Law and Politics

CWA Charges Alcatel-Lucent with Illegally Raiding Retirees’ Health Care Money

November 25, 2015

Washington, D.C. — The Communications Workers of America (CWA) is seeking a temporary restraining order against Alcatel-Lucent to block its illegal plans to use money slated for retirees' health care to cover its own pension funding obligations.

The motion was filed with the U.S. District Court in New Jersey. The company wants to move 20,000 retirees and an additional $1.2 billion from the Lucent Technologies Pension Plan into other company pension plans that aren't as well funded. In effect, Alcatel-Lucent wants to subsidize itself with the assets of the workers' plan.  The company has three pension plans – one covering only retirees and surviving spouses, the Lucent Technologies Pension Plan (LTPP); a second covering current workers; and a third covering management. In the court filing, CWA pointed out that the transfer would violate the current collective bargaining agreement between Alcatel-Lucent and CWA.

It also would violate a separate, standing agreement by Alcatel Lucent, CWA and the International Brotherhood of Electrical Workers (IBEW) over the use of excess pension funds to pay workers' post-retirement health benefits; that agreement is in effect through the end of 2019."The transfers, if allowed to proceed, would result in a significant reduction of the amount of excess funding of the LTPP. The bargaining parties intended that those assets be used exclusively to pay, in part, the post-retirement health benefits of LTPP plan participants (current retirees and surviving spouses).  The improper diversion of the excess LTPP assets jeopardizes the ability of the Company to continue subsidizing promised post-retirement health benefits.The likely reduction, or eventual loss, of retiree health subsidies from the LTPP will likely lead to precipitous increases in the cost of the Company sponsored retiree health program which retirees and eligible dependents must bear. 

Indeed, participants in the retiree health program may well find continued participation in it to become unaffordable," the filing noted."This is a new low, even for Alcatel-Lucent," said CWA Vice President Lisa Bolton, who heads CWA's Telecommunications and Technologies sector representing Alcatel-Lucent employees.  "We deeply regret having to take this action while we are embarking on a new relationship with Nokia, but Alcatel-Lucent has left us no alternative." Clearly, Alcatel-Lucent has committed to the use of excess pension fund assets for retiree health care. However, the company's proposed transfer of $1.2 billion to other pension plans means that the fund will be stripped of the assets necessary to generate funds for retiree health care. Instead, Alcatel-Lucent plans to use the assets of the workers' pension plan to shore up another company plan. Instead of making its own contributions into the management plan, Alcatel-Lucent wants workers and retirees to make those contributions. It's the worst kind of corporate raiding," she said. Alcatel-Lucent is putting the health care coverage of retirees and their spouses at risk, CWA pointed out.

November 25, 2015

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