Dallas, Texas-March 13: A man walking with an umbrella outside AT & T headquarters .. .. [+]
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The The Wall Street Journal We talked about the number of retired AT & Ts
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As the journal reported:
As of January 1, AT & T’s decision to reduce life insurance and death benefits for many of the 220,000 retirees eligible for benefits has been rejected by previous employers. It upset the workers of the generation to say.
Cuts do not apply to top executives who have life insurance under another company-paid program that the company cannot reduce without permission. AT & T will pay Randall Stephenson’s heirs, who resigned as CEO in 2020, $ 3.6 million based on a life insurance plan considered by the board last year.
There is little corporate shock, but it’s a fair price. Looking back on history, we see a number of companies taking pension responsibilities to federal organizations and taking over pension responsibilities so that people do not lose the support they expected as they grow older.
I sent a question to AT & T on Tuesday and received an answer late Wednesday. Here are both and some subsequent analyzes. First, the overall statement from the company:
“We are proud to be one of the less than 10% of Fortune 100 companies in the United States that provide company-sponsored life and death insurance to retirees. Comprehensive services still outweigh the benefits normally offered by other companies in the industry and are subsidizing additional policies available for purchase by these retirees. “
Now for the question:
1. If a worker is usually told to receive $ 60,000 when he dies (taking it from the story example), that would be an unpaid future liability of about $ 12 billion.
“This is not correct. This is a simple calculation, and many employment and labor contracts with employees are based on the programs of the various legacy companies that currently make up AT & T. Today’s AT & T is 30 It’s not the same as a company that existed more than a year ago. In addition, this oversimplification takes into account common actuarial factors such as discount rate assumptions, time value of money, and retiree demographics. The retirement benefits offered to employees vary from company to company, change over time, and debt is much less than the numbers you quoted. “
2. Was the provision of life insurance benefits conditional on those who retire early when provided?
“We are proud to be one of the less than 10% of Fortune 100 companies in the United States that offer company-sponsored life and death insurance to retirees. Life insurance benefits for individuals are benefits provided to employees and have nothing to do with “early retirement” or “voluntary turnover” benefits.
3. Providing life insurance benefits usually means funding insurance programs in the hope that the current dollar will increase. Did AT & T have an investment program?
“Our pension and OPEB payments come from trusts that fund these purposes. Last year in 2020, we paid $ 5.1 billion in pension benefits and $ 1 billion in OPEB benefits. This represents more than 20% of free cash flow. Full year 2020 to fund benefits for current and future retirees. Pensions over the last 10 years (2011-2020) With a total of over $ 50 billion in benefits, it was split almost evenly between pensions and lump sum payments, resulting in just under 500,000 retirees. In addition, medical care for nearly 370,000 retirees and their dependents. We continue to provide subsidies for insurance. “
4. How much is the fund currently?
“As a listed company, we report all financial obligations.”
5. What happens to the money invested when you say your company will no longer cover your insurance promises after this year?
“The premise of your question is wrong. We did not deprive anyone of retirement life insurance benefits. We are one of the 100 Fortune companies in the United States with life insurance sponsored by retirees. Less than 10% of companies offering death insurance. Even with the changes we have made recently, our retired life insurance benefits are the few Fortune 100 companies in the United States that offer them. It remains higher than the average severance benefit offered by. Life insurance is just one of many severance benefits offered to ex-employees, including pensions, 401 (k) accounts, and medical subsidies. “
6. Given such behavior, how can AT & T say that they value their employees when they promise to retire early and then break their promises?
“Our comprehensive services still outweigh the benefits normally offered by other companies in the industry and are subsidizing additional policies available for purchase by these retirees. In reality, AT & T’s. We take care of our current 200,000 beneficiaries, just under 500,000 retirees and their dependents, and strive to responsibly balance our business needs. Sure, it’s a balancing act, many companies can’t navigate well and many others don’t have to consider it, which is what we take seriously.
We promise to operate the company in a sustainable way to care for our employees and retirees. To do this, we need to keep costs constant so that we can remain competitive and attract capital. “
7. Why do you expect current employees to believe in your promises?
“We did not agree to any promises made to employees or retirees. Of the 100 Fortune companies in the United States, we provide retirees with company-sponsored life and death insurance. We continue to be one of less than 10% of the companies we offer. In addition, our Retirement Welfare Package is competitive with the market and offers benefits that are not generally available to other companies. We provide retirees with a powerful suite of post-retirement benefits, depending on their eligibility, including medical, CarePlus, dentistry, vision, life insurance, defined benefit pensions, and 401 (k) benefits. “
Now, the spot for analysis. The point of the journal article is that the promised benefits were reduced after many people were told they were entitled to more money, and the benefits in question were life insurance and death benefits. was. Talking about other benefits is distracting. When a retired person dies, the value of medical, dental, visual and even pension benefits is lost.
“One of the 100 Fortune companies in the United States that offers less than 10% of company-sponsored life and death insurance to retirees” does not respond to the decline in benefits over time. Hmm. It also does not mean that no other company than the Fortune 100 offers life or death insurance.
AT & T spokesman Fletcher Cook wrote in the journal, “We are responsible for balancing our business needs with our current 200,000 employees and 500,000 retirees and their dependents. We are working hard on it. ” “Sure, this is a balancing act, an act that many companies are not able to navigate well.”
AT & T’s answer remains at the table that people were once told to get one, but only find that profits have diminished. As the journal article states, top executives are exempt from cutting.
This is not just AT & T. Many other companies once offered benefits that were reduced or even eliminated. But even if a company makes a promise and is not legally obliged to keep it, there are ethical and moral issues.
People work on a number of factors, including what they are supposed to receive in the future. Many accept more modest current interests because they value future interests. When the company says, “Oops, I’m sorry, I can’t afford to do this anymore,” that may be true in a sense. But where was the effort to fulfill the obligations they set?
Still, companies want more than their employees are loyal. They want a “passion” for the work being done. They want workers who put the company first. Why does everyone trust such an employer when this is likely the end result of a promise? Especially when executives are treated differently. Workers cannot go back in time to make other arrangements until things change. Trust is cheap for one and very important for the other.
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