the company was “wrong” by reducing medical benefits for retirees and current employees

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On Friday evening, Vanguard chief executive Mortimer “Tim” Buckley issued an email and video apology to current and retired employees, saying the mutual fund giant was “completely wrong” in cutting a key medical benefit.

“I sincerely apologize for the anxiety and stress this decision has caused. We know we missed the mark. I can assure our retirees that they can continue to rely on their RMA in the future, ”he said, according to a transcript of the video.

“We aim to share details in the coming weeks” regarding any changes to retiree medical accounts, which are funded by Vanguard.

“Thank you for your patience as we correct our mistake,” Buckley said.

READ MORE: Vanguard Restores Key Health Benefits For All Current Retired Employees After First Removing Them

The message was sent to current and former employees, known among themselves as the Vanguard Crew, regarding a long-standing retirement benefit that funded medical accounts of $ 5,500 per year from age 40. Vanguard’s salary is considered lower than most in the financial industry, but with generous benefits. Retiree medical accounts were a substantial benefit that made up for lower wages, current and former workers said.

Some Vanguard retirees with decades of service were at risk of losing the hundreds of thousands of dollars they needed to pay for health care premiums and medical bills.

The email from Vanguard went out around 8:45 pm EST and was titled: “A message from Tim Buckley to the crew and retirees of Vanguard regarding pension benefits.

The email read:

“As you know, we recently announced several changes to our retirement benefit program, including the removal of the Retiree Medical Account or“ RMA. ”We apologize for the abrupt timing of this week’s announcement and for any anxiety or stress this announcement may have caused We appreciate your sincere, direct and honest comments.

The RMA benefit will remain in place until the end of 2022. The life insurance benefit and COBRA grant for retirees will also remain in place until the end of 2022. In the meantime, our employee benefits team at RH is developing an alternative approach for crew members and retirees. As our HR team consults with internal and external experts to determine a way forward, please share your feedback directly with Crew Central by sending an email [email protected]. “

The mea culpa email and video represented a sharp about-face following Monday’s announcement that Vanguard was terminating retiree medical accounts on the same day.

Depending on the copies of the service contracts, Vanguard can terminate the RMA program at will. But many current and former employees have said they never expected the company to completely and suddenly remove RMAs.

“I worked at Vanguard 35 years, and as a result of that I accumulated about $ 150,000 in tax-free funds” which Vanguard put into the account, Greg Wynn, 59, of Spring City, County Chester, said last week, before Vanguard’s Buckley was issued. the video apologies. “This money was available to pay for health care until I became eligible for Medicare.”

Buckley did not give a specific time frame for the RMA decision in Friday’s video.

Current and former Vanguard employees have expressed hope but cautious skepticism on social media, saying that other than the one-year extension until 2022, it’s unclear what will happen next.

“Appreciate that Vanguard at least heard from us and made some corrections, whether it was out of concern for us or for the negative publicity,” one wrote. “Now we are awaiting the announcement of their post-2022 plan. I’m hopeful until I have reasons not to be.


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