Verizon Communications Inc.'s (NYSE: VZ) management retirees have filed a federal lawsuit to halt their former employer's plan to transfer $7.5 billion of pensions, covering 41,000 management retirees to the Prudential Insurance Company of America (NYSE: PRU).
Verizon retirees charged that Verizon's plan to transfer the retirees' pensions from the Verizon Management Pension Plan into Prudential issued insurance annuities violates federal ERISA law.
If the pension spinoff, which was expected to close in December, is not halted, beginning in January 2013, Prudential will replace retirees' pensions with insurance annuities that are not ERISA-protected.
Retirees claim the conversion to an annuity wipes out the federally insured pension safety net provided by the Pension Benefit Guaranty Corporation (PBGC) and is an effort to sever retirees ERISA protections, as well as the company's fiduciary responsibilities to the very retirees who built their company.
The Verizon Management Pension Plan currently has roughly 100,000 participants, including plaintiffs.
The Association of BellTel Retirees have filed for a request for an immediate temporary restraining order to be followed by a hearing to consider a preliminary injunction in the United States District Court, Northern District of Texas, Dallas Division.