Verizon Retirees Sue Because of Pensions
COLD SPRING HARBOR, N.Y. -- 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.
Verizon Communications Inc. (NYSE: VZ)