Lucent pensioners up in arms at benefits cuts plan
Lucent pensioners are aggrieved at the prospect of the company slashing retirement benefits as part of latest round of cost savings at the beleaguered networking equipment manufacturer.
Ken Raschke, president of Lucent Retirees Organisation, which has signed up 4,000 members since its formation in February, met with Lucent CEO Patricia Russo and other top executives last week.
Raschke described the meeting as “cordial” to Reuters. However he told the news agency that pensioners are “upset” that Lucent has cut their death benefit and fearful about the erosion of other pension and health care benefits.
A death benefit for pensioners, equivalent to a year’s salary for those retiring before 1998, according to Raschke, was dropped by the company in February.
Lucent's “pension fund” was underfunded to the tune of $7.4 billion at the end of September 2002, according to SEC fillings. Cutting benefits is one way to meet this shortfall. Analysts speculate Lucent could half its health insurance outlays by restricting coverage to claims of $5,000 or above.
The Lucent Retirees Organisation aims to use its shareholding and influence to oppose such measures.
"Our members are saying they don't want Lucent to balance the company's books at the expense of eroding what has been promised to them," Raschke, the former head of an equipment plant, told Reuters.
Current Lucent workers also face tough times because of the company’s flagging fortunes. Lucent aims to restructure the company to employ just 35,000 employees by September, a third of the workers it employed when its restructuring process began in January 2001. ®