Sears retirees who had life insurance coverage through the company may now receive just $135 each from the now-bankrupt retailer, Bloomberg reports.
About 29,000 former Sears employees had a life insurance plan through the company, which sold its stores and most of its assets to chairman Eddie Lampert’s hedge fund, ESL Investments, back in January.
In March, Sears canceled its workers’ life insurance plan and gave them the option to pay for their own life insurance. The terminated plan would have provided death benefits of between $5,000 and $14,500 for workers, but the company now says it doesn’t have enough money to pay the full amount.
Sears has laid out a new plan that would drastically reduce the amount of money its retirees will receive. Former Sears employees who were slated to receive thousands in benefits could now receive just $115 to $135, according to a court filing.
“The new plan is totally unacceptable to the retirees,” Ronald Olbrysh, chairman of the National Association of Retired Sears Employees, told Bloomberg. “It’s totally unfair, what Sears is attempting to do.”
A hearing on the proposal is set for August 12.