JANE ANN MORRISON: Unlike death and taxes, promises of retirement benefits certainly change - News

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Sep. 03, 2007
Copyright © Las Vegas Review-Journal

JANE ANN MORRISON: Unlike death and taxes, promises of retirement benefits certainly change

JANE ANN MORRISON
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If you hold a job you enjoy, count yourself among the lucky. And a very happy Labor Day to you.

But in today's changing world, you'd be foolish to count on your retirement benefits actually being what you anticipated.

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The era of the benevolent company caring for its retirees in their golden years is more myth than fact these days. Social Security is on wobbly legs. Your retirement benefits can be changed whenever the company wants, and there's nothing you can do about it.

Nancy Foster worked for the local telephone company for more than 33 years, first when it was Centel, then Sprint. She took early retirement in 1997 rather than move from Nevada to Kansas, knowing her pension would be smaller. Sprint said the retirement program still would provide medical benefits and $25,000 in life insurance benefits.

Sprint became Embarq last year and recently told the retirees old enough for Medicare that, as of Jan. 1, Embarq will no longer be providing supplemental medical benefits to Medicare-eligible retirees like Foster, who was a senior engineer when she retired.

"In essence, what they are telling you is: 'Go find your own supplemental insurance, old person,'" Foster said.

The company also capped life insurance benefits at $10,000, a $15,000 cut for Foster.

"I know I can't change it," the 67-year-old woman said. But it doesn't make it any more palatable.

Ned Holland, senior vice president of human resources for Embarq at the company's Overland Park, Kan., headquarters, said Friday the company is in "blood-curdling competition" with cable companies and is losing 5 percent to 6 percent of its customers a year.

In Clark County, Embarq and Cox Communications are in a ferocious competition for customers wanting phone service and Internet access.

Unless Embarq wants to join financially troubled industries like steel and the airlines, it must cut costs to stay competitive and keep jobs secure for its current employees, Holland said.

The phone company operates in 18 states and has about 14,000 retirees. The cuts are expected to save $30 million a year. (Please, don't let them use the savings to buy more of those annoying singing television ads.)

When people such as Foster went to work for Centel, phone companies were regulated monopolies with guaranteed rates of return, Holland said.

Telecommunications is an entirely different industry today, yet Embarq is still regulated by the state.

For those worried about being able to obtain supplemental insurance, Aetna Insurance will provide policies, even for retirees with pre-existing conditions. "One-third of our retirees will pay less for their premiums" with Aetna than they were paying under Embarq, Holland said.

Embarq notified the retirees in a letter July 26. Another letter telling about the Aetna option went out last week, so retirees will be able to calculate what their financial hit will be and whether Aetna or another company offers them the best option.

Foster now pays $10 a month for her Embarq premium for supplemental insurance, and the quotes she received from a few companies would have her paying $160 a month for the supplemental coverage.

But she was cheered late Friday when Aetna told her the premium would be based on length of time with the company and the position.

"It's guaranteed coverage regardless of medical history," she said. "Maybe it's not as bad as I thought."

There's a generation of workers who started their careers and stayed with one company for decades. They felt they were loyal and that their loyalty would be repaid in their golden years.

"Why punish us who have made this company what it is?" Foster asked, echoing the voices of many others.

This is a national trend; it isn't just Embarq. Only 19 percent of companies offer medical benefits to retirees today.

As more businesses take this route, more retirees will be facing the same questions and have the same concerns that Nancy Foster and other Embarq retirees are stressing over.

It's a warning to all of us who are still working that promises made are not always promises kept. And that you need to ask yourself if you are saving enough for retirement, especially your health care costs.

Most likely you aren't.

Jane Ann Morrison's column appears Monday, Thursday and Saturday. E-mail her at Jane@reviewjournal.com or call 383-0275.

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Please enter your name Name: Please enter your email Email: Please enter a comment COMMENTS : (word count limit is 300) You have reached the maximum number of words allowed Current Word Count: Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background. SICK OF IT wrote on September 09, 2007 02:42 PM: I AM 65 AND CANT GET ANY SS I STILL NEED 3 CREDITS SO NO MEDICARE AND NO SS BUT THE MEXICANS CAN GET IT. AND NO I CANT WORK TO GET THEM I HAVE STROKE'S.. THERE IS SOMETTHING WRONG IN THIS COUNTRY THEY DONT WANT TO TAKE CARE OF OLD PEOPLE cas127 wrote on September 06, 2007 08:11 AM: "Unlike death and taxes, promises of retirement benefits certainly change" Unless you are a government worker (otherwise known as "vote seller for bigger government"). If you are a government worker with a defined benefit pension, you get a taxpayer guarantee to make up any investment shortfalls. On top of the obscured, excessive compensation you were paid during your working years (definition of teacher salaries - "a year's pay for two-thirds a year's work...because my union contract tells me so..."). And Patte is dead on about Police and Fire (as the RJ itself has often documented). Citizens, what exactly do you think constitutes a real world police state? Isn't it when the police live a substantially better life than you do because of the weapons you've bought and paid them to carry? And as for actual exercise of illegitimate force, just wait until we try to cut their pay. Then we'll all get "Boggs'd". Paula wrote on September 05, 2007 08:33 AM: not all federal workers can re-tire at 50 yrs of age-- get a grip on life Patte. i am 54 & still have to work. It might be just the ones in the higer salaried positions, not the federal workers below grades 14/15 John Teeples wrote on September 03, 2007 05:19 PM: Patte is pathetic! those retirees were promised extended benefits! let me ask you this, when embarq reports record profits, would it be fitting to return those benefits? yes! sad wrote on September 03, 2007 02:24 PM: Embarg does a number to help it stay afloat. Follow embarg for one year and you will find where your money went. CEO's and top management will recieve bonus's for job well done. This is called the- Bend over, no kisses here after we are done! Patte wrote on September 03, 2007 12:00 PM: It is about personal responsibility and should be. In today's extremely competitive world of business, why should employers pay for employees who no longer work for them. It's not sustainable. As for government workers who help themselve in the Legislature to bigger and better salaries, pensions, and benefits at our expense. It's time to cut them off. How many cops and fireman in Nevada make well over $100,000 a year and retire at age 50?? Answer, most of them. We're paying for this and its time to put a stop to it. Patte wrote on September 03, 2007 12:00 PM: It is about personal responsibility and should be. In today's extremely competitive world of business, why should employers pay for employees who no longer work for them. It's not sustainable. As for government workers who help themselve in the Legislature to bigger and better salaries, pensions, and benefits at our expense. It's time to cut them off. How many cops and fireman in Nevada make well over $100,000 a year and retire at age 50?? Answer, most of them. We're paying for this and its time to put a stop to it. Patte wrote on September 03, 2007 12:00 PM: It is about personal responsibility and should be. In today's extremely competitive world of business, why should employers pay for employees who no longer work for them. It's not sustainable. As for government workers who help themselve in the Legislature to bigger and better salaries, pensions, and benefits at our expense. It's time to cut them off. How many cops and fireman in Nevada make well over $100,000 a year and retire at age 50?? Answer, most of them. We're paying for this and its time to put a stop to it. Eric wrote on September 03, 2007 07:07 AM: Just read the above article and one thing that need to be mentioned is that not all supplements are acceptable to Medicare, Senior Demensions and Senior Horizons are two of the best and less money than what was quoted in the article. Michael wrote on September 03, 2007 05:16 AM: Notice as benefits for employees & retires are eliminated, the same is not so for top management. They get the full package even if they take the company into the toilet. The best advice for any employee is what they tell boxers in the pre-fight instuctions .. "protect YOURSELF at all times". Also, quit listening to the whining of public employees who enjoy a full benefits out of your pocket. If you have to cover yourself, they can do the same.