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Vol. 1, Edition 1 |
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Contents: |
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11. Membership |
New Newsletter for
Retirees:
This is the
first edition of the Aetna Retirees Association newsletter, or ARA News. Our
intent is to keep Aetna retirees informed of Association activities in support
of their interests and answer retiree questions. It will be published on our
website (www.aetnaretirees.com) as needed. There will also be a printed version
for those who do not have Internet access. We ask that as many of you as
possible read the e-mail or website version for all future editions. We will
keep printing and mailing costs to a minimum by mailing printed copies only to
those who do not have internet access.
Aetna Retiree
Association Activities:
The last couple
of months have been very busy for ARA.
Using about ten different mailing lists that various retirees generously
provided, we announced the existence of the Association and its intended
purpose in late August. The response was quick and over 400 retirees joined us
in the first month. The Association growth was at the same rate in the second
month as more retirees heard about ARA.
It has been
especially gratifying that over 20% of those joining have given at or above the
Founders rate of $100. A few retirees sent in their applications without any
dues. We assume they cannot afford the $20 at this time and we’re happy they
took us at our word that we did not want dues to hinder anyone’s participation.
Early funds were
used to incorporate ARA and mail to additional lists of retirees. Some of the spouses of early members were
enlisted to type addresses. Some continue to help us with recording and
inputting information. We greatly appreciate their efforts.
Our president,
Robert (Bob) Gilligan, has spent a lot of time conferring with the leaders of
other retiree associations. We are indebted to them, as they have been willing
to spend time and talent to help at every turn. We have accomplished in a very
short time what took them months and years to achieve. It would have been impossible without their
help.
By the beginning
of September our incorporation was approved by the State of Connecticut.
Retired Aetna tax lawyers are now helping with our filing for non-profit status
so we will not have to pay taxes on our income. Unfortunately, this status will
not make dues or other contributions tax deductible to members, but it will
help us achieve better results.
Your Retirees
Association Board met for the first time on September 20 for its first formal
meeting. We are very appreciative to have such a strong group of people join
our Board. Their enthusiasm for our cause is very impressive and
encouraging. Their biographies will be
provided on the www.aetnaretirees.com website. During its meeting, the Board appointed
officers to run the daily operation of ARA. These officers’ biographies will
also be on the website
Members are
already voicing a wide variety of concerns and approaches they would recommend.
Some feel we have no option but to go the legal route. Others feel we must get
legislators to take responsibility for making companies do the right thing. And
a few feel we should trust the current Aetna leadership to do the right thing.
The leadership team tries hard to take everyone’s suggestions into
consideration while, at the same time, developing plans to turn these ideas
into actionable items.
Our members seem
most anxious for legal action. We are exploring this option with several law
firms but continue to hope that litigation can be avoided. Nonetheless, we are
determined to be properly prepared should the need arise. (You can help in this
preparation by checking your files and sending information as described below
and in the “Get Involved” section of the website.) The rumor that we are
already pursuing legal action is inaccurate.
“We believe it
is necessary to explore all our legal and legislative options. At the same time as we hope the Company’s
leaders will seek the dialogue they have so far rejected. We plan to engage
Aetna directors and shareholders in understanding their responsibility to
assure that the promises made to employees are kept. We believe this is
critical to the Company’s reputation,” says Bob Gilligan.
We have engaged
a Public Relation firm noted for its expertise in advocacy campaigns to help us
with our media and legislative planning. Warren Azano, an ARA director with
significant government relations expertise is happy to have them on board to
assist us in formulating and carrying out our legislative strategy.
To provide
national support for any legislative efforts we pursue, ARA has just joined the
National Retirees Legislative Network (NRLN). Several large retiree
organizations from corporations with household names, including IBM, AT&T,
Raytheon and Prudential started NRLN. NRLN represents more than 2,000,000
individual retirees and maintains a website at www.nrln.org. Their current priorities include
HR 1322 – The emergency Retiree Health Benefits Protection Act of 2002 – as
well as other Retiree Health and Pension COLA bills. Each of you, as a member
of ARA, is automatically a member of NRLN.
Many you have volunteered
your time to help. We are happy to announce that we have begun to organize this
rich pool of talent and take advantage of your offers. Marilyn Wilson has been
working with Bob Quinn to coordinate volunteer services. That will help your all-volunteer leadership
team get some much-needed help. The first example is the volunteers who worked
on getting this newsletter published. We do thank them for their commitment.
It has been a
busy time and we expect things to continue to be hectic. At the time this was
written, Aetna management had delayed the retiree enrollment period until
November and the enrollment package was being received by retirees. Please read
your package carefully. We are happy that they decided not to raise medical
rates due to increased medical costs, but you will want to study the changes
carefully and call Aetna regarding anything you don’t clearly understand. We
were hoping that they were reconsidering their promise to retirees and would,
on their own, realize it is a commitment that they should keep. Unfortunately,
the recent announcement has shown that not to be true, so we continue our
efforts to defend your rights.
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The questions that follow are in many cases a combination of
similar questions and have been edited for clarity.
Q. One or two retired executives have observed that what current
Aetna executives are doing is just good business. They say retirees have to
recognize how the business environment has changed. Is ARA being unrealistic
about today’s business environment?
A. While
only very few former executives have raised this question, it is one all of us
have thought about. If we were still at Aetna, would we be doing the same
thing? Would we have a very different view of the business environment if we
were still working? It is a question that is impossible to answer accurately.
We can only hope that we would look beyond what other companies are doing and
consider the strong ethical history in which Aetna has been rooted. There are
three aspects to this history which seem relevant:
First and foremost we made solemn promises on
which people based their life decisions. That can not be taken lightly.
Second, Aetna
management decided that Aetna would keep the entire retiree base when it sold
the property/casualty, life and financial businesses. Carrying all these
retirees on a smaller employee base guaranteed that the Company’s expense ratio
would be higher than other health benefit companies. Using that higher expense
now as an excuse to change retiree benefits seems inconsistent at best;
unethical (and possibly illegal) at worst.
Lastly, we
question whether the growing gap between executive compensation and the average
retiree pension is fair. Certainly we want current leadership to be well
rewarded for enhancing shareholder value and Aetna results continue to improve.
That is good (or should be) for retirees as well as active employees. Aetna has
always set a higher standard for employee compensation…for example your Editor
remembers the implementation of “Performance Bonus” from which all employees
could benefit. No other Company that we knew had such a program for all
employees. Those affiliated with ARA believe in that higher standard. We know
it would be hard to maintain in today’s business climate – maybe even more
difficult than it used to be. We understand the difficulty associated with such
decisions but that doesn’t relieve responsible managers from keeping the
promises made by their predecessors. In
the parlance of a current biography, “I did it because I could” is hardly the standard
we will willingly accept.
Q. One retiree has expressed concern that
the association seems to be dominated by former executives and that (current)
executives are the source of the problem. She asks, “Wouldn’t we be better off
with average employees representing us rather than (former) executives?”
A. It is hard not to agree with this one. We are hopeful that
more women and more of the people who had the non-managerial jobs will not only
become members, but leaders who help with the work we have in progress. These
are the people who contributed so much to Aetna’s success and now we need them
to make ARA successful. They can also help us identify other issues and other
actions that will make us a better stronger organization. If you are one of the
people who is willing to work and bring your ideas into the mix, we would be
happy to hear more. Meanwhile the new critical role of volunteer coordinator is
being filled by Marilyn Wilson, a former administrative assistant – a good
start. And we should all remember
that many of the executives involved in this effort got their start from within
the ranks, unlike today’s execs who were brought in from the outside, neither
understanding nor, apparently, agreeing with Aetna’s culture.
Q. Why aren’t you being more aggressive and
filing a class action lawsuit against Aetna?
A. As ARA Board Chairman John Dwyer has said
in various interviews, we are not anxious to take Aetna to court. We are all
very devoted to the Company. It was a wonderful company for us. You don’t act
precipitously against a company you feel so positively about. However, that
being said, we are preparing material in case legal action proves
necessary. You can get more detail and
even help in this effort by looking on page ten at the “Do you Have Old
Documents” piece or going to the “Get Involved” section of the website and
click on “HERE” on the fourth bullet.
Q. Why are you going after Aetna when they have been so good
to us? I’m sure they wouldn’t do this if they didn’t have to.
A. We all had this kind of trust in Aetna leadership
for a lot of years. However, reducing reserves by $32 million and flowing that
into earnings in the face of very satisfactory earnings coupled with a $750
million tax refund and executive compensation which may be worth hundreds of
millions (for example Jack Rowe cashed in over $26 million on stock options in
one week of September, this year) has made many of us question whether Aetna
should be trusted to act in the best interest of retirees. We admire those of you who are able to keep
the faith. Most, however, seem to be willing to join in our efforts. It’s
important to remember that “Aetna” is not an entity in itself…it’s made up of
people, and people can change its direction.
Q. Will you be addressing the Cash Balance
pension plan?
A. This was not originally on our agenda,
but as long as there are current retirees for whom it raises
issues we will help them analyze the issues involved and explore what can be
done. If you are interested in this issue please contact our President, Bob
Gilligan at president@aetnaretirees.com and indicate your
interest and willingness to work on this issue. Or write him at our address:
Aetna Retirees Association, PO Box 280165, East Hartford CT 06128. It would be
particularly helpful if an actuary could join Bob on this issue.
Q. When will we get an accounting of the funds going to ARA?
A. First be assured that the Leadership Team and Board of
Directors review ARA’s financials on a regular basis to assure they are being
accounted for in accordance with sound accounting procedures and controls. At
the end of the fiscal year, which ends in December, we plan to have our books
audited by a CPA. In addition, ARA will comply with all federal and state
financial reporting requirements. Once these steps have been taken we will make
our reports available to any member who would like to schedule a review
in our offices. However, we will not be publishing our financials; we have a
concern that total openness might lead Aetna executives to base their responses
on our financials, rather than the ethical aspects of the issues. This is a
particular concern as we are just starting our operation and growing our
membership
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Your
Leadership Team and Board
Brief Bios
on select leadership Team and Board members will appear in each edition of
PROMISES.
John
J. Dwyer, Chairman
Following graduation
from Providence College, Mr. Dwyer joined Aetna Life and Casualty in 1960 at
that company’s Harrisburg Pennsylvania field office as a claim
representative. During the course of his
thirty four years with the company he headed several of the casualty-property
divisions including National Accounts, the Bond Division, the Personal Lines
Division and the consolidation of the Personal and Commercial Claim
Departments. While at Aetna, he served
as a founding director of Executive Risk Inc. which was subsequently acquired
by the Chubb Insurance Company following a successful public offering. During his Aetna years he served on the Board
of the Surety Association of America and the National Insurance Crime Bureau.
Following his
retirement from Aetna in 1994 he joined Terra Nova Holdings Ltd. and moved to
Bermuda as President of that company’s Bermuda insurance operations. He was later appointed by the Board of
Directors to the position of Executive Chairman and held that position until
the successful sale of the Company to Markel Corporation in 2000. During his Terra Nova assignment he served as
a Director of Octavian Managing Agency Ltd., Terra Nova’s wholly owned
subsidiary, which managed seven syndicates at Lloyd’s.
His community
involvement included service to the Advisory Board of Council Partners in
Bermuda and the Board of Directors of the Connecticut Institute for the
Blind/Oak Hill School in Connecticut.
John and his
wife Susan have two grown children and three granddaughters. They live in West Simsbury, Connecticut and
summer in South Duxbury, Massachusetts.
Robert Gilligan,
President
Bob Gilligan began his Aetna
career in 1957 as a Programmer-Trainee in the Group Control Department. He retired
in1990 as Vice President, Employee Benefits Division. He is a LOMA Fellow
and a member of the very first Yale Senior Management Program. Along the
way he was the Project leader of Aetna's first real-time computer
system-AECLAIMS and helped start an insurance company in Indonesia.
Active in the South Windsor
community for twenty five years, he served as Chairman of the Library Board,
Zoning Board of Appeals and Planning and Zoning Commission.
Bob participates in a number of non-profit
organizations and is an avid golfer with memberships in Florida and
Connecticut. He and his wife Virginia have three children, Robert of
Grand Rapids, Michigan, Laurie of Rocky Hill and Terri Robinson of Glastonbury.
Robert C. Quinn, Vice President
Bob
joined the Aetna in June, 1964 following two years as a First Lieutenant in the
Army. He spent his entire 30 year career with Aetna in the Human Resources
Department. From 1985-1994, Bob headed up the Executive Resources Department
within Corporate Human Resources. As such, he was accountable for supporting
the Chairman and his direct reports in areas such as succession planning, high
talent identification and executive development. In addition, Bob was
responsible for overseeing and coordinating separation agreements for all home
office officers who were terminated during this period of time. He worked
directly with the Law Department and senior management in developing an
enhanced separation package to help ease the financial burden on those whose
positions were eliminated during the late 80’s and early 90’s. Therefore, he
was an active participant in, and witness to, the Company’s efforts to
accomplish its downsizing goals by encouraging managers to accept early
retirement by accepting a generous package of compensation and benefits. Bob
feels a personal responsibility to fight to help restore benefits for those to
whom he and others made promises that are now being broken.
Bob currently owns his own career consulting
practice, Career Management Services, in Rocky Hill, Connecticut. He lives in
Wethersfield with Priscilla,his wife of 42 years. He has 4 grown children and 7
grandchildren.
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About
The Aetna Retirees Association
The following
information has appeared previously on the www.aetnaretirees.com website. The above
information will also be available there shortly.
Aetna Retirees
Announce New Association
Bob Gilligan, formerly a Vice President
in Aetna’s Employee Benefits Division announced the creation of a new retirees
association focused on helping retirees address benefit and pension issues when
Aetna seeks to make changes. He said, “The immediate cause for creating this
organization is Aetna’s announcement that they plan to eliminate the subsidy
for the retiree dental plan.
After efforts by John Dwyer,
our new Board Chairman, as well as by Bob Quinn and Emmett McTeague, who met
with Aetna Human Resources; and then a letter writing campaign by many
retirees, it became clear we needed to better organize our efforts if we were
to be successful. We found tremendous support for the concept of a collective
effort. A few of us got together and decided to get it started”.
Bob goes on to tell us some of
the steps that have been necessary in forming the organization. A leadership
team needed to be pulled together and officers decided upon. Then a board of
people with diverse skills and representing the various divisions Aetna
retirees come from had to be identified and engaged in supporting AR’s efforts.
John Dwyer indicated, “I couldn’t be more pleased with the people who have come
forward to serve in this effort. We have people with Government Relation,
legal, Human Resources, technology and leadership skills. Divisions from
Employee Benefits to Property Casualty, to International, as well as Corporate
are all represented. And they all believe firmly in the cause”.
"What we all seem to have
in common is a combination of disappointment and anger at Aetna’s decision to
break its promises”, said Gilligan. “While it is nice to once again experience
the camaraderie among these former “Aetnoids,” There is a certain sadness in
all of us that we find this new organization necessary”. “Nevertheless, we are
ready to do whatever proves necessary to change Aetna’s decision" adds
Dwyer.
Association's Approach
Approach: The purpose and
approach of the Association are described in the Mission, Strategy and Critical
Success Factors that follow:
MISSION
The Aetna Retirees Association
mission is to involve retirees in protecting the medical/dental, vision,
prescription drug and life insurance benefits as well as the pensions that
Aetna committed itself to, so that they may live in retirement as Aetna
promised they would.
STRATEGY
We hope to carry out this
mission in cooperation with the Company by regularly communicating our views
regarding proposed benefit changes while seeking a clear understanding of their
intent. We will also seek to educate directors and shareholders regarding their
obligations to the former employees who have served them well and to enlist
their aid in assuring that the company keeps its commitments.
If and when the Company proves unresponsive,
ARA will, with great reluctance, engage legislators and regulators in those
issues requiring a legislative remedy and, if necessary, initiate legal action.
We will involve the public through various media when we believe public support
will be helpful in gaining a better response from the Company.
CRITICAL SUCCESS FACTORS
-
Timely
benefits information from the Company
-
Clear
support and involvement from a large portion of retirees
-
Sufficient
financial resources
-
Timely
access to expert resources
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Will the Retirees Association really be able to make
a difference?
Aetna, like all corporations has to be concerned with its image/reputation.
When the Retiree Association is able to speak for a substantial part of Aetna's
eleven thousand retirees there is a better chance that those retirees will be
heard.
On what will our money be spent?
The Association will have
a website, a newsletter, the expense of computers and other office equipment,
mailing costs and similar expenses. When we have enough income we also hope to
hire legal support for our efforts (much of the initial legal expense for
incorporation has been avoided because of support by retired Aetna lawyers).
Other retiree organizations have also found it effective to purchase company
stock in the organizations name so that it may place shareholder proposals on
the shareholder agenda. All of these things cost money. Our workers are all
volunteers and we initially have donated office space and furnishings. We will
spend your money as judiciously as we know how.
Aetna has, until now, been very good to us. Is the
Association out to hurt Aetna?
It would be foolish of us to
set out to hurt Aetna. Aetna is the source of our retirement income and
benefits. We are convinced that in the long run we will be helping Aetna if we
can get the new leadership to understand that they are a better company when
their employees and retirees can count on them to keep their promises. Aetna
was great when it acted in that way. It needs to be that way again if it is to
return to true greatness.
May active employees join the Aetna Retirees
Association?
Because the Association
will not represent the interest of active employees, membership is not
appropriate. However, those that want to learn about retirement issues and the
impact of Aetna's decisions are certainly welcome to do so by regularly
visiting our website.
Are you really against Aetna management or will you
try to work with them?
We will continue to try to
meet with Aetna management when appropriate. We have told them that they should
feel free to call us whenever they hear something that concerns them. We will
be happy to clarify what we are doing and (often just as importantly) what we
are not doing. We have to admit that, so far, we have not found our individual
efforts to be effective. Perhaps, when they understand the number of retirees
who are in support of our efforts, they will be more responsive.
What if I have questions or comments?
This website can be used to submit to ARA personnel questions or comments about
ARA or about Aetna's actions. You can send these questions and comments to us
via the Contact ARA page
on our website or to Editor, Aetna Retirees Association, PO Box 280165, East
Hartford CT 06128. We welcome your input.
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Do You Have Old
Documents Describing Benefits?
An ad hoc
Committee is gathering additional evidence concerning Aetna's promises to its
retirees. It is important that we gather all available evidence concerning
statements that Aetna made about retirement benefits, reaching back as far as
we can.
Over the years, Aetna
published numerous statements and explanations concerning its promises to
retirees. We have gathered some of these – e.g., we have the October 26,
1967 statement of "Personnel Policy of Aetna Life & Casualty",
"Your Second Paycheck 1988", "Benefits Handbook 1994."
We need to pin down when and
how Aetna first warned that retiree health benefits in particular might be
changed, suspended or terminated.
To the extent that Aetna
expressed caveats about its obligations to retirees, we need to determine
whether such caveats clearly encompassed retiree medical-dental benefits, how
conspicuous or inconspicuous the warnings were, and whether Aetna ever warned
at any time that it might reduce benefits to those already retired.
We need your help in obtaining
other benefits booklets, publications or correspondence of any kind that
address the foregoing. We ask that you look through any materials that you have
retained and if you find any that might be pertinent, please resolve any doubt
in favor of sending either the originals (or copies) to:
Aetna
Retirees Association.
Ad Hoc Claim Statement Committee
196 Vernon Street West
Manchester, CT 06040-2210
If you wish to submit a
document as an email attachment (or have a question about a possible
submission), send it to adhoc_committee@aetnaretirees.com.
It is possible that
confidential separation agreements contain references to, or guarantees of,
pension or health benefits. If so, we are only interested in the portions that
identify you, the date of the agreement, and the section(s) that address
pension and/or retiree health issues. Please redact the rest before sending.
If you send materials, please
clearly identify yourself, including your address, phone number, Email, Fax,
etc. in the event that future questions arise concerning the source of the
materials.
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Aetna Retirees Association
Membership Application
Print this form out by selecting Print from the
File menu
Name (Last, first, middle initial): _____________________________________________________________________
Date of Birth: _________________ Month/Year of
Retirement: ____________________
Your Last Position and Division at Aetna:
________________________________________________________________________
Your address:
____________________________________________________________
________________________________________________________________________
________________________________________________________________________
E-Mail: _________________________________________________________________
Phone:_____________________________ FAX:
_______________________________
Spouse's Name:
_________________________________________________________
Spouse's Date of Birth (Optional):
_____________________________________
Spouse is (circle one): [Under Aetna insurance]
[Not under Aetna insurance]
Dues: $20 (yearly). Contributions of $100 or more
qualify as a founding member.
Contribution: _______ Total: _______
Dues/contributions are not tax deductible. Please
make checks payable to Aetna Retirees Association, Inc. and send to PO Box
280165, East Hartford, CT 06128
If you are
interested in volunteering your assistance in this work, please let us know
what amount of time you could provide and what particular skills you would like
to offer. (We are currently in particular need of someone with media relations
experience and someone with actuarial experience.)
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