The Denver-based communications company estimates the
move will cut its liabilities by $220 million, the Denver Post reports.
Although Qwest has not made a cash contribution to its pension plan for years
and projects it won’t need to in 2010, it said Monday that removing the death
benefit will help “protect the pension fund’s ability to meet obligations
of current and future retirees,” according to the newspaper.
As many as 27,000 retirees – those who retired before
2004 and have “mandatory beneficiaries,” such as a surviving spouse
or dependent children – are eligible for the death benefit, which pays
beneficiaries an amount equivalent to the retiree’s last annual salary with the
company. The benefit will be eliminated effective March 1.
Retirees filed a lawsuit in 2005 to prevent Qwest from
dropping the coverage but lost on appeal in July (see Elimination of Pensioner Death Benefit Did not Violate ERISA).
Last month, the company announced it is freezing as of December 31, 2009, the pensions of active management employees in the Qwest Pension Plan and Qwest Nonqualified Pension Plan (see Qwest Freezes Pension Accruals).
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