Boston Business Journal
August 27, 2013
By Galen Moore
Boston insurer Liberty Mutual is cutting back insurance coverage for retirees, scaling back pension benefits and reducing its maximum matching contribution to employee retirement plans. Former chief executive and chairman Edmund “Ted” Kelly, who retired earlier this year, receives an annual pension of about $3.3 million.
“I think anyone’s individual reaction will be unique,’’ Mark Touhey, manager of compensation and benefits at Liberty Mutual, told The Boston Globe’s Beth Healy, who reported the change. “There may be some that try to connect those two.” [EXPAND Read more]
The Globe report cited a company brochure for employees describing the changes, which include reducing the company’s maximum matching 401(k) contribution to 6 percent from 7 percent. According to the report, Liberty Mutual is also changing its pension plan in what sounds like a shift from a defined benefit to a defined contribution plan.
“Instead of expecting a certain annual benefit based on years of service over a 35-year career, employees will receive 4.5 percent of their pay each month in a pension account,” the Globe reports, describing the new plan. “That money will earn interest at the rate of the 30-year Treasury bond, which is currently paying 3.77 percent.”
Liberty Mutual’s profit nearly doubled last year, and its net income was up 28 percent in the first half of 2013, the Globe reported. [/EXPAND]