AOL Reverses Retirement-Plan Policy After Workers’ OutrageEdmund Lee and Michelle Yun
AOL Inc. is reversing a new policy for staff retirement plans that would have forced employees who leave before the end of the year to forfeit benefits.
AOL, owner of websites such as the Huffington Post, will change the policy back to matching staff contributions for each pay period, instead of making payments in an annual lump sum, Chief Executive Officer Tim Armstrong said in a Feb. 8 memo to employees seen by Bloomberg News. The reversal was reported yesterday on the Re/code website.
The policy change comes after Armstrong last week blamed President Barack Obama’s health-care law for creating an additional $7.1 million expense for the company, which prompted AOL to seek costs savings by cutting benefits. Other companies including United Parcel Services Inc., the fourth-largest employer in the U.S., also cited the law for some cuts to its spending on benefits.
Armstrong also apologized in the memo for discussing specific health-care examples at a meeting with employees.
The CEO told his staff on Feb. 6 that the health-care expenses of two employees in 2012 played a role in his decision on which benefits to cut, Capital New York reported.