Home » Markets » Vanguard rolls back plan to cut retiree benefits
Vanguard rolls back plan to cut retiree benefits
Fox Business Flash top headlines for October 11
Check out what’s clicking on FoxBusiness.com.
Vanguard Group is restoring benefits for retirees after an attempt to phase them out triggered protests among former staffers.
"I sincerely apologize for the anxiety and stress this decision has caused," Vanguard Chief Executive Tim Buckley said in a video message late Friday. "We know we missed the mark."
Vanguard is reversing course from last Monday when the firm told employees and retirees it was ending a longtime retirement benefit program that allowed workers to accumulate credits for insurance payments. Some long-tenured retirees and employees have amassed more than $100,000 in such credits.
At the time, Vanguard said it was also canceling a life insurance benefit and a Cobra program meant to tide workers over in the months right after they retire. The firm would offer a one-time lump sum taxable cash payment of $40,000 instead.
HOW TO BEAT THE AVERAGE $1,557 MONTHLY SOCIAL SECURITY BENEFIT
When the firm announced the benefit changes dozens of retirees and employees mobilized on social media, and called and emailed staffers to complain.
The firm reinstated these benefits for retirees, and now, it said, it is evaluating the benefits for its current employees.
Vanguard helped pioneer the rise of passive investing through low-cost index funds. In the process, the firm rose to become a $8.3 trillion asset manager and major provider of retirement savings funds to millions of investors. Now, the firm and other asset managers are working to cut corporate costs to sustain their increasingly low-fee business.