A week before its planned merger with Dow Chemical Co., the DuPont Co. has told 9,500 former employees who have not yet begun collecting pensions that they can choose to get a smaller pension that starts earlier or receive a lump sum instead of the potentially larger, later payments to which they are entitled.
DuPont’s vested and separated workers have from Sept. 11 to Oct. 20 to decide, spokesman Daniel Turner confirmed. Those who take lump-sum payments will get their money before year’s end, he said.
The company said it was a coincidence that the offer is being made on the eve of the Dow merger. It had previously announced it would freeze accruals to nonunion pension plans for current employees and would shift future retirement-benefit contributions to an employer-subsidized 401(k) plan, in which the worker, not the company, takes the risk of investments’ losing value. Many companies have made similar switches to avoid future financial responsibility as the number of their retirees exceeds that of active workers.
Retirees need time and the guidance of objective professionals to estimate whether the money DuPont is offering up front is a good deal, compared with the guarantee of a federally insured pension, or a reduced pension that starts earlier, said retired DuPont lobbyist Lawrence Craig Skaggs.
Skaggs, an organizer of a DuPont retirees’ Facebook page, with more than 7,000 members, said he was concerned that the company was playing on retirees’ fears over the future to reduce its successors’ financial obligations without benefiting workers who spent their careers in the company’s plants, offices, and field operations. The company has held meetings with managers and other senior retirees, and says it is complying with federal labor law.
Skaggs also said group members have sent DuPont CEO Edward Breen hundreds of letters with concerns about future retirement-plan funding after DuPont is merged with Dow and split into three or more companies, but have not gotten direct replies.
“The company used our expressions of panic about our futures to stampede vested employees and their spouses into accepting a paltry pension buyout,” Skaggs said.