Verizon Plans Pension Cuts to Managers

Here is another case where employee loyalty just doesn't pay off.

Verizon Communications, the second-biggest U.S. telecoms firm, said it was restructuring retirement benefits for 50,000 managers in a bid to save $3 billion over the next 10 years.

Under the plan — for which Verizon will take an estimated fourth-quarter pre-tax charge of $97 million — managers will no longer earn pension benefits or receive service credits toward healthcare benefits from next July.

Employees currently covered by a defined-benefit plan — which typically has a fixed payout at retirement based on earnings and years of service — will keep pension benefits already earned, and on June 30 will receive an 18-month enhancement to the value of their pension and retiree medical benefits.

Pay attention to these trends fellow economic developers. This is happening in automotive and many other industries. We are losing our wealth base every time a company starts chopping away at employee pension benefits.

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