I have been informed, by Lucent’s Vice President of Workforce Relations, that Lucent intends to impose higher premiums on the retirees who retired after March 1, 1990 effective January 1, 2007. This is not a surprise given the attitude and actions of the company during the last 8 months and their blatant disregard for the retirees. As late as last week I attempted to move Lucent off of this drastic course of action. Lucent is firm in its resolve to break the backs of our retirees.
For months, the Union members of the Joint Retiree Healthcare Committee have been trying to reason with Lucent, get accurate data, realize the cost savings from the providers, and minimize the impact to our retirees. Lucent refuses to budge from the position that the retiree has to pay today for what Lucent thinks the cost for healthcare will be down the road. Every one of the Union’s proposals has been rejected by the company. By refusing to accept any of the Union’s proposals, the company feels they can now impose a premium only solution for what they PROJECT the costs to be.
For those who retired after March 1, 1990 the premiums, which are a percentage of the retiree’s pension, will be as follows:
Today Effective January 1, 2007
Pre – 65 Single – 3 ½ % Pre - 65 Single – 8 ½ %
Pre – 65 2 Person/Family – 7% Pre – 65 2 Person/Family – 17%
Post – 65 Single – 2 ½ % Post – 65 Single– 6 ½ %
Post – 65 2 Person/Family – 5% Post – 65 2 Person/Family – 13%
What is really keeping Lucent afloat? Is it the dynamic leadership? Is it the cutting edge technologies? Is it the responsiveness to the customer? Is it the synergies achieved by the Alcatel merger?
The answer is none of the above. The answer is THE LUCENT RETIREES. The same people who built this company and thought they could retire with a measure of comfort and dignity are the same ones who are now keeping Lucent afloat. Lucent portrays itself as a benevolent provider of retiree healthcare benefits when in fact Lucent has not paid a dime for the benefits it provides. Lucent has, and will continue to, take excess pension assets out of the occupational pension fund to pay for retiree healthcare. All the while expounding on the hardship they must bear to do so. The money used to provide healthcare benefits for occupational retirees comes from our pension fund and NOT from the company.
So how are the retirees keeping Lucent afloat? One way is that Lucent gets a subsidy from the government for providing a prescription drug plan that is on par or better than what Medicare D provides. The subsidy Lucent receives is 28% of the first $250, up to $5,100, of each of the retirees’ eligible prescription drug spend. For January through September of this year alone, it is estimated the company will receive a $24 million subsidy from the government. In essence, the excess pension assets from our pension fund that are used to pay these benefits is what Lucent is getting reimbursed for.
Is Lucent giving the money back to the retirees by depositing it into the Taft Hartley Trust that was established to offset retiree costs? The answer is NO. Lucent refuses to use the government reimbursement to offset retiree costs. Instead, Lucent has taken the position that it is cash in their pockets. Now Lucent is raising the premiums that retirees must pay out of their pension check for healthcare. Why? Because it is the surest way to put money (cash) directly into Lucent’s pockets. The attitude appears to be one of “We need it more than the Retirees.”
There would be nothing preventing the company from putting enough money from excess pension assets into the Trust so the retirees would have no increase for 2007 but again Lucent in their arrogance has refused to do this. Yet Lucent today is seeking to transfer over $500 million dollars to cover their obligations but not those of the retirees.
Has the Lucent Senior Leadership and managers frozen their pay or foregone their bonuses to help keep Lucent afloat? Not hardly but they are quick to take money out of the pockets of those who can least afford it so they can continue heaping huge rewards on themselves. It is time, once again, to let the people responsible for these atrocities know how we feel. I am attaching a list of names and addresses of the Lucent Board of Directors, and Lucent Workforce Relations. In addition, I am asking that you also contact your legislators and legislators-elect and let them know as well the hardship this decision imposes on you.
In Unity,
Ralph V. Maly
cc: CWA Executive Board
LUCENT - BOARD OF DIRECTORS
Carla A. Hills – Position: Chrm & Chief Exec Officer
Hills & Company
901 15th St., N.W., Washington, DC, 20005, United States
Telephone: 202-822-4700
Daniel Goldin – Chairman and CEO, The Intellisis Corp
3550 General Atomics Court M/S 15-140B, San Diego CA 92121 Telephone: 858.909.5200 Fax: 858.909.5250
Edward E. Hagenlocker – Director
Air Products and Chemicals, Inc. 7201 Hamilton Blvd., Allentown, PA, 18195-1501, United States Telephone: 610-481-4911 Fax: 610-481-5765
Franklin A. Thomas - Partner
Shackelford, Thomas & Gregg, P.L.C. 149 West Main Street, P.O. Box 871 Orange, Virginia 22960 Telephone: 540-672-2711 Fax: 540-672-2714
Henry B. Schacht – Position: Managing Director
Warburg Pincus LLC 466 Lexington Ave., New York, NY, 10017-3140, United States Telephone: 212-878-9325 Fax: 212-878-9351
Karl J. Krapek – former President and Chief Operating Officer of United Technologies Corporation
32 Longview Rd, Avon, CT 06001-2935
Linnet F. Deily – Former Deputy, USTR & Former Ambassador To the WTO
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