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US telcos slapped with $55.2 billion health bill
19 October 2009
Although pension schemes run by the big US telcos are now underfunded for the first time in years, it is the rising cost of medical care insurance for company retirees that is posing a much bigger problem for the likes of AT&T and Verizon
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[pensions]
[AT&T]
[Verizon]
[Standard & Poor's]
[medical]
[retirement]
[health care]
By Ken Wieland
This is the second article in a series on pension liabilities. See also BT pension liabilities may hit £11 billion
The stock market havoc wreaked by the credit crunch has pushed the US telecoms sector into the pension-fund red for the first time in years.
According to a report from Standard & Poor’s, published in June 2009, defined benefit pension schemes in the S&P 500 Telecommunications Services sector were underfunded to the tune of 9.56% - or $9.1 billion - by the end of 2008. A defined benefit pension is where employees are guaranteed an income based on a proportion of their final salary once they retire. As it stands at the moment, the large US telcos have insufficient funds to cover their defined benefit pension commitments – a far cry from the end of 2007 when the combined pension funds of the S&P 500 Telecommunications...
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