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We are deeply disturbed and disappointed with the outrageous increase in the health care premiums (150%) for retirees. Lucent greed has seen fit to stick a huge premium increase onto those who can afford it the least, the retirees. Lucent has not paid a nickel toward the cost of health care for its formerly represented retirees since its inception. All the money has come from the pension surplus. As Lucent tries to kick their retirees to curb, their executives line their pockets while manipulating our agreement. The following are Q and A’s on how Lucent is making money off the backs of their retirees and what you can do to support our brothers and sisters.
LUCENT RETIREE HEALTHCARE Q AND A’S
Q) How much does Lucent spend on occupational retiree healthcare? A) Lucent hasn’t spent a dime on providing retiree healthcare since their inception. The approximately $500 million dollars for 2006 occupational retirees healthcare comes directly from the excess assets of the occupational pension fund. Given the rate of inflation on healthcare costs it is projected the cost for 2007 retiree healthcare will exceed $500 million.
Q) Is it the excess assets in the occupational pension plan that has provided the retirees with their healthcare benefits all these years? A) This is correct. By law if a pension fund is over-funded by a certain amount the excess assets can only be used for retiree healthcare benefits.
Q) Than why is Lucent raising the healthcare premiums? A) Raising the healthcare premiums is the surest way for Lucent to get cash in their pockets. By utilizing the occupational pension plan for the company’s healthcare obligation, getting prescription drug rebates and discounts as well as Medicare Part D subsidies the company is able to demonstrate a positive cash flow. Q) Didn’t CWA bargain with Lucent a $400 million dollar Trust fund to help offset the cost to the retirees? A) Yes however Lucent will only deposit the minimum funding requirement of $25 million into the Trust each year.
Q) Couldn’t Lucent take more money out of the pension fund and put it into the Trust? A) There is nothing prohibiting Lucent from putting more money into the Trust however; Lucent has refused to do so.
Q) Aren’t there other cost saving options available that would not bankrupt the retirees? A) The Joint Retiree Healthcare Committee looked at a number of options including plan design changes that would not have had as big an impact on the retiree as the drastic measure the company took. Lucent however rejected all of the options the Unions proposed.
Q) Doesn’t Lucent receive a Medicare Part D subsidy from the government? A) Yes. Lucent does receive a subsidy from the government for offering a Prescription Drug Plan that is better than the Medicare Part D Plan. This year alone it is estimated Lucent will receive approximately $26 million dollars in government subsidy.
Q) Is Lucent using the government subsidy to offset retiree costs? A) NO. Lucent has refused to use the subsidy it will receive from the government to offset retiree costs. Lucent has taken the position that this subsidy is cash in their pockets and the retiree is not entitled to benefit from it.
Q) Didn’t Lucent receive cost savings from their healthcare and prescription drug providers? A) Lucent will receive approximately $101 million dollars in savings over the life of the vendor contracts.
Q) Is Lucent passing those costs savings to the retirees? A) Lucent is not passing all of the cost savings to the retirees. Lucent is pocketing any savings derived from the retirees who retired prior to March 1, 1990.
Q) Does the collective bargaining agreement prohibit Lucent from raising the premiums? A) No. When the Unions negotiated the cost sharing we anticipated that with the rising cost of healthcare it might become necessary to increase the premiums and/or make plan design changes over time. What we did not anticipate was Lucent’s ruthless behavior in its quest to raise cash for the company.
Q) What can we as retirees do? A) We are asking both the retirees and active members to write and call their legislators and future legislators to let them know the outrageous position Lucent has taken and to plead for their help in reversing Lucent’s position. In addition attached are the names, addresses and phone numbers of the Lucent Board of Directors. Please express your outrage to them. |
