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Member, Beacon International Group, Ltd.
ATLANTA--BellSouth Corp. is boosting its estimate of its future retiree health care obligations by nearly half, as it changes how it recognizes those obligations.
Under a tentative five-year contract with the Communications Workers of America reached earlier this month, Atlanta-based BellSouth will boost to $6,982 from $5,000 the annual cap on retiree health care premiums it will pay.
During previous contract periods, BellSouth waived any premiums above the caps but based its calculations of retiree health care obligations on those caps.
Now, though, BellSouth will begin recording retiree health care obligations as if there were no caps in future periods.
"Since this will be the fifth time we've waived any premiums above the cap, we decided it made sense to change our calculation," a BellSouth spokeswoman said.
The change in the calculation will boost BellSouth's accumulated retiree health care obligations by $3.3 billion, to about $10.4 billion. This increase will be recognized over the average remaining service life of employees.