Lucent Technologies Inc., the telecommunications equipment company being spun off from AT&T Corp., will get almost two-thirds of AT&T's pension assets.
But few investment management changes are expected. Lucent agreed to allow AT&T Investment Corp. to continue managing Lucent's assets for two or three years, said Florence L. "Meg" Walsh, who was named vice president and treasurer of Lucent in May.
The agreement could be extended if Lucent executives are satisfied.
Lucent will get $29.1 billion of the $47.6 billion AT&T defined benefit plan, based on a Dec. 31, 1995, valuation.
Lucent also will receive roughly two-thirds, or $8.7 billion, of AT&T's total $14.7 billion defined contribution plan, which is principally a profit-sharing 401(k) plan, based on an estimate provided by Eileen Connolly, manager-financial media relations for AT&T.
In addition, Lucent will get $3.4 billion of $4.7 billion AT&T has in a post-retirement benefits fund, which helps pay for retiree health care, life insurance and other benefits.
It wasn't clear if Lucent will take a more direct role in managing the defined contribution and post-retirement benefit funds. Lucent's new headquarters are in Murray Hill, N.J.; it retains the bulk of the famous Bell Laboratories.
The figures are preliminary, pending completion of valuations and actuarial work.
AT&T is using Milliman & Robertson, New York, and AT&T's own subsidiary, Actuarial Sciences Associates Inc., Somerset, N.J., to advise on the division of the pension plan, Ms. Connolly said.
Along with the assets, Lucent will also get almost two-thirds of AT&T's pension liabilities, or $23.4 billion, based on the Dec. 31 valuation, according to corporate documents.
Also, Lucent will get an estimated $8.4 billion of AT&T's $12.6 billion in post-retirement benefit liabilities.
NCR Corp., Dayton, Ohio, also being spun off from AT&T, will receive some $1 billion to $2 billion in defined benefit pension assets and a similar proportion of liabilities. NCR had nearly $1.9 billion in defined benefit assets in 1994 in its last separate pension report.
Information on how NCR will manage its fund was unavailable.
The NCR share of the AT&T pension fund "will be much easier to separate," Ms. Connolly said.
"The NCR (pension) piece is not something that will take a great deal of effort to separate because it had only recently been merged with AT&T's pension fund," even though AT&T acquired NCR in 1991, said Ms. Connolly.
NCR has a 401(k) plan of about $1 billion, said Robert Farkas, NCR director-corporate media relations. He said that plan had been kept separate from AT&T.
Norman M. Pao will head up the NCR pension fund. Mr. Pao, who most recently was a senior executive in the AT&T human resources department, was NCR's assistant treasurer-benefit fund investments, overseeing the NCR pension and 401(k) funds until they were merged with the AT&T funds.
An estimate of NCR's share of AT&T's post-retirement benefit liabilities was unavailable.
The new AT&T, which will retain the name and telephone services following the spinoff of Lucent and NCR, will receive approximately one-third, or $16 billion, of pre-restructured AT&T's total pension assets.
Likewise, the new AT&T it will get about one-third of the AT&T defined benefit pension liabilities, or about $12 billion.
David P. Feldman, corporate vice president-investment management, and Robert E. Angelica, president, AT&T Investment Management, based in Berkeley Heights, N.J., presumably will stay in their positions. Ms. Connolly said no changes have been announced.
AT&T's treasurer, S. Lawrence Prendergast, has been in the position since 1983 when AT&T was broken up, spinning off the regional Bell operating companies and their massive pension funds.
Lucent's Ms. Walsh said Donald K. Peterson, who was named Lucent's executive vice president and chief financial officer, will oversee the pension fund investments. Ms. Walsh will report to Mr. Paterson, who had been vice president and CFO of AT&T Communications Services Group.
Before moving to Lucent, Ms. Walsh had been assistant treasurer-corporate finance at AT&T.
Lucent, which is expected to be completely spun off from AT&T at the end of the year, is getting 131,000 of AT&T's 296,000 employees. The surviving AT&T will get 127,000 employees and NCR 38,000 employees.
But the Lucent employee benefit plans, as well as AT&T's and even NCR's, could face liquidity needs from work force reductions and early retirements.
Lucent alone has announced it plans to eliminate 22,000 jobs, half of those in management, and sell business employing another 1,000 people.
