Allstate to trim retirement benefits

July 17, 2013

Aimee Chen

(AP/File)
Northbrook-based insurance provider Allstate Corp. announced this week plans to trim its employees benefits to cut company costs. The move is expected to benefit shareholders.

Less than a month after it laid off more than 300 workers, Allstate Corp. announced on Monday plans to trim employee retirement benefits.

The Northbrook-based company said the move will boost its book value from $1.70 to $2 per share.

Jim Ryan, a senior analyst at Morningstar Inc., said the move will be difficult for employees but that it’s what the market dictates. 

“That’s certainly something common among a lot of companies,” he said. “To the extent that if a lot of companies do it and others don’t, those [who] don’t are disadvantaged on a cost basis.”

Ryan also said he believed that Allstate would have a strong future because of plans to broaden its e-surance and online customer base. 

Beginning this summer, the company will no longer offer life insurance to its retirees and introduce a new formula for employee pensions, reducing its contribution obligation. 

Aimee Chen is a WBEZ business reporting intern. Follow her at @AimeeYuyiChen.