Lucent Retiree Update

Dear Retirees: 

As I mentioned in the Retiree Members Council General Membership meeting, held in conjunction with the CWA National convention, there are still many issues surrounding Lucent.

Under the current collective bargaining agreement, a Taft Hartley Health and Welfare Trust was established.  Lucent is required to deposit $400 million into the Trust over the term of the collective bargaining agreement.  The language requires a minimum deposit of $25 million dollars per year.  The Trust funds are then used to help offset the cost to retirees for their healthcare.  Lucent has taken a position that they are only required to put the minimum funding into the Trust.  Since Lucent is only providing the minimum funding it reduces the amount of funds available for the offset in any given year.

Each year the Joint Retiree Healthcare Committee (JRHC) meets to look at any true up necessary based on the previous year’s expenses and the medical trend projected for the following year, based on current medical/prescription drug claims and inflation.  The JRHC then makes a determination, by June 15^th, if it is necessary to alter the medical and prescription drug plan design and/or raise premiums.  This year the committee was working on the plan year 2007.  The JRHC committee could not reach resolution by the 15^th of June and asked Lucent for an extension of the timeframe.  Lucent refused the request and per the contractual language, Lucent now has the right to implement plan design changes, as they deem necessary.  The caveat is they must use $25 million dollars from the Trust. 

On June 16^th, just one day after the deadline, CWA and IBEW discovered Lucent had knowledge of projected cost savings of approximately $32 million dollars a year for the next three years.  We believe it was a deliberate attempt by Lucent as a means to place an undue burden on the backs of the retirees.  I have sent a letter to Bill Schecter, Lucent Workforce Relations, requesting they reconsider their decision and allow the JRHC to reconvene.  If Lucent refuses, I will be asking the retirees to mount a mobilization campaign against Lucent for their blatant disregard of our retirees and the collective bargaining agreement.  

If you recall the collective bargaining agreement also requires the passage of legislation regarding the transfer of excess pension assets to be used solely for retiree healthcare. 

As I committed to you, CWA will be keeping a close watch on the Lucent/Alcatel merger.  I understand the concerns raised about the status of the occupational pension fund during the merger and will continue to be vigilant about protecting it.  We have made it clear to the senior leadership of Lucent that we will fight them with every means possible if they in any way attempt to diminish the rights and obligations of our active and retired members.  We are counting on you to take a stand with us as we move forward in this endeavor.  One way you can support our efforts and receive up-to-date information is to join your Local Retiree Council or Chapter.  For more information, contact your Local or Helen Gibson at CWA Headquarters phone number 202-434-1346 or email hgibson@cwa-union.org.

In Unity,

/s/Ralph Maly

C&T Vice President

cc:        Troy Johnson

Helen Gibson

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