General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsVerizon Sells off 41,000 Pensions to Prudential without Protections!
(Probably a sign of more to come as other Companies will seek to sell off Pensions without protections...Hopefully, the Verizon Retirees win their lawsuit...but the way things are going, it's not likely since Big Business has a track record now of stiffing the population for every dollar they can grub.)
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Federal Court Grants Class Action Status to Verizon Retirees in $8.5 Billion Sell-Off of 41,000 Pensions
COLD SPRING HARBOR, NY--(Marketwire - Apr 1, 2013) - A United States District Court Judge in Dallas has ordered class certification of claims by management retirees of Verizon Communications Inc. (NYSE: VZ) in litigation regarding the sell-off of 41,000 ERISA protected pensions to The Prudential Insurance Company of America (NYSE: PRU) in exchange for providing Prudential with billions in Verizon retirees' pension assets.
Attorneys Curtis L. Kennedy of Denver and Robert E. Goodman, Jr., of Dallas are representing the class of retirees in conjunction with the support of the 128,000 member non-profit Association of BellTel Retirees Inc. (www.BellTelRetirees.org). The case is before Chief Judge Sidney A. Fitzwater (Case No: 3:12-CV-04834-D).
Retirees counsel argue the transaction replaces retirees' pensions with non-ERISA protected insurance annuities, thus stripping participants of the protections of federal law and causing irreparable harm. This case is being closely watched by the employee benefits industry as a case of first impression, as no other corporation has transferred already retired persons from an ERISA protected and Pension Benefit Guaranty Corporation (PBGC) guaranteed pension plan into a group insurance annuity while keeping the pension plan on-going for others.
"This case is likely to be closely watched by employee benefits leaders at thousands of companies across America, with the outcome impacting the management of trillions of dollars in ERISA protected pension assets, clarifying plan sponsor and plan fiduciary obligations, and underscoring the rights of plan participants," said Attorney Curtis Kennedy.
In October 2012, Verizon surprised 41,000 persons who retired prior to January 1, 2010 when the corporation formally disclosed it had agreed to the transaction which ends the retirees' uniform PBGC protections and places retirement income at risk of creditors' claims, bankruptcy claims and ends all of retirees' federal rights they enjoyed since 1974. After the transfer, the on-going Verizon Management Pension Plan currently has approximately 50,000 participants, including about 6,000 other retirees not transferred to Prudential.
More at:
http://finance.yahoo.com/news/federal-court-grants-class-action-190953164.html
Eleanors38
(18,318 posts)ArcticFox
(1,249 posts)The world is scarier and more dangerous than ever.
In combination with the recent reports on the banks' rights to take our deposits, it looks like the wolves won't stop feasting until they've bled us all dry.
KoKo
(84,711 posts)here on DU. It has begun...
Newest Reality
(12,712 posts)Vultures have a peculiar odor, especially when there are so many of them flying overhead and landing to pick your bones.
The parasitic feasting has begun. Nothing you can do except hide over there by those rocks. God forbid you throw any at them.
Rex
(65,616 posts)Never thought my own countries corporations would turn into pirates that raid their own local pension fund.
HiPointDem
(20,729 posts)just a slush fund for the ruling class.
http://www.democraticunderground.com/10022573159
KoKo
(84,711 posts)and wait and see they will steal everything including what's locked down...they will use a crowbar in the dead of night!
SoCalDem
(103,856 posts)No wonder the American worker is so dispirited. A lifetime's worth of work, with many raised passed on (in lieu of better pension benefits) . was just that..work...and little to show for it when it's too late to make different choices all those years ago
Skittles
(153,164 posts)GUESS AGAIN
KoKo
(84,711 posts)for eventual Privatization. It's all going so fast that it's hard to keep up with the pace.
Skittles
(153,164 posts)wages will remain stagnant too, plus you will be forced to buy "health insurance" with little chance of getting actual healthcare
Sgent
(5,857 posts)You lose the safety of the PBGC, but you gain the safety of a guaranteed annuity by a AA rated insurance company. I'm sure most of the airline employees would have rather had this deal than the one they got from the PBGC.
closeupready
(29,503 posts)Or let wikipedia:
>>Investor fraudDuring the 1980s and 1990s, Prudential Securities Incorporated (PSI), formerly a division of Prudential Financial, was investigated by the Securities and Exchange Commission (SEC) for suspected fraud.[19] During the investigation, it was found that PSI had defrauded investors of close to $8 billion, the largest fraud found by the SEC in US history to that point.[20] The SEC charged that Prudential allowed rogue executives to cheat customers on a large scale and blithely ignored a 1986 SEC order to overhaul its internal enforcement of securities laws.[21] In all, some 400,000 individual investors lost money on the deals.[20][22]
Prudential financial eventually settled with investors for $330 million.[19] Prudential said it would repay customers across the U.S. who lost money on the company's limited partnerships in the 1980s. In addition, the firm was required to pay another $41 million in fines.[20] The settlement also resolved investigations of the firm by the National Association of Securities Dealers and 49 states, including California, where 52,000 investors lost money in Prudential limited partnerships.[21][23] Further investigation was conducted by the SEC into the executives of the company to determine the extent of the fraud.[24]<<
http://en.wikipedia.org/wiki/Prudential_Financial#Investor_fraud
I was working at a non-profit in the early 90's which had made pension investments in Prudential; the stock market was booming, but our investments were losing money!
but that's a variable investment. A fixed annuity is we give you 10,000 and you give me $500 a month until I die (or joint for couples, etc.). That's an insurance contract and I don't care what they do with the money -- nor do I have the option of knowing. That is regulated by the state insurance commissioner's, and they are responsible for investing it, not me.
Its not that I love the idea, its just that I either trust Verizon not to go bankrupt (pension assets are part of the bankruptcy estate), or Prudential. I'll take Prudential by a mile.
There are some benefits with the money staying with Verizon:
1) The PBGC -- although if the insurance is needed only a portion of the previous benefits will be paid out, capped at a fairly low level.
2) ERISA protection -- I'm not sure what the benefit of these protections are in a defined benefit plan. Most ERISA protections only apply to defined contribution / cash balance plans.
uponit7771
(90,344 posts)Sgent
(5,857 posts)monthly amount. Many of the airline employee's had their pension cut by 20-50K / year or more in the case of pilots.
Two different concepts though:
ERISA -- legal requirements and protections built into pension plans of all types. Prevents pensions, 401(k), etc. being held against debts, some other stuff.
PBGC -- Government sponsored, theoretically budget neutral pension guarantee fund. Currently massively underfunded and may not be able to pay current claims (much less new ones) without congressional appropriations. They pay pensions in the case of the company going bankrupt, but at a lesser amount, with a cap / year.
uponit7771
(90,344 posts)...nah...I'll take my chances with the feds
Festivito
(13,452 posts)In the mean time, Verizon gets rid of some bad investments and a once brand name titan goes the way of another once upon a time brand name titan, Pan Am, disappearing into the memory hole.
raouldukelives
(5,178 posts)KoKo
(84,711 posts)"THEY DO GOOD WORK FOR US...OUT HERE IN USA!"
KoKo
(84,711 posts)because I know there are MANY DU'ers who do still have some puny Pensions to rely on...(from past good years in US) and those only with SS...already understand the ATTACK THERE.
We've got to be Vigilant and Watchful. They always take away these things in the Dead of Night lately.