‘There’s no estate for some of these people.’
ST. ALBANS — As of Dec. 31, Energizer retirees will lose their life and health insurance coverage from the company.
Originally, Energizer retirees had $5,000 in life insurance paid for by the company and the option to purchase more. At the end of the year, Energizer will no longer pay for the basic insurance.
Instead, retirees will have the option of purchasing insurance through Prudential if they qualify. The $5,000 currently provided by Energizer will cost a 65-year-old retiree $436.75 annually, provided it is paid in one lump sum. For an additional cost, retirees will be able to purchase up to $10,000 in life insurance.
Rita Gagnon, 70, of St. Albans City, is one of those poised to lose her insurance coverage. She retired in 2002 after more than 20 years at the Energizer plant. She began when Union Carbide owned the company.
“Energizer promised us $5,000,” said Gagnon. Many of her fellow retirees were counting on that $5,000 to pay for their funeral expenses. “There’s no estate for some of these people,” she said, now that the life insurance benefit will be lost.
If retirees had known earlier, they could have purchased insurance when they were younger, she noted, adding that companies are reluctant to provide life insurance to the elderly. “There’s no way I can get cheap insurance,” she said.
That is not Energizer’s view. The company argued it’s cheaper for retirees to purchase their own insurance.
“Enrollment in Energizer’s retiree health plans has been declining over the past several years and, more often than not, the market outside of Energizer’s health plans is more competitively priced and offers a wider range of options. As we evaluated our cost structure going forward, and in reaction to the decline in plan participation, in July Energizer notified retirees that effective Dec. 31, 2013, the company will discontinue its coverage for retiree health and life insurance benefits,” the company stated.
In addition to the end of life insurance coverage, Energizer will no longer provide health insurance for retirees, who will have to rely on Medicare and any supplemental insurance they can purchase.
Energizer stated it will be “providing retirees with the option to work with Extend Health, a leader in Medicare coordination and transition services, to find medical and dental coverage through the individual marketplace. Retirees can also choose their own broker or navigate the individual market on their own. Retirees will have access to the full public and private market offerings for health coverage.”
Gagnon has heard from 35 of her fellow Energizer retirees concerned about the changes. She estimates there are at least 300 people impacted locally.
Energizer declined to say how many people were impacted nationwide.
Energizer is in the process of closing its St. Albans facility, which will cease production at the end of this month. Full shutdown of the plant should be complete by the end of the year.
Once the closing was announced many Energizer employees left for expanding companies within Franklin County, including Mylan Technologies in St. Albans City and Perrigo Nutritionals in Georgia.
Gagnon said she was offered a job at the plant at the company’s annual Christmas party and she knows other retirees who have returned to the plant temporarily.
The decision to close the St. Albans facility was part of a 10 percent reduction in staff at Energizer worldwide announced last year. At the time Energizer was cutting production staff, it paid CEO Ward M. Klein $9.5 million not counting bonuses, which also totaled in the millions.
The company did, however, reduced Klein’s personal use of the company aircraft from 50 hours per year to 30 and required Klein to pay the taxes on that use himself.
While area retirees try to find alternatives to pay for their burials, Klein’s Energizer retirement benefits were valued at $13 million in the 2012 proxy statement.
On July 31, the company released its most recent earnings statement. While sales were down 1.1 percent from the previous year’s third quarter sales, earnings were up. Net revenue, however, was up $17 million to $87.2 million. With sales down, the increase in net revenue likely comes from a reduction in costs.
Also up were distributions to shareholders.