Sears abruptly slashes life insurance coverage for 90,000 retirees
3 April 2019
Beginning March 15, thousands of retired Sears employees were informed via a form letter that their life insurance benefits had been eliminated. Retirees were given two options—either convert all or a portion of the previously held policy into a new plan, and begin making payments, or watch it evaporate. As of this writing, it is unknown how many will be affected; however, the previous policies covered approximately 90,000 retirees across Sears and Kmart.
Sears is at the center of the “retail apocalypse,” which has led to mass layoffs and downsizings throughout the country. In 2019, it is estimated that more than 6,300 stores across the US will close, with tens of thousands of employees losing their jobs. With their employers failing to meet projected profits, workers, pitted against top-performing stores and each other, have been forced to accept wage freezes and benefit cuts, while investors on Wall Street have remunerated themselves fabulously.
Sears staved off liquidation earlier this year in a $5.2 billion February bankruptcy sale to current chairman Edward Lampert, who was also the company’s largest creditor. The sale transferred ownership of Sears Holding Corp. to Lampert and the hedge fund he founded, ESL Investments, which completed the sale. The infamous asset-stripper sold his plan to New York bankruptcy judge Robert Drain as an opportunity to “save jobs,” while operating a “leaner” Sears. This “leaner” Sears has an estimated 40,000 employees today, down from 355,000 in 2006.
The ones made to tighten their belts are not billionaires like Lampert, however. Instead, retirees will be left in the lurch, swindled out of a previously promised benefit,…