Nissan To Cut Retiree Health Benefits
Japanese automaker Nissan will cut health insurance and pension benefits for U.S. employees in what the company calls an effort to "remain competitive," the Los Angeles Times reports. Nissan informed workers with manufacturing jobs that, starting at age 65, they will receive an annual stipend to supplement Medicare coverage instead of receiving supplemental health care coverage from the company.
A Nissan spokesperson said that once changes are made, a qualifying retired couple could receive $5,000 in addition to annual 3% increases.
In addition, workers in nonmanufacturing jobs were informed that their retiree health care coverage would end at age 65, with no stipends to cover supplemental insurance costs. According to the Times, the plan will not affect too many U.S. workers initially because the company has a limited number of retirees in the country.
The first U.S. plants opened about 20 years ago. Nissan expects to have about 4,000 retirees in the next decade, the Times reports. The new plan will take effect in January 2007.
U.S. companies in many industries have cut retiree benefits, but Nissan is "leading the automotive industry with such changes," according to Paul Fronstin, director of the health research program at the Employee Benefit Research Institute (O'Dell, Los Angeles Times, 2/7).