December 6, 2005
Mimi Hull, President
ASSOCIATION OF U S WEST RETIREES (AUSWR)
AUSWR Board Members and General Members
This update concern the Phelps v. Qwest Employees Benefit Committee case pending in Denver Federal Court (the ERISA Disclosure case). The last update was sent on September 21, 2005. As you know, AUSWR Executive Director Nelson Phelps formally demanded Qwest make disclosure of the "investment policy guidelines" and "proxy voting guidelines" in order to help him and the retiree association police the goings on with the Qwest Pension Plan. Mr. Phelps was particularly concerned about a complete loss of a $67 million "put option" investment made with pension fund monies in late 2001.
On December 2, 2005, Chief Judge Babcock entered a ruling deciding the central dispute between the parties, i.e., whether Qwest is required to provide certain documents to Mr. Phelps pursuant to § 104(b)(4) of the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1024(b)(4). In short, Chief Judge Babcock ruled that Qwest does not have to disclose the requested proxy voting guidelines, as those matter are handled by outside investment managers and Qwest does not dictate the terms of those polices. However, with respect to the more important issue, Chief Judge Babcock ruled Qwest must turn over the several investment policies/guidelines that are portfolio specific for the pension plan.
This is an important ruling. No other retiree group has made such a legal challenge. Certainly, there has been no other case like this one filed anywhere within the federal courts making up the 10th Circuit Court of Appeals (i.e., Colorado, Kansas, New Mexico, Oklahoma, Utah and Wyoming). This legal issues resolved in the Phelps case is significant not only for AUSWR, but for other retiree groups and individual retirees who, too, want to police their pension plan and, therefore make written requests for information concerning pension plan operations. Retirees should not have to pursue a federal lawsuit simply to find out more about how the pension plan is being managed or mismanaged. You can read Chief Judge Babcock's December 2, 2005 Order at this URL: http://www.uswestretiree.org/Order120205Phelps.pdf
The next step in this case is for Qwest to produce the requested investment policies/guidelines and answer some questions we asked back in January 2005. We will pursue our request that Chief Judge Babcock impose a daily fine on the company and order payment of costs and attorney's fees, so as to deter this type of obstinate behavior in the future when we make requests for other disclosures and information about the Qwest Pension Plan.
Meanwhile, to learn more, you should visit the "Legal Developments" page at the AUSWR website http://www.uswestretiree.org/legal2.htm and under the heading "ERISA Disclosure - Phelps v. Qwest" view all of the updates, the Complaint and other legal papers that have been posted.