Vanguard Group is recovering retired benefits after attempting to phase out a protest raised among former employees.
“We sincerely apologize for the concern and tension caused by this decision,” Vanguard CEO Tim Buckley said in a video message late Friday. “We know we missed Mark.”
Vanguard reversed course from last Monday when the company announced it would end a long-term severance benefit program that would allow workers and retirees to collect credits for insurance payments. I am giving you. Some longtime retirees and employees have raised more than $100,000 in such credits.
At the time, Vanguard said it had also canceled life insurance benefits and a COBRA program that was intended to relieve workers in the months immediately following their retirement. Instead, the company provides a taxable cash payment of $40,000 in a lump sum.
When the company announced the change in benefits, dozens of retirees and employees gathered on social media called and emailed employees to file complaints.
The company said it has revived these benefits for retirees and is currently evaluating benefits for existing employees.
Vanguard helped fuel the rise of passive investing through low-cost index funds. In the process, the company has grown to become a $8.3 trillion asset management company, a leading provider of retirement savings funds for millions of investors. Today, companies and other asset managers are increasingly working to reduce corporate costs to maintain low-cost businesses.
The company has an unusual ownership structure that is owned by the people who invest the money. Owned by American fund investors, the company is under pressure to continue to reinvest returns to its clients and reduce the cost of investment to shareholders.
The cut in severance benefits proposed by Vanguard meant that the longest-serving retirees and employees would not have tens of thousands of dollars in credit to pay their insurance claims by the end of the year.
Kate Lowe, a retired and 20-year Vanguard veteran, posted a message on Facebook Groups and LinkedIn. He also contacted the Human Resources Department.
“I wanted to show them good night and didn’t want to leave in peace,” she said.
After the Philadelphia Inquirer reported on the change last Tuesday, Vanguard said they had relaxed their positions from the previous day and that current and former employees would be able to retain these benefits until 2022. On Friday, the benefits Vanguard originally planned to cancel will remain in place for current retirees.
“Based on feedback from the crew and retirees, we decided to adjust our approach,” a spokesman said in a statement. “We continue to work on a revised approach for the rest of the crew,” she says, so that existing staff can maintain profits until at least the end of 2022. I did
These programs are separate from the Medicare Savings Program and 401(k) benefits. Over the years, many companies have phased out supplemental health insurance plans for retirees. With the decline of traditional workplace pension funds and lower interest rates in a decade, livelihood savings are a major risk for millions of retirees.
Vanguard retiree Lenny Hasinger said that if Vanguard didn’t reinstate benefits, she and her husband would receive a premium of about $180,000 from 30 years of work at Vanguard. He said he was going to lose.
The retirees said they were sending company emails to express their disappointment that Vanguard considered reducing their benefits.
“I hope they will come up with an acceptable solution for those who are currently working and will be retiring soon,” she said.
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