Retirees fight Windstream plan to cut benefits
By Josh Funk, Associated Press
Forbes.com
Friday, December 5, 2008

Windstream Corp. wants a federal judge to affirm its authority to reduce retiree benefits even when the people affected retired from other phone companies that Windstream acquired over the years.

But the retirees argue that Little Rock, Ark.-based Windstream and the companies it acquired -- Lincoln, Neb. based Aliant Communications and its predecessor Lincoln Telephone Company -- promised to maintain retirement benefits unchanged.  A U.S. District judge in Lincoln will hear arguments in the case on Dec. 15.

In court documents, Windstream argues that it has an absolute right to make any changes it wants to the retiree benefit plans.  The retirees counter that they earned those benefits by working for the company at least 15 years.

Attorney David Domina, who represents the retirees, said the benefits should be considered vested and permanent.

An attorney for the company did not immediately respond to a message Wednesday and a Windstream spokesman declined to comment.

Earlier this year, Windstream told retirees that it planned to require them to start paying part of their health insurance costs and reduce other benefits.  In court documents, Windstream said benefits for each of the more than 800 Nebraska retirees covered by the case cost three times more than other retirees.

Windstream estimates that retiree health care benefits represent a $227 million liability for the company, and two-thirds of that figure is associated with benefits for the Nebraska retirees.

Windstream provides voice lines and broadband Internet service in 16 states. The company operates in Alabama, Arkansas, Florida, Georgia, Kentucky, Mississippi, Missouri, Nebraska, New Mexico, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina and Texas.

The publicly traded company was spun off from Alltel Corp. in 2006 and merged with Valor Communications Group Inc. of Irving, Texas.

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