Company Overview: A multi-billion dollar manufacturer and marketer of boats, marine engines and other recreational consumer brands, this KTP client is headquartered in the Chicago area and currently employs approximately 19,000 people worldwide. The company is listed on the New York Stock Exchange.
Plan Design Summary: Before establishing the new plan structure, the company’s retiree medical benefits consisted of self-funded plans not unlike many other Fortune 500 companies of its size, scope and history.
Working with KTP, the company established new pre-65 and post-65 plan structures that optimize the health benefits for retirees while meeting the company’s financial objectives. The new plans cover approximately 5,000 eligible retirees including their spouses and dependents.
Results: KTP helped reduce the company’s FAS 106 liability on the balance sheet by approximately $40 million and achieve total annual savings of approximately $4.5 million per year. This resulted in improved earnings per share and financial performance for all shareholders. In addition, all the retirees were given the option to join the new plans regardless of preexisting conditions or geographic location. The plans also provide retirees with an unlimited prescription drug benefit they didn’t previously enjoy.