Insurance giant MetLife is using part of its $1.2 billion tax savings from the fourth quarter of the 2017 fiscal year to reinvest in its workforce.
The company will increase the minimum contribution to its defined benefit pension plan, auto-enroll its 401(k) plan participants and offer employer-paid legal services. MetLife says the changes were accelerated due to the Tax Cuts and Jobs Act, which slashed the corporate rate to 21% from 35%. All full-time, salaried employees in the United States will be eligible for the newly enhanced benefits.
“When you look at the overall focus of what we did, we took the time to step back and reflect on who we are as a company. We started with our values,” says Susan Podlogar, the company’s executive vice president and chief human resources officer. “We’re focusing on the long term [and] preparing for the future. We really opted to invest in the long term rather than one-time bonuses.”
More than 7,000 U.S. employees will see a 5% benefit to the cash balance formula of MetLife’s defined benefit pension plan, as the company set a minimum credit to $300 per month. Previously, the company did not have a minimum credit.
Likewise, auto-enrollment and auto-escalation for the company’s 401(k) plan, along with immediate company match eligibility and vesting, will take place at the beginning of 2019, says Andy Bernstein, vice president of MetLife’s global compensation and benefits department. The level at which employees are auto-enrolled and whether auto-escalation will be offered and, if so, at what levels have yet to be finalized, he says.
For 7,000 of the company’s U.S. employees who earn less than $75,000 a year, they will see an increase in the amount of their group life insurance coverage as MetLife set the minimum amount of coverage at $75,000 a year. MetLife previously offered all of its U.S. employees group life coverage in an amount equal to their annual pay.
MetLife also changed its legal services offering from voluntary to employer-paid, a move that experts say will become popular in 2018 and beyond.
“When we looked at that one, we did have a lot of feedback that [employees] did value our program,” Podlogar says, noting that most workers used the service for will preparation.
MetLife also is investing $10 million into its Workforce of the Future Development Fund, which will help workers with skills and training for a digital-first workplace.
“Younger employees, the next generation, their financial security is becoming more and more important,” Podlogar says. “We’re looking at the needs of our current workforce.”
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