FOX47 NEWS - Companies Cutting Retirement Benefits
For the first time, many businesses are slashing retirement benefits because of the bad economy.
With the economy in recession, and premiums rising, health care is becoming a huge burden on businesses' bottom lines.
Effective January 1st, Cuna Mutual Group on Madison's west side will no longer provide health coverage for retirees. It's a $100 million burden the company says it can no longer afford.
It was an extremely difficult decision -- one we regret having to take, said Rick Uhlmann, senior manager of media relations. However, these are difficult economic times. We have a fiduciary responsibility to our 400,000 policy holders.
Cuna is offering retirees a lump sum payment to help with the transition. They say it will provide 2 years worth of health coverage the company would have paid to retirees.
Our retirees will still have access to our companies group health plans that our current employees have, said Uhlmann. It's just that they will be paying the premiums for that group health coverage.
As for current employees, Cuna has no plans for layoffs, but will freeze salaries for non-union employees next year. Accrued sick days will also be eliminated.
Cuna isn't the only local company to cut retiree health benefits -- 170 former workers at General Casualty in Sun Prairie will lose their coverage next year.
The company is providing a six-month stipend to help with the transition. A spokesperson for General Casualty said retirees will not have the option of buying health insurance through the company.