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CWA Urges FCC to Block Global Crossing's Sale of Frontier Unless Pension Plan Assets Also Are Transf

Global Crossing's plan to hold onto the pension assets of Frontier Corp. after selling Frontier's local exchange operations to Citizens Communications jeopardizes employee benefits and could lead to rate hikes after the sale, the Communications Workers of America warned in a filing with the Federal Communications Commission.

CWA, representing more than 1,100 Frontier ILEC employees in New York, Iowa and Minnesota, urged the FCC to make transfer of the pension assets a condition for approving the sale.

CWA noted that the Frontier employees are entitled to benefits under the plan -- even though benefits were frozen in 1996 -- and they also have the right to negotiate improvements in the benefit formula based upon the growth of plan assets. If Global Crossing were allowed to keep the pension assets, CWA stated: "Frontier employees would no longer be employed by the entity that controls their pension plan. They could no longer assert their right to negotiate improvements in their benefits on the investment returns enjoyed by the plan trust. Citizens would not have access to the provision of the IRS tax code that would allow it to use excess pension fund assets to fund retiree health insurance."

The plan's assets are now 28 percent greater than accumulated benefits, and that differential is growing, according to CWA. "By retaining control of the pension plan, Global Crossing will be able to siphon off the substantial excess assets in the fund" by terminating the plan or restructuring it in various ways, the union filing stated.

The deal would not be in the best of interest of consumers, "who have funded these assets and who may be asked in the future to pay higher rates. should Citizens be required to seek upward (price cap) adjustment to fund pension or retiree health benefits which have already been paid for but whose assets were transferred to Global Crossing in this sale," CWA stated.

A complete text of CWA's November 20 filing is available on the union's website: ga.cwa-union.org.



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