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Fighting for Retiree Benefits for 15 Years

Jericho Resident Bob Rehm, CFO of the Association of BellTel Retirees, Works to Protect Earned Benefits in A Changed Corporate America

For 30 years, Jericho resident Bob Rehm knew he could make more money away from his job as a division manager at NYNEX, one of the seven “Baby Bells” that emerged from the breakup of AT&T in 1982. However, the job had excellent benefits, and he liked working for the telephone company. “So, in lieu of additional pay – maybe additional vacation time, or additional benefits – I was told ‘hey, this is what you’re getting in health care,’ and they were some of the best benefits in the country in those days,” said Rehm. “‘And then when you retire, you will continue to get these benefits.’”

However, reality after retirement did not match what Rehm had been promised. Cost of Living Adjustments (or COLAs), which had been made nine times over the previous 20 years, suddenly stopped in 1991; the year he retired. In 1996, after waiting five years for the pension adjustments they’d been promised, Rehm and other NYNEX retirees got together and formed the Association of BellTel Retirees (based in Cold Spring Harbor), which fights to protect the pensions and earned benefits of Verizon retirees; NYNEX merged with Bell Atlantic in 1999, and later became Verizon.

The organization started small, with a group of six. However, it didn’t take long for like-minded retirees to discover BellTel.

“Lo and behold, the six members— growing by ones and twos and tens and twenties, and those people telling their friends— we’ve now grown to about 111,000 members,” said Rehm. Not only does the group have members in all 50 states and 13 foreign countries, but it has become one of the most successful advocacy groups in the nation. Rehm, now chief financial officer, has been working for the association for the last 15 years.

One of the keys to the association’s success has been the adamant stance that what these retirees are seeking was already earned; the group seeks to clear up any misconception that they could be “greedy” retirees who want more money.

“These were not gifts by a benevolent employer; we earned them. And they [Verizon] had many benefits over the years for doing that,” said association president C. William Jones, going on to say that the robust benefits and relatively low salary led to lower taxes and better employee retention for the company.

In 1999, the minimum retiree pension at Verizon was $360. In their first major achievement, the group gained three successive increases for retirees on minimum pensions; now, the minimum is $700. In 2000, to resolve the missing COLA adjustments situation, they negotiated with Verizon to get a lump-sum pension payment of up to $20,000 for tens of thousands of retirees.

Later, the association won a proxy for the calculation of executive incentive pay and limiting executive severance agreements with 59 percent of the shareholder vote; the first time a Bell Systems company had ever lost a proxy battle. In 2007, they also won the ‘Say on Executive Pay’ proxy with 50.18 percent of the vote, which went into effect at Verizon in 2009.

Capping executive “golden parachutes” is something Rehm believes is important when a company is reneging on prior commitments. “Hey if you can’t pay the employees, and you’re laying off people, and you can’t give retirees increases in pay, but you can find 30, 40, 50, 60 million dollars annually to pay the top four or five executives- well, there’s something wrong with that and we want the stockholders to have a say in that.”

Today, Verizon stockholders can vote on whether or not they approve of executive compensation packages. Eight other proxies that association leaders proposed have resulted in the company agreeing to completely or substantially amend Verizon’s corporate bylaws.

Now that the association has had so much success, priorities have shifted somewhat, though the organization still protects the benefits of its retirees (and watches how Verizon invests pension funds). A sister corporation, ProtectSeniors.org, was established to protect seniors’ health care benefits. Through ProtectSeniors.org, Bill HR-1322, the Earned Retiree Health Care Benefits Protection Act of 2011, a non-partisan bill, has been introduced in congress. The bill, which states that a company cannot reduce benefits after an employee is already retired, is sponsored by John Tierney (D-Massachusetts) and Walter Jones (R-North Carolina).

The bill does not apply to the currently employed: currently working employees have the option of changing jobs if they don’t like their compensation package. Retirees don’t have the same options, say Rehm and Jones.

“Unfortunately, not only has the telephone company (or the communications company, as they refer to it now) changed; corporate America has changed. And that’s good, but it shouldn’t hurt the retiree who no longer can really do anything because they’re not an active employee,” said Rehm.

“I think that there’s going to be greater and greater pressure on Verizon to reduce benefits, and that is, of course, a very strong concern of ours,” said Jones. “I just don’t think it’s fair to do it to the people who earned those [benefits]…they want to mess around with benefits on a going forward basis to save money, fine- but not to reneg on commitments that were made over 30 or 40 years.”

How has the association accomplished so much? Rehm attributes their success to having a four-pronged approach: Negotiation, Proxy Program, Legislation, and Litigation. While the organization prefers to focus on the first two prongs (and now has ProtectSeniors.org to cover the third), the fourth technique does have its place: when the other three fail.

“You don’t want to sue anybody; it’s very expensive, very time-consuming, and why would we want to sue the company that we built?” said Rehm. However, the association does have litigation pending against Verizon and Supermedia, on behalf of 2,000 retirees.

In 2006, these retirees were transferred from the telephone director side of the company, to a new firm called IDEARC, which filed for bankruptcy soon afterwards. IDEARC, now called Supermedia, is responsible for paying out retiree pensions, even though none of these 2,000 retirees ever worked for the company. The association is pursuing litigation to get the retirees put back on the more stable Verizon pension and welfare benefits plans.

Despite the association’s dislike of litigation, Jones believes the Supermedia case is important, stating that it’s a landmark case with no legal precedent. “We expect that there will be more spin-offs in the future- and it could happen to me, for example. I would hate to be transferred to an under-nourished spin-off, instead of being under the Verizon benefit plans,” said Jones. “We feel that we have to draw the line in the sand; this should not happen again.”

“We think these retirees were done wrong, and should stay with the company that they retired from- not a company they never worked for,” agreed Rehm.

In addition to their efforts on behalf of Verizon retirees, the association also cooperates with other retiree advocacy groups like AT&T Concerned Employees and Retirees and the GM Retirees Association. They also partner with more general senior advocacy groups like the Nassau Committee to Preserve Social Security and Medicare, and the Leadership Council on Aging.

Furthermore, Rehm encourages individual retirees who aren’t getting the benefits they were promised years ago to join or form advocacy groups, and to be aware of the four prongs his association uses. Individually, there may not be much a retiree can do, but the Association of BellTel Retirees is a testament to what a group of dedicated people can accomplish- and primarily through negotiation, rather than lawsuits.

Last year, the 10 members of the association’s all-volunteer board contributed nearly 10,000 hours of volunteer time to keep the association running. For Rehm, who says he works for the association, pro-bono, approximately 20 hours a week, handling all the finances, there’s no plans to change his level of involvement any time soon.

“It’s a sad world for the retiree, but that’s why we have this corporation. And I’ll probably do this until I die, because I think it’s the right thing to do,” said Rehm.

For more information, visit www.belltelretirees.org.