Liberty Mutual is cutting back contributions to retirement plans and other benefits for its employees, just a year after a public uproar over lavish pay and perks for top executives of the Boston insurer.
Under the new plan, the company will reduce the maximum sum it provides to match workers’ savings in their 401(k) plans to 6 percent from 7 percent. The insurer also will change its traditional pension plan to a more modest one that saves the company money. In addition, it will cut back insurance coverage for retirees.
In a brochure for employees that describes the changes, Liberty Mutual said, “the retirement benefits we currently offer are not in line with market practice.” The company said it compared its benefits with those offered by 25 similar financial companies.
The cuts come on the heels of former chief executive Edmund F. “Ted” Kelly’s retirement, capping a four-year period in which he earned $200 million, making him one of the highest-paid executives in the country. Kelly retained his private-jet privileges until he stepped down as chairman in late June. The Globe has reported that he is receiving an annual pension of about $3.3 million.
Against that backdrop, more than 38,000 rank-and-file employees are now digesting the prospect of slimmer benefits.
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