231 Pinetuck Lane Winston-Salem, NC 27104 336-765-9765
Russo, Chairman & CEO
Dear Ms. Russo,
The LRO has obtained a copy of the Plans for Employees’ Pensions Disability Benefits and Insurance promulgated by the American Telephone and Telegraph Company and its Associated and Allied Companies, dated January 1, 1913 and January 1, 1914. You realize of course that the 1913 Plan originated the American Telephone and Telegraph Pension and Benefits Program.
Based on its clear language, there can be no doubt that the 1913/1914 Plans’ intent was that, while the Administrator of the Plan can make changes “as will more effectively carry out the purpose expressed herein…
…such changes shall not without (the beneficiaries’) consent affect the rights of any person to any benefit, insurance or pension to which he may have previously become entitled hereunder.”
We also are in possession of many documents interpreting and elucidating this clear intent of the original 1913/1914 Plans. None of these documents abrogate the above-stated intent of the 1913/1914 Plans.
The mandate to Plan Administrators and fiduciaries down through the years since 1913 and up to the current fiduciaries and Administrators including yourself and the current Board of Directors of Lucent, expressly forbids Lucent’s 2003 actions of terminating the Death Benefit for those persons who became entitled to receive it.
Ms. Fitzgerald formerly of your staff informed the LRO of the legal rationale Lucent used to justify termination of the Death Benefit. Nowhere in this rationale were the legal implications of the 1913 and 1914 Plans addressed and resolved.
The inappropriate cancellation of the Death Benefit raises not only questions about non-compliance with a cornerstone legal document, but introduces questions about the potential of unsatisfied fiduciary responsibilities as well.
At this point, in the best interests of everyone, Lucent has the opportunity to self-initiate restoration of the Death Benefit and so notify beneficiaries. Taking that action would be a major step toward restoring some of the confidence lost by beneficiaries, shareholders, and the public in Lucent as a corporate entity.
If Lucent chooses to notify beneficiaries of the reinstatement of the Death Benefit, the LRO will applaud its actions and view it as a self-initiated action by Lucent toward fairness and equity to beneficiaries.
In the event that Lucent chooses to continue down the path of denial in hopes of settling current class action suits without an airing in Court of the implications of the 1913 and 1914 Plans on Lucent’s power to terminate the Death Benefit, the LRO will then activate plans for others to evaluate the full range of implications of this document.
Please be assured of the resolve of the LRO in this matter. .
Director Dr. Richard C. Levin