Report: Sears Cutting Life Insurance Benefits For Up To 90,000 Retirees
In February, the 40,000 employees of Sears learned that they would still have jobs after a bankruptcy judge approved a bid by Eddie Lampert to buy the retailer out of bankruptcy. CBS reports that this month, an unknown number of Sears’ 90,000 retirees discovered that their life insurance benefits had been ended.
The news came from a letter which notified retirees that their life insurance benefit was canceled on March 15. Ron Olbrysh, who chairs the National Association of Retired Sears Employees (NARSE) received the notice on March 20. The letter gave retirees the option to convert into a whole life policy all or some of the amount of their group coverage that Sears was paying for. The amount could not exceed $10,000. Olbrysh said that premium “would not be competitive in the marketplace.”
The notices were sent to "people in their 80s that had had [life insurance coverage for] a long time," said John Freeman, who retired from Sears in 2002. Sears had already brought down employee benefits during the past decade while it struggled financially.
"We feel they are violating a 2001 settlement agreement" that said retiree life insurance could be canceled only if Sears were to liquidate and go out of business, he said. NARSE may bring a lawsuit against Sears, while considering their chance of success when suing "a company that is dying," Olbrysh said.