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WellPoint freezes pensions: insurer joins national trend, shifts focus to 401(k) plan.

Article Excerpt
WellPoint Inc. quietly froze pension contributions for most of its 42,000 employees earlier this year, a move that draws criticism but fails in step with what many other big employers are doing.

The Indianapolis-based health insurance giant noted deep in an annual report filed late last month that on Jan. 1 it stopped adding pay credits to the pension accounts of employees not nearing retirement.

The insurer rang up a $2.5 billion profit last year and, unlike some other companies that have announced similar moves, it did not attribute the decision to financial strain.

Rather, it stopped making credits toward the $1.9 billion pension plan because it decided to ramp up benefits that give employees greater control over their retirement savings, spokesman Jim Kappel said. Among the changes, he said, is an improved 401(k) program with a larger company match.

But in the process, WellPoint reduced the amount of company dollars feeding employee nest eggs, according to Shaun O'Brien, assistant policy director for the Washington, D.C.-based AFL-CIO.

"This is a pay cut for these people," he said. "Less money in means less money out when you go to retire."

With the shift, WellPoint joins General Motors Corp., IBM and Verizon Communications Inc. in a growing pool of...

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