Verizon Communications Announces Restructuring of Management Retirement Benefits

Dec 05, 2005, 00:00 ET from Verizon Communications Inc.

    NEW YORK, Dec. 5 /PRNewswire/ -- Verizon Communications Inc. (NYSE:   VZ)
 today announced a restructuring of retirement benefits for active management
 employees currently covered by a defined benefit plan.  These employees will
 retain pension benefits they have already earned, continue to be eligible to
 grow into their early retirement pensions, and on June 30, 2006, receive an
 18-month enhancement to the value of their pension and retiree medical
     In addition, the company will increase matching dollars for its Management
 Savings Plan (401k) for these employees as well as for MCI managers who join
 Verizon after the close of the planned Verizon/MCI merger.
     Under the restructured benefit plans, after June 30, 2006, Verizon
 management employees will no longer earn pension benefits or receive any
 additional service credits toward the company's subsidy of retiree medical
 benefits.  These management employees who do not have 15 years of service,
 including the additional 18 months of service, will not be eligible for a
 company subsidy for retiree medical benefits.
     Neither Verizon Wireless nor MCI management employees currently have
 pension or retiree medical benefits.
     After an estimated pre-tax net charge of $97 million (approximately $60
 million after-tax) in the fourth quarter of 2005 related to the recognition of
 the changes, this is expected to provide the company with pre-tax net savings,
 including the effect of the increase in the savings plan match, of
 approximately $3 billion over the next 10 years.
     Verizon Chairman and CEO Ivan Seidenberg said, "These changes will provide
 Verizon with a more affordable benefit cost structure, which enhances our
 ability to compete.   The changes will also provide employees a transition to
 a retirement plan more in line with current trends, allowing employees to have
 greater accountability in managing their own finances and for companies to
 offer greater portability through personal savings accounts.
     "This restructuring reflects the realities of our changing world,"
 Seidenberg added.  "Companies today, including many we compete with, are not
 adopting defined benefit pension plans or subsidized retiree medical
     These changes will not affect current retirees.  Management employees
 hired after Jan. 1, 2006, will not earn pension benefits.
     Verizon Communications Inc. (NYSE:   VZ), a Dow 30 company, is a leader in
 delivering broadband and other communication innovations to wireline and
 wireless customers.  Verizon operates America's most reliable wireless
 network, serving 49.3 million customers nationwide, and one of the nation's
 premier wireline networks, serving home, business and wholesale customers in
 28 states.  Based in New York, Verizon has a diverse workforce of nearly
 215,000 and generates annual revenues of more than $71 billion from four
 business segments: Domestic Telecom, Domestic Wireless, Information Services
 and International.  For more information, visit
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     NOTE:  This press release contains statements about expected future events
 and financial results that are forward-looking and subject to risks and
 uncertainties. For those statements, we claim the protection of the safe
 harbor for forward-looking statements contained in the Private Securities
 Litigation Reform Act of 1995. The following important factors could affect
 future results and could cause those results to differ materially from those
 expressed in the forward-looking statements: materially adverse changes in
 economic and industry conditions and labor matters, including workforce levels
 and labor negotiations, and any resulting financial and/or operational impact,
 in the markets served by us or by companies in which we have substantial
 investments; material changes in available technology; technology
 substitution; an adverse change in the ratings afforded our debt securities by
 nationally accredited ratings organizations; the final results of federal and
 state regulatory proceedings concerning our provision of retail and wholesale
 services and judicial review of those results; the effects of competition in
 our markets; the timing, scope and financial impacts of our deployment of
 fiber-to-the-premises broadband technology; the ability of Verizon Wireless to
 continue to obtain sufficient spectrum resources; changes in our accounting
 assumptions that regulatory agencies, including the SEC, may require or that
 result from changes in the accounting rules or their application, which could
 result in an impact on earnings; a significant change in the timing of, or the
 imposition of any governmental conditions to, the closing of our business
 combination transaction with MCI, Inc.; actual and contingent liabilities in
 connection with the MCI transaction, if consummated; and the extent and timing
 of our ability to obtain revenue enhancements and cost savings following the
 MCI transaction.

SOURCE Verizon Communications Inc.