Verizon to Transfer $7.5 Billion in Management Pension Plan Obligations to Prudential

Verizon Communications Inc. announced today that it has entered into an agreement with The Prudential Insurance Company of America pursuant to which the Verizon Management Pension Plan (the "Plan") will transfer pension assets to Prudential to settle approximately $7.5 billion of Verizon's nearly $30 billion in outstanding pension obligations. Under the agreement, the Plan will purchase a group annuity contract from Prudential, which will then assume the obligation to make future annuity payments to certain Verizon management retirees. The amount of each retiree's annuity payment will be equal to the amount of such individual's pension benefit. The transaction affects Verizon's U.S. management pension benefits covering approximately 41,000 current management retirees. Current management employees, former management employees who retired on or after Jan. 1, 2010, and certain other retirees are not affected. Union-represented employees and formerly union-represented retirees are not affected as well. The pension transfer will not change the amount of the monthly pension benefit received by affected retirees and surviving beneficiaries. No action is required on their part. Prudential, rather than Verizon, will be responsible for making these monthly payments. The group annuity contract includes an irrevocable commitment by Prudential to make annuity payments to affected retirees covered under the annuity contract. The transaction is expected to further Verizon's objective of de-risking the pension plan while improving the company's longer term financial profile. The move is also designed to transfer the payment obligations to a highly rated and highly regulated insurance company with the capacity to manage large pension transfers and a long history of providing group annuity benefits. Prudential already provides pension plan services to 3.7 million workers and retirees for many corporations nationwide. The closing of the transaction, which is subject to certain conditions, is expected to occur in December 2012.