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Verizon Retirees Sue to Halt Verizon's $7.5 Billion Sell-Off of

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: 
tbutler@butlerassociates.com/smiller@butlerassociates.com/vcarman@butlerassociat
es.com 
 
 
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