AT&T Retirees and Future Retirees,

For some of you, this is an update and for others, an introduction. AT&T Concerned Employees for Retirement Protection (ACE) has been an advocacy organization since 1998, composed of current and retired employees of AT&T. Our mission is to:

• Educate AT&T colleagues, active and retired, about the changes that have and are happening that affect our retirement security. Specific issues include the Cash Balance pension conversions, pension funding and health care changes.
• Work to restore and preserve our retirement benefits, with a current focus on pensions rights and the retention of and improvement in current Healthcare Benefits for our current and future retirees.

All these activities take time, money, and resources so we are asking you to join or renew your membership in ACE for only $10 per year. With this funding we can continue and expand our current efforts.

Our website, http://att.nac.net, will provide the details but here is what we have done over the past five years:

• Filed the Cash Balance lawsuit in 1998 and now have class action status. Visit AT&T Controversy tab on the website for historical and current information.
• Represented ACE at the April 2003 IRS hearings. As a result, current legislation restricts any further pension changes before October 2004.
• Initiated letter-writing campaigns to Congress, Department of Labor and IRS.
• Sponsored Shareholder Proxy Proposals, requesting our executive team to offer a choice of pension plan to those AT&T employees and retirees negatively impacted by the conversion to cash balance.

This year we:

• Sponsored a proxy that was accepted by AT&T to exclude all pension credits from the executive compensation formula. (Shareholder Proxy tab)

• Engaged in legislative action to protect Healthcare Benefits, which are eroding for current and future retirees.

We need your support to continue our work on your behalf so please:

· Join or renew your membership with ACE – you’ll enable us to fight for current and future retirement benefits. Visit our website and/or mail your $10 annual dues to ACE, 45 Park Place South, #137, Morristown, N.J. 07960.

· Spread the word - We need the support of your fellow AT&T friends who may not be aware of our efforts.

• Take the one question survey – Click on Summary Plan Description (SPD) Survey on the home page. Your data will be used to ensure that you are a part of the class action group and the information may be used in our lawsuit.
• Volunteer – If you want to get involved, we’d love to have the help.

Note: ACE is aligned with the National Retiree Legislative Network (NRLN) in philosophy and action and sits on the Board. See the NRLN link on our website for more information. ACE members automatically become paid members of NRLN. A portion of annual membership dues is also contributed, on behalf of each member, to the Pension Rights Organization.