Higher Premiums for Lucent Retirees

NOTE: Corrected Address for Franklin Thomas - please see below.  Please do not distribute any more letters to the previous address listed for Mr. Thomas.

Subject:  Higher Premiums for Lucent Retirees

Dear Lucent Retirees and Active Employees,

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

          H. Gibson

          CWA Staff

          C&T Staff

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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

        cahill@hillsandco.com

• 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 Thomas - CORRECTED ADDRESS 11/27
• TFF Study Group
  565 Madison Ave, 33rd Floor
  New York. NY  10022
  
  
  
  
• 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
• Lucent
  600 Mountain Ave.
  Murray Hill, NJ  07974-0636
  Telephone  908 582-8500
  
   
• Patricia Russo - Chairman and CEO of Lucent
• 600 Mountain Ave.
  Murray Hill, NJ  07974-0636
  Telephone  908 582-8500
  
• Richard C. Levin –
• President, Yale University
  
New Haven CT  06520-8283 

• Robert Denham – Partner, Munger, Tolles & Olson LLP
• 355 South Grand Avenue 35th Floor
  Los Angeles, California 90071
  Phone: 213-683-9100
  Fax: 213-687-3702

• Ronald A. Williams - CEO of Aetna
• 151 Farmington Avenue
  Hartford, CT 06156
  Telephone:  860-273-0123
  
  
• Frank D’Amelio, COO
• Lucent Technologies
  600 Mountain Ave., Room 6C370
  Murray Hill, NJ 07974-0636
  Telephone  908 582-8500

• William Schecter, Vice President
• Lucent Technologies Workforce Relations
  600 Mountain Ave., Room 6C370
  Murray Hill, NJ 07974-0636
  Email: wschecter@lucent.com