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1999 Straight Talk Archives

Another Unsung Hero

In addition to driving the Sears casket for lost values to our meeting in Atlanta, Leo McCormack also provided the over 50 signs that were carried in our demonstration. We thought you might be interested in a sampling of the content of some of those signs:

bulletMr. Martinez, we were family until you came along … General Wood is spinning in his grave.
  
bulletSears is unfair to retirees … restore promised insurance.
  
bulletIt appears the Board of Directors has been overlooking instead of overseeing …. Do your job! Hold Arthur accountable.
  
bulletBoycott Sears … unfair to retirees and employees.
  
bulletReunite the Sears family … restore survivors’ earned death benefits.
  
bulletLife insurance benefits living survivors … honor Sears promises … restore benefits.
  
bulletRest in peace … Sears principles … Sears integrity … Sears promises …Sears trust …Sears truth.
  
bulletSears robs widows

We owe Leo our thanks for a job well done. A lot of people got our message because of his message and hard work.   

   (May, 1999)     

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One Retiree’s Reaction to the New “Retiree News”


Monday, May 3, 1999

Sears Retiree News BC-180B
Sears, Roebuck and Co.
3333 Beverly Road
Hoffman Estates, IL 60179

You asked for input, so here it is.... You folks, might do more good for the retirees by taking the money you spend on producing the "News Letter" and apply it to the life insurance that Sears is trying to cheat us out of. I noticed nothing was mentioned about the pending class action law suit now sitting in a Chicago court. I also noticed there was no mention of the NARSE, National Association of Retired Sears Employees. (www.narse.org) There's more news there as to what's going on with Sears than is in your news letter. Now, I know you're not going to publish anything related to NARSE, because there's almost nothing positive there. SO.... heads up guys, there's a message here. If you want to publish a "news letter" then address the facts. This letter pops up at a curious time and appears to me to be an attempt to "pacify the masses" because of the events related to the insurance thing and other disasters brought about by the powers that be. Sounds like just another PR campaign to try to make us "feel better" about the company. Sears..... make us feel better by doing what's right and fulfill a promise made long ago. Don't try to improve your bottom line by standing on the backs of us old folks that gave so many years of service.

David B. Lawrence Retired,
37 1/2 years from unit 8309
  

(May, 1999)    

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Family Planning

This past holiday season, Earl Pleticha forty-three year Sears employee and retired store manager met with his wife, three children, ten grand children, two great grand children and discussed why they were no longer shopping at Sears. Earl explained to them Mr. Martinez's decision to take away their inheritance of his retiree life insurance benefit. Earl went on to explain this benefit was to be paid to his beneficiaries upon his death. But now there would not be enough to pay his funeral expenses. These monies are being taken from them and Sears was breaking it's word and promise to it's retirees. Earl went on to say shopping at Sears would only condone what Mr. Martinez had done to them. Earl urged his children to tell their friends and school mates not to shop at Sears. Mrs. Pleticha commented for her this was going to be difficult as family members would no longer be receiving Sears apparel as gifts and the announced she has already made this sacrifice and was shopping elsewhere.

Her goal now is to tell church members, neighbors and friends not to shop at Sears and why. 

(April, 1999)    

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Phoenix Team Lays Out a Special Welcome Mat

N.A.R.S.E. Vice President, Art Levin, and 18 members of his "road runner” Phoenix retiree club welcomed King Arthur,s 200 top executives at their R&R/March meeting at the luxurious “Phoenician” resort hotel. The enthusiastic demonstrators (many of them veterans of last years welcoming committee) wore "fashionable yellow T-shirts" and carried signs showing their true feelings towards Arthur's decision to take well earned money and benefits from their families. They demonstrated from 9 am to 12:30 and exchanged waves with the vans depositing Sears executives at the hotel. Passing pedestrians asked questions and voiced strong support. Our retirees enjoyed the loud agreement of hundreds of motorists who took the time to read the signs and voice approval by honking and showing thumbs up. We thank the “road runners” for their great effort and effectiveness in representing all Sears retirees. Consider how many people learned in Phoenix in one morning that there is something very wrong at Sears. They may not know all the details, but they do know that Sears is against senior Americans. Will those hundreds and hundreds of thousands nationwide remember this strange corporate posture when considering a purchase or a shopping location? Thanks to the actions of so many Sears retirees, that question is already being answered with a resounding YES from the American public.... just look at about 18 months of company performance for confirmation.  

(March, 1999)     

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Mel Schultz Reacts to Chicago Tribune’s Analysis of Stone Formation at Hoffman Estates

Editor, Chicago Tribune Magazine 435 North Michigan Ave. Chicago, IL 60611

Your March 7 issue features an article "Turning to Stone -- the Rocky Road to spirituality," and pictures a 1,800 ton stone formation created for Sears Roebuck's Hoffman Estates headquarters, "signifying permanence, power and earth- friendliness."

Retired employees of Sears will recognize the irony of this symbol and understand how well it reflects the attitude of current Sears top management, which has retroactively reduced the promised and earned Life Insurance of 84,000 retirees, many too old or ill now to get life insurance on their own.

You can talk about "permanence, power and friendliness," but not with a straight face to any Sears retiree who paid at least ten years for their life insurance while they worked, and were assured repeatedly that it would be free to them - paid up and permanent - after they retired.

A more appropriate title for Sears symbolic pile of limestone would be "heart of Stone."

Sincerely,
Melvin J. Schultz
                                                            

(Mar, 1999)       

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Thoughtful Retiree, Tom Humphrey, Offers Retiree Family Tip

"The U.S. Census Bureau is gearing up to perform the year 2000 census and is in need of part-time help now and in the year 2000. Would you please mention this in the next newsletter. I thought it would be an excellent opportunity to earn some extra dollars." Thank you, Tom Humphrey

 (Mar, 1999)      

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Dues and Taxes

The dues that you pay to NARSE are not deductible as a charitable contribution. These dues , however, may be deductible as a miscellaneous itemized deduction. Please consult your tax advisor. 

  (Mar, 1999)       

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A Sad Quote from U.S. Trustee J. Christopher Marshall

“The Sears prosecution highlights the consequences when Corporate America blindly pursues profitability over their obligation to treat the consuming public with fairness and honesty.”

  (Feb, 1999)      

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Sears Board - January Update

In an effort to keep Arthur’s bosses informed, Ev Buckardt sent the following to the members of the Sears Board of Directors:


Dear Sears Director,

Sears dismal performance underscores what can happen when the company loses focus on its core business. Please know how it has effected the price of Sears stock; year-end closing stock prices 1995 -- $39, 1996 -- $46, 1997 -- $45, 1998 -- $42.

What might be the cause? Could it be the compounding impact of unprecedented executive turnover, floundering Off the Mall strategy, credit extended to hundreds of thousands who failed to pay, failed Softer Side of Sears campaign, the dismantling of a once successful automotive businesses, jettisoning of Home Life, Craftsmen tools losing market share, acting on "flawed advice" from legal advisers/retail consultants, adverse publicity from television exposes and class-action lawsuits, loss of sales from thousands of former Sears best customers (retirees, their families and friends) who no longer shop at Sears.

What is happening - who is mining the store? Have short-term goals put the company at risk long-term? Which remaining pieces of the company might Martinez sell? May I speculate -- Sears Canada, Sears services, Sears logistic services, creation all of a REIT, Sears credit, merging and/or selling Sears Roebuck and company as an entity.

How unfortunate for chairman Martinez to admit that Sears customers prefer to shop at discount stores. Little wonder sales are weak and the organization is floundering from lack of direction. Knee-jerk decisions such as centralizing marketing (deja vu), slashing an advertising plan, and doubling apparel merchandise discounts for associates and retirees sends signals that a business is in trouble. Senior insiders tell us "things have never been as bad as they are today." Many are hanging on for an exit package or early retirement. Who must be held accountable?

Warren Buffett recommends interviewing former executives before investing in a company. He would find departing Sears executives have exercised their options and sold their stock. Doesn’t it seem reasonable that former insiders would hold their stock for a more favorable price assuming each had confidence in Sears future?

Your challenge is immense! It is quite evident chairman Martinez's strategy is flawed. As a retired Sears officer (33 years service, 1959 to 1962) it saddens me to witness one man's dismantling in six years what took thousands of dedicated men and women more than 100 years to create. Hopefully, the Board is shareholder friendly, has the collective resolve to make tough decisions, and halts the impending demise of a great company. To start, you could gain the support of 84,000 retirees and send a clear message on integrity for the long-term good of the company by rescinding Arthur Martinez's decision to raid the earned life insurance benefit of retirees.

I will attend the 1998 annual shareholders meeting in Atlanta, Georgia.

Sincerely,
Everett L. Buckardt

       

 (Feb, 1999)      

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 Retiree Medical Concerns: HMO's,
Sears Retiree Service Center, and More

In response to many retirees being in a state of shock when they received huge cost increases in their 1999 H.M.0. billing, Claude Ireson asked Dick Bruce to research the subject and to report at the N.A.R.S.E. annual meeting on December 19. Dick's report follows, and he does an excellent job of providing some history on a difficult subject. His work is intended to help Sears retirees understand and clarify the roles of Sears and H.M.O.s. More importantly, Dick is trying to explain a confusing subject in a manner that helps all of us understand how a number of factors have changed a simple, modest cost H.M.O./Sears decision into a complex, in many cases, terribly expensive decision.

It has to be said that no one at N.A.R.S.E. claims benefit expertise. We do feel a need to communicate things that we learn that might be helpful to Sears retirees. But, retirees should consult Sears, the Retirees Service Center, H.M.O.s, etc. for the heavy-duty information needed to support their personal decision-making.

Since our December meeting, the Retirees Service Center has suffered some major problems. N.A.R.S.E. VP Gordon Muschett has taken a strong leadership position on some health coverage and related subjects. His Jan. 7 writeup describes the difficulties at the Retirees Service Center. His correspondence to Benefit VP Rossman, his assessment of the problems and their causes, Liz Rossman’s fax in response to Gordon, and her letter to Sears unit managers follow. In an effort to simplify, each subject will be identified separately.

We are blessed with people like Dick Bruce and Gordon Muschett and thank them for caring so much for their retiree family members.

DICK BRUCE -- SEARS MEDICAL INSURANCE PLANS ANALYSIS

Prior to 1978, there was one medical plan for everyone. Then, as different medical plans were offered, a national benchmark for Sears contribution was established yearly by taking a national average of the costs of all medical plans. Consequently, Sears contribution to retiree medical plans for pre-65 retirees were based on a national average which resulted in some very low retiree premiums for low cost HMO's. This also resulted in different rate structures for retirees depending on the year they retired. You should know, that the amount of Sears contribution per person, which varied upon the year of retirement, was "frozen" in 1996. This "frozen" 1996 dollar amount is what Sears has and will pay each subsequent year for medical plan coverage. This applies to Sears PPO Plan and Sears offered HMO plans for pre-65 retirees, and Plan "E" and Medicare HMO plans for Medicare eligible retirees. All Sears associates who retired after 1995 have been reclassified into years of service classifications (i.e. 30 plus, 25 to 30, 20 to 25). Sears' contribution for each class ranged from 75% to 55%. The dollar amount of Sear’s contribution for each class at year of retirement is then "frozen" for future years. For associates retiring after 1995, Sears' has contributed only 50% of the amount paid for the retiree medica coverage, for the retirees spouse's medical coverage. Sears is now using a bench marking system by state for active associates to determine the amount of Sears' contribution for all associates in that state. The amount of contribution is calculated by taking 70% of the cost of the least expensive Sears medical plan offered in that state (PPO or HMO). Currently, there are over 2,000 medical plans rate structures in effect in over 200 different medical plans.

DICK BRUCE -- ANALYSIS OF 1999 RETIREE MEDICAL PLANS

Benefit coverage's provided by Sears PPO Plan (the former Health Care Alliance Plan and Sears Group Medical Plan have been combined into the PPO Plan), and Sears offered HMO's is identical for Sears active associates and pre-65 retirees. Pre-65 Retiree contributions are generally, but not always higher than active associate contributions. The following are two major factors which will probably cause pre-65 retirees contributions to increase significantly more than those of active associates:

A) Sears "frozen" dollar amount of contribution.
B) Pre-65 retirees are no longer included with the entire Sears population, but are now part of a separate 50-65 year old Sears insured population for the cost of coverage experience.

The higher cost of benefits paid to this older group generally result in higher premiums charged. As long as Medicare eligible retirees remain in a Sears offered medical plan (billed through the Retiree Service Center) they can drop one plan and join or rejoin the other. For example, a Medicare eligible retiree can discontinue Plan"E" and join a Sears offered Medicare HMO, and the following year drop the Medicare HMO and rejoin Plan "E". However, it is extremely important to remember, that if Plan "E" is dropped and a non-Sears Medicare HMO is joined, the retiree cannot rejoin Plan "E", even if the Medicare HMO subsequently becomes a Sears offered Medicare HMO. It is very important to carefully check Medicare HMO's which appear to offer expanded benefit coverage for dollar amount limits on benefits paid.

GORDON MUSCHETT . . . JAN.7 
DESCRIPTION OF
RETIREE SERVICE CENTER DIFFICULTIES

I am hoping that this message may be of some assistance to very concerned, frustrated and worried retirees regarding their health care and vitally needed prescription medical plans. I was concerned that some retirees would be falling through the "cracks". Be advised that earlier today, I talked personally to Sears Vice President of Human Resource Liz Rossman and her assistant, Mary Misar. I advised them that there is an extremely serious problem at the Retiree Service Center. Rossman advised that she has been working on the problem all day with her staff and just completed discussions with the top executives of MetLife. The Service Center was literally bombarded by telephone calls, receiving over 5,000 calls yesterday, a volume that was simply beyond Sears wildest dreams and which they simply couldn't handle! The calls, in my opinion, were mitigated by the lack of adequate communications to retirees from Sears and the Center. In many parts of the country, many HMO's did not renew contracts with Sears, HMO's significantly increased their costs, or the HMO's dropped the market. I advised Rossman, that may retirees did not receive any information regarding Health Care options that supposedly were sent out in October. Still others, where health care was not being offered in their community, did not receive information relevant to Plan "E" and the prescription medical plans. In many cases, membership cards have not been sent, nor prescription medicine card and retirees are running out of needed medicines. Others have received no billing which should have been due at the first of the month. In some markets, the costs of pre-medicare retiree health insurance jumped from $57 per person a month to a staggering $374! It appears that the HMO's, who have been losing money servicing the accounts, have really socked it to the retirees.

Rossman, Misar, and I reaffirmed the need for better communication with retirees and suggested consideration of an email and fax sites. They are presently working on an email address and Sears Human Resources will advise as soon as established. The Retiree Service Center is "out-sourced" by Sears and serving other firms such as Allstate, GM, and others, however the individuals in the Sears section should be able to adequately answer all you questions, providing you can get into them. >From Headquarters, 15 or more additional personnel will be sent to the Center by Monday to assist in the workload and attempt to unsnarl the attendant problems. Further, I discussed with Rossman and Misar, the need for consideration of putting both retiree and active associates centrally under the Sears umbrella for better service and communications. They are studying the issue.

GORDON MUSCHETT LETTER TO LIZ ROSSMAN, SEARS BENEFITS VP


January 9, 1999

Ms. Liz Rossman Vice President - Benefits
Sears Roebuck & Co.
3333 Beverly Road
Hoffman Estates, IL 60179

Dear Liz,

Thank you so much for taking the time to discuss with me the situation at the Retiree Service Center. Again, we wish to thank you for the prompt actions you and Mary Misar initiated. From the calls, messages, faxes, and email that I've received, there are thousands of Sears retirees that are very concerned, frustrated, and worried regardingtheir health care and vitally needed prescription medical plans. My concern is that some retirees may be falling through the "cracks". It is obvious that there is a communications problem between HR, the Retiree Service Center, and the retirees. Since the loss of the long promised paid-up retiree life insurance, retirees no longer trust Sears and Arthur Martinez. Martinez promised improved communications at the last Shareholders Meeting in Chicago….we’re still waiting to receive. There is a very deep animosity which has generated a public relations problem that incurred with the loss of the long promised paid-up retiree life insurance and lack of communications from the Company. Retirees are now blaming Sears for the increased HMO costs and we must somehow clarify the situation.

As you are aware, In several parts of the country, many HMO's did not renew contracts with Sears, HMO's significantly increased their costs, or the HMO's dropped the market. Many retirees did not receive any information regarding Health Care options that supposedly were sent out in October. Still others, where health care was not being offered in their community, did not receive information relevant to Plan "E" and the prescription medical plans. In many cases, membership cards have not been sent, nor prescription medicine card and retirees are running out of needed medicines. Others have received no billing which should have been due at the first of the month. In some markets, the costs of pre-Medicare retiree health insurance jumped from $57 per person a month to a staggering $374 or more without explanation. It appears that the HMO's, who have been losing money servicing the accounts, have really socked it to the retirees.

Over the Internet, to give some information to retirees, I sent out the following information. If it needs some correction or amplification, let me know: (Dick Bruce info above...not repeated here)

Liz, we both realize the need for better communications with retirees. Since Martinez became Chairman, communications to retirees seem to be cut off. I know that you’re aware of the Class Action Lawsuits that have been filed by retirees with the loss of their paid-up life insurance and cannot make any comments in this regard. The loss is extremely distasteful to retirees and their families as it was promised to them on exit interviews and was planned as a part of their estate. And further, particularly distasteful, was the comment calling retirees a “BURDEN” after their years of dedicated service. There are thousands of Sears retiree families and friends that no longer shop at Sears due to the negative manner in which they have been handled. If communications were individually re-established, perhaps they may come back to Sears’ and assist in developing sales and resultant profits . The increasing of the discount means nothing to retirees who no longer shop at Sears!

Here are some of my thoughts that may improve the vision of Sears to 133,000 retiree families:

1. Return our retiree life insurance to long promised levels! NARSE was solely established last year by Sears’ retirees for the protection and restoration of Sears’ retiree benefits after the change to retiree life insurance. 2. Re-establish at least a quarterly newsletter to retiree families. 3. Add additional incoming phone lines into the Service Center, perhaps with message capability. 4. Suggest consideration of an email address for the Retiree Service Center where messages may be sent and received by retirees. 5. Establish and publish a fax number for inquires into the Service Center. 6. Utilize the current Sears electronic web site with a section for Sears’ retirees. You could set it up so they could have individual access with their Social Security number. 7. Consider putting both retiree and active associates centrally under one Sears’ HMO umbrella for better service and control. 8. Plan to meet with local Chicago members of the NARSE Board and see if we can mutually explore opportunities to assist retirees and Sears’. 9. We’d be pleased to explore the thought of perhaps taking a brief section in our NARSE newsletters to retirees about retiree benefits and changes.

Again, thanks for your prompt action. We wish you well in your new assignment and I hope to hear from you as to how we may assist.

Sincerely, Gordon H. Muschett,
Retired Sears Executive Field Vice President,
NARSE Member, NARSE Communications Committee

LIZ ROSSMAN VP BENEFITS JAN.19 FAX TO GORDON MUSCHETT


RE: Retiree Heath Insurance

“We are receiving many inquiries regarding 1999 retiree HMO rates. In response to these concerns, we are offering you the opportunity to switch plans, between now and February 15, 1999.

For retirees who would like to switch plans, you have until February 15 to submit a new enrollment form to the Retiree Service Center. If you plan to enroll by February 15, your enrollment to the new plan and your disenrollment from the current plan will be retroactive to January 1,1999.

Here is what you need to do: Mail or fax your enrollment form in the postage-paid, pre-addressed envelope (included with your annual election packet) to the RSC no later than February 15, 1999:

Mail: Sears Retiree Service Center, Post Office Box 5161, Southfield, MI 48086-5161
Fax: 1-248-358-6500

If you do not have your packet, you may obtain one by contacting the RSC by telephone, email or fax. A packet will be sent to you via US Mail, 2-day delivery. You will have until February 15, 1999 to respond once you received your packet.”

Telephone: 1-800-762-7327
Email: GTHORNTON@MetLife.com
Fax: 1-248-358-6500

Please be guided accordingly. Please relay to your Sears retiree friends.

LIZ ROSSMAN VP BENEFITS JAN 20 LETTER TO SEARS UNIT MANAGERS


To: Unit Managers

From: Benefits Department 707BEN
cc: Human Resource Managers

Subject: RETIREES

Some of you have contacted us for information to help you respond to questions from retirees relative to their medical plan costs and their difficulty in getting through to the Sears Retiree Service Center. We are providing the following information to help you address these inquiries.

RETIREE SERVICE CENTER

-- Since the beginning of the year, the Retiree Service Center has experienced problems in handling the large volume of incoming phone calls. The call volume has now declined. However, if retirees are still unable to get through to the RSC via phone at 1-800-762-7327, they may contact the RSC by fax at 1-248-358-6500 or email at GTHORNTON@MetLife.com.

RETIREE MEDICAL RATES

-- Generally, Sears retirees under age 65 are offered the same medical plan options as active associates. Most retirees can choose from the Sears PPO Plan and one or more HMOs.

-- Some pre-65 HMO rates increased significantly for 1999, for two reasons. First, HMO rates across the industry increased more in 1999 than in recent years. Second, since Sears did not begin offering HMOs to pre-65 retirees until 1997, some HMOs underestimated the cost of the retiree population and are now adjusting their rates to reflect those higher costs.

-- Sears contribution toward the cost of retiree medical coverage is determined in the year of retirement and does not change in subsequent years. Retirees bear the cost of rate increases.

-- As with active associates, retirees enrolled in 1998 in HealthCare Alliance, Sears Group Medical Plan, or an HMO that was discontinued in 1999 were defaulted to the Sears PPO Plan for 1999 if no other election was made.

-- A small number of retirees did not receive Annual Election information. Others do not recall receiving it or did not read it. As a result, when these individuals received their first 1999 invoice in early January, they were surprised by either the plan in which they were enrolled, the increase in their medical plan cost, or both.

             

  (Jan, 1999)       

 

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