The Association of U S West Retirees



Qwest retirees denounce benefit reductions
Some stand to lose most of the value of their life insurance.
By Steve Alexander
Minneapolis Star Tribune
Thursday, October 25, 2006

Some Minnesota Qwest retirees said Wednesday they felt betrayed by the company's announcement this week that it will cut retirement benefits, which they said could be devastating for some former colleagues. "It's a terrible double-cross," said Arnie Albrecht of Roseville, who retired in 1994 as head of the company's regulatory operations in Minnesota.  "To retain people, they promised them retirement benefits while they were employed.  Then, after the people retired and didn't have any power, they jerked it out from under them."

Qwest Communications said this week that in response to "market conditions" it would stop providing retired workers with increases to their pension payments or health care benefits, and would cap their life insurance at $10,000 -- a huge drop for many workers.  About half of all Qwest's retired workers -- 25,000 to 30,000 people -- are believed to be affected.

Those who retired from Qwest or its predecessor, US West, after 1990 will suffer the health care cutbacks.  Only nonunion retirees are affected by Qwest's $10,000 cap on life insurance because union members previously had that limit.  Union members also aren't immediately affected by the freeze on health care payments, but they probably will be in the future, said Dick Johnson, 71, of Blaine, a former Qwest technician and union executive who retired in 1996.

The announcement followed two profitable quarters and the company's decision to buy back up to $2 billion of its stock.

The reduction of life insurance benefits is particularly harmful, Albrecht said.  "I've had a quadruple bypass, a heart attack and a pacemaker.  I can't replace that company life insurance plan."

The company's retiree life insurance had been based on a formula:  It was equal to people's salary in the year they retired, then over several years gradually diminished to half that amount.

"For me, the $10,000 life insurance cap amounts to a $15,000 to $20,000 decline," said Marlyn Beaudine of St. Cloud, who retired in 1989 as a telephone line construction director for part of Minnesota and the Dakotas.

"It's just another corporate greed story to me," said Mary Ann Neuman, 60, of New Hope, who retired as a corporate communications staff manager in 2001.  "My reduced life insurance won't even be enough to bury me."  It could be devastating for some retirees," Johnson said.  "All these people were led to believe they would have pension increases, and that the rest of their benefits would always be there."

Neuman said, "I'm very angry that the people who worked so hard for the company are getting so hurt."

Steve Alexander 612-673-4553