retirees lodge protests
By Virgil Larson, Staff
Omaha World Herald
Thursday, November 2, 2006
Phone company retirees picketed Qwest Communications
offices in Omaha today to protest a freeze on pensions, a shift
of health insurance premium increases to them and a cut in
About 20 men and women who retired from either Northwestern
Bell, its successor U S West or the current company, Qwest,
walked the street in front of Qwest offices at 1314 Douglas St.
with signs protesting Qwest's actions on retiree benefits.
There are about 2,000 retirees from the companies in Nebraska,
most of them in Omaha.
The company says that it is doing what other companies are doing
to offset the rising cost of health care and that it has no
obligation to increase pensions.
The freeze on pensions means that some retirees getting the
minimum benefit, $500 a month, will never get more, said Jim
Burns, Vice Chairman of a five-state group of Northwestern
Bell-U S West-Qwest retirees. Their last increase was in the
mid-1990s. At that time about 10 percent of retirees got the
minimum benefit, Burns said.
For those who get more than the minimum, the last increase in
pension pay of 2.8 percent came in 1996.
Nelson Phelps of Aurora, Colo., head of the 14-state Association
of U S West Retirees, a group that has pushed Qwest on retiree
benefits, said he did not know how much the average pension
Beginning in January, retirees not covered by union contracts
will begin picking up all increases in health insurance
premiums. Qwest now pays the full cost of premiums for people
who retired before 1990 and shares the cost with post-'90
retirees. The change doesn't affect retirees who belonged to
unions; union contracts require the company to pay the entire
Company-paid death benefits, which now amount to what the
ex-employee was paid in the last year before retiring, will be
capped at $10,000.
Phelps puts the blame for the cuts and caps on Richard Notebaert,
Qwest's chief executive officer.
Notebaert announced the changes in an Oct. 14 Denver-area
meeting with retirees, Phelps said, and retirees have been
seething since. While Notebaert has not agreed with all of
retirees' requests in the past, Phelps said, he had been
well-regarded since replacing the ousted and now-indicted Joe
Naccio in 2002 as head of the debt-laden, poorly performing
"They believed Notebaert was an honest man, working hard to turn
the company around," Phelps said. "He did do that, but he has
sold us out. He has sold out the retirees."
Phelps suggested Notebaert is curbing the retirees' pensions and
insurance benefits in a way that will improve his.
The pension fund is fully funded. The company has not had to put
money into it since 1986.
Cutting the company's share of health insurance benefits will
save it $20 million to $30 million a year, Phelps said, and
Notebaert will be compensated for improvements in the company's
"The money, in essence, flows out of our pockets into his,"
Accounting rules allow companies to treat a reduced liability -
future costs of health insurance, for example - as a gain,
sometimes letting it fall directly to the bottom line.
Qwest spokesman Bob Toevs said the decision to shift health
insurance costs to retirees was a tough one to make.
"These decisions are always difficult," he said. "But here's the
thing . . . we're not alone."
Every business is facing increasing health care costs and many
are cutting benefits, he said.
Qwest still will be paying a substantial portion of the
premiums, Toevs said, and in the case of retirees whose health
insurance is protected by union contracts the company will
continue to pay the entire premium cost. Union retirees make up
more than half of the 48,000 retirees, he said.
Toevs would not disclose the dollar amount of savings the
company expects from shifting the increase in premium costs to
retirees and capping death benefits.
As for the pension itself, he said there is no provision for
Burns, the retiree official, said that's true. but the company
has increased pensions in the past, and other telephone
companies that grew out of the old Bell system, such as AT&T
(formerly Southwestern Bell) and Verizon, have raised pensions.
Phelps believes the company is obligated by what Northwestern
Bell and U S West employees were told.
"All of us, when we went to work, were told salary would be
below average," he said, but that pensions, health insurance and
other fringe benefits were above average.
"All during our careers, we heard, 'Yeah, you're not making as
much as the guy down the street, but you gotta remember your
benefits are the best in the world.'
"We consider this a contract."