231 Pinetuck Lane Winston-Salem, NC 27104 Phone: 336-765-9765
August 3, 2004
Employee Benefits Security Administration
U.S. Department of Labor
200 Constitution Avenue NW – Room N5625
Washington, DC 20210
Jack Hardy, Branch Chief of the Securities and Exchange Commission recommended that I write to your agency for help. The Lucent Retirees Organization (LRO) has endeavored to be an advocate for pensioners to obtain answers from Lucent about its investments of monies to secure the future of Lucent retirees. However, Lucent has thwarted our every attempt to gain information that would help 235,000 Lucent retirees and their dependents sleep better at night knowing that their pensions are secure.
Our concerns about our pensions are underlined by a front page story in the New York Times this past weekend concerning the precarious status of the Government’s Pension Benefit Guaranty Corporation. According to the Times, possible pension defaults by major airlines could lead to a national pension scandal comparable to the Savings and Loan debacle of the 1980’s and necessitate a multi-billion dollar taxpayer bailout.
I am writing to ask your agency’s guidance on what can we do when Lucent has recently turned down our request for a face-to-face meeting to address proposed agenda items on our health care trusts. In addition, Lucent Chairman and CEO Patricia Russo rejected the LRO’s request for an independent audit of the pension trust funds. In both these instances Lucent gave written responses that left us feeling the assurances were far from adequate to give us confidence
the funds to support our pensions and benefits are safe and being properly managed.
What’s a retiree to do when we read almost daily that companies have defaulted on their committed pensions and other earned benefits? How can a retiree not worry when we read reports from the Securities and Exchange Commission that it levied a $25 million penalty against Lucent for its “lack of cooperation” in the SEC’s investigation of securities fraud charges against Lucent? Are retirees just supposed to depend on prayer alone that something similar hasn’t happened with the administration of their pension and health care trust funds?
On March 29, the Wall Street Journal published a lengthy front-page article that revealed: (1) How Lucent has been able to use assets from pension and benefit trust funds to help it pay for repeated rounds of downsizing; (2) How—thanks to accounting rules—Lucent received hundreds of millions of dollars of income from the pension and benefit trust funds; (3) How through a separate accounting maneuver, the cuts that Lucent made in the benefit plans last fall will contribute hundreds of millions of dollars more in income over future years, and (4) How in most years the pension and retiree benefit plans have enhanced Lucent’s earnings, not burdened them.
After reading an article like this, how can retirees who have had their survivor’s benefits and health care coverage eliminated or severely reduced accept Lucent’s “trust me” response that their pensions are secure?
The LRO embodies the hopes of men and women in their “golden years” who don’t want to have happen to them what retirees of Enron and WorldCom have had to endure. We need your help. What support can the Employee Benefits Security Administration provide to Lucent retirees who want genuine assurance that their pension and benefits trust funds are protected? Will your agency agree to perform an independent audit of Lucent’s pension and benefit trust funds? Please ask someone from your agency to contact me so we can establish a dialogue. If your agency cannot help us, please contact me personally and let me know to whom in our government we should turn for assistance.
K. O. Raschke
Richard Burr - United States House of Representatives
Jack Hardy - Securities and Exchange Commission
Tom Harkin - United States Senate
Ralph Maly - Communications Workers of America
A. J. Norby - National Retiree Legislative Network
William D. Novelli - AARP
Ellen Schultz - The Wall Street Journal
John F. Tierney - United States House of Representatives
Mary Williams Walsh - The New York Times