News Release            Lucent Retiree Organization

(Contact information at end of news release)




Retirees Critical Of Lucent Technologies As Company

Announces Huge Increases In Health Care Premiums


NEW YORK – The Lucent Retiree Organization (LRO) today was critical of Lucent Technologies after the company again announced plans for huge health care insurance premium increases in 2006 for management retirees and their dependents.

“Lucent executives rightly communicate how well the company is doing financially to Wall Street while, at the same time, requiring their retirees to take on an ever increasing share of the cost of their well-earned health care benefits. ” said Ken Raschke, LRO president.

Some 30,000 management retirees have been notified through a mailing from Lucent that their monthly health care premiums to cover them and their dependents will be raised as much as 39 percent effective January 1, 2006. 

Further, Lucent has claimed that after September 30, 2006 retiree health care benefits will be discretionary.

“Lucent continues to place the burden of its profitability on the pockets of management retirees,” Raschke said.  “We believe that the more than 30 percent increase in health care insurance premiums is unwarranted.  An October 10, 2005 report by Hewitt Associates is projecting a 9.9 percent average increase in health care costs for employers in 2006.”

The LRO president noted that his organization, which embraces the interests of 235,000 retirees and their dependents, has repeatedly requested financial records on how Lucent spends money from the health care premiums paid directly to the company which is self-insured. The company has steadfastly refused to do so. 

“We want to trust that retirees’ premium payments are being properly handled, but we have not been allowed to verify that is happening,” Raschke said.

Raschke said he has received emails from retired couples documenting that their health care premiums have risen from $42 per month in 2001 to $516 per month in 2005 and will jump to $690 per month in 2006.  

“Lucent executives apparently believe they have a legal right to make these huge increases in health care premiums that will drive many retirees and their dependents out of Lucent’s health care plans,” Raschke said.  “This is morally wrong.  We believe retirees earned through decades of their labor the right to health care benefits at a reasonable cost.  Time and again when we were employees, the company told us that a portion of our salary was being deferred so we would have a secure pension and benefits during retirement.  It is our deferred compensation that Lucent is eliminating to increase its profits.”

“Retirees have had to reduce their standard of living or return to work to pay for their health care coverage,” said Raschke. “This is unconscionable when Lucent’s earnings per share in 2004 were the second highest in the company’s history, cash flow per dollar of revenue was the best ever and 2005 profits appear to be solid.

“Lucent reported that its contributions for postretirement benefits were $27 million in fiscal 2004, barely three-tenths of one percent of revenues, lower than in 2001 when revenues were double at $21 billion.  It is obvious that retirees are sacrificing while compensation for top executives is at record highs.”

Raschke pointed out that in addition to Lucent’s current profitability, on August 31, 2005 the company received a $902 million refund, including interest, from the Internal Revenue Service.

 “I sent a letter to Lucent Chairman and CEO Patricia Russo requesting that some of the refund be used for retirees’ health care,” Raschke said.  “Ms. Russo responded that the refund would be used for ‘corporate purposes,’ not retirees.

In an effort to combat the cuts in benefits, Raschke said the LRO is working with the National Retiree Legislative Network in an effort to get Congress to pass HR 1322 that would prevent employers from breaking commitments on health care benefits to retirees.

Lucent’s reductions in benefits to management retirees continues to mount year after year.  On February 1, 2003 the death benefit of one-year’s salary paid to a surviving spouse was eliminated.  On October 1, 2003, Lucent eliminated the reimbursement to retirees and spouses for Part B Medicare coverage.

On January 1, 2004, Lucent no longer paid for management retirees’ and dependents’ dental coverage, but does provide access to Lucent's dental plan at their group rate if paid by retirees. Also on this date Lucent eliminated the health care premium subsidy for the dependents of management retirees who retired after March 1, 1990 and had made a salary of $87,000.

On January 1, 2005, Lucent no longer subsidized the cost of medical coverage for dependents of management retirees who retired on or after March 1, 1990, and whose annual salary at retirement was $65,000 or higher.

“If, in dealing out these benefit reductions, Lucent has failed to adhere to its own benefit plan documents, or to the intent of the AT&T Master Trust that set up the Plans, or to federal regulations that assure ongoing maintenance of benefits following transfers of surplus pension assets to a health care trust, the LRO will seek redress of members' losses with all its resources,” Raschke said.


About the LRO

The Lucent Retirees Organization was chartered in January 2003 in the state of New York.  The LRO embodies the interests of 235,000 retirees and dependents.  Membership in the LRO is composed of individuals under the Lucent pension plan, including all Lucent and Bell Labs retirees, and those who retired when the company was known as Western Electric and/or AT&T Network Systems, plus subsidiaries such as Teletype and Sandia.  The LRO is a member of the National Retiree Legislative Network and allied with retiree associations from other major corporations.  For more information about the LRO go to  




For More Information Contact:

Ken Raschke                                        Ed Beltram

Phone: 336-765-9765                             Phone: 719-687-6157

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