Eli Lilly Workers to Share More Health Care Costs in Retirement

January 23, 2008 (PLANSPONSOR.com) - Drug maker Eli Lilly has informed its 20,300 U.S. employees of numerous changes in their retirement benefits, the Indianapolis Star reports.

Under the changes, current retirees will see their share of health-care premium costs rise by 12% over six years, starting in 2009. Those who retire in 2010 or after will also share more of the health care premium cost, but the company did not say how much.

The company also announced a change to its calculation of benefits from its defined benefit pension plan. Company spokesman Phil Belt told the Indianapolis Star an unspecified number of employees “will have to work a little longer” to get the same benefit as provided under the current formula.

Belt said the changes are designed to keep the company’s benefits plans sustainable for years to come, not to further reduce head count or to increase retirements. He added that the pension plan is fully funded.

Meanwhile, the company has increased its contribution to its 401(k) plan, effective January 1. Eli Lilly now matches employee contributions in the form of company stock, 100% up to 6% of pay. The company previously contributed at least 50% for every $1 in employee contributions, and sometimes increased that up to 100% based on its financial position.