In Practice March 29, 2007

Fidelity Investments to End DB Plan

The fund giant will instead offer a richer 401(k) match and an annual credit to a health savings plan.
Reported by

Further, beginning in 2008, Anne Crowley, a company spokesman, told the Boston Globe that employees will be able to roll over their existing pension benefits into an existing company profit-sharing plan or they can choose to take those benefits as an annuity upon retirement.

The firm’s matching contribution will be increased from 5% to 7% and, beginning in 2008, Fidelity will credit employee health care savings accounts with $3,000 annually to help pay for retiree healthcare. This money will be accrued in an account in which distributions are not taxed.

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Health Care Concerns

The change comes as Fidelity released data that the average 65-year-old couple needs an estimated $215,000 to cover health care costs in retirement (see Estimated $215,000 Needed for Retiree Health Care Costs). According to the Globe, Crowley said that 71% of Fidelity’s employees (who have an average age of about 35) reported they did not know how they would pay for healthcare in retirement. Their average employee is around 35, according to the report.

The pension plan, which the firm says is fully funded to meet current obligations, will be eliminated for approximately 32,000 of the company’s employees, according to the Boston Globe report. According to a filing with the U.S. Department of Labor, the pension plan has 36,800 participants, including current employees, former workers due future benefits, and retirees.

Fidelity will stop making payments into the pension plan June 1, the report said. The report did not say whether there will be any cost savings by the change.

Deals & People March 28, 2007

Still Going Strong

The nation's oldest CEO celebrated a birthday this week.
Reported by
Jack A. Weil, the founder and chief executive of Denver-based Rockmount Ranch Wear, who is believed to be the nation’s oldest CEO, turned 106 this week.
His Western shirt design with snaps instead of buttons has endured as a hit for decades, and the firm’s fashions were prominent in the film Brokeback Mountain. While Weil’s grandson Steve heads daily operations of the manufacturing company, Mr. Weil typically works about four hours each weekday at the office, according to the Denver Post.
In a recent interview with the Post, “Papa Jack’ offered the following observations:
  • On building a successful business: “You’ve got to consider the environment, and you’ve got to consider the times. I learned a long time ago that I don’t want anyone to give me more than 5 percent of my business. Because if I lose them, that would put too much pressure on (the company).”
  • On dealing with overdue customers: “I suggest that they send me three or four checks post-dated. Not too many (business) people do that. You have to understand your customers’ problems.”
  • On working every day: “What the heck else would I do?”
  • On money and politics: “I’ve always felt that a young man worth his salt is a Democrat until he makes a little money. And if he wants to save that money, he becomes a Republican.”
  • On drinking whiskey: “I drink for medicinal purposes. I take a shot of Jack Daniel’s about twice a week to keep my blood thin.”
You can send Jack a birthday greeting HERE
You can see Jack at work HERE

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