A world unto itself
It may be of some comfort to those 50,000 managers at Verizon Communications Inc. who are fuming about having their pensions frozen and losing their retirement health benefits to know that the people at the top know all about hard work and sacrifice. Take, for instance, Doreen Toben, Verizon's chief financial officer.
''Horses are an incredible amount of work," Toben told Fortune magazine two years ago. ''I was raised on a horse farm in Harding Township, N.J. My father worked on Wall Street. There were always horses on the property, and we grew up with horses and fox hunting with the likes of Jackie Kennedy and stuff. When you got home from school, you would have to muck your own stall. You would brush your own horses. You would groom your own horses."
Imagine the hardship. But to continue: ''My daughter does show jumping, and we have six horses. If you think of the Olympics with maybe one rail lower, that's the kind of jumping I'm talking about. We do horse shows every single weekend. It's a real bond between the two of us because we can talk about it. My husband talks to my son about basketball. It's also a very stay-out-of-trouble, all encompassing, wear-blue-jeans-and-a-T-shirt-with-no-makeup-and-your-hair-pulled-back kind of lifestyle."
It gets better: ''Our horses are warmbloods, which come from Europe. A thoroughbred, which you see on a racetrack, is considered a hotblood. The warmbloods are much more mellow, and they're also bigger. So we go over to Europe and buy them. Generally the ones that she has now cost someplace between $150,000 and $300,000. That's her cutoff. Some of these horses are half a million to a million. It really is a world unto itself."
Heaven knows, a mom has to draw the line somewhere. Toben and Verizon's senior management just decided the place to draw the line at the nation's second-largest telephone company is with the pension and retirement healthcare benefits for its managers, including 3,500 in Massachusetts. After next June, managers will stop earning pension credits and managers hired after the first of the year will receive no pension benefits at all. Verizon managers with less than 13 1/2 years with the company will no longer receive subsidized retiree medical benefits. Verizon's unionized workforce of 105,000, and its 210,000 retirees, fear they are next.
Toben declined to comment. Ivan Seidenberg, Verizon's CEO, said, ''This restructuring reflects the realities of our changing world."
This changing world will cost Ralph M. Casillas, a Verizon manager in Thousand Oaks, Calif., about a quarter of his pension, or about $101,000, he estimates. That wouldn't even buy a low-end nag for Toben's daughter, but for Casillas, 56, it means he will be working longer than expected. Says Casillas about Verizon's senior management: ''These guys don't know what the inside of a grocery store looks like."
Terminating pension plans is becoming common among big companies -- a promise broken to their own people. The three-legged stool of retirement -- your pension, your Social Security check, and your savings -- is looking pretty wobbly. In place of traditional pensions, we have 401(k) accounts, which have the advantage of moving with you from job to job, but in general are a poor substitute for what's lost. Last year, the average 401(k) account at Fidelity Investments had a balance of $61,000 -- which is less than it had six years ago.
Verizon's bosses are sharing the pain, freezing their own pension plans. They can afford it. Through the end of last year, the company had contributed $13.8 million to Seidenberg's pension plan and $11.9 million to president Lawrence Babbio's plan. Verizon contributed $3 million to Toben's pension. Last year alone, Seidenberg received $13.1 million in total compensation plus stock options worth $4.2 million. Toben received $4.5 million in total compensation and $1.3 million in options.
At the top, as Toben says, it really is a world unto itself.
Steve Bailey is a Globe columnist. He can be reached at bailey@globe.com or at 617-929-2902. 
