Lucent Retirees Lambaste Benefit Cuts

NEW YORK -- The president of the Lucent Retirees Organization charged today that Lucent executives have created a “moral chasm” by drawing multi-million dollar salaries while eliminating health care benefits promised to retirees and their dependents.

“After examining the deep cuts in management retiree benefits that Lucent announced this week, the LRO leaders and members are shocked and dismayed,” said Ken Raschke, LRO president. “We are appalled at the difference in treatment of the company’s retirees versus how well Lucent’s senior management continues to take care of itself.”

The LRO represents the interests of 127,000 retirees, including 50,000 management retirees affected by Lucent’s action to no longer reimburse retirees for Medicare premiums, dental coverage or health care insurance subsidies for dependents. Lucent has reported that the cuts will save the company $75 million annually.

"It is time for Congress to enact protective legislation that ends this carnage,” Raschke said. “Republican legislators refuse to support HR 1322, a House bill that protects retiree health care as ERISA protects pensions. It is time for these legislators, the White House and AARP to wake up. Today's executives have lost their moral compass.

“Our members are asking: Where are the corresponding reductions in salary for executives?” Raschke said. “Lucent executives inflict pain time after time on retirees and continue to pay themselves excessive salaries and maintain their expensive perks in the absence of a return to profitability. They should be setting the proper moral tone for the sacrifices they are forcing upon retirees by making public, highly visible sacrifices themselves.

“Their bonuses and salaries seem to be based on how much they can take away from retirees rather than how successfully they grow the business,” Raschke added “Lucent’s executives continue to pay themselves very high salaries as they preside over a company whose revenues are now in the $8-9 billion range compared to $38 billion in 1999.”

Raschke noted that the LRO Board would be evaluating with legal experts Lucent’s latest “brutal whacks at retirees’ benefits.” Already, the LRO is examining the potential for a class action lawsuit against Lucent for the February elimination of the death benefit many retirees had when they left the active payroll.

“The LRO’s membership is rapidly increasing, providing us with broader input from retirees as well as raising the funds needed to challenge Lucent on its actions against retirees,” Raschke said.

According to the LRO president, the organization was formed by a group of loyal management retirees who gave the company many years of quality, dedicated service. “Our intent has been to help Lucent, but the negative actions of its top executives has made that impossible,” Raschke said.

He pointed out that LRO representatives have offered volunteer services and proposals to help reduce health care costs during two meetings this year with senior executives at Lucent’s New Jersey headquarters. “Apparently, we have been headed down a one-way street because Lucent blind-sided us with these latest reductions in benefits to management retirees.

“Management retirees who ran the business successfully for decades never dreamed the company would renege on the commitments made to them for retirement benefits such as the death benefit, reimbursement for Medicare B premiums and spousal insurance coverage. They made their retirement plans, indeed were encouraged to retire with these benefits at times, and always relied on a strong belief and trust that future management would honor its commitments to them as they had to earlier retirees.”