Sears has ended life insurance benefits for eligible retirees, one of the final links to the days when the company promised generous benefits to take care of its workers.
The life insurance benefits were canceled March 15, though some retirees didn't receive letters notifying them of the change until after that date, said Ron Olbrysh, chairman of the National Association of Retired Sears Employees.
It's unclear how many Sears' retirees will lose coverage, but the company paid about $16.6 million in premiums for eligible retirees for the year that ended Dec. 31, 2017, according to a report on benefits that Olbrysh said he and other retirees received.
A company attorney declined to comment.
Retirees can convert all or part of their group life insurance policies to individual whole life policies and pay the premiums, according to the letter sent to retirees.
Sears had already sacrificed popular employee perks amid longstanding financial struggles, including significant cuts to life insurance coverage in 1997. But the company still covered life insurance policies worth at least $5,000 for eligible retirees, according to Olbrysh, who said the average policy ranged from $8,000 to $10,000.
When the company sought bankruptcy protection in October, retirees were more concerned about losing the life insurance benefits than their pensions, which were covered by the Pension Benefit Guaranty
Corp. The federal pension agency moved to take over Sears' plans, which cover about 90,000 people, this year.
Olbrysh said the retirees' association was under the impression that life insurance benefits would be secure as long as Sears had not fully wound down its business.
Sears' former CEO and largest shareholder, Edward Lampert, won a bankruptcy auction in February for the retailer's remaining assets with a $5.2 billion bid and plan to keep a new, leaner version of Sears in business operation. A new entity controlled by Lampert's hedge fund, ESL Investments, has completed that transaction.
Though the life insurance benefits had been reduced over the years, it was still meaningful, said Tom Dowd, 76, who was a human resources manager when he retired after 30 years at Sears in 1998.
To Dowd, who lives in Delaware, it was the way the news was delivered that stung. He found out about it first from other retirees.
"I spent my adult life there, and if nothing else, that requires a little bit of dignity as opposed to a letter saying your benefits are gone, and here's how much you can pay to get them back," he said.