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Last modified:July 13, 2008

Update On Lucent Management Retirees Pension Plan

The LRO's Pension Team has reviewed the latest information released by Alcatel-Lucent about the financial status of the Lucent Management Retirees Pension Plan. Reporting data as of the end of 2007, Plan Assets were $18.994 billion and Plan Liabilities (accumulated plan benefits) were $16.412 billion. Thus, Plan Assets exceeded Plan Liabilities by $2.582 billion. As retirees may remember, following the stock market downturn in 2002 and Lucent’s use of pension assets to pay early retirement pensions, the management pension plan assets were less than its obligations until recently. These amounts at the end of 2007 suggest that the plan is now in somewhat better condition than several years ago. Click here to read the report by the LRO's Pension Team.


Federal Judge Rules Lucent Technologies Violated Law By Failing To Maintain Medical Benefits For Retirees

A news release was issued on June 12, 2008 announcing that a federal district court judge in Newark, N.J. has ruled that Lucent Technologies, now known as Alcatel-Lucent, violated the requirements of Section 420 of the Internal Revenue Code in administering its health care plan for management retirees during the period 1999-2006.

Lucent retiree plaintiffs had charged in a lawsuit filed on October 24, 2005 that, following several transfers beginning in September 1999 of excess pension assets to a retiree health care trust, Lucent failed to meet its "benefit maintenance" obligations for the years 1999 through 2003 and its "cost maintenance" obligation for the years 2004 through 2006, as mandated by plan provisions incorporating these requirements of Internal Revenue Code Section 420.

In a 40-page opinion released the morning of June 12, 2008, U.S. District Judge Peter G. Sheridan ruled that the federal Employee Retirement Income Security Act (ERISA) statute and the intent of Congress were very clear. Companies that take advantage of the special provision permitting transfers of excess pension funds to fund retiree health care benefits must comply with strict requirements that for a period of five years benefits be maintained at the same level as in the year preceding the first transfer. This "maintenance of benefit" rule was triggered by Lucent's first transfer of approximately $183 million on September 29, 1999.

The court ruled before trial on motions for summary judgment that the evidence at least established that Lucent breached its obligations to maintain benefits for the year 2003. Regarding the other years in the period 1999-2003 that are in dispute, the court ruled that the evidence did not permit a determination one way or the other and ordered discovery to continue as to Lucent's liability for years 1999 through 2002 under the "maintenance of benefit "rule as well as Lucent's liability for "maintenance of cost" for the years 2004 to 2006.

"This is a significant victory for Lucent retirees who have seen the cost of their company-sponsored health care insurance increase substantially since 2000," said Alan Sandals, lead attorney for the Lucent retirees. "While the court believed that the evidence assembled so far only permits a determination of a violation during the year 2003, we believe that further discovery and analysis will lead to findings of violations during other years as well."

The lawsuit challenged Lucent's reductions and terminations of retiree medical and prescription drug benefits, as well as increased co-pays and increased contribution requirements after the company made transfers from the management pension trust fund totaling $ 888.2 million to offset Lucent's obligations to pay for retiree medical benefits. Congress enacted strict conditions to ensure that participants did not experience benefits reductions at the same time the funding of their pension plan was being tapped by the employer.

The lead plaintiffs in the proposed class action lawsuit are Peter and Geraldine Raetsch of Reading, Pa. and Curtis Shiflett of Macungie, Pa.

"We commend the Lucent retirees and their attorneys for standing up for the rights of all Lucent retirees," said Andy Guarriello, President of the Lucent Retirees Organization. "Although the LRO couldn't be a plaintiff in this type of lawsuit, we have closely followed the case and provided the plaintiffs' attorneys with documents relating to the company's benefit plans."

Click here to read the entire news release.
Click here to read the court's order.
Click here to read the court's decision.


LRO Creates New Message Board For Members’ Use

Due to problems encountered with the previous supplier of the LRO Website Message Board, a new Message Board has been created with a different vendor.

The LRO Message Board can be accessed at www.board.thelro.org . Access can also be gained by clicking on Member Services and then selecting Member Message Board from the drop-down menu. Nearly 2,000 LRO members have visited/registered on the LRO Message Board in the past. We hope these individuals and more members will make use of the new Message Board.

Message Board visitors can read postings without registering. However, in order to post a message, you will need to click on the “Register” box at the top of the page and follow the instructions to register as a Message Board user. This registration is independent from your registration as an LRO member. If you choose to register on the Message Board, you will receive a welcome message from msgboard@thelro.org. Please put this email address in your address book, so that messages from the Message Board will not be rejected by your spam filter.

Message Board Forum topics include Health Care and Prescription Drug Plans, Retirement Issues, Legislative Initiatives, Alcatel-Lucent Business, Pensions and Suggestions to LRO. Other Forum topics can be added as needed. The LRO encourages you to use the Message Board to pass along information and to stimulate online dialogue on issues of interest to Lucent retirees.


LRO Spring Newsletter Is Available To Be Read

Click here to read the LRO Spring Newsletter. The LRO hopes you will find the new format of the newsletter attractive and easy to read. You will need Adobe Reader software to be able to open the newsletter. If you do not have Adobe Reader software, please go to the link and download the latest version of the FREE Adobe Reader:


Three-Judge Panel Hears Oral Arguments In Death Benefit Case Appeal

A 1-hour oral argument was held April 16, 2008 before a three-judge Panel in the Third Circuit Court of Appeals in Philadelphia on the appeal from summary judgment and dismissal in favor of Lucent in the Death Benefit lawsuit brought by Lucent retirees. Chuck Graves, LRO Legal Team Director, and several LRO members attended the hearing. Click here to read Chuck's summary of the hearing.


Lucent Retirees Have Right To Medco's Grievance Process

The LRO has received a number of emails and phone calls from Lucent retirees on Medicare who have encountered various problems in dealing with Medco for their prescription drugs under Medicare Part D. The LRO wants you, as a participant in Alcatel-Lucent's Medco Prescription Drug Plan, to understand that Medco is a Medicare contractor. As such, you have a right to file a grievance on any type of problem encountered with Medco or one of its network pharmacies.

A number of Lucent retirees have reported that filing a grievance has produced satisfactory results. The Medicare grievance procedure is posted at http://www.lucentretirees.com/BenefitsTeam/docs/CMS-grievances-part-d.pdf . It describes the reasons for filing a complaint or grievance. Page 23 enumerates the problems with enrollment and disenrollment that many retirees have reported.

The address to write to about your problem is:
Medco Prescription Drugs Service Grievance Resolution Team
P. O. Box 639405 Irving, TX 75063-9405

There is a toll-free number 1-800-230-0512 that you can call with specifics to file a complaint. The address for the Medco website is www.medco.com, but you may need to register before you get access to relevant Web pages.

Please tell us with an email to benefits@lucentretirees.com what worked for you in dealing with Medco, or what problems remain so that the Benefits Team can work to clear these before the next enrollment period.

Also, if you're approaching age 65 for Medicare eligibility, be sure to visit the Benefits Team Home Page at www.lucentretirees.com/BenefitsTeam to guide you in the important decisions on Medicare coverage.


LRO Seeking Data On 2008 Premium Costs For Alcatel-Lucent Healthcare/Prescription Drug Plans

The LRO Legal Team is interested in gathering data from LRO members on what your 2008 premium costs are for your Alcatel-Lucent healthcare/prescription drug coverage.

 In the 2008 Open Enrollment "yellow envelope" that you received there is a sheet of paper on "Benefit Choices" (probably Page 3). At the top of that page, please write your name, age and retirement date and circle the monthly premium dollar figure next to the medical plan you enrolled in for 2008. As soon as possible, fax the page to Chuck Graves at 512-266-2696. If you do not have a fax machine but have scanning capability for your computer, you may scan the page and email it to Chuck at jgraves@austin.rr.com.

The information you provide will be kept private and confidential. It is truly urgent that the LRO gain a good sampling of the "Page 3" data. Premium data of sufficient sample size is a component of the analysis of whether and how Alcatel-Lucent is providing the level of benefits it claims to be providing and whether the company's offering represents inferior healthcare benefits to Medicare-eligible retirees vs. under age 65 Lucent retirees. Your assistance is important to this data gathering effort.


Reminder To Regularly Visit LRO Benefits Team Web Pages

LRO Members are reminded to regularly check the LRO Benefits Team web pages for healthcare and prescription drug information.
 Click here to go directly to the Benefits Team Home Page or click on the Benefits tab at the top of this Home Page. Once on the Benefits Home Page, click on the "Rx Tab" for updated information about prescription drugs.


LRO Still Seeking Older Pension & Benefit Documents

The LRO appreciates that many members have responded generously to the LRO’s request for pension and benefit papers to build the LRO Documents Library.  We now have copies in our data base of many pension, medical, dental, death benefit and life insurance plan documents and correspondence from about 1980 to the present. The LRO is still seeking older pension, life insurance and benefit plan documents and correspondence from the 1970s and earlier.  If you have or know of other Lucent retirees who may have any documents and correspondence from this period, the LRO would appreciate learning about them. Click here to learn how you can help expand the LRO Documents Library.


Privacy Statement: The LRO endeavors to protect the privacy of personal information provided through membership registration.  Your information will only be used for purposes related to the LRO's mission and will never be released for purposes not authorized by the LRO Board of Directors.  Members who do not want their names and email addresses accessed by other LRO members should click here to opt-out

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