LRO Leaders Place Intense Focus On Needs Of Lucent Retirees

          A Report on the LRO Annual Meeting on March 26 and 27


Presentations, intense discussions and a coming together on the key initiatives to be addressed by the LRO in 2004 were the results of the LRO leadersí meeting in Dallas on March 26 and 27.

LRO President Ken Raschke set the tone for the meeting with his opening remarks, recognizing the outstanding progress that had been made in a little more than one year. He challenged the group to use their time together to focus on the needs of Lucentís retirees and develop explicit action plans for the next nine months.

The meeting opened with a presentation by Walt Ehmer, Southeast Region Director, who conducted an opinion survey sent to LRO members who have email addresses.  Since 10 percent of those receiving the survey responded, there is a fairly broad sampling of membersí opinions.  As might be expected, the overwhelming priorities of respondents are for the LRO to continue its efforts to protect retireesí pension and health care benefits, along with attempting to restore the death benefit.  An in depth report on the survey and the actions to be taken on much of the feedback is being prepared and will be posted on the website when completed.

A presentation on the LROís accomplishments since its creation in January 2003 was made by Ed Beltram, Communications Director.  Click here to read the list of significant accomplishments.  Joe Sciulli, Website and Membership Data Base Administrator, reported there are 7,238 registered members and of this number 5,619 have email addresses.  Joe discussed developments in progress to assist Region Directors to communicate more effectively via email to members in their regions.  He also outlined enhancements planned for the LRO website and the administrative data base.

LRO Treasurer Bob Janish reported on the LROís financial status.  The financial details were reported in the LRO Annual Report for 2003 & Spring 2004 Newsletter that was distributed to members via US Mail and email on March 23.  Bob emphasized the need for all registered members to become dues-paying members so there will be sufficient funds available to support the actions planned by the LRO.  These expenses include paying accounting and legal experts for audits and advice on Lucentís activities with the pension and health care trusts; covering costs for the website, emails, newsletter printing and mailing, and travel and conference call expenses for leader to communicate and have face-to-face meetings with Lucent executives.     

            Bill Kadereit, LRO Public Affairs Director, and members of the PA Task Force reported on their vision to develop a more effective government relations program, create information tools, provide improved legislative knowledge and services to members and strengthen the LROís ability to influence political action at all levels. An online legislative library is being developed on retiree-focused legislation, statutes and codes.  Region Directors were called on to create retiree coalitions in each state who will have regular and meaningful contact with members of Congress.  Bill, who is also the LROís representative on the board of directors for the National Retirees Legislative Network, will position the LRO PA agenda with common elements of the NRLNís legislative program.

            Key among these common objectives is to have Congress repeal or sun set Sec. 420 & 401(h) trusts that are a license for executives to exhaust pension trusts to enhance corporate profits rather than preserve them for retiree payments, including COLA.  There will be an effort to initiate legislation to modify ERISA regulations to set restrictive conditions that minimize the removal of surplus funds from pension trusts.  In addition, there is a desire to require pension trust fiduciaries to select an asset allocation model that parallels that of the PBGC (Pension Benefit Guaranty Corporation) and other conservative models and to name independent fiduciaries exclusive of Lucent management.

            Walt Ehmer reported on his experience at the Lucent Annual Meeting held February 18 where the LRO-supported proxy to limit executives ďgolden parachutesĒ received 65 percent of the shareholder votes cast.  Strategies were discussed for pressing Lucent to adopt the non-binding resolution as policy.  Walt urged all LRO board members to attend the next Lucent Annual Meeting along with a large contingent of LRO members.  A three-member committee was formed to begin deliberations on what proxy resolutions the LRO would sponsor for the next annual meeting.  Also, there was a discussion on the best ways for the LRO to attract the support of Lucentís independent board members. 

            Lola Hotchkis, Chair of the LRO Health Care Committee, participated by conference call to lead a discussion on problems that members are encountering with Lucentís health care coverage providers.  A strategy was agreed on to address Lucentís communications and administrative problems in providing these services, especially since a growing number of retirees are paying for services they had expected were an entitlement.

            Jeff Purtell, a special advisor to the board on benefits issues, made a presentation on Lucentís cancellation of the death benefit.  LRO board member Mike Bard, a retired Lucent attorney, discussed (via phone) his interface with the Chimicles law firm and the Sandals law firm that have filed separate class action lawsuits on behalf of their clients as the result of Lucentís cancellation of the death benefit.  Chuck Graves, a LRO board member and retired Lucent attorney, participated in the discussion, explaining that a library of documents being supplied by members is being created for potential use to demonstrate that Lucentís elimination of the death benefit was improper. 

Several hours of the meeting were devoted to presentations and discussions focusing on months of work that has been put into researching financial disclosures that Lucent is required to file with the Securities and Exchange Commission and other federal agencies.  Bill Kadereit went through the details of his research regarding Lucentís movements of funds in the pension trusts and the questions that he has identified.  LRO board member Herb Zydney provided an in depth explanation of his meticulous study of Lucentís health care trusts and the questions resulting from this examination.

The LRO board appointed a search committee to identify an attorney or law firm with extensive experience in ERISA law, regulatory standards, pension welfare benefits, and age discrimination that might provide professional guidance is addressing questions about Lucentís administration of the pension and health care trusts.

In wrapping up the meeting, the board spent considerable time on identifying a series of specific actions to preserve the pension plan, conserve benefits, address possible abuses of the trusts, further investigate the legality of Lucentís elimination of the death benefit, and endeavor to bring greater fiduciary accountability.  Details of these objectives are not being disclosed at the present time so that the LRO strategy is not evident to Lucent.

Vice President Eli Shaff commended the dedication of the group, singling out the contributions of various individuals during the inaugural year and soliciting their continued support in the months ahead.

The ambitious objectives that were reaffirmed and new ones advanced out of the meeting underscore the importance of continuing to grow the LRO in terms of the number of members and financial strength.  Every retireeís help is needed to sign up more dues-paying members and volunteers willing to provide the LRO with their time and talents to advance the well being and interest of all retirees.