SYS-CON MEDIA Authors: Liz McMillan, Sean Houghton, Glenn Rossman, Ignacio M. Llorente, Xenia von Wedel

News Feed Item

Verizon Retirees Sue to Halt Verizon's $7.5 Billion Sell-Off of 41,000 Pensions

Federal Court Action Seeks to Reverse Spin-Off to Prudential Insurance Annuity Plan

COLD SPRING HARBOR, NY -- (Marketwire) -- 11/29/12 -- Management retirees of Verizon Communications Inc. (NYSE: VZ) have filed a federal lawsuit to halt their former employer's plan to sell off 41,000 Employee Retirement Income Security Act (ERISA) protected pensions to the Prudential Insurance Company of America (NYSE: PRU) in exchange for providing Prudential with $7.5 billion in Verizon retirees' pension assets. If the pension spinoff, which was expected to close in December, is not halted, beginning in January 2013, Prudential will replace retirees' pensions with insurance annuities that are not ERISA-protected.

Attorneys Curtis L. Kennedy of Denver and Bob Goodman of Dallas representing retirees in conjunction with the 128,000 member non-profit Association of BellTel Retirees Inc. (www.BellTelRetirees.org) have filed for a request for an immediate temporary restraining order to be followed by a hearing to consider a preliminary injunction in the United States District Court, Northern District of Texas, Dallas Division charging that Verizon's plan to transfer the retirees' pensions from the Verizon Management Pension Plan into Prudential issued insurance annuities violates federal ERISA law.

On October 17 Verizon surprised 41,000 pre-January 1, 2010 company management retirees when it disclosed the transaction. Retirees claim the conversion to an annuity wipes out the federally insured pension safety net provided by the Pension Benefit Guaranty Corporation (PBGC) and is an effort to sever retirees ERISA protections, as well as the company's fiduciary responsibilities to the very retirees who built their company. The Verizon Management Pension Plan currently has approximately 100,000 participants, including plaintiffs.

Retiree association President C. William Jones said, "On behalf of 41,000 Verizon retirees scattered across the country, who are being given no choice, no voice and no protection in the transfer of their pension assets, we are calling upon the company to reverse this action and halt this predatory business transaction that will impact many retired Americans, who labored a lifetime to fund their earned pension benefits."

Retirees note that Prudential could also sell or transfer all or part of its ownership of the annuity asset to another company. While Prudential looks and sounds like a solid insurance company, the retirees say America's history is littered with the carcasses of many once-great and too-big-to-fail financial powerhouses such as: AIG, Kentucky Central Life Insurance Co, Executive Life, The Equitable Life Assurance Society (Equitable Life), Lehman Brothers and Bear Stearns.

Should the insurer experience a default or asset shortfall, the PBGC would be replaced with a patchwork network of state guaranty associations, many of which are underfunded.

Corporate retirees, like Verizon's who are at least 65 years of age, are insured by the PBGC, up to the limit of $55,800 per year, per retiree for an unlimited number of years. By spinning off the 41,000 pensions to an annuity provider, Verizon retirees' PBGC protections are replaced by insufficient and varying coverage -- generally determined by state of residence at the time of impairment -- from $100,000 - $500,000 (lifetime per person cap).

  • Eight states and one U.S. territory -- AK, AZ, IN, MA, MS, MO, NH, NV and Puerto Rico -- limit total lifetime coverage for annuity holders in case of a default or shortfall to a lifetime maximum of $100,000;
  • 28 others -- CA, CO, DE, HI, ID, IL, IA, KS, LA, ME, MD, MI, MN, MT, NE, NM, ND, OH, RI, SD, TN, TX, UT, VT, VA, WV, WY - go up to $250,000 lifetime coverage;
  • 10 states and District of Columbia use a $300,000 top end -- AL, AR, FL, GA, NC, OK, OR, PA, SC, WI;
  • Just 4 -- CT, NJ, NY, WA -- go up a ceiling of $500,000;

Mr. Jones said, "Retirees and their spouses, especially in states with the lowest protection levels, will be seriously harmed and left with as little as two years pension replacement in case of insurer default. Verizon's pension spin-off and conversion to a non-PBGC insurance annuity offers zero protection or upside for tens of thousands of Ma Bell's orphans."

The case is: William Lee and Joanne McPartlin and Plan Beneficiaries of the Verizon Management Pension Plan vs Verizon Communications Inc. in the United States District Court, Northern District of Texas, Dallas Division (Case No: 3:12-CV-04834-D)

Media Contact:
Tom Butler/Stu Miller/Victoria Carman
Tel: 212-685-4600
Email: Email Contact/Email Contact/Email Contact

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
The BPM world is going through some evolution or changes where traditional business process management solutions really have nowhere to go in terms of development of the road map. In this demo at 15th Cloud Expo, Kyle Hansen, Director of Professional Services at AgilePoint, shows AgilePoint’s unique approach to dealing with this market circumstance by developing a rapid application composition or development framework.
SYS-CON Events announced today Isomorphic Software, the global leader in high-end, web-based business applications, will exhibit at SYS-CON's DevOps Summit 2015 New York, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Isomorphic Software is the global leader in high-end, web-based business applications. We develop, market, and support the SmartClient & Smart GWT HTML5/Ajax platform, combining the productivity and performance of traditional desktop software ...

ARMONK, N.Y., Nov. 20, 2014 /PRNewswire/ --  IBM (NYSE: IBM) today announced that it is bringing a greater level of control, security and flexibility to cloud-based application development and delivery with a single-tenant version of Bluemix, IBM's

"BSQUARE is in the business of selling software solutions for smart connected devices. It's obvious that IoT has moved from being a technology to being a fundamental part of business, and in the last 18 months people have said let's figure out how to do it and let's put some focus on it, " explained Dave Wagstaff, VP & Chief Architect, at BSQUARE Corporation, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo (http://www.CloudComputingExpo.com...
"Our premise is Docker is not enough. That's not a bad thing - we actually love Docker. At ActiveState all our products are based on open source technology and Docker is an up-and-coming piece of open source technology," explained Bart Copeland, President & CEO of ActiveState Software, in this SYS-CON.tv interview at DevOps Summit at Cloud Expo®, held Nov 4-6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The Internet of Things is not new. Historically, smart businesses have used its basic concept of leveraging data to drive better decision making and have capitalized on those insights to realize additional revenue opportunities. So, what has changed to make the Internet of Things one of the hottest topics in tech? In his session at @ThingsExpo, Chris Gray, Director, Embedded and Internet of Things, discussed the underlying factors that are driving the economics of intelligent systems. Discover ...
SYS-CON Events announced today that Windstream, a leading provider of advanced network and cloud communications, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Windstream (Nasdaq: WIN), a FORTUNE 500 and S&P 500 company, is a leading provider of advanced network communications, including cloud computing and managed services, to businesses nationwide. The company also offers broadband, p...
SYS-CON Media announced today that Aruna Ravichandran, VP of Marketing, Application Performance Management and DevOps at CA Technologies, has joined DevOps Journal’s authors. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. DevOps Journal brings valuable information to DevOps professionals who are transforming the way enterprise IT is done. Aruna's inaugural article "Four Essential Cultural Hacks for DevOps Newbies" discusses how to demonstrate the...
The move in recent years to cloud computing services and architectures has added significant pace to the application development and deployment environment. When enterprise IT can spin up large computing instances in just minutes, developers can also design and deploy in small time frames that were unimaginable a few years ago. The consequent move toward lean, agile, and fast development leads to the need for the development and operations sides to work very closely together. Thus, DevOps become...
Verizon Enterprise Solutions is simplifying the cloud-purchasing experience for its clients, with the launch of Verizon Cloud Marketplace, a key foundational component of the company's robust ecosystem of enterprise-class technologies. The online storefront will initially feature pre-built cloud-based services from AppDynamics, Hitachi Data Systems, Juniper Networks, PfSense and Tervela. Available globally to enterprises using Verizon Cloud, Verizon Cloud Marketplace provides a one-stop shop fo...
AppZero has announced that its award-winning application migration software is now fully qualified within the Microsoft Azure Certified program. AppZero has undergone extensive technical evaluation with Microsoft Corp., earning its designation as Microsoft Azure Certified. As a result of AppZero's work with Microsoft, customers are able to easily find, purchase and deploy AppZero from the Azure Marketplace. With just a few clicks, users have an Azure-based solution for moving applications to the...
“In the past year we've seen a lot of stabilization of WebRTC. You can now use it in production with a far greater degree of certainty. A lot of the real developments in the past year have been in things like the data channel, which will enable a whole new type of application," explained Peter Dunkley, Technical Director at Acision, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
SYS-CON Events announced today that IDenticard will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. IDenticard™ is the security division of Brady Corp (NYSE: BRC), a $1.5 billion manufacturer of identification products. We have small-company values with the strength and stability of a major corporation. IDenticard offers local sales, support and service to our customers across the United States and Canada...
SYS-CON Events announced today that AIC, a leading provider of OEM/ODM server and storage solutions, will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. AIC is a leading provider of both standard OTS, off-the-shelf, and OEM/ODM server and storage solutions. With expert in-house design capabilities, validation, manufacturing and production, AIC's broad selection of products are highly flexible and are conf...