Picket in Roanoke Co. urges Allstate to restore benefits

Nov. 13--Upset former employees of Allstate Corp. in Roanoke County say they hope a picket Tuesday near the company's Electric Road office and a recent federal lawsuit have sent the company a message: Don't eliminate free retiree life insurance.

Allstate this past summer announced the end of free and permanent life insurance coverage for qualified retirees in 2016. Retirees can buy a policy if they want, but many don't believe they should have to buy a product that was promised for free.

In addition, the retirees say that given their ages and, in some cases, medical conditions, new insurance could be impossible to obtain or too costly outside of what they see as a high-priced option established by Allstate.

One retiree, in Montgomery, Ala., has alleged deceptive practices in a federal lawsuit. He's 81 and can't afford to pay the nearly $1,000 a month in premiums it would take to sustain coverage, according to his attorney, who has asked a judge to open the case to all similarly affected Allstate retirees.

Allstate retirees in the Roanoke region, who could join the lawsuit if it is declared a class action, went public with their concerns by massing in front of Allstate on Tuesday morning.

"It makes me sad the company that we gave the best of our lives to would turn around and do this," said Kathy Shepherd of Roanoke County, who stood with between 20 and 25 protesters on the shoulder of Electric Road for two hours.

The goal of the picket was to let Allstate's home office in Northbrook, Ill., know that its Southwest Virginia retirees are unhappy, according to protesters.

Several retirees said they still have the retirement paperwork to prove Allstate promised them free, post-employment life insurance until death, Shepherd said. But the global corporation, which took in nearly $29 billion in premiums last year, has decided to renege. Allstate also has trimmed its pension-benefit formula and announced layoffs in Roanoke County and elsewhere. Company spokeswoman Laura Strykowski said the benefit cuts are designed to bring Allstate, which employed 38,000 people at the end of last year, more in line with the benefits that other companies offer.

A promise was made, however, according to retirees, who say they intend to fight to keep the life insurance by telling the public what Allstate has done and by legal means, if necessary.

Allstate is no longer behaving like the company it once was, said Carolyn Sommardahl of Roanoke, retired after nearly 15 years of service.

"To me, they've forgotten about the people, and it's the bottom line now," she said.

"We're not in Good Hands," read one sign at the protest, while another said: "Allstate breaks their promise to retirees."

The retirees said their other Allstate retirement benefits appear to be intact, including access to health insurance and pension checks for those who receive them. The trimming of retirement benefits does not directly affect or coincide with any changes to Allstate insurance products sold to the public.

The lawsuit, filed Sept. 23 in the Middle District of Alabama in Montgomery, accuses the company of breaching a duty to provide workers accurate benefit information. If that's proven, it would violate the Employee Retirement Income Security Act of 1974, a type of consumer-protection law governing pension and health plans in the private sector, the suit said.

The promise of free insurance was "misleading and false," according to the lawsuit, though employees relied upon it in their financial planning and did not buy other insurance.

Offering retirees an option to buy coverage is "a radical departure from the benefits previously provided, promised, and represented," the lawsuit said.

Shepherd, 61, who has had cancer, is unsure of her ability to purchase new insurance on her own. Guaranteed coverage that Allstate is offering through a separate company, Minnesota Life, would cost $22 a month to sustain her current benefit of $16,800, according to a table the company gave retirees. The rates retirees were given are good from 2016 through 2018 and increase with age, and could increase again after 2018, Shepherd noted. By her math, if she lives to 84, she could pay more in premiums than the life insurance benefit to which her heirs would be entitled.

Anna Crockett, 85, of Roanoke retired from Allstate after 21 years with a $13,000 life insurance policy she expected to maintain free of charge for the rest of her life. Under the payment option, she would owe $227 a month.

"That's crazy," Crockett said.

The Alabama man who instigated the suit, Garnet Turner, 81, was for 32 years a sales agent whose high productivity earned him a $90,000 life insurance policy, $10,000 beneath the maximum retiree life insurance benefit of $100,000, attorney Taylor Barlett in Birmingham said. To buy the same coverage would cost Turner $972 a month, according to the table.

___

(c)2013 The Roanoke Times (Roanoke, Va.)

Visit The Roanoke Times (Roanoke, Va.) at www.roanoke.com

Distributed by MCT Information Services