiree Guardian 5 LEGAL ACTIVITIES by Curtis L. Kennedy EEOC’s Proposed Rule to Allow Discrimination Against Older Retirees is Stricken Down; Is There a Fox Guarding the Chicken House?
In recent years, many corporate employers four of its retiree members filed suit in Philadelphia providing health care benefits for retirees, have Federal Court requesting an injunction prohibiting been looking for ways to decrease the cost of this the EEOC from implementing the rule. A month “legacy liability.” Employers have considered plans later, federal Judge Anita B. Brody, issued a 14 page to either reduce or completely eliminate employer ruling that strikes down the proposed rule or sponsored health care for retirees who are age 65 regulation. This ruling directly affects millions of and older and, thus, eligible for Medicare. But, retirees. engaging in that type of action would constitute age Judge Brody found the EEOC’s proposed discrimination; specifically forbidden by the federal regulation directly conflicted with a 2000 decision law Age Discrimination in Employment Act by the 3rd U.S. Circuit Court of Appeals that (ADEA). Therefore, corporate employers heavily explicitly barred such a practice. In Erie County lobbied the Equal Employment Opportunity Retiree Association v. County of Erie, the 3rd Commission (EEOC) to do them a favor – Circuit held that allowing employers to give retirees implement a rule or regulation that would exonerate who are 65 or older health benefits that are inferior any employer who did the dirty deed and, to the health benefits given to younger retirees accordingly, cut or eliminated employer sponsored violates the ADEA. health care coverage for persons who are Medicare In the case before Judge Brody, the EEOC eligible. The EEOC was happy to help out. argued that without the exemption, employers will On April 22, 2004, the EEOC approved the reduce or eliminate health benefits for all retirees, following rule or regulation that provides the no matter what their age, because retiree health following exemption under the ADEA: benefits are becoming so expensive that employers “(b) Exemption. Some employee benefit plans cannot afford to give the same level of health provide health benefits for retired participants that benefits to all. With the exemption, the EEOC said, are altered, reduced or eliminated when the employers could afford to offer greater health participant is eligible for Medicare health benefits benefits to its retirees under age 65. Since those or for health benefits under a comparable State over 65 are eligible for Medicare, it argued, they health benefit plan, whether or not the participant have less need for employer-provided health actually enrolls in the other benefit program. benefits. Pursuant to the authority contained in section 9 of But, Judge Brody said the EEOC, may not issue the Act [the ADEA], and in accordance with the regulations, rules or exemptions that go against the procedures provided therein and in ß 1625.30(b) of intent of Congress and the ADEA. In a written this part, it is hereby found necessary and proper in decision issued on March 30, 2005, Judge Brody the public interest to exempt ruled the EEOCís proposed rule from all prohibitions of the Act or regulation was invalid. Judge such coordination of retiree Stated simply, the Brody said the EEOC was trying health benefits with Medicare or EEOC’s proposed rule to “issue a blanket exemption for a comparable State health illegal behavior,” and she “perm- benefit.” or regulation would anently enjoined [the EEOC] Stated simply, the EEOC’s create an exemption to from publishing or otherwise proposed rule or regulation allow employers, implementing the challenged would create an exemption to regulation.” allow employers, without re- without restriction, to EEOC Chair Cari striction, to reduce or terminate reduce or terminate Dominguez issued a statement retiree health benefits when the retiree health benefits that she would ask U S Justice retiree reaches age 65. Department lawyers to appeal Before that rule or regula- when the retiree Judge Brody’s ruling to the 3rd tion could take effect, AARP and reaches age 65. Circuit Court of Appeals.
6 The Retiree Guardian / Summer 2005 IINN TTHEHE MMEDIAEDIA From media coverage around the region and nation.
MCI TO PAY $100 MILLION FOR PREDECESSOR’S BACK TAXES By Shelia Byrd -- Associated Press -- The Arizona Republic -- Tuesday, May 10, 2005 JACKSON, Miss. – MCI Inc. will pay $100 fraud, conspiracy and false regulatory filings in the million in cash to cover back taxes that its WorldCom accounting scandal. Ebbers’ sentencing predecessor WorldCom Inc. owed Mississippi, state is set for June 13. Attorney General Jim Hood announced Monday. Hood said the settlement was filed Monday in WorldCom collapsed in 2002 amid revelations U.S. Bankruptcy Court in New York. He expects of an $11 billion accounting fraud to inflate court approval later this week. earnings and hide expenses. Mississippi’s claim for unpaid taxes, interest WorldCom, which got its start in Mississippi, and penalties arose from an alleged complex tax was once headquartered in Jackson and later moved shelter that the former WorldCom devised to avoid to nearby Clinton. WorldCom emerged from bank- paying income taxes by characterizing management ruptcy protection as MCI, which is based in fees as royalties, rather than income or service fees, Ashburn, Va., and recently accepted an $8.54 billion Hood said. buyout offer from Verizon Communications Inc. Under the settlement, outstanding state tax Hood said MCI did not admit any wrongdoing. claims against MCI related to the royalty program MCI is also voluntarily making a $4.2 million are dismissed, the company said. donation to Children’s Justice Center of Mississippi Hood said at least 18 other states have also sued to benefit abuse victims and will make a payment of the company over the royalty program, through $14 million for Mississippi’s attorneys’ fees and which WorldCom allegedly licensed intangible costs, he said. assets – mainly “management foresight” – to its “This agreement benefits MCI and the state of units in exchange for royalty payments totaling Mississippi, allowing us to put this issue behind us about $19 billion. in a fair and equitable manner,” Carol Ann Petren, “It was nothing but a tax evasion scheme,” MCI deputy general counsel, said in a statement that Hood said. was e-mailed to the Associated Press. “I’ve yet to find an accountant who’s ever heard The telecommunications company also will of this term ‘management foresight’ where it was turn over WorldCom’s former headquarters building worth a $1 billion in taxes.” in downtown Jackson to the state, Hood said. The Hood said the state is seeking $900 million from building has not been appraised, he said. KPMG LLP, an accounting firm that he alleged Hood said the headquarters would be a symbol helped WorldCom come up with the scheme. of the millions of dollars lost by state investors. KPMG replaced auditing firm Arthur Andersen LLP “They needed to leave a symbolic marker here as WorldCom’s auditor shortly before WorldCom for the people to see what had happened to people’s collapsed. retirement savings,” Hood said. KPMG said Monday that it provided sound and Hood said the $100 million will cover some of appropriate tax advice as part of the company’s the $1 billion in back taxes, including corporate restructuring in the late 1990s. income taxes, owed to the state for the period 1998 “MCI/WorldCom was ultimately responsible to 2002. for deciding whether, and how, to implement that In March, former WorldCom Chief Executive advice,” spokesman George Ledwith said in a Officer Bernard Ebbers was convicted on charges of statement.
“It was nothing but a tax evasion scheme.”
Summer 2005 / The Retiree Guardian 15 IINN TTHEHE MMEDIAEDIA From media coverage around the region and nation.
STUDY AFFIRMS PERIL OF STOCK OPTIONS By Al Lewis -- Denver Post Business Columnist -- Tuesday, March 22, 2005 Stock options are an economic incentive to Shareholders in the 1980s were upset when commit fraud. CEOs got raises as their stocks crashed. So they Anyone aware of the allegations at Qwest – pushed for stock options to align management’s which restated billions in revenues after its top interests with their own. executives cashed millions in stock options – already Under this plan, executives would receive knows this. options to buy stock at a certain “strike price.” If “Why would you commit a fraud unless you executives managed their companies well, the stocks were going to benefit from the fraud?” says Purdue would climb above the strike price and the executives University finance professor David Denis. would get rich for a job well done. But Denis’ study It sounds obvious. But in the world of academia, underscores that stock options have a dark side as even the obvious must be statistically verified. well. So Denis – along with Santa Clara University After an unprecedented spate of corporate fraud, finance professor Atulya Sarin and Purdue graduate the use of stock options is now in decline. They were student Paul Hanouna – studied 358 companies that once a way for companies to print money – issuing were accused of fraud in shareholders’ lawsuits paper to key executives and employees instead of between 1993 and 2002. cash. But beginning June 15, large publicly traded Their not-so-surprising conclusion: The more companies will be required to report stock options as stock options companies give their executives, the expenses. Once they become expenses, they will more likely they are to be accused of fraud. have to be doled out sensibly. Most of the frauds covered by the study fell “This is more of an indictment of boards of squarely into two categories: Misstated financial directors than the use of options,” Denis said of his reports or misrepresented prospects. study. “When you have options in place, you’ve got In 1984, stock-based compensation made up less to be more careful, and boards of directors have not than 1 percent of CEO pay for the median company. been careful.” By 2001, that figure had climbed to 66 percent, Indeed. Few batted an eye at reports of enormous according to research cited in Denis’ study. stock-option profits until after the market crashed.
MERGER CRITICS SEEK TELECOM REGULATION By Yuki Noguchi -- Washington Post -- Wednesday, April 20, 2005
Critics of consolidation in the telecommunications services bundled together, even if consumers don’t industry warned members of Congress that specific want them, Consumers Union senior director Gene remedies would be necessary to ensure consumers are Kimmelman said. not harmed by a series of recently proposed mergers. Smaller providers are concerned about getting The proposed acquisitions of AT&T Corp. by SBC access to the larger companies’ Internet and phone Communications Inc. and MCI Inc. by Verizon networks and getting a good connection over those Communications Inc. raise questions about how lines. An executive with Vonage Holdings Corp., a smaller players will be able to compete, they told the national provider of Internet phone service, told Senate Judiciary subcommittee on antitrust, compe- members of Congress that regulators must police the tition policy and consumer rights in a hearing larger phone companies, which might otherwise yesterday. block companies such as Vonage from transmitting The mega-companies could, among other things, their own calls or connecting to the 911 emergency drive up costs by requiring customers to buy multiple calling system.
14 The Retiree Guardian / Summer 2005 WESLEY COLVIN V. QWEST -- NOTICE OF PROPOSED SETTLEMENT --
by Susan Johnson The following is a very brief summary of the class notice Qwest will have mailed in late April 2005, to those 3-4,000 retirees who are eligible to participate in the proposed class settlement in the Colvin v. Qwest case (Retiree Telephone Concession case).
Wesley Colvin (represented by AUSWR Junta, Colorado on Wednesday, June 22, 2005, at Attorney Curtis L. Kennedy) filed a class action 1:00 p.m. During that hearing, the parties and legal lawsuit against Qwest on March 11, 2004, and counsel will ask the judge to give final approval to claimed Qwest had improperly terminated retiree the settlement. telephone concession benefits that Qwest had been Very Important: In order for an eligible retiree to providing to its retirees who live in areas in which receive the benefits described in the proposed Qwest does not provide local telephone service. settlement, he or she must submit a Claim and There has been a settlement agreement reached and Release form that will be sent to the primary notice is being mailed to the 3-4000 persons eligible residence by mail within several weeks after the June to participate in the proposed class settlement. 22, 2005 Settlement Approval Hearing. The Claim Among other things, the agreement provides for a and Release form must be timely returned to the lump sum $300 cash payment and free lifetime Claims Manager at the address shown on the Claim unlimited long distance services (both in-state and and Release form. AUSWR ncourages retirees to out-of-state) to each eligible retiree. The settlement is regularly check the AUSWR website binding upon any Qwest successor in interest. http://www.uswestretiree.org/legal2.htm and look for If you are one of the eligible retirees and you do updates under “Colvin v. Qwest.” nothing in response to the notice mailed to you, you If an eligible retiree wishes to be excluded from will remain a member of the Settlement Class and the Settlement Class and become ineligible for will be bound by the Settlement if the Settlement is settlement benefits, he or she must submit a written approved by the Court. and signed Request for Exclusion stating that he or Please note that a final “Fairness Hearing” will she wishes to be excluded from the Settlement Class be held at the Otero County District Court in La and any participation in the Settlement.
JUST WHAT IS AUSWR DOING IN HEALTH CARE FOR POST ’90 RETIREES? Susan Olson, Past President, Arizona TRA-AZ
If you are like me, the increased co-pays for Management Retirees Health Care Costs – The Dark doctor visits, and definitely the monthly payments Side of ERISA” for medical insurance, and prescription medications “In September 2003, Qwest Communications are making a significant impact on your financial International, Inc. announced it had made dramatic situation. changes to its employee benefit plans providing Following is a summary of the status of post ‘90 potential benefits to retirees. In particular, the retiree healthcare. What can and is being done. What company announced that it would begin requiring can’t be done. What you can do to help. management retirees who retired after January 1, Legal: As a reminder, on October 11, 2004, 1991, to pay a portion, at least 20%, of the annual AUSWR staff attorney Curtis Kennedy released to costs of the premiums to provide heath care coverage. the leadership and general membership of AUSWR The changes caught many by surprise, as they had the following document: “Re: Post-1990 Qwest (continued on page 8)
Summer 2005 / The Retiree Guardian 7 HEALTH CARE FOR POST ’90 RETIREES (continued from page 7) expectations Qwest would continue to provide free retirees as many corporations have been reducing health care benefits, like historically provided by U S healthcare benefits for retirees for the past decade. WEST, Mountain Bell and the former Bell System Unfortunately, the Bill has not garnered the needed companies. Every week, I continue to get many support for a vote in the House of Representatives e-mails about this issue as many post-1990 and a Senate sponsor has not been found. management retirees wonder whether or not a legal Last year, NRLN decided to explore other challenge can be made.” options for healthcare reform. A team was formed, “The short answer: No. The attachment is a ten with John Kotson (IBM Retiree) as chairman, to page report in Adobe PDF file format explaining the conduct a survey of other organizations to determine reason there is no viable legal challenge option.” if a consensus existed on what an affordable health- Note: That attachment is available on the care program should contain. While the responses AUSWR www.uswestretiree.org. Click on “Bene- were limited, a representative cross-section was fits”, then “Health Care”. If you do not have access obtained from healthcare advocacy groups, industry, to the internet yourself and want to see the long labor unions, retiree organizations and insurance version, I suggest you ask a friend or family member companies. There were several areas of agreement to pull it up for you. and some disagreement among respondents. Areas of Curtis continues to monitor Qwest’s actions to general agreement were; everyone should be make sure that they don’t try to get away with covered, a core set of medical benefits should be something that can be challenged. available to everyone, quality of care should be Retiree Advocates: These diligent volunteers improved, consumer involvement and education have “resolved many cases for post ‘90 retirees when should be stressed, and some form of cost sharing the plans are violated or misinterpreted by should be implemented. There was general concern UnitedHealthcare. We have also helped many who expressed over cost and cost management. The major did not receive the proper treatment with their pen- area of disagreement was over single payer versus sions” according to Howard Rickman, Ombudsman multiple payer healthcare plans. Retiree Advocacy Program for AUSWR. Based on these results, it was recommended that Howard further reports that some of the most NRLN select an approach that emphasized that areas active and successful Advocates across the 14 states of agreement but also could accommodate the areas are post ‘90 retirees and they work very hard to of disagreement. The National Coalition on Health- ensure that their peers receive the treatment and care specification for reform was selected as the coverage they should. approach that best fit these recommendations. This At the National Level: Your AUSWR leader- specification is entitled “Building a Better Health- ship recognized some time ago that the healthcare care System” and can be viewed on website issue is not unique to Qwest and its retirees. It is www.nchc.org. The NRLN Board of Directors much larger than that. As a founding member of the agreed to endorse this approach. National Retiree Legislative Network (NRLN), A healthcare sub-committee was established by AUSWR has been ably represented on their board of NRLN with Mimi Hull, AUSWR President as its directors by Nelson Phelps and now Mimi Hull. chairman. The committee has established several Mimi now chairs the NRLN Affordable Health Care objectives and is actively working them. First, we are Committee. Hazel Floyd, President of CO/WY continuing a dialog with NCHC to determine their AUSWR, also sits on this committee and obtained future plans, whether they intend to propose legisla- for us the following report. tion to implement their proposal and when. Second, we are identifying the many healthcare reform Progress Report on Affordable Healthcare proposals that have been published. Third, the John R Kotson; IBM Retiree committee is starting to evaluate some of the health- Chairman of the Rocky Mountain Action Coalition care proposals against the NCHC specification for (RMAC) reform. Fourth, we are sending letters to Congres- “For the past four years, NRLN has pursued sional Representatives requesting that they evaluate legislation entitled “The Healthcare Restoration Act the NCHC specification to determine if they would of 2001”, HR1322. This legislation, introduced by support this approach for affordable healthcare. Congressman John Tierney of Massachusetts, would Finally, we are attempting to gain insight into the require corporations to restore retiree healthcare costs associated with medical practices including benefits that were in effect at the time a person prescription drugs. The committee’s goal is to have a retired. This would have been a great deal for most (continued on page 9)
8 The Retiree Guardian / Summer 2005 IINN TTHEHE MMEDIAEDIA From media coverage around the region and nation.
EXECUTIVE PENSION BENEFIT SCOREBOARD By David Milstead -- Rocky Mountain News -- Saturday, May 7, 2005
At Qwest, CEO Dick Notebaert and CFO Oren Qwest will take the SBC pension plan and add Shaffer participate in the Qwest executive pension up the benefits Notebaert and Shaffer would have plan. Right now, the company estimates that would received had their Qwest service actually been with be worth $1.85 million to Notebaert and $497,000 to SBC instead. Then they’ll figure out the boosted Shaffer if they retired at age 65. SBC pension and pay the extra benefit on top of what But Qwest has a bonus for the two men, they already get from both the SBC and Qwest plans. veterans of Chicago telco Ameritech before it was That benefit, Qwest estimates, is worth $15.1 sold to SBC Communications under their leadership. million to Notebaert and $3.06 million to Shaffer.
U S WEST EXECUTIVES PAY CUT – THE GOOD OLD DAYS Ada Bork, who enjoys re-reading the Omaha World Herald, March 29, 1992. -- Englewood, Colo. (AP) Top executives of U S West Inc. took signifi- VP Richard Callahan, $486,900 to $392,500. cant pay cuts in 1991 as the Englewood based Chairman and former chief executive officer, Jack telecommunications company faced losses from MacAllister, $1.24 million in 1900, last year of both real estate investments and job reductions. positions. The pay of Richard McCormick, U S West President and chief executive officer, Gary Ames, President and chief executive officer, was cut nearly a 7.5 percent cut to $499,230. 23 percent last year, from $851,800 to $660,000, Note: Ada says, “Mr. McCormick wanted to deny according to a shareholder proxy statement filed the 1996 pension raise but the board overrode him with the Securities and Exchange Commission. and approved the raise April 1995 that started McCormick also received no incentive pay under February 1996 for management personnel in the company’s short-term incentive plan. Nebraska. The fellas of today have it a bit LARGER.”
QWEST TO SELL NEW MEXICO LAND LINES By Tom McGhee -- Denver Post Staff Writer -- Saturday, April 9, 2005 Qwest plans to sell about 2,400 phone lines in analyst Donna Jaegers. New Mexico to Sacred Wind, a rural telephone But Qwest will rid itself of lines on Navajo land company formed to serve the Navajo Nation, where where the population is small, spread out and costly most residents are without phones. to serve. The land lines would be incorporated into a The line sale would be the first by Qwest since wireless system that Sacred Wind wants to build on 2001, when the company sold 35,000 access lines in the 25,000-square-mile reservation, said John Badal, Utah to a consortium of small Utah phone companies a consultant with Sacred Wind. Terms of the deal are for $90 million. expected to be worked out by the end of the month, Regulators who are members of the Qwest he said. Regional Oversight Committee asked company The companies haven’t announced a sale price representatives at a recent meeting if Qwest was for the lines. The number to be sold is too small to planning to sell more lines in its 14-state region, said improve the financial condition of debt-strapped Tony Clark, a North Dakota regulator who is Qwest, which owes $17.2 billion, said Janco Partners chairman of the committee.
Summer 2005 / The Retiree Guardian 13 IINN TTHEHE MMEDIAEDIA From media coverage around the region and nation. To view these and many other articles that may affect Qwest retirees, go to our new and improved website: www.qwestretiree.org and click on In the Media.
QWEST EMPLOYEES SAW SAVINGS RUINED By Leslie Brooks Suzukamo -- St Paul Pioneer Press -- Wednesday, March 16, 2005
Mary Ann Neuman’s reaction was immediate and debt. heartfelt when she heard that the U.S. Securities and Qwest’s weak finances are hurting its present Exchange Commission had filed fraud charges struggle to woo long-distance giant MCI away from Tuesday against former Qwest Communications the much larger Verizon Communications. Qwest is International chief executive Joseph Nacchio and six offering $8 billion in stock and cash for MCI, but the of his ex-lieutenants. MCI board hasn’t budged from its deal to be acquired “There is a God!” the 59-year-old Qwest retiree by Verizon for $6.75 billion, saying Verizon is from New Hope said. stronger financially than Qwest and presents a better As she heard the names of the former Qwest long-term partner. officials who were charged, including former Chief Qwest, and predecessors U S West and North- Operating Officer Afshin Mohebbi, Neuman said, “Oh western Bell before it, had matched employee good, they’re getting all his cronies.” contributions to personal retirement accounts using “He just raped and pillaged the company,” company stock. The stock’s share price soared in the Neuman said. “You just felt violated.” late 1990s into the low $70s, but after the merger, The depth of Neuman’s anger against Nacchio Qwest’s stock dropped to under $2. It now trades at may seem unusual, but in Minnesota, where 4,600 under $5 a share. people still work for Qwest, many past and present Neuman is one of those people hurt by the employees are still boiling mad at their former boss. company’s change in fortune. When Qwest’s stock In their eyes, Nacchio dismantled a once great price peaked after the merger at about $51 a share, her company and put their jobs and retirements in portfolio was worth more than $220,000. At Tuesday’s jeopardy. Qwest, in part because of actions under closing price, it was worth less than $17,000. Nacchio’s tenure, skirted bankruptcy a couple years The difference is more than $200,000. ago and is still hobbled by more than $17 billion in “That’s what Joe owes me,” she said.
EXECUTIVE PERKS SCOREBOARD Rocky Mountain News -- May 7, 2005
Qwest Communications lavished Chairman and “flexible benefits” or the perk of his choice, the Chief Executive Dick Notebaert with more than a document showed. half-million dollars in perks, the Denver-based Notebaert, who took home a salary and bonus telecommunications company’s proxy showed, last year of $4.1 million, also received about though that’s actually less than the amount he $180,000 in “gross up” payments to reimburse him received in the previous year. for taxes he paid on some perks. Personal use of the corporate jet came to Qwest spokesman Bob Toevs would not $189,296, financial consulting services totaled elaborate on the extra benefits, saying only they $74,336, and a personal assistant and related office were “part of his employment agreement.” expenses hit $46,841. Another $75,000 was for
12 The Retiree Guardian / Summer 2005 HEALTH CARE FOR POST ’90 RETIREES (continued from page 8) recommended healthcare reform approach to NRLN help. Their website is www.nrln.org. in time for the next BOD meeting in early 2006. Susan Olson compiled this information from Your AUSWR Editorial Board will follow up on several sources including the “Progress Report on the progress of this effort. In the meantime, Affordable Health Care” by John Kotson, an IBM becoming better informed yourselves and supporting Retiree who is also chairman of the Rocky Mountain any initiatives from NRLN will be a good way to Action Coalition (RMAC). RETIREE ADVOCACY In general, the following applies to all four of the pre-91 Health Care Plans with some very minor differences. Many providers send a bill to UHC and also furnish UHC with a copy of the Medicare determination and payment. We have asked Qwest to do this and they have declined. It would greatly reduce the administration costs and the provider would receive their payment much sooner if UHC needs to pay. -- Howard Rickman, Ombudsman
HEALTH CARE CLAIMS approved amount. In this case, you can generally file Monte Shriver with UHC to be reimbursed 80% of the additional 15% the doctor is allowed to charge. For example, if If you are a pre-91 retiree on Medicare and have the Medicare approved amount for an office visit is Retiree Health Care Medical Plan 1, here is what you $100, Medicare would pay $80.00 or 80% of the need to know about the relationship between Medi- $100.00 approved amount. The doctor would bill care and United Healthcare reimbursements. When you $115.00. Per the Plan quoted above, UHC would you or any of your eligible dependents become eli- calculate your reimbursement at 80% of the $115.00 gible for Medicare, claims should be submitted to or $92.00. They would then subtract the Medicare Medicare first. Once you receive the Medicare Sum- payment of $80.00 and reimburse you $12.00. The mary Notice, you can then file with United Health- Medicare payment of $80.00 and the UHC payment Care by sending in a copy of the Summary Notice. of $12.00 totals to $92.00 which is exactly the Your Medicare Summary Notice includes your social reimbursement that you would have received from security number but I recommend you add your UHC UHC prior to being on Medicare. ID and Group numbers to the Medicare Form. UHC will still base the overall allowance on The Medical Plan states that “To determine the “reasonable and customary charges” or the “limiting amount payable after Medicare’s payment, benefits charge” as UHC now refers to it. In most cases, when that would be available in the absence of Medicare a doctor does not accept assignment and charges the are calculated first. These benefits are then reduced 15% above the Medicare approved amount, that by any benefits payable from Medicare, whether or amount will still be less than the reasonable and cus- not you actually apply for benefits from Medicare. tomary charge so you should receive reimbursement Your combined payment from Medicare and the Plan from UHC as calculated above. In many cases, UHC will never exceed the amount available under the employees have tried to treat “unassigned claims” Qwest Plan alone”. There are two categories of the same way as they treat “assigned claims” and claims with Medicare: Assigned Claims and have denied retirees their proper reimbursement. I Unassigned Claims. The Medicare Summary Notice understand UHC has now clarified this issue in their indicates whether the claim is assigned or instructions. unassigned. An Assigned Claim means that the Monte Shriver is a Pre-91 retiree and Retiree Doctor has agreed to accept the Medicare approved Advocate for New Mexico. Prior to retirement, amount. Once you meet the annual Medicare Monte was in charge of the U S WEST Accounting deductible, Medicare will pay the Doctor 80% of the Witness organization. Upon retirement, he was a approved amount and you will pay the 20% balance. loaned executive as an Adjunct College Professor at Since the Qwest Plan would also pay the same 80% New Mexico State University in the Center for Public (after the Qwest deductible has been met), you would Utilities. Upon leaving New Mexico State University, receive no reimbursement from the Plan. he was appointed by New Mexico Governor Gary Doctors who do not accept assignment are Johnson to the New Mexico Public Utility allowed to charge you 15% above the Medicare Commission where he served in 1997.
Summer 2005 / The Retiree Guardian 9 OVER 200 RETIREES GATHER IN FARGO MAY
ELDON RANNEY PRESENTS THE TOP AWARD AS HE STEPS DOWN FROM THE BOARD Eldon Ranney: In 1998, Jim Shaw and I had the first organizational meeting of this Association. Jim and I temporarily served as co-chairs. Later, we were elected to the board. Jim was very, very busy starting and handling the company advocate plan. In fact, he Jim Shaw, recipient of the Eldon Ranney made hundreds of phone calls and made many “Above and Beyond” Award. contacts to help people with things that had to do with helping to organize this group to begin with. Eldon has their benefits and Jim really deserves this award. It really been our go-to man. He’s like that real good says, “Above and Beyond” Award, presented to Jim tight end. A guy that when, you’re deep in trouble, you Shaw, in grateful appreciation for dedicated and throw the ball to him and gets a few more yards - gets generous service. Northwestern Bell/U S West Retiree the job done. That’s always what Eldon does. And I’m Association, May, 2005. hopeful, Eldon, that even though you’re dropping out Chairman Larry Smith: “We wish to recognize as a director, we can still call you on occasion. We the job that Eldon Ranney has done, since he began always value your input.” CURTIS KENNEDY ADDRESS TO NWB/U S WEST ANNUAL MEETING For 23 years I have been focusing my practice commitments and the promises that they’ve made to on helping out the former Bell Sytem retirees. That’s you. I saw this coming because I’ve done a lot of what I do. I work alone. I have no secretary. I have this work in the 80s and I saw how the attitude in the no support staff. I get around on my Harley as an companies changed. attitude adjustment, because I am constantly dealing You may have heard about me in 1994. The with some really troubling issues for people. Unger case. This was a class action suit where I We’ve evolved to the stage where we are now, caught a U S West spending pension money, about where you retirees are the legacy liability. You nine to ten million dollars, on company matters – interfere with the ability of the company to compete. salaries and travel expenses that should have been Because now they compete with a lot of upstart paid out of operating revenues. companies that don’t have the legacy liability. They As we resolved the Unger case for a $9-million don’t have the pension plan. They don’t have payment back to the pension plan, the next thing I retirees who they have to pay health care for. That saw was that the company was sending out all this makes it tough. literature to employees saying help us help you by How do they handle this. They renege on the joining the HMO. A benefit to the company; a
10 The Retiree Guardian / Summer 2005 Y 19TH FOR NWB/U S WEST ANNUAL MEETING
questionable change for the employees. And postage never be forced into an HMO. Your prescription and expenses were paid out of the pension plan drug coverage is covered the same regardless of this rather than operating expenses. Medicare law that’s in effect.” You guys are the I examined company documents and there’s this protected species in this organization. clause in the retiree health plan. It said, we can And guess what? I did it all for free. 30,500 change this any time we want. We can take it away people benefited from my work that was inspired any time we want. I’m paraphrasing, but that’s the because I saw the need for this, and the retiree meaning of the legalese language. I said to Nelson organization was a catapult from that. And if you Phelps, “This is really bad. They really should have were a pre-1991 retiree, please raise your hand. (A in there a promise to pay your health benefits for the majority in the room raised their hands!) You’ve got rest of your lives. Let’s make them put it in there.” a lot to be thankful for. You’ve got friends who’ve Phelps said, “Right on. Let’s do it.” retired a few years later and they are paying what, So we filed what I call a preemptive strike $300 a month, $400 a month, maybe more, for against the company. They hadn’t done anything health care? You’re not. What I want you to do is wrong yet. But I could guarantee you they would show your appreciation and write a check for some have. nominal amount to this organization. You owe it to Lawyers from the large Colorado and California this organization. This is what they’re doing. This is firms opposing me indicated they would have this what I’m doing. You’re saving hundreds and hun- case tied up for years and we had no chance to win. dreds of dollars a month for what this organization But we organized union and grass roots efforts, did for you, even though the Northwestern Bell letter writing, publicity campaigns, and had some group wasn’t aware of it. court cases on the matter. And the company decided What are we doing now? Taking a preemptive to resolve this thing – for strike against Qwest regarding political reasons. Partly be- your death benefits. I call it a cause they’d just been bashed pension death benefit, paid out for doing “no-no” with the of the pension plan. It was pension plan. Partly because funded, it was charged to the we still had people who were ratepayers, it was always fac- honorable that were in charge tored in as a commitment that of the company, who wanted the company would carry out. to do the right thing. And Barry Allen came to partly because we had the company leadership 18 months mass media working with me ago and said, “We’ve already and we had the retirees getting drafted a letter. We’re going to organized. And guess what? send notices to everybody. They put a guarantee in there We’re going to cancel the death that protects everyone who benefit.” Your Association retires before January, 1991, approached me for help. We saying “you will never pay a recently filed another penny over what you were preemptive strike to get Qwest paying before for your health to guarantee this death benefit, care. You will never pay a just like the health care. monthly premium. You will Curtis Kennedy (continued on page 16)
Summer 2005 / The Retiree Guardian 11